Document:

EXHIBIT 4.2

 

 

EXECUTION COPY

 

Rainbow National Services LLC

 

RNS Co-Issuer Corporation

 

and the Guarantors listed on the signature pages
hereof

 

 

103/8% SENIOR SUBORDINATED NOTES
DUE 2014

 

Indenture

 

Dated as of August 20, 2004

 

 

The Bank of New York

 

Trustee

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE ONE

  	
   

  
	
  DEFINITIONS
  AND INCORPORATION

  BY REFERENCE

  	
   

  
	
   

  	
   

  
	
  Section 1.01.
  Definitions

  	
   

  
	
  Section 1.02. Other Definitions

  	
   

  
	
  Section 1.03.
  Incorporation by Reference of Trust Indenture Act

  	
   

  
	
  Section 1.04.
  Rules of Construction

  	
   

  
	
   

  	
   

  
	
  ARTICLE TWO

  	
   

  
	
  THE NOTES

  	
   

  
	
  Section 2.01.
  Form and Dating

  	
   

  
	
  Section 2.02.
  Execution and Authentication

  	
   

  
	
  Section 2.03.
  Methods of Receiving Payments on the Notes

  	
   

  
	
  Section 2.04. Registrar
  and Paying Agent

  	
   

  
	
  Section 2.05.
  Paying Agent to Hold Money in Trust

  	
   

  
	
  Section 2.06.
  Holder Lists

  	
   

  
	
  Section 2.07. Transfer and
  Exchange

  	
   

  
	
  Section 2.08. Replacement Notes

  	
   

  
	
  Section 2.09. Outstanding Notes

  	
   

  
	
  Section 2.10.
  Treasury Notes

  	
   

  
	
  Section 2.11.
  Temporary Notes

  	
   

  
	
  Section 2.12.
  Cancellation

  	
   

  
	
  Section 2.13. Defaulted
  Interest

  	
   

  
	
  Section 2.14.
  CUSIP Numbers

  	
   

  
	
   

  	
   

  
	
  ARTICLE THREE

  	
   

  
	
  REDEMPTION AND OFFERS TO

  PURCHASE

  	
   

  
	
   

  	
   

  
	
  Section 3.01. Notices to
  Trustee

  	
   

  
	
  Section 3.02.
  Selection of Notes to Be Redeemed

  	
   

  
	
  Section 3.03. Notice of
  Redemption

  	
   

  
	
  Section 3.04.
  Effect of Notice of Redemption

  	
   

  
	
  Section 3.05. Deposit
  of Redemption Price

  	
   

  
	
  Section 3.06. Notes
  Redeemed in Part

  	
   

  
	
  Section 3.07. Optional
  Redemption

  	
   

  
	
  Section 3.08. Repurchase Offers

  	
   

  
	
  ARTICLE FOUR

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  
	
  Section 4.01.
  Payment of Notes

  	
   

  

 

i

 

	
  Section 4.02.
  Maintenance of Office or Agency

  	
   

  
	
  Section 4.03.
  Reports

  	
   

  
	
  Section 4.04. Compliance
  Certificate

  	
   

  
	
  Section 4.05.
  Taxes

  	
   

  
	
  Section 4.06.
  Stay, Extension and Usury Laws

  	
   

  
	
  Section 4.07. Restricted
  Payments

  	
   

  
	
  Section 4.08.
  Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

  	
   

  
	
  Section 4.09.
  Incurrence of Indebtedness and Issuance of Preferred Stock

  	
   

  
	
  Section 4.10.
  Asset Sales

  	
   

  
	
  Section 4.11.
  Transactions with Affiliates

  	
   

  
	
  Section 4.12.
  Liens

  	
   

  
	
  Section 4.13. Business
  Activities

  	
   

  
	
  Section 4.14.
  Offer to Repurchase upon a Change of Control

  	
   

  
	
  Section 4.15.
  Limitation on Senior Subordinated Debt

  	
   

  
	
  Section 4.16.
  Designation of Restricted and Unrestricted Subsidiaries

  	
   

  
	
  Section 4.17. Payments for
  Consent

  	
   

  
	
  Section 4.18.
  Guarantees

  	
   

  
	
  Section 4.19.
  Suspension of Certain Covenants and Agreements

  	
   

  
	
  Section 4.20.
  Limitation on Issuances and Sales of Equity Interests in Restricted
  Subsidiaries

  	
   

  
	
   

  	
   

  
	
  ARTICLE FIVE

  	
   

  
	
  SUCCESSORS

  	
   

  
	
   

  	
   

  
	
  Section 5.01.
  Merger, Consolidation or Sale of Assets

  	
   

  
	
  Section 5.02.
  Successor Corporation Substituted

  	
   

  
	
   

  	
   

  
	
  ARTICLE SIX

  	
   

  
	
  DEFAULTS AND REMEDIES

  	
   

  
	
   

  	
   

  
	
  Section 6.01. Events of Default

  	
   

  
	
  Section 6.02.
  Acceleration

  	
   

  
	
  Section 6.03.
  Other Remedies

  	
   

  
	
  Section 6.04. Waiver of
  Past Defaults

  	
   

  
	
  Section 6.05. Control by
  Majority

  	
   

  
	
  Section 6.06. Limitation on
  Suits

  	
   

  
	
  Section 6.07.
  Rights of Holders of Notes to Receive Payment

  	
   

  
	
  Section 6.08.
  Collection Suit by Trustee

  	
   

  
	
  Section 6.09.
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10.
  Priorities

  	
   

  
	
  Section 6.11. Undertaking
  for Costs

  	
   

  
	
   

  	
   

  
	
  ARTICLE SEVEN

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  
	
  Section 7.01. Duties of Trustee

  	
   

  
	
  Section 7.02. Certain
  Rights of Trustee

  	
   

  

 

ii

 

	
  Section 7.03. Trustee’s
  Disclaimer

  	
   

  
	
  Section 7.04. May Hold
  Securities

  	
   

  
	
  Section 7.05. Money Held in
  Trust

  	
   

  
	
  Section 7.06.
  Compensation and Reimbursement

  	
   

  
	
  Section 7.07.
  Eligibility; Disqualification

  	
   

  
	
  Section 7.08. Replacement
  of Trustee

  	
   

  
	
  Section 7.09.
  Acceptance of Appointment by Successor

  	
   

  
	
  Section 7.10.
  Merger, Conversion, Consolidation or Succession to Business

  	
   

  
	
  Section 7.11.
  Preferential Collection of Claims Against Issuers

  	
   

  
	
  Section 7.12.
  Trustee’s Application for Instructions from the Issuers

  	
   

  
	
  Section 7.13. Notice of
  Defaults

  	
   

  
	
   

  	
   

  
	
  ARTICLE EIGHT

  	
   

  
	
  DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

  
	
  Section 8.01.
  Option to Effect Legal Defeasance or Covenant Defeasance

  	
   

  
	
  Section 8.02. Legal
  Defeasance and Discharge

  	
   

  
	
  Section 8.03. Covenant
  Defeasance

  	
   

  
	
  Section 8.04.
  Conditions to Legal or Covenant Defeasance

  	
   

  
	
  Section 8.05.
  Deposited Money and Government Securities to Be Held in Trust; Other
  Miscellaneous Provisions

  	
   

  
	
  Section 8.06.
  Reinstatement

  	
   

  
	
   

  	
   

  
	
  ARTICLE NINE

  	
   

  
	
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  
	
  Section 9.01.
  Without Consent of Holders of Notes

  	
   

  
	
  Section 9.02. With
  Consent of Holders of Notes

  	
   

  
	
  Section 9.03.
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.04.
  Revocation and Effect of Consents

  	
   

  
	
  Section 9.05.
  Notation on or Exchange of Notes

  	
   

  
	
  Section 9.06. Trustee
  to Sign Amendments, Etc

  	
   

  
	
   

  	
   

  
	
  ARTICLE TEN

  	
   

  
	
  NOTE GUARANTEES

  	
   

  
	
   

  	
   

  
	
  Section 10.01.
  Guarantee

  	
   

  
	
  Section 10.02.
  Limitation on Guarantor Liability

  	
   

  
	
  Section 10.03.
  Execution and Delivery of Note Guarantee

  	
   

  
	
  Section 10.04.
  Guarantors May Consolidate, Etc., on Certain Terms

  	
   

  
	
  Section 10.05. Release of
  Guarantor

  	
   

  
	
  Section 10.06.
  Subordination of Note Guarantee

  	
   

  
	
   

  	
   

  
	
  ARTICLE ELEVEN

  	
   

  
	
  SATISFACTION AND DISCHARGE

  	
   

  
	
   

  	
   

  
	
  Section 11.01.
  Satisfaction and Discharge

  	
   

  

 

iii

 

	
  Section 11.02.
  Deposited Money and Government Securities to Be Held in Trust; Other
  Miscellaneous Provisions

  	
   

  
	
  Section 11.03. Repayment
  to the Issuers

  	
   

  
	
   

  	
   

  
	
  ARTICLE TWELVE

  	
   

  
	
  SUBORDINATION

  	
   

  
	
   

  	
   

  
	
  Section 12.01. Agreement
  to Subordinate

  	
   

  
	
  Section 12.02.
  Liquidation; Dissolution; Bankruptcy

  	
   

  
	
  Section 12.03.
  Default on Designated Senior Debt

  	
   

  
	
  Section 12.04.
  Acceleration of Securities

  	
   

  
	
  Section 12.05.
  When Distribution Must Be Paid Over

  	
   

  
	
  Section 12.06. Notice by
  the Issuers

  	
   

  
	
  Section 12.07.
  Subrogation

  	
   

  
	
  Section 12.08. Relative Rights

  	
   

  
	
  Section 12.09.
  Subordination May Not Be Impaired by the Issuers

  	
   

  
	
  Section 12.10.
  Distribution or Notice to Representative

  	
   

  
	
  Section 12.11.
  Rights of Trustee and Paying Agent

  	
   

  
	
  Section 12.12.
  Authorization to Effect Subordination

  	
   

  
	
  Section 12.13.
  Trustee Not Fiduciary for Holders of Senior Indebtedness

  	
   

  
	
   

  	
   

  
	
  ARTICLE THIRTEEN

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  Section 13.01. Trust
  Indenture Act Controls

  	
   

  
	
  Section 13.02.
  Notices

  	
   

  
	
  Section 13.03.
  Communication by Holders of Notes with Other Holders of Notes

  	
   

  
	
  Section 13.04.
  Certificate and Opinion as to Conditions Precedent

  	
   

  
	
  Section 13.05.
  Statements Required in Certificate or Opinion

  	
   

  
	
  Section 13.06. Rules
  by Trustee and Agents

  	
   

  
	
  Section 13.07.
  No Personal Liability of Directors, Officers, Employees and Stockholders

  	
   

  
	
  Section 13.08.
  Governing Law

  	
   

  
	
  Section 13.09. Consent to
  Jurisdiction

  	
   

  
	
  Section 13.10.
  Form of Documents Delivered to Trustee

  	
   

  
	
  Section 13.11.
  Successors

  	
   

  
	
  Section 13.12.
  Severability

  	
   

  
	
  Section 13.13. Counterpart
  Originals

  	
   

  
	
  Section 13.14.
  Acts of Holders

  	
   

  
	
  Section 13.15. Benefit of
  Indenture

  	
   

  
	
  Section 13.16. Table of
  Contents, Headings, Etc.

  	
   

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  FORM OF
  NOTE

  	
   

  
	
   

  	
   

  
	
  Exhibit B

  	
  FORM OF
  CERTIFICATE OF TRANSFER

  	
   

  

 

iv

 

	
  Exhibit C

  	
  FORM OF
  CERTIFICATE OF EXCHANGE

  	
   

  
	
   

  	
   

  
	
  Exhibit D

  	
  FORM OF
  CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

  	
   

  
	
   

  	
   

  
	
  Exhibit E

  	
  FORM OF
  NOTATION OF GUARANTEE

  	
   

  

 

v

 

INDENTURE dated as of August 20, 2004 among Rainbow National Services LLC,
a Delaware limited liability company (the “Company”),
RNS Co-Issuer Corporation, a Delaware corporation and wholly owned subsidiary
of the Company (“Co-Issuer Corp.”
and, together with the Company, the “Issuers”),
the initial Guarantors listed on the signature pages hereto and The Bank of New
York, a New York banking corporation, as trustee.

 

The
Issuers have duly authorized the execution and delivery of this Indenture to
provide for the issuance from time to time of their 103/8% Senior Subordinated Notes due 2014 to be issued as
provided in this Indenture.  The initial
Guarantors have duly authorized the execution and delivery of this Indenture to
provide for a guarantee of the Notes and of certain of the Issuers’ obligations
hereunder.

 

The
Issuers, the initial Guarantors and the Trustee (as defined below) agree as
follows for the benefit of each other and for the equal and ratable benefit of
the Holders (as defined below) of the Issuers’ 103/8%
Senior Subordinated Notes due 2014 issued pursuant to this Indenture:

 

ARTICLE ONE

DEFINITIONS AND INCORPORATION

BY REFERENCE

 

Section 1.01.          Definitions.

 

“144A Global Note” means Notes substantially
in the form of Exhibit A bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee, that shall be issued in a denomination equal
to the outstanding principal amount at maturity of the Notes sold in reliance
on Rule 144A.

 

“Acquired Debt” means, with respect to any
specified Person:

 

(1)                                  Indebtedness of any other Person existing at
the time such other Person is merged with or into, or becomes a Subsidiary of,
such specified Person, whether or not such Indebtedness is incurred in connection
with, or in contemplation of, such other Person merging with or into, or
becoming a Subsidiary of, such specified Person; and

 

(2)                                  Indebtedness secured by a Lien encumbering
any asset acquired by such specified Person.

 

“Additional Notes” means an unlimited
maximum aggregate principal amount of Notes (other than the Notes issued on the
date hereof) issued under this Indenture in accordance with Sections 2.02 and
4.09.

 

“Affiliate” of any specified Person means
any other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For purposes of
this definition, “control,” as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the

 

1

 

management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise. For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” shall have correlative
meanings.

 

“Agent” means any Registrar or Paying Agent.

 

“AMC Preferred Stock” means redeemable
preferred membership interests of American Movie Classics Company LLC, as
described in the Offering Memorandum.

 

“Annualized Cash Flow” means, with respect
to the Company as of any date of determination, the product of (x) the
Consolidated Cash Flow of the Company for the most recent two quarters for
which internal financial statements are available immediately prior to such
date of determination and (y) 2.0.

 

“Applicable Premium” means, with respect to
a Note at any date of redemption, the excess of (A) the present value at such
date of redemption of (1) the redemption price of such Note at September 1,
2009 plus (2) all remaining
required interest payments due on such Note through September 1, 2009
(excluding accrued but unpaid interest to the date of redemption), computed
using a discount rate equal to the Treasury Rate plus 50 basis points, over (B)
the principal amount of such Note.

 

“Applicable Procedures” means, with respect
to any transfer or exchange of or for beneficial interests in any Global Note,
the rules and procedures of the Depositary, Euroclear and Clearstream that
apply to such transfer or exchange.

 

“Asset Sale” means:

 

(1)                                  the sale, lease, conveyance or other
disposition of any property or assets; other than a sale, lease, conveyance or
other disposition governed by the provisions of Section 4.14 or 5.01; and

 

(2)                                  the issuance of Equity Interests by any of
the Company’s Restricted Subsidiaries or the sale by the Company or any
Restricted Subsidiary thereof of Equity Interests in any of its Restricted
Subsidiaries (other than directors’ qualifying shares and shares issued to foreign
nationals to the extent required by applicable law).

 

Notwithstanding
the preceding, the following items shall be deemed not to be Asset Sales:

 

(1)                                  any single transaction or series of related
transactions that involves assets having a Fair Market Value (as determined by
the Board of Directors or senior management) of less than $10.0 million;

 

(2)                                  a transfer of assets or properties between or
among the Company and its Restricted Subsidiaries (including any transfer to
any Person that concurrently becomes a Restricted Subsidiary of the Company);

 

2

 

(3)                                  an issuance of Equity Interests by a
Restricted Subsidiary of the Company to the Company or to another Restricted
Subsidiary, including, without limitation, an issuance of Equity Interests by a
Restricted Subsidiary of the Company to the Company in exchange for or in
conversion of AMC Preferred Stock;

 

(4)                                  the sale, lease, conveyance or other
disposition of equipment, inventory, accounts receivable or other assets in the
ordinary course of business;

 

(5)                                  the sale, lease, conveyance or other
disposition of intellectual property and other intangibles under affiliation
agreements or film rights agreements in the ordinary course of business
consistent with past practice;

 

(6)                                  the licensing or sublicensing of intellectual
property or other general intangibles, and licenses, leases or subleases of
other property in the ordinary course of business which do not materially
interfere with the business of the Company or any of its Restricted
Subsidiaries;

 

(7)                                  the sale or other disposition of Cash
Equivalents;

 

(8)                                  dispositions of accounts receivables in
connection with the compromise, settlement or collection thereof in the
ordinary course of business or in bankruptcy or similar proceedings;

 

(9)                                  a Restricted Payment that is not prohibited
by Section 4.07 and any Permitted Investment;

 

(10)                            the granting of a Lien not prohibited
hereunder;

 

(11)                            any surrender or waiver of contract rights or
the settlement, release or surrender of contract rights or other litigation
claims in the ordinary course of business; and

 

(12)                            any sale or disposition of any property or
equipment that has become damaged, worn out, obsolete or otherwise unsuitable
for use in connection with the business of the Company or its Restricted
Subsidiaries.

 

“Bankruptcy Law” means Title 11 of the
United States Code or any similar federal or state law for the relief of
debtors.

 

“Beneficial Owner” has the meaning assigned
to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act. The terms “Beneficially
Owns” and “Beneficially Owned” shall have a corresponding meaning.

 

“Board of Directors” means:

 

(1)                                  with respect to a corporation, the board of
directors of the corporation or, except in the context of the definitions of “Change
of Control” and “Continuing Directors,” a committee thereof authorized to
exercise the power of the board of directors of such corporation;

 

3

 

 

(2)                                  with respect to a partnership, the board of
directors of the general partner of the partnership (or if the general partner
is not a corporation, the board or committee of the general partner serving a
similar function); and

 

(3)                                  with respect to any other Person, the board
or committee of such Person serving a similar function.

 

“Board Resolution” means a copy of a
resolution certified by the Secretary of an Issuer or any Guarantor to have
been duly adopted by the Board of Directors of such entity and to be in full
force and effect on the date of such certification.

 

“Business Day” means any day other than a
Saturday, a Sunday or a day on which commercial banking institutions are
authorized or required by law, regulation or executive order to close in New
York City.

 

“Capital Lease Obligation” means, at the
time any determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at that time be required to be
capitalized on a balance sheet in accordance with GAAP.

 

“Capital Stock” means:

 

(1)                                  in the case of a corporation, corporate
stock;

 

(2)                                  in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;

 

(3)                                  in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited); and

 

(4)                                  any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

 

“Cash Equivalents”  means:

 

(1)                                  United States dollars;

 

(2)                                  marketable direct obligations of the United
States of America maturing, unless such securities are deposited to defease any
Indebtedness, within 397 days of the date of purchase;

 

(3)                                  commercial paper issued by a Person having
consolidated net worth of at least $250.0 million, which conducts a substantial
part of its business in the United States of America, maturing within 180 days
from the date of the original issue thereof, and rated “P-1” or better by Moody’s
or “A-1” or better by S&P;

 

(4)                                  fully collateralized repurchase agreements
with financial institutions having a rating of “Baa” or better from Moody’s or
a rating of “A–” or better from S&P;

 

4

 

(5)                                  certificates of deposit, bankers’ acceptances
and time deposits maturing within 397 days after the date of purchase, which
are issued by a United States national or state bank or foreign bank having
capital, surplus and undivided profits totaling more than $100.0 million, and
having a rating of “Baa” or better from Moody’s, or a rating of “A–” or better
from S&P; and

 

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

 

“Cash Flow” means, with respect to any
specified Person for any period, the sum of (a) Net Income of such Person for
such period, excluding any unusual, non-recurring or extraordinary items
(including any gain or loss, together with any related provision for taxes on
such gain or loss, realized in connection with any sale of assets outside the
ordinary course of business), plus
(b) the sum, without duplication, for such period to the extent, in the case of
each of clauses (i) through (vi), deducted in calculating such Net Income, of
(i) Fixed Charges for such Person, plus
(ii) non-cash dividends or distributions on Preferred Stock of such Person, plus (iii) depreciation for such Person, plus (iv) amortization for such person
(other than (a) Film Rights Amortization and (b) amortization of prepaid cash
expenses that were paid in a prior period), plus
(v) taxes for such Person, plus
(vi) other non-cash expenses (excluding any such non-cash expense to the extent
that it represents an accrual of or reserve for cash expenses in any future
period) for such Person, minus
(vii) non-cash items for such Person increasing such Net Income, other than the
accrual of revenue consistent with past practice, in each case, determined in
accordance with GAAP.

 

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

 

(1)                                  the direct or indirect sale, transfer,
conveyance or other disposition (other than by way of merger or consolidation),
in one or a series of related transactions, of all or substantially all of the
properties or assets of the Company and its Restricted Subsidiaries, taken as a
whole, to any “person” (as that term is used in Section 13(d)(3) of the
Exchange Act) other than to one or more of the Principals;

 

(2)                                  the adoption of a plan relating to the
liquidation or dissolution of the Company;

 

(3)                                  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
of the Principals, becomes the ultimate Beneficial Owner, directly or
indirectly, of 50% or more of the voting power of the Voting Stock of the
Company;

 

(4)                                  the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors;
or

 

(5)                                  the Company consolidates with, or merges with
or into, any Person, or any Person consolidates with, or merges with or into
the Company, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company or such other Person is converted into
or exchanged for cash, securities

 

5

 

or
other property, other than any such transaction where (A) the Voting Stock of
the Company outstanding immediately prior to such transaction is converted into
or exchanged for Voting Stock (other than Disqualified Stock) of the surviving
or transferee Person constituting, or remains outstanding and constitutes, a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance) and (B)
immediately after such transaction, no “person” or “group” (as such terms are
used in Section 13(d) and 14(d) of the Exchange Act), other than the
Principals, becomes, directly or indirectly, the ultimate Beneficial Owner of
50% or more of the voting power of the Voting Stock of the surviving or
transferee Person; provided that,
following completion of the offer to purchase Notes pursuant to
Section 4.14, any subsequent change in the voting power of the Voting
Stock of the surviving or transferee Person Beneficially Owned by the “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) that resulted in such earlier Change of Control shall not result in an
additional Change of Control.

 

“Clearstream” means Clearstream Banking S.A.
and any successor thereto.

 

“Commission” means the United States
Securities and Exchange Commission and any successor thereto.

 

“Consolidated Cash Flow” means, with respect
to the Company for any period, (a) Cash Flow of the Company and its
Subsidiaries for such period, plus (b)
the sum for such period, in each case to the extent deducted in calculating
such Cash Flow and without duplication, (i) any non-cash charges incurred
subsequent to the date of this Indenture resulting from the application of
Statement of Financial Accounting Standards No. 123 or Statement of Financial
Accounting Standards No. 142, plus
(ii) Deferred Carriage Fees, plus
(iii) non-cash unrealized losses in respect of securities and derivatives, plus (iv) Restructuring Charges, plus (v) losses in respect of Monetization
Transactions, minus (vi) non-cash
unrealized gains in respect of securities and derivatives, minus (vii) gains in respect of
Monetization Transactions, in each case, on a consolidated basis and determined
in accordance with GAAP; provided
that:

 

(1)                                  for purposes of calculations under
Section 4.07 only:

 

(a)                                  the Cash Flow of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Cash Flow is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its equityholders; and

 

(b)                                 the Cash Flow of any Person acquired during
the specified period for any period prior to the date of such acquisition shall
be excluded;

 

6

 

(2)                                  the Cash Flow of any Person that is not a
Restricted Subsidiary of the Company or that is accounted for by the equity
method of accounting shall be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a Restricted
Subsidiary thereof;

 

(3)                                  the Cash Flow of a Restricted Subsidiary of
the Company shall be included in the same percentage as the percentage
ownership interest in the net income (loss) of such Restricted Subsidiary owned
on the last day of such period by the Company or any of its Restricted
Subsidiaries; and

 

(4)                                  the cumulative effect of a change of
accounting principles shall be excluded.

 

“Consolidated Leverage Ratio” means, as of
any date of determination, the ratio of:

 

(1)                                  the aggregate outstanding amount of
Indebtedness of the Company and its Restricted Subsidiaries (other than
Monetization Indebtedness) as of such date of determination on a consolidated
basis (subject to the terms described in the paragraph below) after giving pro
forma effect to the incurrence of the Indebtedness giving rise to the need to
make such calculation (including a pro forma application of the use of proceeds
therefrom), on such date to,

 

(2)                                  the Annualized Cash Flow of the Company as of
such date of determination.

 

For
purposes of this definition:

 

(1)                                  Consolidated Cash Flow shall be calculated on
a pro forma basis after giving effect to (A) the incurrence of the Indebtedness
of the Company and its Restricted Subsidiaries (and the application of the
proceeds therefrom) giving rise to the need to make such calculation and any
incurrence (and the application of the proceeds therefrom) or repayment of
other Indebtedness on the date of determination, and (B) any acquisition or
disposition (including, without limitation, any acquisition giving rise to the
need to make such calculation as a result of the Company or one of its
Restricted Subsidiaries (including any Person that becomes a Restricted
Subsidiary as a result of such acquisition) incurring, assuming or otherwise
becoming liable for Indebtedness) at any time on or subsequent to the first day
of the applicable period specified and on or prior to the date of
determination, as if such acquisition or disposition (including the incurrence
or assumption of any such Indebtedness and also including any Consolidated Cash
Flow associated with such acquisition or disposition) occurred on the first day
of such two-quarter period; and

 

(2)                                  pro forma calculations shall be made in good
faith by a responsible financial or accounting officer of the Company and pro
forma effect may be given to any non-recurring expenses, non-recurring costs
and cost reductions within the first year after such acquisition that the
Company reasonably anticipates in good faith if the Company delivers to the
Trustee an Officers’ Certificate executed by the chief financial or accounting
officer of the Company certifying to and describing and

 

7

 

quantifying with reasonable specificity such non-recurring expenses,
non-recurring costs and cost reduction.

 

“Continuing Directors” means, as of any date
of determination, any member of the Board of Directors of the Company who:

 

(1)                                  was a member of such Board of Directors on
the date of this Indenture; or

 

(2)                                  was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election.

 

“Corporate Trust Office of the Trustee”
shall be at the address of the Trustee specified in Section 13.02 or such
other address as to which the Trustee may give notice to the Issuers.

 

“Credit Agreement” means that certain loan
agreement, dated as of the date of this Indenture, by and among the Company,
the guarantors thereto, JPMorgan Chase Bank, as Administrative Agent, the other
agents party thereto and the lenders party thereto from time to time, providing
for term loan and revolving credit borrowings, including any related notes,
Guarantees, collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced,
restated, restructured, increased, substituted or refinanced in whole or in
part from time to time, regardless of whether such amendment, modification,
renewal, refunding, replacement, restatement, restructuring, increase,
substitution or refinancing is with the same financial institutions or
otherwise.

 

“Credit Facilities” means one or more debt
or borrowing facilities (including, without limitation, the Credit Agreement), commercial
paper facilities or indentures, in each case with banks or other institutional
lenders or a trustee, providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables), letters of credit or issuances of notes, in each
case, as amended, modified, renewed, refunded, replaced, restated, substituted
or refinanced in whole or in part from time to time, regardless of whether such
amendment, modification, renewal, refunding, replacement, restatement,
substitution or refinancing is with the same financial institutions or
otherwise.

 

“Custodian” means the Trustee, as custodian
with respect to the Notes in global form, or any successor entity thereto.

 

“Default” means any event that is, or with
the passage of time or the giving of notice or both would be, an Event of
Default.

 

“Deferred Carriage Fees” means the
amortization of (x) launch support payments and (y) payment in exchange for
carriage, in each case made by the Company or any of its Restricted
Subsidiaries.

 

“Definitive Note” means a Note registered in
the name of the Holder thereof and issued in accordance with Section 2.07,
substantially in the form of Exhibit A, except that such

 

8

 

Note
shall not bear the Global Note Legend and shall not have the “Schedule of
Exchanges of Interests in the Global Note” attached thereto.

 

“Depositary” means, with respect to the
Notes issuable or issued in whole or in part in global form, the Person
specified in Section 2.04 as the Depositary with respect to the Notes, and
any and all successors thereto appointed as depositary hereunder and having
become such pursuant to the applicable provision of this Indenture.

 

“Designated Senior Debt” means:

 

(1)                                  any Indebtedness outstanding under the Credit
Agreement; and

 

(2)                                  to the extent permitted by the Credit
Agreement, any other Senior Debt permitted under this Indenture the principal
amount of which is $50.0 million or more and that has been designated by the
Company as “Designated Senior Debt.”

 

“Disqualified Stock” means any Capital Stock
that, by its terms (or by the terms of any security into which it is
convertible, or for which it is exchangeable, in each case at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Notes mature. Notwithstanding
the preceding sentence, any Capital Stock that would constitute Disqualified
Stock solely because the holders thereof have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such Capital
Stock pursuant to such provisions unless such repurchase or redemption complies
with Section 4.07. The term “Disqualified Stock” shall also include any
options, warrants or other rights that are convertible into Disqualified Stock
or that are redeemable at the option of the holder, or required to be redeemed,
prior to the date that is 91 days after the date on which the Notes mature.

 

“Distribution” means the distribution of
capital stock of Rainbow Media Enterprises to the stockholders of Cablevision Systems
Corporation as described in the Offering Memorandum.

 

“Dolan Family Members” means (i) Charles F.
Dolan and (ii) any spouse, child, child of a spouse, parent, grandchild or
other descendant of Charles F. Dolan (where applicable in each of the foregoing
instances, whether natural or adopted), and any other intestate distributee,
heir or legatee of Charles F. Dolan.

 

“Domestic Subsidiary” means any Restricted
Subsidiary of the Company other than a Restricted Subsidiary that is (1) a “controlled
foreign corporation” under Section 957 of the Internal Revenue Code (other
than any such entity that Guarantees Indebtedness of the Company or of any of
its other Domestic Subsidiaries) or (2) a Subsidiary of an entity described in
the preceding clause (1).

 

“Earn-out Obligation” means any contingent
consideration based on future operating performance of an acquired entity or
assets or other purchase price adjustment or

 

9

 

indemnification
or similar obligation, payable following the consummation of an acquisition
based on criteria set forth in the documentation governing or relating to such
acquisition.

 

“Equity Interests” means Capital Stock and
all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for, Capital
Stock).

 

“Euroclear” means Euroclear Bank S.A./N.V.,
as operator of the Euroclear system, and any successor thereto.

 

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

 

“Existing Indebtedness” means the aggregate
principal amount of Indebtedness of the Company and its Subsidiaries (other
than Indebtedness under the Credit Agreement) in existence on the date of this
Indenture after giving effect to the application of the proceeds of (1) the
Notes and (2) any borrowings made under the Credit Agreement on the date of
this Indenture. Existing Indebtedness shall include the Senior Notes and the
Senior Note Guarantees issued on the date of this Indenture.

 

“Fair Market Value” means the price that
would be paid in an arm’s-length transaction between an informed and willing
seller under no compulsion to sell and an informed and willing buyer under no
compulsion to buy, as determined, unless otherwise specified, in good faith by
the Board of Directors or, if permitted by the terms of this Indenture, by
senior management, whose determination in all cases shall be conclusive.

 

“Film Rights Amortization” means the
amortization of expenditures of the Company and its Restricted Subsidiaries for
the acquisition of film rights and broadcast programming.

 

“Fixed Charges” means, with respect to any
specified Person for any period, the sum, without duplication, of:

 

(1)                                  the consolidated interest expense of such
Person for such period, whether paid or accrued (without duplication),
including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers’ acceptance
financings, and the net payments made or received pursuant to Hedging
Obligations, but excluding any dividends on Equity Interests of such Person to
the extent paid solely in Equity Interests (other than Disqualified Stock) of
such Person; plus

 

(2)                                  any interest expense on Indebtedness of
another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon,

 

10

 

in
each case, on a consolidated basis and in accordance with GAAP.

 

“GAAP” means generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
in the statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as have been approved by
a significant segment of the accounting profession, which are in effect on the
date of this Indenture.

 

“Global Note Legend” means the legend set
forth in Section 2.07(g)(ii), which is required to be placed on all Global
Notes issued under this Indenture.

 

“Global Notes” means, individually and
collectively, each of the Restricted Global Notes and the Unrestricted Global
Notes, substantially in the form of Exhibit A, issued in accordance with
Section 2.01 or Section 2.07.

 

“Government Securities” means securities
that are direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged.

 

“Guarantee” means, as to any Person, a
guarantee other than by endorsement of negotiable instruments for collection in
the ordinary course of business, direct or indirect, in any manner including,
without limitation, by way of a pledge of assets or through letters of credit
or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness of another Person.

 

“Guarantors” means, with respect to this
Indenture:

 

(1)                                  each direct or indirect Domestic Subsidiary
of the Company on the date of this Indenture, other than (x) Co-Issuer Corp.
and (y) any Insignificant Subsidiary; and

 

(2)                                  any other subsidiary that executes a Note
Guarantee in accordance with the provisions of this Indenture and a
supplemental indenture, pursuant to which it agrees to be bound by the terms of
this Indenture as Guarantor;

 

and
their respective successors and assigns until released from their obligations
under their Note Guarantees and this Indenture in accordance with the terms of
this Indenture.

 

“Hedging Obligations” means, with respect to
any specified Person, the obligations of such Person under:

 

(1)                                  interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and other agreements or
arrangements with respect to interest rates;

 

(2)                                  commodity swap agreements, commodity option
agreements, forward contracts and other agreements or arrangements with respect
to commodity prices; and

 

11

 

(3)                                  foreign exchange contracts, currency swap
agreements and other agreements or arrangements with respect to foreign
currency exchange rates.

 

“Holder” means a Person in whose name a Note
is registered.

 

“incur” means, with respect to any
Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become
directly or indirectly liable for or with respect to, or become responsible
for, the payment of, contingently or otherwise, such Indebtedness.

 

“Indebtedness” means, with respect to any
specified Person, any indebtedness of such Person, whether or not contingent:

 

(1)                                  in respect of borrowed money;

 

(2)                                  evidenced by bonds, notes, debentures or
similar instruments;

 

(3)                                  evidenced by letters of credit (or
reimbursement agreements in respect thereof), but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in clauses (1) or (2) above or
clauses (5), (6) or (8) below) entered into in the ordinary course of business
of such Person to the extent such letters of credit are not drawn upon or, if
drawn upon, to the extent such drawing is reimbursed no later than the 10th
Business Day following receipt by such Person of a demand for reimbursement;

 

(4)                                  in respect of bankers’ acceptances;

 

(5)                                  in respect of Capital Lease Obligations;

 

(6)                                  in respect of the balance deferred and unpaid
of the purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable;

 

(7)                                  representing the Fair Market Value (as
determined by the Board of Directors or senior management) of Hedging
Obligations, other than Hedging Obligations that are incurred for the purpose
of fixing, hedging or swapping interest rate, commodity price or foreign
currency exchange rate risk (or to reverse or amend any such agreements
previously made for such purposes), and not for speculative purposes, and that
do not increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder; or

 

(8)                                  representing Disqualified Stock valued at the
greater of its voluntary or involuntary maximum fixed repurchase price plus
accrued dividends.

 

In
addition, the term “Indebtedness” includes (x) all Indebtedness of others
secured by a Lien on any asset of the specified Person (whether or not such
Indebtedness is assumed by the specified Person), provided that the amount of
such Indebtedness shall be the lesser of (A) the Fair Market

 

12

 

Value
(as determined by the Board of Directors or senior management) of such asset at
such date of determination and (B) the amount of such Indebtedness, and (y) to
the extent not otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person. For purposes hereof, the “maximum fixed
repurchase price” of any Disqualified Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were repurchased on any date
on which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair Market
Value (as determined by the Board of Directors or senior management) of such
Disqualified Stock, such fair market shall be determined in good faith by the
Company’s Board of Directors.

 

The
amount of any Indebtedness outstanding as of any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, and shall be:

 

(1)                                  the accreted value thereof, in the case of
any Indebtedness issued with original issue discount; and

 

(2)                                  the principal amount thereof, together with
any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness;

 

provided that Indebtedness shall not include:

 

(i)                                     any liability for federal, state, local or
other taxes,

 

(ii)                                  any liability in respect of performance
bonds, compensation claims, surety or appeal bonds and payment obligations in
connection with self-insurance or similar obligations,

 

(iii)                               any liability arising from the honoring by a
bank or other financial institution of a check, draft or similar instrument
drawn against insufficient funds in the ordinary course of business, provided,
however, that such liability is extinguished within five Business Days of its
incurrence,

 

(iv)                              any accrued expense or trade payable to trade
creditors arising in the ordinary course of business, including guarantees
thereof or instruments evidencing such liabilities,

 

(v)                                 any Earn-out Obligation, except to the extent
that the contingent consideration relating thereto is not paid within five
Business Days after the contingency relating thereto is resolved, or

 

(vi)                              agreements providing for indemnification,
adjustment of purchase price or similar obligations, or Guarantees or letters
of credit, surety bonds or performance bonds securing any obligations of the
Company or any of its Restricted Subsidiaries pursuant to such agreements, in
any case incurred or assumed in connection with the disposition of any
business, assets or Restricted Subsidiary of the Company

 

13

 

(other
than Guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or such Restricted Subsidiary for the purpose
of financing such acquisition), so long as the principal amount does not exceed
the gross proceeds actually received by the Company or any Restricted
Subsidiary thereof in connection with such disposition.

 

“Indenture” means this Indenture, as amended
or supplemented from time to time.

 

“Indirect Participant” means a Person who
holds a beneficial interest in a Global Note through a Participant.

 

“Institutional Accredited Investor” means an
institution that is an “accredited investor” as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who is not also a QIB.

 

“Internal Revenue Code” means the Internal
Revenue Code of 1986, as amended.

 

“Insignificant Subsidiary” means any
Subsidiary of the Company designated by the Company as an “Insignificant
Subsidiary;” provided that the
total assets of all Subsidiaries that are so designated, as reflected on the
Company’s most recent consolidating balance sheet prepared in accordance with
GAAP, do not in the aggregate at any time exceed $5.0 million.

 

“Investment Grade Rating” means (1) a rating
of BBB– or better, in the case of S&P (or its equivalent under any
successor Rating Categories of S&P) and a rating of Baa3 or better, in the
case of Moody’s (or its equivalent under any successor Rating Categories of
Moody’s), or (2) in each case, if a Rating Agency in the foregoing clause (1)
ceases to rate the Notes for reasons outside the control of the Company, an
equivalent Rating Category of any other Rating Agency.

 

“Investments” means, with respect to any
Person, all direct or indirect investments by such Person in other Persons
(including Affiliates) in the forms of loans or other extensions of credit
(including Guarantees, but excluding advances to customers or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of the
Company or its Restricted Subsidiaries and endorsements for collection or deposit
arising in the ordinary course of business), advances (excluding commission,
payroll, travel and similar advances to officers and employees made consistent
with past practices), capital contributions (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.

 

If
the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Restricted Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the

 

14

 

date
of any such sale or disposition equal to the Fair Market Value (as determined
by senior management or the Board of Directors, unless such Fair Market Value
exceeds $10.0 million, in which event such Fair Market Value must be determined
by the Board of Directors) of the Investment in such Subsidiary not sold or
disposed of.  The acquisition by the
Company or any Restricted Subsidiary of the Company of a Person that holds an
Investment in a third Person shall be deemed (without duplication) to be an Investment
by the Company or such Restricted Subsidiary in such third Person at the time
that the acquired Person becomes a Restricted Subsidiary of the Company in an
amount equal to the Fair Market Value (as determined by senior management or
the Board of Directors, unless such Fair Market Value exceeds $10.0 million, in
which event such Fair Market Value must be determined by the Board of
Directors) of the Investment held by the acquired Person in such third Person.
Except as otherwise provided in this Indenture, the amount of an Investment shall
be determined at the time the Investment is made and without giving effect to
subsequent changes in value.

 

“Issue Date” means the date of the original
issuance of the Notes under this Indenture.

 

“Legended Regulation S Global Note” means a
Note in the form of Exhibit A bearing the Global Note Legend, the
Private Placement Legend and the Regulation S Global Note Legend and deposited
with or on behalf of and registered in the name of the Depositary or its
nominee, issued in a denomination equal to the outstanding principal amount at
maturity of the Notes initially sold in reliance on Rule 903 of Regulation S.

 

“Lien” means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

 

“Monetization Indebtedness” means any
Indebtedness of the Company or any Restricted Subsidiary thereof issued in
connection with a Monetization Transaction; provided
that, (i) on the date of its incurrence, the purchase price or principal amount
of such Monetization Indebtedness does not exceed the Fair Market Value of the
securities that are the subject of such Monetization Transaction on such date
and (ii) the obligations of the Company and its Restricted Subsidiaries with
respect to the purchase price or principal amount of such Monetization
Indebtedness (x) may be satisfied in full by delivery of the securities that
are the subject of such Monetization Transaction and any related options on
such securities or any proceeds received by the Company or any Restricted
Subsidiary thereof on account of such options; provided
that if the Company or such Restricted Subsidiary no longer owns sufficient
securities that were the subject of such Monetization Transaction and/or
related options on such securities to satisfy in full the obligations of the
Company and its Restricted Subsidiaries under such Monetization Indebtedness,
such Indebtedness shall no longer be deemed to be Monetization Indebtedness,
and (y) are not secured by any Liens on any of the Company’s or its Restricted
Subsidiaries’ assets other than the securities that are the subject of such
Monetization Transaction and the related options on such securities.

 

15

 

“Monetization Transaction” means a
transaction pursuant to which (1) securities received pursuant to an Asset Sale
are sold, transferred or otherwise conveyed (including by way of a forward
purchase agreement, prepaid forward sale agreement, secured borrowing or
similar agreement) within 120 days of such Asset Sale and (2) the Company
receives (including by way of borrowing under Monetization Indebtedness) not
less than 75% of the Fair Market Value of such securities in the form of cash.

 

“Moody’s” means Moody’s Investors Service,
Inc. and its successors.

 

“Net Income” means, with respect to any
specified Person, the net income (loss) of such Person after taxes (unless such
Person is a partnership or limited liability company), determined in accordance
with GAAP.

 

“Net Proceeds” means the aggregate cash
proceeds, including payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not the interest component, thereof)
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale),
net of (1) the direct costs relating to such Asset Sale, including, without
limitation, legal, accounting, investment banking and brokerage fees, and sales
commissions, and any relocation expenses incurred as a result thereof, (2)
taxes paid or payable as a result thereof, in each case, after taking into
account any available tax credits or deductions and any tax sharing
arrangements, (3) amounts required to be applied to the repayment of
Indebtedness or other liabilities, secured by a Lien on the asset or assets
that were the subject of such Asset Sale, or is required to be paid as a result
of such sale, (4) any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP and (5) appropriate
amounts to be provided by the Company or its Restricted Subsidiaries as a
reserve against liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in accordance
with GAAP.

 

“Non-U.S. Person” means a Person who is not
a U.S. Person.

 

“Note Guarantee” means a Guarantee of the
Notes pursuant to this Indenture.

 

“Notes” means the 103/8% Senior Subordinated Notes due 2014 of the Issuers
issued on the date hereof and any Additional Notes.  The Notes and the Additional Notes, if any,
shall be treated as a single class for all purposes under this Indenture.

 

“Obligations” means any principal, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.

 

“Offering Memorandum” means the offering
memorandum, dated August 13, 2004, relating to the Issuers’ 103/8% Senior Subordinated Notes due 2014.

 

“Officer” means, with respect to any Person,
the Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer,  the Chief
Financial Officer, 

16

 

the
Treasurer, any Assistant Treasurer, the Controller, the Secretary, any
Assistant Secretary or any Vice-President.

 

“Officers’ Certificate” means a certificate
signed on behalf of the Company by at least two Officers of the Company, one of
whom must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Company, that meets
the requirements of this Indenture.

 

“Opinion of Counsel” means an opinion from
legal counsel (who may be counsel to or an employee of the Company) that meets
the requirements of this Indenture.

 

“Participant” means, with respect to the
Depositary, Euroclear or Clearstream, a Person who has an account with the
Depositary, Euroclear or Clearstream, respectively (and with respect to DTC,
shall include Euroclear and Clearstream).

 

“Permitted Business” means any business
conducted or proposed to be conducted (as described in the Offering Memorandum)
by the Company and its Restricted Subsidiaries on the date of this Indenture
and other businesses reasonably related or ancillary thereto.

 

“Permitted Investments” means:

 

(1)                                  any Investment in the Company or in a
Restricted Subsidiary of the Company;

 

(2)                                  any Investment in Cash Equivalents;

 

(3)                                  any Investment by the Company or any
Restricted Subsidiary of the Company in a Person, if as a result of such
Investment:

 

(a)                                  such Person becomes a Restricted Subsidiary
of the Company; or

 

(b)                                 such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company;

 

(4)                                  any Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10;

 

(5)                                  Investments to the extent acquired in
exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company;

 

(6)                                  Hedging Obligations that are incurred for the
purpose of fixing, hedging or swapping interest rate, commodity price or
foreign currency exchange rate risk (or to reverse or amend any such agreements
previously made for such purposes), and not for speculative purposes, and that
do not increase the Indebtedness of the obligor outstanding at any time other
than as a result of fluctuations in interest rates, commodity prices or foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;

 

17

 

 

(7)                                  any Investments received in satisfaction of
judgments or in settlement of debt or compromises of obligations incurred in
the ordinary course of business, including pursuant to any plan of
reorganization or similar arrangement upon bankruptcy or insolvency;

 

(8)                                  any Investments received as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect
to any secured Investment or other transfer of title with respect to any
secured Investment in default;

 

(9)                                  advances to customers or suppliers in the
ordinary course of business that are recorded in accordance with GAAP as
accounts receivable or prepaid expenses or lease, utility or other similar
deposits in the ordinary course of business; and

 

(10)                            Investments consisting of the licensing or
contribution of intellectual property pursuant to affiliation agreements or
film rights agreements in the ordinary course of business consistent with past
practice.

 

“Permitted Junior Securities” means:

 

(1)                                  Equity Interests in either Issuer or any
Guarantor or any other business entity provided for by a plan of
reorganization; and

 

(2)                                  debt securities of either Issuer or any
Guarantor or any other business entity provided for by a plan of reorganization
that are subordinated to all Senior Debt and any debt securities issued in
exchange for Senior Debt to the same extent as, or to a greater extent than,
the Notes and the Note Guarantees are subordinated to Senior Debt under this
Indenture.

 

“Permitted Liens” means:

 

(1)                                  Liens on the properties or assets of the
Company and any Guarantor securing Senior Debt that was permitted by the terms
of this Indenture to be incurred;

 

(2)                                  Liens in favor of the Company or any
Guarantor;

 

(3)                                  Liens securing Monetization Indebtedness;

 

(4)                                  Liens on property or assets of a Person
existing at the time such Person is merged with or into or consolidated with
the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any properties or assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;

 

(5)                                  Liens on property or assets existing at the
time of acquisition thereof by the Company or any Restricted Subsidiary of the
Company, provided that such Liens
were in existence prior to the contemplation of such transaction and do not
extend

 

18

 

to
any properties or assets other than those so acquired by the Company or the
Restricted Subsidiary;

 

(6)                                  Liens to secure Indebtedness (including
Capital Lease Obligations) permitted by Section 4.09(b)(iv) covering only
the assets acquired with such Indebtedness;

 

(7)                                  Liens existing on the date of this Indenture;

 

(8)                                  Liens securing the Notes;

 

(9)                                  during any period commencing from the date
the Suspension Condition is first satisfied, Liens to secure Indebtedness that
is not pari passu or subordinated
to the Notes or the Note Guarantees;

 

(10)                            Liens incurred in the ordinary course of
business of the Company or any Restricted Subsidiary of the Company with
respect to obligations that do not exceed $10.0 million at any one time
outstanding;

 

“Permitted Refinancing Indebtedness” means:

 

(A)          any Indebtedness of the Company or any of its Restricted Subsidiaries
(other than Disqualified Stock) issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries (other than
Disqualified Stock and intercompany Indebtedness); provided that:

 

(1)                                  the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued
and unpaid interest thereon and the amount of any reasonable premium necessary
to accomplish such refinancing and such reasonable expenses incurred in
connection therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;

 

(3)                                  if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes or the Note Guarantees, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable, taken as a whole in all material respects, to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;

 

(4)                                  if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the
Notes or any Note Guarantees,

 

19

 

such Permitted Refinancing
Indebtedness is pari passu with,
or subordinated in right of payment to, the Notes or such Note Guarantees; and

 

(5)                                  such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and

 

(B)                                any Disqualified Stock of the Company or any
of its Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are used to extend, refinance, renew, replace or refund Indebtedness or
other Disqualified Stock of the Company or any of its Restricted Subsidiaries
(other than Indebtedness or Disqualified Stock held by the Company or any of
its Restricted Subsidiaries); provided
that:

 

(1)                                  the liquidation or face value of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness, or the liquidation or face
value of the Disqualified Stock, as applicable, so extended, refinanced, renewed,
replaced or refunded (plus all accrued and unpaid interest or dividends thereon
and the amount of any reasonable premium necessary to accomplish such
refinancing and such reasonable expenses incurred in connection therewith);

 

(2)                                  such Permitted Refinancing Indebtedness has a
final redemption date later than the final maturity or redemption date of, and
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of, the Indebtedness or Disqualified Stock being extended,
refinanced, renewed, replaced or refunded;

 

(3)                                  such Permitted Refinancing Indebtedness has a
final redemption date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as favorable,
taken as a whole in all material respects, to the Holders of Notes as those
contained in the documentation governing the Indebtedness or Disqualified Stock
being extended, refinanced, renewed, replaced or refunded;

 

(4)                                  such Permitted Refinancing Indebtedness is
not redeemable at the option of the holder thereof or mandatorily redeemable
prior to the final maturity or redemption date of the Indebtedness or
Disqualified Stock being extended, refinanced, renewed, replaced or refunded;
and

 

(5)                                  such Disqualified Stock is issued either by
the Company or by the Restricted Subsidiary who is the issuer of the
Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced or refunded.

 

“Person” means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, limited liability company or government or other
entity.

 

20

 

“Preferred Stock” means, with respect to any
Person, any Capital Stock of such Person that has preferential rights to any
other Capital Stock of such Person with respect to dividends or redemptions
upon liquidation.

 

“Principals” means (a) any Dolan Family
Member, (b) any trusts for the benefit of any Dolan Family Members, (c) any
estate of any Dolan Family Member or testamentary trust of any Dolan Family
Member for the benefit of any Dolan Family Members, (d) any executor,
administrator, conservator or legal or personal representative of any Person or
Persons specified in clauses (a), (b) and (c) above to the extent acting in
such capacity on behalf of any Dolan Family Member or Members and not
individually, (e) any Person, eighty percent (80%) of which is owned and
controlled by any of the foregoing or combination of the foregoing, and (f) The
Dolan Family Foundation, a New York not-for-profit corporation.

 

“Private Placement Legend” means the legend
set forth in Section 2.07(g)(i) to be placed on all Notes issued under
this Indenture except where otherwise permitted by the provisions of this
Indenture.

 

“QIB” means a “qualified institutional buyer”
as defined in Rule 144A.

 

“Qualified Equity Offering” means (i) an
offer and sale of Equity Interests (other than Disqualified Stock) of the
Company pursuant to a registration statement that has been declared effective
by the Commission pursuant to the Securities Act (other than a registration
statement on Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company) or (ii) any private placement of
Equity Interests (other than Disqualified Stock) of the Company to any Person
other than a Subsidiary of the Company.

 

“Rainbow Media Enterprises” means Rainbow
Media Enterprises, Inc.

 

“Rating Agency” means (1) each of S&P
and Moody’s and (2) if S&P or Moody’s ceases to rate the Notes for reasons
outside the control of the Company, a “nationally recognized statistical rating
organization” within the meaning of Rule 15c-3-1(c)(vi)(F) under the Exchange
Act selected by the Company, which shall be substituted for S&P or Moody’s,
as the case may be.

 

“Rating Category” means (1) with respect to
S&P, any of the following categories (any of which may include a “+” or “–”:
AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories),
(2) with respect to Moody’s, any of the following categories: Aaa, Aa, A, Baa,
Ba, B, Caa, Ca, C and D (or equivalent successor categories), and (3) the
equivalent of any such categories of S&P or Moody’s used by another Rating
Agency, if applicable.

 

“Regulation S” means Regulation S
promulgated under the Securities Act.

 

“Regulation S Global Note” means a Legended
Regulation S Global Note or an Unlegended Regulation S Global Note, as
appropriate.

 

“Regulation S Global Note Legend” means the
legend set forth in Section 2.07(h) that is required to be placed in
Legended Regulation S Global Notes under the Indenture.

 

21

 

“Replacement Assets” means any combination
of (1) non-current assets that shall be used or useful in a Permitted Business
or (2) all or substantially all the assets of a Permitted Business or a
majority of the Voting Stock of any Person engaged in a Permitted Business
(including by means of a merger, consolidation or other business combination permitted
under this Indenture) that shall become on the date of acquisition thereof a
Restricted Subsidiary.

 

“Representative” means the trustee, agent or
representative for any Senior Debt.

 

“Responsible Officer,” when used with
respect to the Trustee, means any officer within the Corporate Trust Office of
the Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of the Indenture.

 

“Restricted Definitive Note” means a
Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note” means a Global Note
bearing the Private Placement Legend.

 

“Restricted Investment” means an Investment
other than a Permitted Investment.

 

“Restricted Period” means the 40-day
distribution compliance period as defined in Regulation S.

 

“Restricted Subsidiary” of a Person means
any Subsidiary of such Person that is not an Unrestricted Subsidiary.

 

“Restructuring Charges” means, with respect
to the Company, restructuring charges incurred by the Company and its
Restricted Subsidiaries in connection with exiting an activity or restructuring
an operation or activity, in accordance with GAAP.

 

“Rule 144” means Rule 144 promulgated under
the Securities Act.

 

“Rule 144A” means Rule 144A promulgated
under the Securities Act.

 

“Rule 903” means Rule 903 promulgated under
the Securities Act.

 

“Rule 904” means Rule 904 promulgated under
the Securities Act.

 

“S&P” means Standard & Poor’s Rating
Services, a Division of The McGraw-Hill Companies, Inc., and its successors.

 

“Securities Act” means the Securities Act of
1933, as amended.

 

22

 

“Senior Debt” means:

 

(1)                                  all Indebtedness outstanding under the Credit
Agreement, the Senior Notes and all Hedging Obligations with respect thereto,
whether outstanding on the date of this Indenture or incurred thereafter;

 

(2)                                  any other Indebtedness of either Issuer or
any Guarantor permitted to be incurred under the terms of this Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment to the
Notes or any Note Guarantee; and

 

(3)                                  all Obligations with respect to the items
listed in the preceding clauses (1) and (2) (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for
in the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law).

 

Notwithstanding
anything to the contrary in the preceding paragraph, Senior Debt shall not
include:

 

(1)                                  any liability for federal, state, local or
other taxes owed or owing by either Issuer or any Guarantor;

 

(2)                                  any Indebtedness of either Issuer or of any
Guarantor to any of their Subsidiaries or other Affiliates;

 

(3)                                  any trade payables;

 

(4)                                  the portion of any Indebtedness that is
incurred in violation of this Indenture (but, as to any Indebtedness incurred
under clause (1) of the definition of Permitted Debt, an officer’s certificate
in good faith to the effect that the incurrence of such Indebtedness does not
violate this Indenture shall be conclusive absent manifest error);

 

(5)                                  any Indebtedness that, when incurred, was
without recourse to the Issuers or such Guarantor;

 

(6)                                  any repurchase, redemption or other
obligation in respect of Disqualified Stock or any Preferred Stock; or

 

(7)                                  any Indebtedness owed to any employee of the
Company or any of its Subsidiaries.

 

“Senior Note Guarantee” means a Guarantee of
the Senior Notes pursuant to the Senior Notes Indenture.

 

“Senior Notes” means the Issuers’ 83⁄4% Senior
Notes due 2012 issued pursuant to the Senior Notes Indenture.

 

23

 

“Senior Notes Indenture” means the indenture
dated as of the date of this Indenture among the Issuers, the guarantors
thereto and The Bank of New York, as trustee, pursuant to which the Issuers
issued the Senior Notes.

 

“Significant Subsidiary” means any
Subsidiary that would constitute a “significant subsidiary” within the meaning
of Article 1 of Regulation S-X promulgated pursuant to the Securities Act,
as such Regulation is in effect on the date of this Indenture.

 

“Stated Maturity” means, with respect to any
installment of interest or principal on any series of Indebtedness, the date on
which such payment of interest or principal was scheduled to be paid in the
original documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary” means, with respect to any
specified Person:

 

(1)                                  any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of that Person (or a combination thereof); and

 

(2)                                  any partnership (a) the sole general partner
or the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).

 

“TIA” means the Trust Indenture Act of 1939,
as in effect on the date of this Indenture.

 

“Treasury Rate” means the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least two
Business Days prior to the date fixed for prepayment (or, if such Statistical
Release is no longer published, any publicly available source for similar
market data)) most nearly equal to the then remaining term of the Notes to
September 1, 2009; provided, however,
that if the then remaining term of the Notes to September 1, 2009 is not
equal to the constant maturity of a United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the then remaining term of the Notes to September 1,
2009 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.

 

“Trustee” means The Bank of New York, a New
York banking corporation, until a successor replaces it in accordance with the
applicable provisions of this Indenture and thereafter means the successor
serving hereunder.

 

24

 

“Unlegended Regulation S Global Note” means
a Note in the form of Exhibit A bearing the Global Note Legend and the
Private Placement Legend, deposited with or on behalf of and registered in the
name of the Depositary or its nominee and issued upon expiration of the
Restricted Period.

 

“Unrestricted Definitive Note” means one or
more Definitive Notes that do not bear and are not required to bear the Private
Placement Legend.

 

“Unrestricted Global Note” means a Global
Note substantially in the form of Exhibit A that bears the Global Note
Legend, that has the “Schedule of Exchanges of Interests in the Global
Note” attached thereto, that is deposited with or on behalf of and registered
in the name of the Depositary or its nominee and that does not bear the Private
Placement Legend.

 

“Unrestricted Subsidiary” means any
Subsidiary of the Company that is designated as an Unrestricted Subsidiary in
compliance with Section 4.16 and any Subsidiary of such Subsidiary.

 

“U.S. Person” means a U.S. person as defined
in Rule 902(o) under the Securities Act.

 

“Voting Stock” of any Person as of any date
means the Capital Stock of such Person that is at the time entitled to vote in
the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means,
when applied to any Indebtedness at any date, the number of years obtained by
dividing:

 

(1)                                  the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment; by

 

(2)                                  the then outstanding principal amount of such
Indebtedness.

 

25

 

Section 1.02.                             Other
Definitions

 

	
  Term

  	
   

  	
   

  	
  Defined in Section

  	
   

  
	
  “Act”

  	
   

  	
  13.14

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.11

  	
   

  
	
  “Asset Sale Offer”

  	
   

  	
  4.10

  	
   

  
	
  “Authentication Order”

  	
   

  	
  2.02

  	
   

  
	
  “Basket Period”

  	
   

  	
  4.07

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.14

  	
   

  
	
  “Change of Control Payment”

  	
   

  	
  4.14

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.14

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  	
   

  
	
  “DTC”

  	
   

  	
  2.01

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Excess Proceeds”

  	
   

  	
  4.10

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “non-payment default”

  	
   

  	
  12.03

  	
   

  
	
  “Offer Amount”

  	
   

  	
  3.08

  	
   

  
	
  “Offer Period”

  	
   

  	
  3.08

  	
   

  
	
  “offshore transaction”

  	
   

  	
  2.07

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.04

  	
   

  
	
  “Payment Blockage Notice”

  	
   

  	
  12.03

  	
   

  
	
  “Payment Default”

  	
   

  	
  6.01

  	
   

  
	
  “Permitted Debt”

  	
   

  	
  4.09

  	
   

  
	
  “Purchase Date”

  	
   

  	
  3.08

  	
   

  
	
  “Registrar”

  	
   

  	
  2.04

  	
   

  
	
  “Related Proceedings”

  	
   

  	
  13.09

  	
   

  
	
  “Repurchase Offer”

  	
   

  	
  3.08

  	
   

  
	
  “Restricted Payments”

  	
   

  	
  4.07

  	
   

  
	
  “Specified Courts”

  	
   

  	
  13.09

  	
   

  
	
  “Suspension Condition”

  	
   

  	
  4.19

  	
   

  
	
  “Suspended Covenants”

  	
   

  	
  4.19

  	
   

  

 

Section 1.03.                             Incorporation by Reference of Trust Indenture Act

 

Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.

 

The
following TIA terms used in this Indenture have the following meanings:

 

“obligor” on the Notes
means the Issuers and any successor obligor upon the Notes.

 

Section 1.04.                             Rules of Construction. Unless
the context otherwise requires:

 

(a)                                  a term has the meaning assigned to it;

 

26

 

(b)                                 an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;

 

(c)                                  “or” is not exclusive;

 

(d)                                 words in the singular include the plural, and
in the plural include the singular;

 

(e)                                  “herein”, “hereof” and other word of similar
import refer to this Indenture as a whole and not to any particular Section,
Article or other subdivision;

 

(f)                                    all references to Sections or Articles or
Exhibits refer to Sections or Articles or Exhibits of or to this Indenture
unless otherwise indicated; and

 

(g)                                 references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the Commission from time to time.

 

ARTICLE TWO

THE NOTES

 

Section 2.01.                             Form and Dating

 

(a)                                  General.  The
Notes and the Trustee’s certificate of authentication shall be substantially in
the form of Exhibit A.  The Notes
may have notations, legends or endorsements required by law, stock exchange
rule or usage.  Each Note shall be dated
the date of its authentication.  The
Notes shall be issued in registered form without interest coupons in minimum
denominations of $5,000 and integral multiples of $1,000 in excess thereof.

 

The
terms and provisions contained in the Notes shall constitute, and are hereby
expressly made, a part of this Indenture, and the Issuers, the Guarantors and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.  However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.

 

(b)                                 Global Notes. 
Notes issued in global form shall be substantially in the form of Exhibit
A (and shall include the Global Note Legend thereon and the “Schedule of
Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form shall be
substantially in the form of Exhibit A (but without the Global Note Legend
thereon and without the “Schedule of Exchanges of Interests in the Global
Note” attached thereto).  Each Global
Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it represents the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions.  Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby shall be made by the
Trustee or, if the Custodian and the Trustee are not the same Person, by the Custodian
at the

 

27

 

direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by
Section 2.07 hereof.

 

(c)                                  Regulation S Global Notes. 
Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of the Legended Regulation S Global Note, which
shall be deposited on behalf of the purchasers of the Notes represented thereby
with the Trustee, as custodian for The Depository Trust Company (“DTC”) in New York, New York, and registered
in the name of the Depositary or its nominee for the accounts of designated
agents holding on behalf of Euroclear or Clearstream, duly executed by the
Issuers and authenticated by the Trustee as hereinafter provided.  Following the termination of the Restricted
Period, beneficial interests in the Legended Regulation S Global Note may be
exchanged for beneficial interests in Unlegended Regulation S Global Notes
pursuant to Section 2.07 and the Applicable Procedures.  Simultaneously with the authentication of
Unlegended Regulation S Global Notes, the Trustee shall cancel any Legended
Regulation S Global Notes.  The aggregate
principal amount of the Regulation S Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and
the Depositary or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.

 

(d)                                 Euroclear and Clearstream
Procedures Applicable.  The provisions of the “Operating Procedures
of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear”
and the “General Terms and Conditions of Clearstream Banking” and “Customer
Handbook” of Clearstream shall be applicable to transfers of beneficial
interests in the Regulation S Global Notes that are held by Participants
through Euroclear or Clearstream.

 

Section 2.02.                             Execution
and Authentication

 

The
Notes shall be executed on behalf of each Issuer by any one of the
following:  its Chairman, Chief Executive
Officer, President or Chief Financial Officer and attested by any of the
aforementioned Officers other than the Officer who executed the Notes or any
other Person authorized for such purpose. 
The signature of any of these officers on the Notes may be manual or facsimile.

 

If
an Officer whose signature is on a Note no longer holds that office at the time
a Note is authenticated, the Note shall nevertheless be valid.

 

A
Note shall not be valid until authenticated by the manual signature of a duly
authorized signatory of the Trustee. 
Such signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.

 

The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is unlimited.

 

The
Issuers may, subject to Article Four of this Indenture and applicable law,
issue Additional Notes under this Indenture. 
The Notes issued on the Issue Date and any Additional Notes subsequently
issued shall be treated as a single class for all purposes under this Indenture.

 

28

 

At
any time and from time to time after the execution of this Indenture, the
Trustee shall, upon receipt of a written order of the Issuers signed by two
Officers of each Issuer (an “Authentication
Order”), authenticate Notes for original issue in an aggregate
principal amount specified in such Authentication Order.  The Authentication Order shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated.

 

The
Trustee may appoint an authenticating agent acceptable to the Issuers to
authenticate Notes.  An authenticating
agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Holders or an Affiliate of the Issuers.

 

Section 2.03.                             Methods of Receiving Payments on the Notes

 

If
a Holder has given wire transfer instructions to the Company, the Paying Agent,
on behalf of the Issuers, shall pay all principal, interest and premium, if
any, on that Holder’s Notes in accordance with those instructions.  All other payments on Notes shall be made at
the office or agency of the Paying Agent and Registrar within the City and
State of New York unless the Issuers elect to make interest payments by check
mailed to the Holders at their addresses set forth in the register of Holders.

 

Section 2.04.                             Registrar
and Paying Agent

 

(a)                                  The Issuers shall maintain a registrar with
an office or agency where Notes may be presented for registration of transfer
or for exchange (“Registrar”) and
a paying agent with an office or agency where Notes may be presented for
payment (“Paying Agent”).  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Issuers may appoint one or more co-registrars and one or more
additional paying agents.  The term “Registrar”
includes any successor thereto and co-registrar and the term “Paying Agent”
includes any successor thereto and additional paying agent.  The Issuers may change any Paying Agent or
Registrar without prior notice to any Holder. 
The Issuers shall notify the Trustee in writing of the name and address
of any Agent not a party to this Indenture. 
If the Issuers fail to appoint or maintain another entity as Registrar
or Paying Agent, the Trustee shall act as such. 
The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.

 

(b)                                 The Issuers initially appoint DTC to act as
Depositary with respect to the Global Notes.

 

(c)                                  The Issuers initially appoint the Trustee to
act as the Registrar and Paying Agent and to act as Custodian with respect to
the Global Notes.

 

Section 2.05.                             Paying
Agent to Hold Money in Trust

 

The
Issuers shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent shall hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and shall notify the Trustee of any
default by the Issuers in making any such payment.  While any such default continues, the Trustee
may require a Paying Agent to pay all money held

 

29

 

by
it to the Trustee.  The Issuers at any
time may require a Paying Agent to pay all money held by it to the
Trustee.  Upon payment over to the
Trustee, the Paying Agent (if other than the Company or one of its
Subsidiaries) shall have no further liability for the money.  If the Company or one of its Subsidiaries
acts as Paying Agent, it shall segregate and hold in a separate trust fund for
the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization
proceedings relating to the Issuers, the Trustee shall serve as Paying Agent
for the Notes.

 

Section 2.06.                             Holder Lists

 

(a)                                  The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA
Section 312(a).  If the Trustee is
not the Registrar, the Issuers shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Issuers shall otherwise comply with TIA Section 312(a).

 

(b)                                 Every Holder, by receiving and holding the
same, agrees with the Issuers, the Guarantors and the Trustee that none of the
Issuers, the Guarantors or the Trustee or any agent of theirs shall be held
accountable by reason of the disclosure of any information as to the names and
addresses of the Holders in accordance with TIA Section 312, regardless of
the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request
made under TIA Section 312.

 

Section 2.07.                             Transfer and
Exchange

 

(a)
Transfer and Exchange of Global Notes.  A Global Note may not be transferred as a
whole except by the Depositary to a nominee of the Depositary, by a nominee of
the Depositary to the Depositary or to another nominee of the Depositary, or by
the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary.  All Global
Notes shall be exchanged by the Issuers for Definitive Notes if (i) DTC (A)
notifies the Issuers that it is unwilling or unable to continue as Depositary
for the Global Notes and the Issuers fail to appoint a successor Depositary
within 90 days after receiving such notice or (B) has ceased to be a clearing
agency registered under the Exchange Act and the Issuers fail to appoint a
successor Depositary within 90 days after becoming aware of such condition;
(ii) the Issuers, at their option, notify the Trustee in writing that they
elect to cause the issuance of Definitive Notes; provided that in no event shall the Legended Regulation S
Global Note be exchanged by the Issuers for Definitive Notes prior to the
expiration of the Restricted Period; or (iii) there shall have occurred and be
continuing a Default or Event of Default with respect to the Notes.  Upon the occurrence of any of the preceding
events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such
names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or
replaced, in whole or in part, as provided in Sections 2.08 and 2.11
hereof.  Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.07 or Section 2.08 or 2.11 hereof, shall
be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for
another Note other than as provided in this Section 2.07(a); however,
beneficial

 

30

 

interests in a Global Note
may be transferred and exchanged as provided in Section 2.07(b) or (c)
hereof.

 

(b)
Transfer and Exchange of Beneficial
Interests in the Global Notes. 
The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. 
Beneficial interests in the Restricted Global Notes shall be subject to
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act. 
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well
as one or more of the other following subparagraphs, as applicable:

 

(i)                                     Transfer of Beneficial
Interests in the Same Global Note.  Beneficial interests in any
Restricted Global Note may be transferred to Persons who take delivery thereof
in the form of a beneficial interest in the same Restricted Global Note in
accordance with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of
the Restricted Period, transfers of beneficial interests in the Legended
Regulation S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser).  Beneficial interests in any Unrestricted
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers described in
this Section 2.07(b)(i).

 

(ii)                                  All Other Transfers and
Exchanges of Beneficial Interests in Global Notes.  In
connection with all transfers and exchanges of beneficial interests that are
not subject to Section 2.07(b)(i) above, the transferor of such beneficial
interest must deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to credit or cause to
be credited a beneficial interest in another Global Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information regarding
the Participant account to be credited with such increase or (B) (1) a written
order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to the
Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange referred
to in (1) above; provided that in
no event shall Definitive Notes be issued upon the transfer or exchange of
beneficial interests in the Legended Regulation S Global Note prior to the
expiration of the Restricted Period. 
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the Notes
or otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount at maturity of the relevant Global Notes pursuant to
Section 2.07(i).

 

31

 

(iii)                               Transfer of Beneficial
Interests to Another Restricted Global Note.  A beneficial interest in any
Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global Note
if the transfer complies with the requirements of Section 2.07(b)(ii)
above and the Registrar receives the following:

 

(A)                              if the transferee shall take delivery in the
form of a beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B, including the
certifications in item (1) thereof; and

 

(B)                                if the transferee shall take delivery in the
form of a beneficial interest in a Legended Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B,
including the certifications in item (2) thereof.

 

(iv)                              Transfer and Exchange of
Beneficial Interests in a Restricted Global Note for Beneficial Interests in an
Unrestricted Global Note.  A beneficial interest in any Restricted
Global Note may be exchanged by any Holder thereof for a beneficial interest in
an Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note if
the exchange or transfer complies with the requirements of
Section 2.07(b)(ii) above and the Registrar receives the following:

 

(A)                              if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit C, including the certifications in item
(1)(a) thereof; or

 

(B)                                if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form of Exhibit
B, including the certifications in item (4) thereof;

 

and,
in each such case set forth in this paragraph (iv), if the Registrar or the
Issuers so request or if the Applicable Procedures so require, an Opinion of Counsel
in form reasonably acceptable to the Registrar and the Issuers to the effect
that such exchange or transfer is in compliance with the Securities Act and
that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the
Securities Act.

 

If
any such transfer is effected at a time when an Unrestricted Global Note has
not yet been issued, the Issuers shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee
shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial
interests transferred.

 

32

 

Beneficial
interests in an Unrestricted Global Note cannot be exchanged for, or
transferred to Persons who take delivery thereof in the form of, a beneficial
interest in a Restricted Global Note.

 

(c)
Transfer or Exchange of Beneficial Interests
for Definitive Notes.

 

(i)                                     Beneficial Interests in
Restricted Global Notes to Restricted Definitive Notes.  If
any holder of a beneficial interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Restricted Definitive Note or to transfer
such beneficial interest to a Person who takes delivery thereof in the form of
a Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:

 

(A)                              if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest for a
Restricted Definitive Note, a certificate from such holder in the form of Exhibit
C, including the certifications in item (2)(a) thereof;

 

(B)                                if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B, including the
certifications in item (1) thereof;

 

(C)                                if such beneficial interest is being
transferred to an Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other than that listed
in subparagraph (B) above, a certificate to the effect set forth in Exhibit
B hereto, including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable; or

 

(D)                               if such beneficial interest is being
transferred to the Issuers or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B, including the certifications in item
(3)(a) thereof,

 

the
Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.07(i) hereof, and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount.  Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.07(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.07(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.

 

(ii)                                  Beneficial Interests in
Legended Regulation S Global Note to Definitive Notes.  A
beneficial interest in the Legended Regulation S Global Note may not be
exchanged for a Definitive Note or transferred to a Person who takes delivery
thereof in

 

33

 

the
form of a Definitive Note prior to the expiration of the Restricted Period,
except in the case of a transfer pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.

 

(iii)                               Beneficial Interests in
Restricted Global Notes to Unrestricted Definitive Notes.  A
holder of a beneficial interest in a Restricted Global Note may exchange such
beneficial interest for an Unrestricted Definitive Note or may transfer such
beneficial interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note only if the Registrar receives the following:

 

(A)                              if the holder of such beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a certificate
from such Holder in the form of Exhibit C, including the certifications
in item (1)(b) thereof; or

 

(B)                                if the holder of such beneficial interest in
a Restricted Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a Definitive Note that
does not bear the Private Placement Legend, a certificate from such Holder in the
form of Exhibit B, including the certifications in item (4) thereof;

 

and,
in each such case, if the Registrar or the Issuers so request or if the
Applicable Procedures so require, an opinion of 
counsel in form reasonably acceptable to the Registrar and the Issuers
to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.

 

(iv)                              Beneficial Interests in
Unrestricted Global Notes to Unrestricted Definitive Notes.  If
any holder of a beneficial interest in an Unrestricted Global Note proposes to
exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth in
Section 2.07(b)(ii), the Trustee shall cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant to
Section 2.07(i), and the Issuers shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.07(c)(iv) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.  Any Definitive Note issued
in exchange for a beneficial interest pursuant to this Section 2.07(c)(iv)
shall not bear the Private Placement Legend.

 

34

 

(d)
Transfer and Exchange of Definitive Notes
for Beneficial Interests.

 

(i)                                     Restricted Definitive Notes
to Beneficial Interests in Restricted Global Notes.  If
any Holder of a Restricted Definitive Note proposes to exchange such Note for a
beneficial interest in a Restricted Global Note or to transfer such Restricted
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:

 

(A)                              if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a Restricted
Global Note, a certificate from such Holder in the form of Exhibit C,
including the certifications in item (2)(b) thereof;

 

(B)                                if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a certificate to the effect set
forth in Exhibit B, including the certifications in item (1) thereof;

 

(C)                                if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an “offshore
transaction” in accordance with Rule 903 or Rule 904, a certificate
to the effect set forth in Exhibit B, including the certifications in
item (2) thereof; or

 

(D)                               if such Restricted Definitive Note is being
transferred to the Issuers or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B, including the certifications in item
(3)(a) thereof,

 

the
Trustee shall cancel the Restricted Definitive Note, and increase or cause to
be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, and in the case of clause (C) above, the Regulation S
Global Note.

 

(ii)                                  Restricted Definitive Notes
to Beneficial Interests in Unrestricted Global Notes.  A
Holder of a Restricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Restricted Definitive
Note to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note only if: the Registrar receives the
following:

 

(A)                              if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit
C, including the certifications in item (1)(c) thereof; or

 

(B)                                if the Holder of such Restricted Definitive
Note proposes to transfer such Note to a Person who shall take delivery thereof
in the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B, including the
certifications in item (4) thereof;

 

and,
in each such case, if the Registrar or the Issuers so request or if the
Applicable Procedures so require, an Opinion of Counsel in form reasonably
acceptable to the

 

35

 

Registrar
and the Issuers to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.07(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the Unrestricted
Global Note.

 

(iii)                               Unrestricted Definitive
Notes to Beneficial Interests in Unrestricted Global Notes.  A
Holder of an Unrestricted Definitive Note may exchange such Note for a
beneficial interest in an Unrestricted Global Note or transfer such
Unrestricted Definitive Note to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable Unrestricted
Definitive Note and increase or cause to be increased the aggregate principal
amount of one of the Unrestricted Global Notes.

 

If
any such exchange or transfer from a Definitive Note to a beneficial interest
is effected pursuant to subparagraphs (ii) or (iii) above at a time when an
Unrestricted Global Note has not yet been issued, the Issuers shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02
hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in
an aggregate principal amount equal to the principal amount of Definitive Notes
so transferred.

 

(e)
Transfer and Exchange of Definitive Notes
for Definitive Notes.  Upon
request by a Holder of Definitive Notes and such Holder’s compliance with the
provisions of this Section 2.07(e), the Registrar shall register the
transfer or exchange of Definitive Notes. 
Prior to such registration of transfer or exchange, the requesting
Holder shall present or surrender to the Registrar the Definitive Notes duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney,
duly authorized in writing. In addition, the requesting Holder shall provide
any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 2.07(e).

 

(i)                                     Restricted Definitive Notes
to Restricted Definitive Notes.  Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof
in the form of a Restricted Definitive Note if the Registrar receives the
following:

 

(A)                              if the transfer shall be made pursuant to
Rule 144A under the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B, including the certifications in item (1)
thereof; and

 

(B)                                if the transfer shall be made pursuant to any
other exemption from the registration requirements of the Securities Act, then
the transferor must deliver

 

36

 

a
certificate in the form of Exhibit B, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if
applicable.

 

(ii)                                  Restricted Definitive Notes
to Unrestricted Definitive Notes.  Any Restricted Definitive Note
may be exchanged by the Holder thereof for an Unrestricted Definitive Note or
transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if the Registrar receives the following:

 

(A)                              if the Holder of such Restricted Definitive
Note proposes to exchange such Note for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C, including the
certifications in item (1)(d) thereof; or

 

(B)                                if the Holder of such Restricted Definitive
Note proposes to transfer such Note to a Person who shall take delivery thereof
in the form of an Unrestricted Definitive Note, a certificate from such Holder
in the form of Exhibit B, including the certifications in item (4)
thereof;

 

and,
in each such case, if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Issuers to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act.

 

(iii)                               Unrestricted Definitive
Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted
Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. 
Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the instructions
from the Holder thereof.

 

(f)
[Intentionally omitted].

 

(g)
Legends.  The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of this
Indenture.

 

(i)                                     Private Placement Legend. 
Except as permitted below, each Global Note and each Definitive Note
(and all Notes issued in exchange therefor or substitution thereof) shall bear
the legend in substantially the following form:

 

THIS
NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS.  NEITHER THIS NOTE NOR
THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT

 

37

 

FROM,
OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THE HOLDER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUERS OR ANY
AFFILIATE OF THE ISSUERS WERE THE OWNER OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES ENDORSED
HEREON) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE COMPANY OR
ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES AND GUARANTEES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)
TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT
OR PURSUANT TO CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING
CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.  THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF A HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

 

Notwithstanding the foregoing, any Global Note or Definitive Note
issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii),
(e)(ii) or (e)(iii) to this Section 2.07 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private Placement Legend.

 

(ii)                                  Global Note Legend.  Each
Global Note shall bear a legend in substantially the following form:

 

38

 

THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUERS.

 

(h)
Regulation S Global Note Legend.
The Regulation S Global Note shall bear a legend in substantially the following
form:

 

THE
RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN).

 

(i)
Cancellation and/or Adjustment of Global
Notes.  At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.12
hereof.  At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Note or for Definitive Notes, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who shall take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

 

(j)
General Provisions Relating to Transfers and
Exchanges.

 

(i)                                     To permit registrations of transfers and
exchanges, the Issuers each shall execute and the Trustee shall authenticate
Global Notes and Definitive Notes upon the Issuers’ order or at the Registrar’s
request.

 

(ii)                                  No service charge shall be made to a Holder
of a beneficial interest in a Global Note or to a Holder of a Definitive Note
for any registration of transfer or exchange, but the Issuers may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such

 

39

 

transfer
taxes or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.11, 3.06, 3.08, 4.10, 4.14 and 9.05).

 

(iii)                               The Registrar shall not be required to
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in part.

 

(iv)                              All Global Notes and Definitive Notes issued
upon any registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid and legally binding obligations of the Issuers,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.

 

(v)                                 The Issuers shall not be required (A) to
issue, to register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part, (C) to register the
transfer of or to exchange a Note between a record date and the next succeeding
interest payment date or (D) to register the transfer of or to exchange a Note
tendered and not withdrawn in connection with a Change of Control Offer or an
Asset Sale Offer.

 

(vi)                              Prior to due presentment for the registration
of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and
treat the Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving all payments of principal of and
interest on such Notes and for all other purposes, and none of the Trustee, any
Agent or the Issuers shall be affected by notice to the contrary.

 

(vii)                           The Trustee shall authenticate Global Notes
and Definitive Notes in accordance with the provisions of Section 2.02.

 

(viii)                        All certifications, certificates and Opinions
of Counsel required to be submitted to the Registrar pursuant to this
Section 2.07 to effect a registration of transfer or exchange may be
submitted by facsimile.

 

Section 2.08.                             Replacement
Notes

 

(a)                                  If any mutilated Note is surrendered to the
Trustee or the Issuers and the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Note, the Issuers shall issue and the
Trustee, upon receipt of an Authentication Order, shall authenticate a replacement
Note if the Trustee’s requirements are met. 
If required by the Trustee or the Issuers, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and
the Issuers to protect the Issuers, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced.  The Issuers may charge for
their expenses in replacing a Note.

 

 

40

 

(b)                                 Every replacement Note is an additional obligation
of the Issuers and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.

 

Section 2.09.                             Outstanding
Notes

 

(a)                                  The Notes outstanding at any time are all the
Notes authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Note effected by the Trustee in accordance with the provisions hereof, and
those described in this Section as not outstanding.  Except as set forth in Section 2.10, a
Note does not cease to be outstanding because the Issuers or an Affiliate of
the Issuers holds the Note; however,
Notes held by the Company or a Subsidiary of the Company shall not be deemed to
be outstanding for purposes of Section 3.07(b).

 

(b)                                 If a Note is replaced pursuant to
Section 2.08, it ceases to be outstanding unless the Trustee receives
proof satisfactory to it that the replaced Note is held by a bona fide
purchaser or protected purchaser.

 

(c)                                  If the principal amount of any Note is
considered paid under Section 4.01, it ceases to be outstanding and
interest on it ceases to accrue.

 

(d)                                 If the Paying Agent (other than the Company,
a Subsidiary of the Company or an Affiliate of any of the foregoing) holds, on
a redemption date or maturity date, money sufficient to pay Notes payable on
that date, then on and after that date such Notes shall be deemed to be no
longer outstanding and shall cease to accrue interest.

 

Section 2.10.                             Treasury Notes

 

In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Issuers, or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuers, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded.

 

Section 2.11.                             Temporary Notes

 

(a)                                  Until certificates representing Notes are
ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes.  Temporary Notes shall be substantially in the
form of Definitive Notes but may have variations that the Issuers consider
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee.  Without unreasonable delay, the
Issuers shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.

 

(b)                                 Holders of temporary Notes shall be entitled
to all of the benefits of this Indenture.

 

41

 

Section 2.12.                             Cancellation

 

The
Issuers at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment.  The Trustee and no
one else shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of canceled
Notes in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition (subject to the record
retention requirement of the Exchange Act). 
Certification of the disposition of all canceled Notes shall be
delivered to the Issuers upon their written request.  The Issuers may not issue new Notes to
replace Notes that they have paid or that have been delivered to the Trustee
for cancellation.

 

Section 2.13.                             Defaulted
Interest

 

If
the Issuers default in a payment of interest on the Notes, such interest and
interest on such defaulted interest shall forthwith cease to be payable to the
Holder on the record date set forth in the Notes by virtue of having been such
Holder and the Issuers shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at
the rate provided in the Notes and in Section 4.01.  The Issuers shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. 
The Issuers shall fix or cause to be fixed each such special record date
and payment date, provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. 
At least 10 days before the special record date, the Issuers (or, upon
the written request of the Issuers, the Trustee in the name and at the expense
of the Issuers) shall mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.

 

Section 2.14.                             CUSIP Numbers

 

The
Issuers in issuing the Notes may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of
redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers.  The Issuers shall promptly notify the Trustee
of any change in the “CUSIP” numbers.

 

ARTICLE THREE

REDEMPTION AND OFFERS TO

PURCHASE

 

Section 3.01.                             Notices to
Trustee

 

If
the Issuers elect to redeem Notes pursuant to the optional redemption
provisions of Section 3.07, they shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers’
Certificate setting forth (i) the clause of this

 

42

 

Indenture
pursuant to which the redemption shall occur, (ii) the redemption date, (iii)
the principal amount of Notes to be redeemed and (iv) the redemption price.

 

Section 3.02.                             Selection
of Notes to Be Redeemed

 

(a)                                  If less than all of the Notes are to be
redeemed at any time, the Trustee shall select the Notes for redemption as
follows:

 

(i)                                     if the Notes are listed on any national
securities exchange, in compliance with the requirements of such principal
national securities exchange; or

 

(ii)                                  if the Notes are not so listed, on a pro rata basis, by lot or by such method
as the Trustee shall deem appropriate.

 

In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption.

 

(b)                                 The Trustee shall promptly notify the Issuers
in writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount at maturity thereof to be
redeemed.  No Notes in amounts of $5,000
or less shall be redeemed in part.  Notes
and portions of Notes selected shall be in amounts of $5,000 or whole multiples
of $5,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $5,000, shall be redeemed.  Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.

 

Section 3.03.                             Notice of
Redemption

 

(a)                                  At least 30 days but not more than 60 days
before a redemption date, the Issuers shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.

 

The
notice shall identify the Notes to be redeemed and shall state:

 

(i)                                     the redemption date;

 

(ii)                                  the redemption price;

 

(iii)                               if any Note is being redeemed in part, the
portion of the principal amount thereof to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion of the original Note shall be issued in
the name of the Holder thereof upon cancellation of the original Note;

 

(iv)                              the name and address of the Paying Agent;

 

43

 

(v)                                 that Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price and become due
on the date fixed for redemption;

 

(vi)                              that, unless the Issuers default in making
such redemption payment, interest, if any, on Notes called for redemption
ceases to accrue on and after the redemption date;

 

(vii)                           the paragraph of the Notes and/or
Section of this Indenture pursuant to which the Notes called for
redemption are being redeemed; and

 

(viii)                        that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.

 

(b)                                 At the Issuers’ request, the Trustee shall
give the notice of redemption in the Issuers’ name and at their expense; provided, however,
that the Issuers shall have delivered to the Trustee, at least 35 days prior to
the redemption date, an Officers’ Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.  The
notice, if mailed in the manner provided herein shall be presumed to have been
given, whether or not the Holder receives such notice.

 

Section 3.04.                             Effect
of Notice of Redemption

 

Once
notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. 
Interest, if any, on Notes called for redemption ceases to accrue on and
after the redemption date, unless the Issuers default in making the applicable
redemption payment.  A notice of
redemption may not be conditional.

 

Section 3.05.                             Deposit
of Redemption Price

 

(a)                                  Not later than 12:00 p.m. (noon) Eastern Time
on the redemption date, the Issuers shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued and
unpaid interest on all Notes to be redeemed on that date.  The Trustee or the Paying Agent shall
promptly return to the Issuers any money deposited with the Trustee or the
Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued and unpaid interest on, all Notes to be
redeemed.

 

(b)                                 If the Issuers comply with the provisions of
the preceding paragraph, on and after the redemption date, interest shall cease
to accrue on the Notes or the portions of Notes called for redemption.  If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any
accrued and unpaid interest shall be paid to the Person in whose name such Note
was registered at the close of business on such record date.  If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the Issuers
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal from the redemption date until such principal is paid and to the
extent lawful on any interest not paid on such unpaid principal, in each case
at the rate provided in the Notes and in Section 4.01.

 

44

 

Section 3.06.                             Notes
Redeemed in Part

 

Upon
surrender and cancellation of a Note that is redeemed in part, the Issuers
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Issuers a new Note equal in principal amount to the unredeemed portion of
the Note surrendered.  No Notes in
denominations of $5,000 or less shall be redeemed in part.

 

Section 3.07.                             Optional
Redemption

 

(a)          Except as set forth in clauses (b) and (c) of
this Section 3.07, the Issuers shall not have the option to redeem the
Notes pursuant to this Section 3.07 prior to September 1, 2009.  On or after September 1, 2009, the
Issuers may redeem all or a part of the Notes at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest thereon, to the applicable redemption date, if redeemed during
the twelve-month period beginning on September 1 of the years indicated
below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2009

  	
   

  	
  105.188

  	
  %

  
	
  2010

  	
   

  	
  103.458

  	
  %

  
	
  2011

  	
   

  	
  101.729

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)          At any time prior to September 1, 2007,
the Issuers may redeem up to 35% of the aggregate principal amount of the Notes
issued hereunder (including any Additional Notes) at a redemption price of
110.375% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date, with the net cash proceeds of one or more
Qualified Equity Offerings; provided
that:

 

(i)                                     at least 65% of the aggregate principal
amount of the Notes issued hereunder (including any Additional Notes) remains
outstanding immediately after the occurrence of such redemption (excluding, for
purposes of such calculation, Notes held by the Company or its Subsidiaries);
and

 

(ii)                                  the redemption must occur within 90 days of
the date of the closing of such Qualified Equity Offering.

 

(c)           If at any time prior to September 1,
2009:

 

(i)                                     (A) the Company has made an Asset Sale Offer
for 50% or more of the outstanding Notes in compliance with Section 4.10,
(B) the Company has purchased all Notes tendered and (C) less than all of the
outstanding Notes have been tendered and purchased pursuant to such Asset Sale
Offer; or

 

(ii)                                  the Company or a Restricted Subsidiary
thereof has entered into a binding agreement related to a transaction that is
subject to Section 5.01 pursuant to which the Company or any of its
Restricted Subsidiaries is entitled to receive net proceeds in excess of the
sum of the principal amount of all Senior Debt and Notes outstanding at such
time,

 

45

 

then
the Company may redeem all or part of the Notes at a redemption price equal to
the sum of (A) 100% of the principal amount thereof, plus (B) the Applicable Premium as of the date of
redemption, plus (C) accrued and
unpaid interest, if any, to the date of redemption.

 

(d)         Any redemption pursuant to this
Section 3.07 shall be made in accordance with the provisions of Sections
3.01 through 3.06.

 

Section 3.08.                             Repurchase
Offers

 

In
the event that, pursuant to Section 4.10 or Section 4.14, the Issuers
shall be required to commence an offer to all Holders to purchase all or a
portion of their respective Notes (a “Repurchase
Offer”), they shall follow the procedures specified in such Sections
and, to the extent not inconsistent therewith, the procedures specified below.

 

The
Repurchase Offer shall remain open for a period of no less than 30 days and no
more than 60 days following its commencement, except to the extent that a
longer period is required by applicable law (the “Offer Period”).  No
later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuers shall purchase
the principal amount of Notes required to be purchased pursuant to
Section 4.10 or 4.14 hereof (the “Offer
Amount”) or, if less than the Offer Amount has been tendered, all
Notes tendered in response to the Repurchase Offer.  Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.

 

If
the Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Repurchase Offer.

 

Upon
the commencement of a Repurchase Offer, the Issuers shall send, by first class
mail, a notice to each of the Holders, with a copy to the Trustee.  The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to the
Repurchase Offer.  The Repurchase Offer
shall be made to all Holders.  The
notice, which shall govern the terms of the Repurchase Offer, shall state:

 

(i)                                     that the Repurchase Offer is being made pursuant
to this Section 3.08 and Section 4.10 or Section 4.14 hereof,
and the length of time the Repurchase Offer shall remain open;

 

(ii)                                  the Offer Amount, the purchase price and the
Purchase Date;

 

(iii)                               that any Note not tendered or accepted for
payment shall continue to accrue interest;

 

(iv)                              that, unless the Issuers default in making
such payment, any Note (or portion thereof) accepted for payment pursuant to
the Repurchase Offer shall cease to accrue interest after the Purchase Date;

 

46

 

(v)                                 that Holders electing to have a Note
purchased pursuant to a Repurchase Offer may elect to have Notes purchased in
integral multiples of $5,000 only and integral multiples of $1,000 in excess
thereof;

 

(vi)                              that Holders electing to have a Note
purchased pursuant to any Repurchase Offer shall be required to surrender the
Note, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, or transfer by book-entry transfer, to the Issuers,
a depositary, if appointed by the Issuers, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;

 

(vii)                           that Holders shall be entitled to withdraw
their election if the Issuers, a depositary, if appointed by the Issuers, or
the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such Note
purchased;

 

(viii)                        that, if the aggregate amount of Notes
surrendered by Holders exceeds the Offer Amount, the Trustee shall, subject in
the case of a Repurchase Offer made pursuant to Section 4.10, select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Trustee so that only Notes in denominations of
$5,000, or integral multiples of $1,000 in excess thereof, shall be purchased);
and

 

(ix)                                that Holders whose Notes were purchased only
in part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry transfer).

 

On
the Purchase Date, the Issuers shall, to the extent lawful, subject in the case
of a Repurchase Offer made pursuant to Section 4.10 to the provisions of
Section 4.10, accept for payment on a pro rata basis to the extent
necessary, the Offer Amount of Notes (or portions thereof) tendered pursuant to
the Repurchase Offer, or if less than the Offer Amount has been tendered, all
Notes tendered, and shall deliver to the Trustee an Officers’ Certificate
stating that such Notes (or portions thereof) were accepted for payment by the
Issuers in accordance with the terms of this Section 3.08.  The Issuers, a Depositary, if appointed by
the Issuers, or the Paying Agent, as the case may be, shall promptly (but in
any case not later than three days after the Purchase Date) mail or deliver to
each tendering Holder an amount equal to the purchase price of Notes tendered
by such Holder, as the case may be, and accepted by the Issuers for purchase,
and the Issuers shall promptly issue a new Note.  The Trustee, upon written request from the
Issuers shall authenticate and mail or deliver such new Note to such Holder, in
a principal amount at maturity equal to any unpurchased portion of the Note
surrendered.  Any Note not so accepted
shall be promptly mailed or delivered by the Issuers to the respective Holder thereof.  The Issuers shall publicly announce the
results of the Repurchase Offer on the Purchase Date.

 

The
Issuers shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws or regulations are applicable in connection with the repurchase of the
Notes pursuant to a

 

47

 

Repurchase
Offer.  To the extent that the provisions
of any securities laws or regulations conflict with Section 3.08, 4.10 or
4.14, the Issuers shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
Section 3.08, 4.10 or 4.14 by virtue of such compliance.

 

ARTICLE FOUR

COVENANTS

 

Section 4.01.                             Payment of Notes

 

(a)     The Issuers shall pay or cause to be paid the
principal of, and premium, if any, and interest on, the Notes on the dates and
in the manner provided in the Notes. 
Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or one of its
Subsidiaries, holds as of 12:00 p.m. (noon) Eastern Time on the due date money
deposited by the Issuers in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.

 

(b)     The Issuers shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful.  The Issuers shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.

 

Section 4.02.                             Maintenance
of Office or Agency

 

(a)      The Issuers shall maintain in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or Registrar
or agent of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Issuers in respect of the Notes and this Indenture may be served.  The Issuers shall give prompt written notice
to the Trustee of the location, and any change in the location, of such office
or agency.  If at any time the Issuers
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.

 

(b)    The Issuers may also from time to time
designate one or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided,
however, that no such designation
or rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York
for such purposes.  The Issuers shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.

 

(c)     The Issuers hereby designates the Corporate
Trust Office of the Trustee as one such office or agency of the Issuers in
accordance with Section 2.04 of this Indenture.

 

48

 

Section 4.03.                             Reports

 

(a)     So long as any Notes are outstanding, the Company shall provide the
Trustee and the Holders of the Notes, within the time periods specified in the
Commission’s rules and regulations, all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including:

 

(i)                                     a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations;”

 

(ii)                                  a presentation of Consolidated Cash Flow for
each period presented; and

 

(iii)                               with respect to the annual information only,
a report on the annual financial statements by the Company’s certified
independent accountant;

 

provided, however, that (A) such reports shall not be required to contain separate
financial statements for any Guarantors other than condensed consolidating
footnote disclosure containing information with respect to Guarantors and
Subsidiaries that are not Guaranteeing the Notes, in each case on an aggregate
basis and (B) such reports shall not be required to comply with the rules,
regulations and policies of the Commission with respect to any non-GAAP
financial measures contained therein.

 

(b)    In addition, if the Distribution has not been consummated on or prior
to January 1, 2005 and at all times thereafter until the Distribution has
been consummated, the Company shall:

 

(i)                                     provide the Trustee and the Holders, within
10 Business Days, all current reports that would be required to be filed with
the Commission on Form 8-K (other than (x) with respect to any entry into or
termination of any agreement for the acquisition of film rights, (y) with
respect to any entry into or termination of any affiliation agreement that
would not have a material impact on the Company and its Restricted Subsidiaries
and (z) Item 5.02 thereof) if the Company were required to file such reports;

 

(ii)                                  hold a quarterly conference call for the
Holders to discuss the information contained in the annual and quarterly
reports required under this Section 4.03 not later than 5 Business Days
from the time the Company distributes such information to the Holders;

 

(iii)                               no fewer than 3 Business Days prior to the
date of the conference call required to be held in accordance with clause (ii)
above, issue a press release to the appropriate wire services announcing the time
and date of such conference call and directing the Holders, prospective
investors and securities analysts to contact the investor relations office of
the Company to obtain such information or to access such conference call; and

 

(iv)                              either
(A) maintain a non-public website to which Holders, prospective investors and
securities analysts are given access and to
which such information and

 

49

 

conference
call access details are posted or (B) distribute via electronic mail such
information and conference call details to Holders, prospective investors and
securities analysts who request to receive such distributions.

 

(c)     If the Company has designated any of its
Subsidiaries as Unrestricted Subsidiaries under this Indenture and such
Subsidiaries together would constitute a Significant Subsidiary, then the
quarterly and annual financial information required by this Section 4.03
shall include a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.

 

(d)    For so long as any Notes remain outstanding,
the Company and the Guarantors shall furnish to the Holders and to prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.

 

Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute constructive
notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).

 

Section 4.04.                             Compliance
Certificate

 

(a)     The Issuers shall deliver to the Trustee,
within 90 days after the end of each fiscal year, an Officers’ Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Issuers have kept,
observed, performed and fulfilled their obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that to his
or her knowledge, the Issuers have kept, observed, performed and fulfilled
their obligations under this Indenture and are not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action the Issuers are taking or propose to take with respect thereto)
and that to his or her knowledge no event has occurred and remains in existence
by reason of which payments on account of the principal of or interest, if any,
on the Notes is prohibited or if such event has occurred, a description of the
event and what action the Issuers are taking or proposes to take with respect
thereto.

 

(b)    So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
Public Accounting Oversight Board or any other body that may oversee independent
public accountants’ practices, and so long as permitted to be delivered
pursuant to such independent public accountants’ internal rules and guidelines,
the year-end financial statements delivered pursuant to Section 4.03(a)(i)
above shall be accompanied by a written statement of the Company’s independent
public accountants (which shall be a firm of established national reputation)
that in making the examination necessary for

 

50

 

certification of such
financial statements, nothing has come to their attention that would lead them
to believe that the Company has failed to comply with the Company’s financial
covenants set forth in Sections 8.8 through 8.11 of the Credit Agreement or, if
an event of noncompliance has come to their attention, specifying the nature
and period of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.

 

(c)     The Issuers shall, so long as any of the
Notes are outstanding, deliver to the Trustee, promptly after any Officer
becomes aware of any Default or Event of Default, an Officers’  Certificate specifying such Default or Event
of Default and what action the Issuers are taking or proposes to take with
respect thereto.

 

Section 4.05.                             Taxes

 

The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior to
delinquency, any taxes, assessments, and governmental levies except such as are
contested in good faith or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.

 

Section 4.06.                             Stay, Extension and Usury Laws

 

The
Issuers and each of the Guarantors covenant (to the extent that they may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Issuers and each of the Guarantors (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenants
that they shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been
enacted.

 

Section 4.07.                             Restricted
Payments

 

(a)     The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)                                     declare or pay any dividend or make any other
payment or distribution on account of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving the Company or any of its
Restricted Subsidiaries) or to the direct or indirect holders of the Company’s
or any of its Restricted Subsidiaries’ Equity Interests in their capacity as
such (other than dividends, payments or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends, payments
or distributions payable to the Company or a Restricted Subsidiary of the
Company);

 

(ii)                                  purchase, redeem or otherwise acquire or
retire for value (including, without limitation, in connection with any merger
or consolidation involving the

 

51

 

Company)
any Equity Interests of the Company or any Restricted Subsidiary of the Company
held by Persons other than the Company or any of its Restricted Subsidiaries;

 

(iii)                               purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the Notes
or the Note Guarantees, except (i) a payment of interest thereon or principal
at the Stated Maturity thereof or (ii) the purchase, redemption, defeasance or
other acquisition or retirement of any such Indebtedness in anticipation of
satisfying a sinking fund obligation or payment of principal at the Stated
Maturity thereof, in each case, due within one year of the date of such
purchase, redemption, defeasance or other acquisition or retirement; or

 

(iv)                              make any Restricted Investment;

 

(all
such payments and other actions set forth in Section 4.07(a)(i) through
(iv) being collectively referred to as “Restricted
Payments”), unless, at the time of and after giving effect to such
Restricted Payment:

 

(A)                              no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;

 

(B)                                the Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Leverage Ratio test set forth in Section 4.09(a) and

 

(C)                                such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (vii), (viii),
(ix), (x) or (xi) of Section 4.07(b)), is less than the sum, without
duplication, of:

 

(1)                                  an amount equal to the Company’s Consolidated
Cash Flow for the period (taken as one accounting period) from July 1, 2004
to the end of the Company’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such Restricted
Payment (the “Basket Period”) less
the product of (x) 1.4 and (y) the Company’s Fixed Charges for the Basket
Period; plus

 

(2)                                  100% of the aggregate net cash proceeds
received by the Company since the date of this Indenture as a contribution to
its common equity capital or from the issue or sale of Equity Interests (other
than Disqualified Stock) of the Company or from the issue or sale of
Disqualified Stock or debt securities of the Company that have been converted
into or exchanged for such Equity Interests (other than Equity Interests (or
Disqualified Stock or debt securities) sold to a Restricted Subsidiary of the
Company); plus

 

(3)                                  with respect to Restricted Investments made
by the Company and its Restricted Subsidiaries after the date of this
Indenture, an amount equal to the

 

52

 

aggregate
net cash proceeds from the sale of such Restricted Investment, except to the
extent that any such proceeds are included in the calculation of Consolidated
Cash Flow; plus

 

(4)                                  to the extent that any Unrestricted
Subsidiary that was designated as such after the date of this Indenture is
redesignated as a Restricted Subsidiary of the Company, the Fair Market Value
(as determined, if such Subsidiary is not an Insignificant Subsidiary, by the
Board of Directors) of the Company’s Investments in such Subsidiary as of the
date of such redesignation, not to exceed the amount of Restricted Investments
previously made by the Company or any Restricted Subsidiary of the Company in
such Unrestricted Subsidiary.

 

(b)    Section 4.07(a) shall not prohibit:

 

(i)                                     the payment of any dividend within 60 days
after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture;

 

(ii)                                  the redemption, repurchase, retirement,
defeasance or other acquisition of any Indebtedness of the Company, Co-Issuer
Corp. or any Guarantor that is subordinated to the Notes or Note Guarantees or
of any Equity Interests of the Company or any Restricted Subsidiary of the
Company in exchange for, or out of the net cash proceeds of a contribution to the
common equity of the Company or a substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of, Equity Interests (other than
Disqualified Stock) of the Company; provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall be
excluded from Section 4.07(a)(C)(2);

 

(iii)                               the redemption, repurchase, retirement,
defeasance or other acquisition of Indebtedness of the Company, Co-Issuer Corp.
or any Guarantor that is subordinated to the Notes or Note Guarantees with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;

 

(iv)                              the redemption, repurchase, retirement,
conversion, exchange or other acquisition of Preferred Stock of any Restricted
Subsidiary of the Company in exchange for or out of the net cash proceeds of a
substantially concurrent issuance or sale of Equity Interests (other than
Disqualified Stock) of the Restricted Subsidiary of the Company that issued the
Preferred Stock being redeemed, repurchased, retired or otherwise acquired; provided that the liquidation or face
value of such Equity Interests proposed to be issued does not exceed the
liquidation or face value of the Preferred Stock being redeemed, repurchased,
retired, converted, exchanged or otherwise acquired (plus all accrued dividends
thereon and the amount of any reasonable premium and other amounts necessary to
accomplish such refinancing and such reasonable fees and expenses incurred in connection
therewith);

 

(v)                                 the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its common Equity Interests on a
pro rata basis;

 

53

 

(vi)                              Investments acquired as a capital contribution
to, or in exchange for, or out of the net cash proceeds of a substantially
concurrent offering of, Equity Interests (other than Disqualified Stock) of the
Company; provided that the amount
of any such net cash proceeds that are utilized for any such acquisition or
exchange shall be excluded from Section 4.07(a)(C)(2);

 

(vii)                           the declaration and payment of dividends or
distributions on AMC Preferred Stock (and any Preferred Stock issued in
exchange therefor or issued to redeem, repurchase, retire or otherwise acquire
AMC Preferred Stock, in each case, pursuant to Section 4.07(b)(iv) above)
solely in the form of additional Equity Interests (other than Disqualified
Stock);

 

(viii)                        the repurchase of Capital Stock deemed to
occur upon the exercise of options or warrants to the extent that such Capital
Stock represents all or a portion of the exercise price thereof;

 

(ix)                                so long as no Default has occurred and is
continuing or would be caused thereby, payments to any direct or indirect
parent of the Company to provide for operating costs and expenses and capital
expenditures of such direct or indirect parent, including, without limitation,
in respect of directors’ fees and expenses, administrative, legal and
accounting services and costs and expenses with respect to filings with the
Commission; provided that the
aggregate amount of such dividends and other distributions, together with all
other direct or indirect payments by the Company or any of its Restricted
Subsidiaries on account of such costs and expenses, in any calendar year shall
not exceed $20.0 million for calendar years 2004, 2005 and 2006 and $15.0
million for each calendar year thereafter;

 

(x)                                   so long as no Default has occurred and is
continuing or would be caused thereby, the payment of dividends or other
distributions to any direct or indirect parent of the Company; provided that the aggregate amount of such
dividends and other distributions shall not, since the date of this Indenture,
exceed $325.0 million; or

 

(xi)                                the distribution of the proceeds of the
issuance of the Notes and borrowings under the Credit Agreement to the extent
described in the Offering Memorandum under the section entitled “Use of
Proceeds.”

 

(c)     The amount of all Restricted Payments (other
than cash) shall be the Fair Market Value (as determined by the Board of
Directors) on the date of the Restricted Payment of the assets or securities
proposed to be transferred or issued to or by the Company or such Subsidiary,
as the case may be, pursuant to the Restricted Payment. Not later than the date
of making any Restricted Payment (other than cash) with a Fair Market Value (as
determined by the Board of Directors) in excess of $25.0 million, the Company
shall deliver to the Trustee an Officers’ Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by this Section 4.07 were computed.

 

(d)    If the Company or a Restricted Subsidiary of
the Company makes a Restricted Payment that, at the time of the making of such
Restricted Payment, would, in the Company’s

 

54

 

good faith determination, be
permitted under the requirements of this Section 4.07, such Restricted
Payment shall be deemed to have been made in compliance with this
Section 4.07 notwithstanding any subsequent adjustments made in good faith
to the Company’s financial statements for any period affecting the calculations
set forth above with respect to such Restricted Payment.

 

Section 4.08.                             Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries

 

(a)     The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or permit
to exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to:

 

(i)                                     pay dividends or make any other distributions
on its Capital Stock (or with respect to any other interest or participation
in, or measured by, its profits) to the Company or any of its Restricted
Subsidiaries or pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;

 

(ii)                                  make loans or advances to the Company or any
of its Restricted Subsidiaries; or

 

(iii)                               transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries.

 

(b)    The restrictions in paragraph (a) above shall
not apply to encumbrances or restrictions:

 

(i)                                     existing under, by reason of or with respect
to the Credit Agreement, Existing Indebtedness or any other agreements in effect
on the date of this Indenture and any amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or refinancings
thereof, provided that the
encumbrances and restrictions in any such amendments, modifications, restatements,
renewals, extensions, supplements, refundings, replacements or refinancings are
not materially more restrictive, taken as a whole, than those contained in the
Credit Agreement, Existing Indebtedness or such other agreements, as the case
may be, as in effect on the date of this Indenture;

 

(ii)                                  set forth in this Indenture, the Notes and
the Note Guarantees;

 

(iii)                               existing under, by reason of or with respect
to applicable law, rule, regulation or order;

 

(iv)                              with respect to any Person or the property or
assets of a Person acquired by the Company or any of its Restricted
Subsidiaries existing at the time of such acquisition and not incurred in
connection with or in contemplation of such acquisition, which encumbrance or
restriction is not applicable to any Person or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired and any amendments, modifications, restatements, renewals, extensions,
supplements, refundings, replacements or refinancings thereof, provided that the encumbrances and
restrictions in any such amendments, modifications, restatements,

 

55

 

renewals,
extensions, supplements, refundings, replacements, or refinancings are not materially
more restrictive, taken as a whole, than those in effect on the date of the
acquisition;

 

(v)                                 in the case of Section 4.08(a)(iii):

 

(A)                              that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset;

 

(B)                                existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary thereof not
otherwise prohibited by this Indenture; or

 

(C)                                arising or agreed to in the ordinary course
of business, not relating to any Indebtedness, and that do not, individually or
in the aggregate, materially detract from the value of property or assets of
the Company or any Restricted Subsidiary thereof;

 

(vi)                              existing under, by reason of or with respect
to any agreement for the sale or other disposition of all or substantially all
of the capital stock of, or property and assets of, a Restricted Subsidiary
that restrict distributions by that Restricted Subsidiary pending such sale or
other disposition;

 

(vii)                           restrictions on cash or other deposits or net
worth imposed by customers or lessors or required by insurance, surety or
bonding companies, in each case, under contracts, leases or other agreements
entered into in the ordinary course of business; and

 

(viii)                        existing under, by reason of or with respect
to customary supermajority voting provisions and customary provisions with
respect to the disposition or distribution of assets or property, in each case
contained in joint venture, partnership, or limited liability company
agreements.

 

Section 4.09.                             Incurrence of Indebtedness and Issuance of Preferred Stock

 

(a)     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur any Indebtedness (including
Acquired Debt), and the Company shall not permit any of its Restricted
Subsidiaries to issue any Preferred Stock; provided,
however, that the Company or any Guarantor may incur Indebtedness at
any time prior to January 1, 2009 if the Company’s Consolidated Leverage
Ratio at the time of the incurrence of such Indebtedness is less than 7.0 to
1.0 and, at any time on or after January 1, 2009, if the Company’s
Consolidated Leverage Ratio at the time of the incurrence of such Indebtedness
is less than 6.0 to 1.0.

 

(b)    So long as no Default would be caused
thereby, Section 4.09(a) shall not prohibit the incurrence or issuance of
any of the following (collectively, “Permitted
Debt”):

 

56

 

(i)                                     the incurrence by the Company of Indebtedness
under Credit Facilities (and the incurrence by Co-Issuer Corp. and the
Guarantors of Guarantees thereof) in an aggregate principal amount at any one
time outstanding pursuant to this clause (i) (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Company and its Restricted Subsidiaries thereunder) not to exceed $950.0
million, less the aggregate amount of all Net Proceeds of Asset Sales applied
by the Company or any Restricted Subsidiary of the Company to permanently repay
any such Indebtedness pursuant to Section 4.10;

 

(ii)                                  the incurrence of Existing Indebtedness;

 

(iii)                               the incurrence by the Issuers and the
Guarantors of Indebtedness represented by the Notes and the related Note
Guarantees to be issued on the date of this Indenture;

 

(iv)                              the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each case,
incurred for the purpose of financing all or any part of the purchase price or
cost of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any Indebtedness incurred pursuant to this clause
(iv), not to exceed $60.0 million at any time outstanding;

 

(v)                                 the incurrence by the Company or any
Restricted Subsidiary of the Company of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund, refinance or
replace Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under this Section 4.09(a) or clauses
(ii), (iii), (iv), (v) or (xii) of this Section 4.09(b);

 

(vi)                              the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness owing to and held by the
Company or any of its Restricted Subsidiaries; provided,
however, that:

 

(a)          if the Company or any Guarantor is the
obligor on such Indebtedness and such Indebtedness is held by a Person that is
not the Company, Co-Issuer Corp. or a Guarantor, such Indebtedness must be
unsecured and expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes, in the case of the Company, or the
Note Guarantee, in the case of a Guarantor;

 

(b)         Indebtedness owed to the Company or any
Guarantor must be evidenced by an unsubordinated promissory note, unless the
obligor under such Indebtedness is the Company or a Guarantor; and

 

(c)          (i) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a Person
other than the Company or a Restricted Subsidiary thereof and (ii) any sale or
other transfer of any

 

57

 

such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary thereof, shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vi);

 

(vii)                           the issuance of shares of Preferred Stock by
any of the Company’s Restricted Subsidiaries to the Company or to a Guarantor;
provided that (i) any subsequent issuance or transfer of any Equity Interests
that results in such Preferred Stock being held by a Person other than the
Company or a Guarantor and (ii) any sale or other transfer of any such
Preferred Stock to a Person that is not either the Company or a Guarantor shall
be deemed, in each case, to constitute an issuance of such shares of Preferred
Stock that was not permitted by this clause (vii);

 

(viii)                        the Guarantee by the Issuers or any of the
Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
Section 4.09;

 

(ix)                                the incurrence of any Monetization
Indebtedness;

 

(x)                                   the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness to the extent the net proceeds thereof
are promptly deposited to (i) defease all outstanding Notes pursuant to Article Eight
hereof or (ii) satisfy and discharge this Indenture pursuant to Article 11
hereof;

 

(xi)                                the issuance of up to 3,500,000 shares of AMC
Preferred Stock, any Preferred Stock issued in exchange therefor or issued to
redeem, repurchase, retire or otherwise acquire such AMC Preferred Stock
pursuant to Section 4.07(b)(iv), and any subsequent issuance of Equity
Interests (other than Disqualified Stock) on any of the foregoing as a
dividend; or

 

(xii)                             the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (xii), not to exceed $50.0
million; provided that the
aggregate principal amount (or accreted value, as applicable) of Indebtedness
of all Restricted Subsidiaries of the Company that are not Guarantors incurred
pursuant to this clause (xii), together with all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any such Indebtedness,
shall not at any time exceed $25.0 million.

 

For
purposes of determining compliance with this Section 4.09, in the event
that any proposed Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xii) above, or
is entitled to be incurred pursuant to Section 4.09(a), the Company shall
be permitted to classify at the time of its incurrence such item of
Indebtedness in any manner that complies with this Section 4.09.
Indebtedness under the Credit Agreement outstanding on the date on which Notes
are first issued under this Indenture shall be deemed to have been incurred on such
date in reliance on the exception provided by clause (i)

 

58

 

above.
In addition, (A) any Indebtedness originally classified as incurred pursuant to
clauses (i) through (xii) above may later be reclassified by the Company such
that it shall be deemed as having been incurred pursuant to another of such
clauses to the extent that such reclassified Indebtedness could be incurred
pursuant to such new clause at the time of such reclassification and (B) any
Indebtedness originally classified as incurred pursuant to Section 4.09(a)
or pursuant to clauses 4.09(b)(ii) through (xii) above may later be
reclassified by the Company such that it shall be deemed as having been
incurred pursuant to Section 4.09(a) or pursuant to another of such
clauses to the extent that such reclassified Indebtedness could be incurred
pursuant to Section 4.09(a) or such new clause at the time of such
reclassification.

 

(c)     Notwithstanding any other provision of this
Section 4.09:

 

(i)                                     the maximum amount of Indebtedness that may
be incurred pursuant to this Section 4.09 shall not be deemed to be
exceeded with respect to any outstanding Indebtedness due solely to the result
of fluctuations in the exchange rates of currencies;

 

(ii)                                  any Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary of the Company shall be deemed
to be incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary of the Company;

 

(iii)                               neither the accrual of interest nor the
accretion of original issue discount (to the extent provided for when the
Indebtedness on which such interest is paid was originally issued) shall be
considered an incurrence of Indebtedness; provided
that in each case the amount thereof is for all other purposes included in the
Fixed Charges and, in the case of accretion of original issue discount,
Indebtedness of the Company or its Restricted Subsidiaries as accrued or
accreted, as applicable; and

 

(iv)                              the payment of interest in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
(to the extent provided for when the Indebtedness or Disqualified Stock on
which such interest or dividend is paid was originally issued) shall not be
considered an incurrence of Indebtedness; provided
that in each case the amount thereof is for all other purposes included in the
Fixed Charges and Indebtedness of the Company or its Restricted Subsidiaries as
accrued.

 

Section 4.10.                             Asset Sales

 

(a)     The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(i)                                     the Company (or the Restricted Subsidiary, as
the case may be) receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value (as determined by the Board of Directors) of the
assets or Equity Interests issued or sold or otherwise disposed of; provided that this clause (i) shall not
apply to an Asset Sale resulting solely from a foreclosure or sale by a third
party upon assets or property subject to a Lien not prohibited by this
Indenture;

 

59

 

(ii)                                  where such Fair Market Value exceeds $25.0
million, the Company’s Board of Directors’ determination of such Fair Market
Value is set forth in an Officers’ Certificate delivered to the Trustee; and

 

(iii)                               at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of Cash
Equivalents or Replacement Assets or a combination thereof. For purposes of
this provision, each of the following shall be deemed to be Cash Equivalents:

 

(A)                              any liabilities (as shown on the Company’s or
such Restricted Subsidiary’s most recent balance sheet, or would be shown on
the Company’s or such Restricted Subsidiary’s balance sheet on the date of such
Asset Sale) of the Company or any Restricted Subsidiary (other than contingent
liabilities, Indebtedness that is by its terms subordinated to the Notes or any
Note Guarantee and liabilities to the extent owed to the Company or any
Affiliate of the Company) that are assumed by the transferee of any such assets
pursuant to a written agreement that releases the Company or such Restricted
Subsidiary from further liability therefor; and

 

(B)                                any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted (including by way of any Monetization Transaction) by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received in that conversion) within 120 days of such Asset Sale.

 

(b)    Within 360 days after the receipt of any Net
Proceeds from an Asset Sale, the Company may apply such Net Proceeds at its
option:

 

(i)                                     to repay Senior Debt and, if the Senior Debt
repaid is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;

 

(ii)                                  to acquire all or substantially all of the
assets of, or a majority of the Voting Stock of, another Permitted Business
(including by means of a merger, consolidation or other business combination
permitted under this Indenture) to be held, commencing on the date of such
acquisition, as or in a Restricted Subsidiary of the Company;

 

(iii)                               to pay for or purchase Replacement Assets; or

 

(iv)                              any combination of the foregoing.

 

Pending
the final application of any such Net Proceeds, the Company may temporarily
reduce revolving credit borrowings or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture.

 

(c)     Any Net Proceeds from Asset Sales that are
not applied or invested as provided in Section 4.10(b) above shall
constitute “Excess Proceeds.”
Within 30 days after the aggregate amount of Excess Proceeds exceeds $25.0
million, the Company shall make an Asset

 

60

 

Sale
offer (an “Asset Sale Offer”) to
all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes or any Note
Guarantee containing provisions similar to those set forth by this Indenture
with respect to offers to purchase with the proceeds of sales of assets, to
purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
shall be equal to 100% of the principal amount of the Notes and such other pari passu Indebtedness plus accrued and
unpaid interest to the date of purchase, and shall be payable in cash. If any
Excess Proceeds remain after consummation of an Asset Sale Offer, the Company
may use such Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Notes and such
other pari passu Indebtedness
shall be purchased on a pro rata basis based on the principal amount of Notes
and such other pari passu
Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.

 

(d)    The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with each repurchase of Notes pursuant to an Asset
Sale Offer. To the extent that the provisions of any securities laws or
regulations conflict with the Asset Sale Offer provisions of this Indenture,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under the Asset Sale
Offer provisions of this Indenture by virtue of such compliance.

 

Section 4.11.                             Transactions
with Affiliates

 

(a)     The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into, make, amend, renew or extend
any transaction, contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

 

(i)                                     such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable arm’s-length transaction by
the Company or such Restricted Subsidiary with a Person that is not an
Affiliate of the Company; and

 

(ii)                                  the Company delivers to the Trustee:

 

(A)                              with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $25.0 million, a resolution of the Board of Directors set forth in an
Officers’ Certificate certifying that such Affiliate Transaction or series of
related Affiliate Transactions complies with this Section 4.11 and, if
such Affiliate Transaction is with an entity other than Rainbow Media
Enterprises or a Subsidiary thereof, that such Affiliate Transaction or series
of related Affiliate Transactions has been approved by a majority of the
disinterested members of the Board of Directors; and

 

61

 

(B)                                with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $50.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary of such Affiliate Transaction or series of related
Affiliate Transactions from a financial point of view issued by an independent
accounting, appraisal or investment banking firm of national standing.

 

(b)    The following items shall not be deemed to be
Affiliate Transactions and, therefore, shall not be subject to the provisions
of Section 4.11(a):

 

(i)                                     transactions between or among the Company
and/or its Restricted Subsidiaries;

 

(ii)                                  transactions, contracts, agreements,
understandings, loans, advances or Guarantees having aggregate consideration
(for all such transactions, contracts, agreements, understandings, loans,
advances or Guarantees) not to exceed $500,000 in any fiscal year;

 

(iii)                               transactions or other arrangements pursuant
to employment agreements, collective bargaining agreements, employee benefit
plans or arrangements for employees, officers or directors, including vacation
plans, health and life insurance plans, deferred compensation plans, directors’
and officers’ indemnification arrangements, retirement or savings plans, stock
option, stock ownership and similar plans and similar arrangements; provided that, for any of the foregoing
(A) any such transaction or arrangement is with respect to any Person other
than a Principal and (B) the terms of any such transaction or arrangement have
been approved by the Board of Directors of the Company in good faith;

 

(iv)                              Restricted Payments that are not prohibited
by the provisions of Section 4.07;

 

(v)                                 any sale of Capital Stock (other than
Disqualified Stock) of the Company;

 

(vi)                              loans and advances to officers, directors or
employees of the Company or its Restricted Subsidiaries (or guarantees of third
party loans to such officers, directors or employees) in an amount not to
exceed $5.0 million outstanding at any time;

 

(vii)                           the issuance of up to 3,500,000 shares of AMC
Preferred Stock and any action taken by the holders of the AMC Preferred Stock
permitted by the certificate of designations for the AMC Preferred Stock;

 

(viii)                        the payment of interest and principal to
holders of Indebtedness; provided
that (1) the terms of such interest and principal payments were set forth in
the original documentation pursuant to which such Indebtedness was incurred,
and (2) either (A) the incurrence of such Indebtedness was subject to and not
prohibited by this Section 4.11 or (B) such Indebtedness was not initially
issued, directly or indirectly, to any Affiliate of the Company or any of its
Restricted Subsidiaries;

 

62

 

(ix)                                transactions pursuant to agreements or
arrangements between Rainbow Media Enterprises and its Subsidiaries, on the one
hand, and Cablevision Systems Corporation or its Subsidiaries, on the other
hand, that are (1) put in place on or prior to the date of the Distribution and
(2) on terms as favorable to the Company or the relevant Restricted Subsidiary
of the Company as those available from unrelated parties for a comparable
arrangement, or any amendment, modification or supplement thereto or any
replacement thereof, as long as such agreement or arrangement as so amended,
modified, supplemented or replaced, taken as a whole, is not materially more
disadvantageous to the Company and its Restricted Subsidiaries than such
original agreement or arrangement; and

 

(x)                                   transactions pursuant to other agreements or
arrangements in effect on the date of this Indenture that are either (A)
described in the Offering Memorandum or (B) would not be required to be
described pursuant to Item 404 of Regulation S-K promulgated pursuant to the
Securities Act, or any amendment, modification or supplement thereto or any replacement
thereof, as long as such agreement or arrangement as so amended, modified,
supplemented or replaced, taken as a whole, is not materially more
disadvantageous to the Company and its Restricted Subsidiaries than the
original agreement or arrangement as in effect on the date of this Indenture.

 

Section 4.12.                             Liens

 

The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
create, incur, assume or otherwise cause or suffer to exist or become effective
any Lien of any kind securing Indebtedness (other than Permitted Liens) upon
any of their property or assets, now owned or hereafter acquired, unless all
payments due under this Indenture and the Notes are secured on an equal and
ratable basis with the obligations so secured (or, in the case of Indebtedness
subordinated to the Notes or the Note Guarantees, senior thereto, with the same
relative priority as the Notes shall have with respect to such subordinated
Indebtedness) until such time as such obligations are no longer secured by a
Lien.

 

Section 4.13.                             Business
Activities

 

(a)     The Company shall not, and shall not permit
any Restricted Subsidiary thereof to, engage in any business other than
Permitted Businesses, except to such extent as would not be material to the
Company and its Restricted Subsidiaries taken as a whole.

 

(b)    Co-Issuer Corp. shall not hold any material
assets or become liable for any Obligations or engage in any business
activities; provided that
Co-Issuer Corp. may be a co-obligor of the Notes (including any Additional
Notes) pursuant to the terms of this Indenture, a borrower or guarantor
pursuant to the terms of the Credit Agreement or a co-obligor on other
Indebtedness of the Company if the Company is an obligor of such Indebtedness
and the net proceeds of such Indebtedness are received by the Company or one or
more of the Company’s Restricted Subsidiaries other than Co-Issuer Corp.  Co-Issuer Corp. may, as necessary, engage in
any activities directly related to or necessary in connection with serving as a
co-obligor of the Notes, a borrower or guarantor pursuant to the terms of the
Credit Agreement and a co-obligor on such other Indebtedness. The Company shall
not sell or otherwise dispose of any of its Equity

 

63

 

Interests in Co-Issuer Corp.
and shall not permit Co-Issuer Corp., directly or indirectly, to issue or sell
or otherwise dispose of any of its Equity Interests.

 

Section 4.14.                             Offer
to Repurchase upon a Change of Control

 

(a)     If a Change of Control occurs, each Holder of
Notes shall have the right to require the Issuers to repurchase all or any part
(equal to $5,000 or an integral multiple of $1,000 in excess thereof) of that
Holder’s Notes pursuant to an offer by the Issuers (a “Change of Control Offer”) at an offer price
(a “Change of Control Payment”) in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest thereon, to the date of the Change of Control Payment
Date.  Within 60 days following any
Change of Control, the Issuers shall mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes on a date (the “Change
of Control Payment Date”) specified in such notice, which date shall
be no earlier than 30 days and no later than 60 days from the date such notice
is mailed, pursuant to the procedures described in Section 3.08 (including
the notice required thereby). The Issuers shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control. To the
extent that the provisions of any securities laws or regulations conflict with
the Change of Control provisions of this Indenture, the Issuers shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached their obligations under the Change of Control provisions of this
Indenture by virtue of such compliance.

 

(b)    On the Change of Control Payment Date, the Issuers shall, to the extent
lawful:

 

(i)                                     accept for payment all Notes or portions
thereof properly tendered pursuant to the Change of Control Offer;

 

(ii)                                  deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Notes or portions thereof so
tendered; and

 

(iii)                               deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers’ Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Issuers.

 

(c)     The Paying Agent shall promptly mail or wire transfer to each Holder of
Notes so tendered the Change of Control Payment for such Notes, and the Trustee
shall promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Note equal in principal amount to any unpurchased portion
of the Notes surrendered, if any; provided
that each such new Note shall be in a principal amount of $5,000 or an integral
multiple of $1,000 in excess thereof. 
Any Note so accepted for payment shall cease to accrue interest on and
after the Change of Control Payment Date.

 

(d)    The Issuers shall publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.

 

64

 

(e)     Prior to complying with any of the provisions
of this Section 4.14, but in any event within 60 days following a Change of
Control, the Issuers shall either repay all outstanding Senior Debt or obtain
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of Notes required by this
Section 4.14.  The Issuers shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.

 

(f)       Notwithstanding anything to the contrary in
this Section 4.14, the Issuers shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.14 and all other provisions of
this Indenture applicable to a Change of Control Offer made by the Issuers and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.

 

Section 4.15.                             Limitation on Senior Subordinated Debt

 

(a)     (1) The Company shall not incur any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of the Company unless it is pari passu
or subordinate in right of payment to the Notes and (2) Co-Issuer Corp. shall
not incur any Indebtedness that is subordinate or junior in right of payment to
any Senior Debt of Co-Issuer Corp. unless it is pari passu or subordinate in right of payment to the Notes.

 

(b)    No Guarantor shall incur any Indebtedness
that is subordinate or junior in right of payment to the Senior Debt of such
Guarantor unless it is pari passu
or subordinate in right of payment to such Guarantor’s Note Guarantee.

 

(c)     For purposes of the foregoing, no
Indebtedness shall be deemed to be subordinated in right of payment to any
other Indebtedness of the Company, Co-Issuer Corp. or any Guarantor, as
applicable, solely by virtue of being unsecured or by virtue of the fact that
the holders of any secured Indebtedness have entered into intercreditor
agreements giving one or more of such holders priority over the other holders
in the collateral held by them.

 

Section 4.16.                             Designation of Restricted and Unrestricted Subsidiaries

 

(a)     Unless designated as an Unrestricted
Subsidiary, each newly acquired or created Subsidiary of the Company or a
Restricted Subsidiary of the Company shall be a Restricted Subsidiary of the
Company.  Any Restricted Subsidiary of
the Company (other than Co-Issuer Corp.) may be designated by the Company as an
Unrestricted Subsidiary; provided
that:

 

(i)                                     any Guarantee by the Company or any
Restricted Subsidiary thereof of any Indebtedness of the Subsidiary being so
designated shall be deemed to be an incurrence of Indebtedness by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation, and such incurrence of Indebtedness would be permitted under
Section 4.09;

 

(ii)                                  the aggregate Fair Market Value (as
determined by senior management or the Board of Directors, unless such Fair
Market Value exceeds $10.0 million, in which

 

65

 

event
such Fair Market Value must be determined by the Board of Directors) of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary being so designated (including any Guarantee by the Company or
any Restricted Subsidiary of any Indebtedness of such Subsidiary) shall be
deemed to be a Restricted Investment made as of the time of such designation
and that such Investment would be permitted under Section 4.07;

 

(iii)                               such Subsidiary does not hold any Liens
(other than Permitted Liens) on any property of the Company or any Restricted
Subsidiary thereof; and

 

(iv)                              the Subsidiary being so designated:

 

(A)                              is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company;

 

(B)                                is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (1) to subscribe for additional Equity Interests or (2) to maintain
or preserve such Person’s financial condition or to cause such Person to
achieve any specified levels of operating results; and

 

(C)                                has not Guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries, except to the extent such Guarantee or credit
support would be released upon such designation;

 

(v)                                 no Default or Event of Default would be in
existence following such designation; and

 

(vi)                              if the Subsidiary being so designated is a
Significant Subsidiary (or if the group of Subsidiaries being so designated
would together constitute a Significant Subsidiary), such designation must be
evidenced to the Trustee by filing with the Trustee a certified copy of a
resolution of the Board of Directors giving effect to such designation.

 

(b)    Any designation of a Restricted Subsidiary of
the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by
filing with the Trustee an Officers’ Certificate certifying that such
designation complied with the preceding conditions and was permitted by this
Indenture. If, at any time, any Unrestricted Subsidiary would fail to meet any
of the preceding requirements described in Section 4.16(a)(iv) and such
failure continues for a period of 30 days, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness,
Investments, or Liens on the property, of such Subsidiary shall be deemed to be
incurred or made by a Restricted Subsidiary of the Company as of such date and,
if such Indebtedness, Investments or Liens are not permitted to be incurred or
made as of

 

66

 

such date under this
Indenture, the Company shall be in violation of the applicable provisions of
this Indenture.

 

(c)     The Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary of the Company; provided that:

 

(i)                                     such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if such Indebtedness is permitted under the
Section 4.09, calculated on a pro forma basis as if such designation had
occurred at the beginning of the applicable two-quarter reference period;

 

(ii)                                  all outstanding Investments owned by such
Unrestricted Subsidiary shall be deemed to be made as of the time of such
designation and such Investments shall only be permitted if such Investments
would be permitted under Section 4.07;

 

(iii)                               all Liens upon property or assets of such
Unrestricted Subsidiary existing at the time of such designation would be
permitted under Section 4.12; and

 

(iv)                              no Default or Event of Default would be in
existence following such designation.

 

Section 4.17.                             Payments for
Consent

 

The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.

 

Section 4.18.                             Guarantees

 

(a)     The Company shall not permit any of its
Restricted Subsidiaries (other than Co-Issuer Corp. and any Insignificant
Subsidiary), directly or indirectly, to Guarantee or pledge any assets to
secure the payment of any other Indebtedness of the Company or any of the
Company’s other Restricted Subsidiaries unless such Restricted Subsidiary (i)
is a Guarantor under this Indenture or (ii) becomes a Guarantor under this
Indenture and simultaneously executes and delivers a supplemental indenture
pursuant to which it agrees to be bound by the terms of this Indenture as a
Guarantor, provided that such
Guarantee shall be senior to or pari passu
with such Subsidiary’s Guarantee of such other Indebtedness unless such other
Indebtedness is Senior Debt, in which case the Note Guarantee may be
subordinated to the Guarantee of such Senior Debt to the same extent as the
Notes are subordinated to such Senior Debt.

 

(b)    In the event that any Restricted Subsidiary
that is an Insignificant Subsidiary ceases to be an Insignificant Subsidiary,
then such Restricted Subsidiary must become a Guarantor and execute a
supplemental indenture pursuant to which it agrees to be bound by the

 

67

 

terms of this Indenture as a
Guarantor and, if requested, deliver an Opinion of Counsel to the Trustee. The
form of the Note Guarantee is attached as Exhibit E hereto.

 

(c)     Notwithstanding Section 4.18(a), any
Note Guarantee may provide by its terms that it shall be automatically and
unconditionally released and discharged under the circumstances described under
Section 10.05 hereof.

 

Section 4.19.                             Suspension of Certain Covenants and Agreements

 

(a)     During any period of time that the Notes
maintain an Investment Grade Rating from both Rating Agencies and no Default or
Event of Default shall have occurred and then be continuing (the foregoing
conditions being referred to collectively as the “Suspension Condition”), the Company and its Restricted
Subsidiaries shall not be subject to Sections 3.08, 4.07, 4.08, 4.09, 4.10,
4.11, 4.14, 4.20 and clauses (iii) and (v) of Section 5.01(a)
(collectively, the “Suspended Covenants”).

 

(b)    If the Company and its Restricted
Subsidiaries are not subject to the Suspended Covenants with respect to the
Notes for any period of time pursuant to Section 4.19(a) and,
subsequently, one or both Rating Agencies withdraw their Investment Grade
Rating or downgrade the Investment Grade Rating assigned to the Notes such that
the Notes no longer have an Investment Grade Rating from both Rating Agencies,
then the Company and each of its Restricted Subsidiaries shall thereafter again
be subject to the Suspended Covenants. 
Compliance with the Suspended Covenants with respect to Restricted
Payments made after the time of such withdrawal or downgrade shall be
calculated in accordance with the terms of Section 4.07 as if such
section had been in effect during the entire period of time from the date
of this Indenture.

 

Section 4.20.                             Limitation on Issuances and Sales of Equity Interests in Restricted
Subsidiaries

 

The
Company shall not transfer, convey, sell, lease or otherwise dispose of, and
shall not permit any of its Restricted Subsidiaries to, issue, transfer,
convey, sell, lease or otherwise dispose of any Equity Interests (other than
issuances of AMC Preferred Stock or any Preferred Stock (other than
Disqualified Stock)) issued in exchange therefor or issued to redeem,
repurchase, retire, convert, exchange or otherwise acquire such AMC Preferred
Stock pursuant to Section 4.07(b)(iv), and any subsequent issuance of
Equity Interests (other than Disqualified Stock) on any of the foregoing as a
dividend) in any Restricted Subsidiary of the Company to any Person (other than
the Company or a Restricted Subsidiary of the Company or shares of its Capital
Stock constituting directors’ qualifying shares or issuances of shares of
Capital Stock of foreign Restricted Subsidiaries to foreign nationals, to the
extent required by applicable law), except:

 

(i)                                     if, immediately after giving effect to such
issuance, transfer, conveyance, sale, lease or other disposition, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
any Investment in such Person remaining after giving effect to such issuance or
sale would have been permitted to be made under Section 4.07 if made on
the date of such issuance or sale and the cash Net Proceeds from such transfer,

 

68

 

conveyance,
sale, lease or other disposition are applied in accordance with
Section 4.10; or

 

(ii)                                  sales of Equity Interests of a Restricted
Subsidiary of the Company by the Company or a Restricted Subsidiary of the
Company; provided that the
Company or such Restricted Subsidiary complies with Section 4.10.

 

ARTICLE FIVE

SUCCESSORS

 

Section 5.01.                             Merger, Consolidation or Sale of Assets

 

(a)     The Company shall not, directly or
indirectly: (1) consolidate or merge with or into another Person (whether or
not the Company is the surviving corporation) or (2) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the properties and
assets of the Company and its Restricted Subsidiaries taken as a whole, in one
or more related transactions, to another Person, unless:

 

(i)                                     either: (a) the Company is the surviving
corporation or limited liability company; or (b) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made (1) is a Person organized or existing under the laws of the
United States, any state thereof or the District of Columbia and (2) assumes
all the obligations of the Company under the Notes and this Indenture pursuant
to agreements reasonably satisfactory to the Trustee;

 

(ii)                                  immediately after giving effect to such
transaction, no Default or Event of Default exists;

 

(iii)                               immediately after giving effect to such
transaction on a pro forma basis, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other disposition shall
have been made shall, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same had
occurred at the beginning of the applicable two-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Leverage Ratio test set forth in Section 4.09(a);

 

(iv)                              each Guarantor, unless such Guarantor is the
Person with which the Company has entered into a transaction under this
Section 5.01, shall have by amendment to its Note Guarantee confirmed that
such Note Guarantee shall apply to the obligations of the Company or the
surviving Person in accordance with the Notes and this Indenture, and Co-Issuer
Corp., unless it is the other party to the transactions in this
Section 5.01, shall have by supplemental indenture confirmed its obligations
under this Indenture and the Notes; and

 

(v)                                 the Company delivers to the Trustee an
Officers’ Certificate (attaching the arithmetic computation to demonstrate
compliance with clause 5.01(iii)) and, if

 

69

 

requested,
an Opinion of Counsel, in each case stating that such transaction and such
agreement complies with this Section 5.01 and that all conditions
precedent provided for in this Indenture relating to such transaction have been
complied with.

 

(b)                                 In addition, neither the Company nor any
Restricted Subsidiary thereof may, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. Section 5.01(a)(iii) shall not apply to
any merger, consolidation or sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries.

 

Section 5.02.                             Successor Corporation Substituted.

 

Upon
any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, conveyance or other
disposition, the provisions of this Indenture referring to the “Company” shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein; provided, however,
that the predecessor Company shall not be relieved from the obligation to pay
the principal of and interest on the Notes except in the case of a sale,
assignment, transfer, conveyance or other disposition of all of the Company’s
assets that meets the requirements of Section 5.01 hereof.

 

ARTICLE SIX

DEFAULTS AND REMEDIES

 

Section 6.01.                             Events of Default.

 

(a)                                  Each of the following is an “Event of Default”:

 

(i)                                     default for 30 days in the payment when due
of interest on the Notes whether or not prohibited by the subordination
provisions of this Indenture;

 

(ii)                                  default in payment when due (whether at
maturity, upon acceleration, redemption or otherwise) of the principal of, or
premium, if any, on the Notes, whether or not prohibited by the subordination
provisions of this Indenture;

 

(iii)                               failure by the Company or any of its
Restricted Subsidiaries to comply with the provisions of Sections 3.08,
4.10(c), 4.14 or 5.01;

 

(iv)                              failure by the Company or any of its Restricted
Subsidiaries for 60 days after written notice by the Trustee or Holders
representing 25% or more of the aggregate principal amount of the Notes
outstanding to comply with any of the other agreements in this Indenture;

 

70

 

(v)                                 default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the Company
or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee
now exists, or is created after the date of this Indenture, if that default:

 

(A)                              is caused by a failure to make any payment
when due at the final maturity of such Indebtedness (a “Payment Default”); or

 

(B)                                results in the acceleration of such
Indebtedness prior to its express maturity,

 

and,
in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$15.0 million or more;

 

(vi)                              failure by the Company or any of its
Restricted Subsidiaries to pay final judgments aggregating in excess of $15.0
million, which judgments are not paid, discharged or stayed for a period of 60
days after such judgment becomes final and non-appealable;

 

(vii)                           except as permitted by this Indenture, the
Note Guarantee of any Subsidiary that is not an Insignificant Subsidiary shall
be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any such Guarantor, or
any Person acting on behalf of any such Guarantor, shall deny or disaffirm its
obligations under its Note Guarantee;

 

(viii)                        the Company, any Guarantor that is not an
Insignificant Subsidiary or any Significant Subsidiary of the Company (or any
Restricted Subsidiaries that together would constitute a Significant Subsidiary)
pursuant to or within the meaning of Bankruptcy Law:

 

(A)                              commences a voluntary case;

 

(B)                                consents to the entry of an order for relief
against it in an involuntary case;

 

(C)                                makes a general assignment for the benefit of
its creditors; or

 

(D)                               generally is not paying its debts as they
become due; and

 

(ix)                                a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:

 

(A)                              is for relief against the Company, any
Guarantor that is not an Insignificant Subsidiary or any Significant Subsidiary
of the Company (or

 

71

 

Restricted
Subsidiaries that together would constitute a Significant Subsidiary), in an
involuntary case; or

 

(B)                                appoints a custodian of the Company, any
Guarantor that is not an Insignificant Subsidiary or any Significant Subsidiary
of the Company (or Restricted Subsidiaries that together would constitute a
Significant Subsidiary) or for all or substantially all of the property of the
Company, any Guarantor that is not an Insignificant Subsidiary or any of its
Restricted Subsidiaries that is a Significant Subsidiary (or Restricted
Subsidiaries that together would constitute a Significant Subsidiary); or

 

(C)                                orders the liquidation of the Company, any
Guarantor that is not an Insignificant Subsidiary or any Significant Subsidiary
of the Company (or Restricted Subsidiaries that together would constitute a
Significant Subsidiary);

 

and
the order or decree remains unstayed and in effect for 60 consecutive days.

 

Section 6.02.                             Acceleration.

 

(a)                                  In the case of an Event of Default specified
in clause (viii) or (ix) of Section 6.01 with respect to the Company, any
Guarantor that is not an Insignificant Subsidiary or any Significant Subsidiary
of the Company (or any Restricted Subsidiaries that together would constitute a
Significant Subsidiary), all outstanding Notes shall become due and payable
immediately without further action or notice. 
If any other Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately; provided, however, that so long as any
Indebtedness permitted to be incurred pursuant to the Credit Agreement shall be
outstanding, that acceleration shall not be effective until the earlier of (i)
an acceleration of Indebtedness under the Credit Agreement; and (ii) five
Business Days after receipt by the Issuers and the agent under the Credit
Agreement of written notice of the acceleration of the Notes.

 

(b)                                 In the case of any Event of Default occurring
by reason of any willful action or inaction taken or not taken by or on behalf
of the Issuers with the intention of avoiding payment of the premium that the
Issuers would have had to pay if the Issuers then had elected to redeem the
Notes pursuant Section 3.07, an equivalent premium shall also become and
be immediately due and payable to the extent permitted by law upon the
acceleration of such Notes. If an Event of Default occurs during any time that
the Notes are outstanding, by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Issuers with the intention of avoiding
the prohibition on redemption of such Notes, then the premium specified in
Section 3.07(c) shall also become immediately due and payable to the
extent permitted by law upon the acceleration of such Notes.

 

Section 6.03.                             Other Remedies.

 

(a)                                  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

 

72

 

(b)                                 The Trustee may maintain a proceeding even if
it does not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder of a Note in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. 
All remedies are cumulative to the extent permitted by law.

 

Section 6.04.                             Waiver of Past Defaults.

 

(a)                                  Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of Default
and its consequences hereunder except a continuing Default or Event of Default
in the payment of interest on, or the principal of, the Notes; provided, however,
that the Holders of a majority in principal amount of the then outstanding
Notes may rescind an acceleration and its consequences, including any related
payment default that resulted from such acceleration.

 

(b)                                 The Company shall deliver to the Trustee an
Officers’ Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents.  In case of any such waiver, the Issuers, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Notes, respectively. 
This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of
the TIA and such Section 316(a)(1)(B) of the TIA is hereby expressly
excluded from this Indenture and the Notes, as permitted by the TIA.  Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.

 

(c)                                  In the event of a declaration of acceleration
of the Notes because of an Event of Default specified in
Section 6.01(a)(v) has occurred and is continuing, the declaration of
acceleration of the Notes shall be automatically annulled if the event of
default or payment default triggering such Event of Default pursuant to
Section 6.01(a)(v) shall be remedied or cured by the Company or a
Restricted Subsidiary of the Company or waived by the holders of the relevant
Indebtedness within 20 days after the declaration of acceleration with respect
thereto and if (i) the annulment of the acceleration of such Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, except non-payment of principal, premium
or interest on the Notes that became due solely because of the acceleration of
the Notes have been cured or waived.

 

Section 6.05.                             Control by Majority.

 

The
Holders of a majority in principal amount of the then outstanding Notes shall
have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee.  However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that may involve the
Trustee in personal liability, or that the Trustee determines in good faith may
be prejudicial to the rights of Holders of Notes not joining in the giving of
such direction and may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes.

 

73

 

Section 6.06.                             Limitation on Suits.

 

(a)                                  A Holder may not pursue any remedy with
respect to this Indenture or the Notes unless:

 

(i)                                     the Holder gives the Trustee written notice
of a continuing Event of Default;

 

(ii)                                  the Holders of at least 25% in aggregate
principal amount of the outstanding Notes make a written request to the Trustee
to pursue the remedy;

 

(iii)                               such Holder or Holders offer the Trustee
indemnity satisfactory to the Trustee against any costs, liability or expense;

 

(iv)                              the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of indemnity; and

 

(v)                                 during such 60-day period, the Holders of a
majority in aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.

 

(b)                                 A Holder of a Note may not use this Indenture
to prejudice the rights of another Holder of a Note or to obtain a preference
or priority over another Holder of a Note.

 

Section 6.07.                             Rights of Holders of Notes to Receive
Payment.

 

Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of the principal of, premium, if any, or interest on such Note
or to bring suit for the enforcement of any such payment, on or after the due
date expressed in the Notes, which right shall not be impaired or affected
without the consent of the Holder.

 

Section 6.08.                             Collection Suit by Trustee.

 

If
an Event of Default specified in Section 6.01(a)(i) or (a)(ii) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Issuers for the whole amount of
principal of, premium, if any, and interest, if any, remaining unpaid on the
Notes and interest on overdue principal and premium, if any, and, to the extent
lawful, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

 

Section 6.09.                             Trustee May File Proofs of Claim.

 

The
Trustee is authorized to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of the
Notes allowed in any judicial proceedings relative to the Issuers or any
Guarantor (or any other obligor upon the Notes), its creditors or its

 

74

 

property and shall be entitled and empowered
to collect, receive and distribute any money or other securities or property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.06.  To the extent
that the payment of any such compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and any other amounts due the Trustee
under Section 7.06 out of the estate in any such proceeding shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.  Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.

 

Section 6.10.                             Priorities.

 

(a)                                  If the Trustee collects any money pursuant to
this Article Six, it shall pay out the money in the following order:

 

First:  to the Trustee, its
agents and attorneys for amounts due under Section 7.06, including payment
of all reasonable compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the reasonable costs and expenses of
collection;

 

Second:  to Holders of Notes for
amounts due and unpaid on the Notes for principal, premium, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any, and
interest, respectively; and

 

Third:  to the Issuers or to such
party as a court of competent jurisdiction shall direct in writing.

 

(b)                                 The Trustee may fix a record date and payment
date for any payment to Holders of Notes pursuant to this Section 6.10.

 

Section 6.11.                             Undertaking for Costs.

 

In
any suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as a Trustee,
a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than ten percent in principal amount of
the then outstanding Notes.

 

75

 

ARTICLE SEVEN

TRUSTEE

 

Section 7.01.                             Duties of Trustee.

 

Except
to the extent, if any, provided otherwise in the TIA:

 

(a)                                  If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

 

(b)                                 Except during the continuance of an Event of
Default:

 

(i)                                     The Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

 

(ii)                                  in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be forwarded to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

 

(c)                                  No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     this paragraph shall not be construed to
limit the effect of paragraph (b) of this Section 7.01;

 

(ii)                                  the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts;

 

(iii)                               the Trustee shall not be liable with respect
to any action taken or omitted to be taken in good faith in accordance with the
direction of the Holders of a majority in principal amount of the outstanding
Notes relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture with respect to the Notes; and

 

(iv)                              no provision of this Indenture shall require
the Trustee to expend or risk its own funds or incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable

 

76

 

grounds
for believing that repayment of such funds or indemnity against such risk or
liability is not reasonably assured to it.

 

(d)                                 Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.

 

Section 7.02.                             Certain Rights of Trustee.

 

Subject
to the provisions of the TIA Sections 315(a) through 315(d):

 

(a)                                  the Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in its original or facsimile
form) believed by it to be genuine and to have been signed or presented by the
proper party or parties;

 

(b)                                 any request or direction of the Issuers
mentioned herein shall be sufficiently evidenced by a written request or order
signed, with respect to either Issuer, (i) by its Chairman, Chief Executive
Officer, Chief Financial Officer, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary and delivered to the Trustee; provided, however, that such written request or order may be
signed by any two of the officers or directors listed in clause (i) above in
lieu of being signed by one of such officers or directors listed in such clause
(i) and one of the officers listed in clause (ii) above and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;

 

(c)                                  whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers’ Certificate;

 

(d)                                 the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;

 

(e)                                  the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

 

(f)                                    the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to

 

77

 

make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuers, personally or by agent or attorney at the expense of the
Issuers and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;

 

(g)                                 the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;

 

(h)                                 the Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture;

 

(i)                                     in no event shall the Trustee be responsible
or liable for special, indirect, or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit) irrespective of
whether the Trustee has been advised of the likelihood of such loss or damage
and regardless of the form of action;

 

(j)                                     the Trustee shall not be deemed to have
notice of any Default or Event of Default unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and this
Indenture; and

 

(k)                                  the rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.

 

Section 7.03.                             Trustee’s Disclaimer.

 

The
recitals contained herein and in the Notes, except the Trustee’s certificates
of authentication, shall be taken as the statements of the Issuers, and the
Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes.  The Trustee shall not be accountable for the
use or application by the Issuers of Notes or the proceeds thereof, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder.

 

Section 7.04.                             May Hold Securities.

 

The
Trustee, any Paying Agent, Registrar or any other agent of the Issuers, in its
individual or any other capacity, may become the owner or pledgee of Notes
subject to TIA Sections 310(b) and 311, may otherwise deal with the Issuers
with the same rights it would have if it were not Trustee, Paying Agent,
Registrar or such other agent.

 

78

 

Section 7.05.                             Money Held in Trust.

 

Money
held by the Trustee in trust hereunder need not be segregated from other funds
except to the extent required by law. 
The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the
Issuers.

 

Section 7.06.                             Compensation and Reimbursement.

 

The
Issuers and the Guarantors, jointly and severally, agree:

 

(a)                                  to pay to the Trustee from time to time such
compensation as shall be agreed to in writing between the Issuers and the Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);

 

(b)                                 except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as shall have been caused by its negligence or willful
misconduct; and

 

(c)                                  to indemnify each of the Trustee or any
predecessor Trustee for, and to hold it harmless against, any and all loss,
damage, claim, liability or expense including taxes (other than taxes based on
the income of the Trustee) incurred without negligence or willful misconduct on
its part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder.

 

As
security for the performance of the obligations of the Issuers under this
Section 7.06, the Trustee shall have a Lien prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the benefit of Holders of particular Notes.

 

When
the Trustee incurs expenses or renders services in connection with an Event of
Default specified in Section 6.01(viii) or 6.01(ix), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services shall be intended to constitute expenses of
administration under any Bankruptcy Law.

 

The
provisions of this Section 7.06 shall survive the termination of this
Indenture.

 

Section 7.07.                             Eligibility; Disqualification.

 

There
shall at all times be a Trustee hereunder qualified or to be qualified under
TIA 310(a)(1) and which shall have a combined capital and surplus of at least
$50,000,000 to the extent there is such an institution eligible and willing to
serve.  If the Trustee publishes reports
of condition at least annually, pursuant to law or to the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section 7.07,

 

79

 

the combined capital and surplus of the
Trustee shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.  If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.07, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.

 

Section 7.08.                             Replacement of Trustee.

 

(a)                                  No resignation or removal of the Trustee and
no appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Trustee
under Section 7.09.

 

(b)                                 The Trustee may resign at any time by giving
written notice thereof to the Issuers. 
If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition at the expense of the Issuers
any court of competent jurisdiction for the appointment of a successor Trustee.

 

(c)                                  The Trustee may be removed at any time by an
Act of Holders of a majority in principal amount of the Notes, delivered to the
Trustee and the Issuers.  If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of removal, the
removed Trustee may petition at the expense of the Issuers any court of
competent jurisdiction for the appointment of a successor Trustee.

 

(d)                                 If at any time:

 

(i)                                     the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request therefor by the
Issuers or by any Holder who has been a bona fide Holder of a Note for at least
six months; or

 

(ii)                                  the Trustee shall cease to be eligible under
Section 7.07 and shall fail to resign after written request therefor by
the Issuers or by any Holder who has been a bona fide Holder of a Note for at
least six months; or

 

(iii)                               the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,

 

then,
in any case, (A) the Issuers by a Board Resolution may remove the Trustee, or
(B) subject to Section 6.11, the Holder of any Note who has been a bona
fide Holder of a Note for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

 

(e)                                  If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, the Issuers, by a Board Resolution, shall promptly
appoint a successor Trustee.  If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by the Act of Holders of a
majority in principal amount of the Notes delivered to the Issuers and the

 

80

 

retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with
Section 7.09, become the successor Trustee and supersede the successor
Trustee appointed by the Issuers.  If no
successor Trustee shall have been so appointed by the Issuers or the Holders of
the Notes and so accepted appointment, the Holder of any Note who has been a
bona fide Holder for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.

 

(f)                                    The Issuers shall give notice of each
resignation and each removal of the Trustee and each appointment of a successor
Trustee by mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Notes as their names and addresses appear in the
register of Notes.  Each notice shall
include the name of the successor Trustee and the address of its Corporate
Trust Office.

 

No
successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article.

 

Section 7.09.                             Acceptance of Appointment by Successor.  

 

Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Issuers and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee, provided,
however, that the retiring Trustee shall continue to be entitled to
the benefit of Section 7.06(c); but, on request of the Issuers or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder.  Upon
request of any such successor Trustee, the Issuers shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.

 

Section 7.10.                             Merger, Conversion, Consolidation or Succession to
Business.

 

Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.  In case any
Notes shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.

 

81

 

Section 7.11.                             Preferential Collection of Claims
Against Issuers.

 

If
and when the Trustee shall be or become a creditor of the Issuers (or any other
obligor under the Notes), the Trustee shall be subject to the provisions of the
TIA regarding the collection of claims against the Issuers (or any such other
obligor).

 

Section 7.12.                             Trustee’s Application for Instructions from the Issuers.

 

Any
application by the Trustee for written instructions from the Issuers may, at
the option of the Trustee, set forth in writing any action proposed to be taken
or omitted by the Trustee under this Indenture and the date on and/or after
which such action shall be taken or such omission shall be effective.  The Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
Officer of the Issuers actually received such application) unless, with respect
to any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted).

 

Section 7.13.                             Notice of Defaults.

 

Within
90 days after the occurrence of any Default, the Trustee shall transmit by mail
to all Holders, as their names and addresses appear in the register of Notes,
notice of such Default hereunder actually known to a Responsible Officer of the
Trustee, unless such default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of or interest on any Note,
the Trustee shall be protected in withholding such notice if and so long as a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders.

 

ARTICLE EIGHT

DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.01.                             Option to Effect Legal Defeasance or
Covenant Defeasance.

 

The
Issuers may, at their option and at any time, elect to have either
Section 8.02 or 8.03 be applied to all outstanding Notes and Note
Guarantees upon compliance with the conditions set forth below in this
Article Eight.

 

Section 8.02.                             Legal Defeasance and Discharge.

 

Upon
the Issuers’ exercise under Section 8.01 hereof of the option applicable
to this Section 8.02, the Issuers shall, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from all their obligations with respect to all outstanding Notes and
all obligations of the Guarantors shall be deemed to have been discharged with
respect to their obligations under the Note Guarantees on the date the
conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that
the Issuers and the Guarantors shall be deemed to have paid and discharged the
entire Indebtedness represented by the outstanding Notes and Note Guarantees,

 

82

 

respectively, which shall thereafter be
deemed to be “outstanding” only for the purposes of Section 8.05 and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their other obligations under such Notes and this Indenture (and
the Trustee, on demand of and at the expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following
provisions, which shall survive until otherwise terminated or discharged
hereunder:

 

(a)                                  the rights of Holders of outstanding Notes to
receive solely from the trust fund described in Section 8.04, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Notes when such payments are due;

 

(b)                                 the Issuers’ obligations with respect to such
Notes under Article Two concerning issuing temporary Notes, registration
of Notes and mutilated, destroyed, lost or stolen Notes and the Issuers’
obligations under Section 4.02;

 

(c)                                  the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Issuers’ and the Guarantors’
obligations in connection therewith and

 

(d)                                 this Section 8.02.

 

Subject
to compliance with this Article Eight, the Issuers may exercise their
option under this Section 8.02 notwithstanding the prior exercise of their
option under Section 8.03 hereof.

 

Section 8.03.                             Covenant Defeasance.

 

Upon
the Issuers’ exercise under Section 8.01 hereof of the option applicable
to this Section 8.03, the Issuers and the Guarantors shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be
released from their obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.20, 5.01
and 10.04 with respect to the outstanding Notes on and after the date the
conditions set forth in Section 8.04 are satisfied (hereinafter, “Covenant Defeasance”), and neither the
Notes nor the Note Guarantees shall thereafter be deemed “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed “outstanding” for all other purposes hereunder (it
being understood that such Notes shall not be deemed outstanding for accounting
purposes).  For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Issuers and
the Guarantors may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01, but, except
as specified above, the remainder of this Indenture and such Notes shall be
unaffected thereby.  In addition, upon
the Issuers’ exercise under Section 8.01 of the option applicable to this
Section 8.03, subject to the satisfaction of the conditions set forth in
Section 8.04, Sections 6.01(a)(iii) through (vii) shall not constitute
Events of Default.

 

83

 

Section 8.04.                             Conditions to Legal or Covenant
Defeasance.

 

(a)                                  The following shall be the conditions to the
application of either Section 8.02 or 8.03 to the outstanding Notes:

 

(i)                                     the Issuers must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S.
dollars, non-callable Government Securities, or a combination thereof, in such
amounts as shall be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of, or interest and
premium, if any, on the Notes on the Stated Maturity or on the applicable
redemption date, as the case may be, and the Issuers must specify whether the
Notes are being defeased to maturity or to a particular redemption date;

 

(ii)                                  in the case of Legal Defeasance, the Issuers
shall have delivered to the Trustee an Opinion of Counsel confirming that (a)
the Issuers have received from, or there has been published by, the Internal
Revenue Service a ruling or (b) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes shall not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and shall be
subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;

 

(iii)                               in the case of Covenant Defeasance, the
Issuers shall have delivered to the Trustee an Opinion of Counsel confirming that
the Holders of the outstanding Notes shall not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and
shall be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred;

 

(iv)                              no Default or Event of Default shall have
occurred and be continuing either:  (a)
on the date of such deposit; or (b) insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period ending
on the 123rd day after the date of deposit;

 

(v)                                 such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default under any
material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

 

(vi)                              the Issuers must have delivered to the
Trustee an Opinion of Counsel to the effect that, (1) assuming no intervening
bankruptcy of the Issuers or any Guarantor between the date of deposit and the
123rd day following the deposit and assuming that no Holder is an “insider” of
the Issuers under applicable bankruptcy law, after the 123rd day following the
deposit, the trust funds shall not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights

 

84

 

generally, including
Section 547 of the United States Bankruptcy Code and (2) the creation of
the defeasance trust does not violate the Investment Company Act of 1940;

 

(vii)                           the Issuers must deliver to the Trustee an
Officers’ Certificate stating that the deposit was not made by the Issuers with
the intent of preferring the Holders of the Notes over the other creditors of
the Issuers with the intent of defeating, hindering, delaying or defrauding
creditors of the Issuers or others;

 

(viii)                        if the Notes are to be redeemed prior to
their Stated Maturity, the Issuers must deliver to the Trustee irrevocable
instructions to redeem all of the Notes on the specified redemption date; and

 

(ix)                                the Issuers must deliver to the Trustee an
Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

 

Section 8.05.                             Deposited Money and Government
Securities to Be Held in Trust; Other Miscellaneous Provisions.

 

(a)                                  Subject to Section 8.06, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee pursuant to Section 8.04 in respect of the outstanding
Notes shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Issuers acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal and premium, if any, and interest,
but such money need not be segregated from other funds except to the extent
required by law.

 

(b)                                 The Issuers shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to
Section 8.04 or the principal and interest received in respect thereof
other than any such tax, fee or other charge which by law is for the account of
the Holders of the outstanding Notes.

 

(c)                                  Anything in this Article Eight to the
contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from
time to time upon the request of the Issuers any money or non-callable
Government Securities held by it as provided in Section 8.04 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which
may be the opinion delivered under Section 8.04(a)), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 8.06.                             Reinstatement.

 

If
the Trustee or Paying Agent is unable to apply any United States dollars or
non-callable Government Securities in accordance with Section 8.02 or
8.03, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuers’ obligations under this Indenture and

 

85

 

the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 and, in
the case of a Legal Defeasance, the Guarantors’ obligations under their
respective Note Guarantees shall be revised and reinstated as though no deposit
had occurred pursuant to Section 8.02, in each case until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03, as the case may be; provided,
however, that, if the Issuers
make any payment of principal of, premium, if any, or interest on any Note
following the reinstatement of their obligations, the Issuers shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

 

ARTICLE NINE

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.                             Without Consent of Holders of Notes.

 

Notwithstanding
Section 9.02 below, the Issuers, the Guarantors, and the Trustee may amend
or supplement this Indenture, the Notes or the Note Guarantees without the
consent of any Holder of a Note:

 

(i)                                     to cure any ambiguity, defect or
inconsistency;

 

(ii)                                  to provide for uncertificated Notes in
addition to or in place of Certificated Notes;

 

(iii)                               to provide for the assumption of the Issuers’
or any Guarantor’s obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the Issuers’ or such
Guarantor’s assets;

 

(iv)                              to make any change that would provide any
additional rights or benefits to the Holders of Notes (including additional
Note Guarantees or Liens securing the Notes) or that does not materially
adversely affect the rights under this Indenture of any such Holder;

 

(v)                                 to comply with the provisions of
Section 4.18;

 

(vi)                              to evidence and provide for the acceptance of
appointment by a successor Trustee; or

 

(vii)                           to provide for the issuance of Additional
Notes in accordance with this Indenture.

 

Upon
the request of the Issuers authorizing the execution of any such amended or
supplemental Indenture, the Trustee shall join with the Issuers in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

 

86

 

Section 9.02.                             With Consent of Holders of Notes.

 

(a)                                  Except as otherwise provided in this
Section 9.02, the Issuers, the Guarantors and the Trustee may amend or
supplement this Indenture, the Notes or the Notes Guarantees with the consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Notes), and,
subject to Sections 6.04 and 6.07, any existing Default or Event of Default or
compliance with any provision of this Indenture or the Notes or the Notes
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including Additional Notes, if any)
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes).

 

(b)                                 The Issuers may, but shall not be obligated
to, fix a record date for the purpose of determining the Persons entitled to
consent to any indenture supplemental hereto. 
If a record date is fixed, the Holders on such record date, or its duly
designated proxies, and only such Persons, shall be entitled to consent to such
supplemental indenture, whether or not such Holders remain Holders after such
record date; provided that unless
such consent shall have become effective by virtue of the requisite percentage
having been obtained prior to the date which is 90 days after such record date,
any such consent previously given shall automatically and without further
action by any Holder be cancelled and of no further effect.

 

(c)                                  Upon the request of the Issuers authorizing
the execution of any such amendment or supplement to this Indenture, and upon
the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee
of the documents described in Section 7.02, the Trustee shall join with
the Issuers in the execution of such amendment or supplement unless such
amendment or supplement directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amendment or
supplement.

 

(d)                                 It shall not be necessary for the consent of
the Holders of Notes under this Section 9.02 to approve the particular
form of any proposed amendment, supplement or waiver, but it shall be
sufficient if such consent approves the substance thereof.

 

(e)                                  After an amendment, supplement or waiver
under this Section becomes effective, the Issuers shall mail to the
Holders of Notes affected thereby a notice briefly describing the amendment,
supplement or waiver.  Any failure of the
Issuers to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or
waiver.  Subject to Sections 6.04 and
6.07, the Holders of a majority in aggregate principal amount of the then
outstanding Notes (including Additional Notes, if any) may waive compliance in
a particular instance by the Issuers with any provision of this Indenture, or
the Notes.  However, without the consent
of each Holder affected, an amendment or waiver under this Section 9.02
may not (with respect to any Notes held by a non-consenting Holder):

 

87

 

(i)                                     reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver;

 

(ii)                                  reduce the principal of or change the fixed
maturity of the Notes or alter the provisions, or waive any payment, with
respect to the redemption of the Notes to the extent such alteration or waiver
reduces the principal amount or premium payable upon redemption of the Notes or
changes the date on which the Notes may be redeemed;

 

(iii)                               reduce the rate of or change the time for
payment of interest on the Notes;

 

(iv)                              waive a Default or Event of Default in the
payment of principal of, or interest, or premium, if any, on, the Notes (except
a rescission of acceleration of the Notes by the Holders of at least a majority
in aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);

 

(v)                                 make the Notes payable in money other than
U.S. dollars;

 

(vi)                              make any change in the provisions of this
Indenture relating to waivers of past Defaults or the rights of Holders of the
Notes to receive payments of principal of, or interest or premium, if any, on
the Notes;

 

(vii)                           release any Guarantor from any of its
obligations under its Note Guarantee or this Indenture, except in accordance
with the terms of this Indenture;

 

(viii)                        impair the right to institute suit for the
enforcement of any payment on or with respect to the Notes or the Note
Guarantees;

 

(ix)                                amend, change or modify the obligation of the
Company to make and consummate an Asset Sale Offer with respect to any Asset
Sale in accordance with Section 4.10(c) after the obligation to make such
Asset Sale Offer has arisen, or the obligation of the Issuers to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 4.14 after such Change of Control has occurred,
including, in each case, amending, changing or modifying any definition
relating thereto;

 

(x)                                   except as otherwise permitted under Sections
4.18 and 5.01, consent to the assignment or transfer by the Issuers or any
Guarantor of any of their rights or obligations under this Indenture;

 

(xi)                                amend or modify any of the provisions of this
Indenture or the related definitions affecting the subordination or ranking of
the Notes or any Note Guarantee in any manner adverse to the holders of the
Notes or Note Guarantee; or

 

(xii)                             make any change in the preceding amendment
and waiver provisions.

 

88

 

Section 9.03.                             Compliance with Trust Indenture Act.

 

Every
amendment or supplement to this Indenture or the Notes shall be set forth in a
document that complies with the TIA as then in effect.

 

Section 9.04.                             Revocation and Effect of Consents.

 

Until
an amendment, supplement or waiver becomes effective, a consent to it by a
Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt
as the consenting Holder’s Note, even if notation of the consent is not made on
any Note.  However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note if
the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. 
An amendment, supplement or waiver becomes effective in accordance with
its terms and thereafter binds every Holder.

 

Section 9.05.                             Notation on or Exchange of Notes.

 

(a)                                  The Trustee may place an appropriate notation
about an amendment, supplement or waiver on any Note thereafter
authenticated.  The Issuers in exchange
for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.

 

(b)                                 Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.

 

Section 9.06.                             Trustee to Sign Amendments, Etc.

 

The
Trustee shall sign any amendment or supplement to this Indenture or any Note
authorized pursuant to this Article Nine if the amendment or supplement
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  The Issuers may not sign an
amendment or supplemental Indenture or Note until the Board of Directors of the
Company approves it.  In executing any
amendment or supplement or Note, the Trustee shall be provided with and
(subject to Section 7.01) shall be fully protected in relying upon an
Officers’ Certificate and an Opinion of Counsel stating that the execution of
such amendment or supplement is authorized or permitted by this Indenture.

 

ARTICLE TEN

NOTE GUARANTEES

 

Section 10.01.                       Guarantee.

 

(a)                                  Subject to this Article Ten, each of the
Guarantors hereby, jointly and severally, and fully and unconditionally,
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of, this Indenture, the Notes or the obligations of the
Issuers hereunder or thereunder, that: 
(i) the principal of, premium, if any, and interest on the Notes shall
be promptly paid in full when due, whether at maturity, by acceleration,
redemption or

 

89

 

otherwise, and interest on the overdue principal of,
premium, if any, and interest on the Notes, if lawful (subject in all cases to
any applicable grace period provided herein), and all other obligations of the
Issuers to the Holders or the Trustee hereunder or thereunder shall be promptly
paid in full, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, the same shall be promptly paid in full when due in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. 
Failing payment when due of any amount so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately.  Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.

 

(b)                                 The Guarantors hereby agree that, to the
maximum extent permitted under applicable law, their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Issuers, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.  Subject to Section 6.06, each Guarantor
hereby waives diligence, presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of the Issuers, any right to
require a proceeding first against the Issuers, protest, notice and all demands
whatsoever and covenants that this Note Guarantee shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.

 

(c)                                  If any Holder or the Trustee is required by
any court or otherwise to return to the Issuers, the Guarantors or any
custodian, trustee, liquidator or other similar official acting in relation to
any of the Issuers or the Guarantors, any amount paid by any of them to the
Trustee or such Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.

 

(d)                                 Each Guarantor agrees that it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.  Each Guarantor
further agrees that, as between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Article Six for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (ii) in the event of any declaration of acceleration of
such obligations as provided in Article Six hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.  The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holders under the Note Guarantee.

 

Section 10.02.                       Limitation on Guarantor Liability.

 

Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Note Guarantee of such Guarantor
not constitute

 

90

 

(i) a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal, state or foreign law to the
extent applicable to its Note Guarantee or (ii) an unlawful distribution under
any applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to its Note Guarantee.  To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor shall be limited to the maximum amount as shall,
after giving effect to all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Note Guarantee or this Article Ten, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance or such an unlawful shareholder distribution.

 

Section 10.03.                       Execution and Delivery of Note
Guarantee.

 

(a)                                  To evidence its Note Guarantee set forth in
Section 10.01, each Guarantor hereby agrees that a notation of such Note
Guarantee substantially in the form included in Exhibit E shall be endorsed
by an Officer of such Guarantor by manual or facsimile signature on each Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor by one of its Officers.

 

(b)                                 Each Guarantor hereby agrees that its Note
Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.

 

(c)                                  If an Officer whose signature is on this
Indenture or on the Note Guarantee no longer holds that office at the time the
Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note
Guarantee shall be valid nevertheless.

 

(d)                                 The delivery of any Note by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of
the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

(e)                                  If required by Section 4.18, the Company
shall cause such Subsidiaries to execute supplemental indentures to this
Indenture and Note Guarantees in accordance with Section 4.18 and this
Article Ten, to the extent applicable.

 

Section 10.04.                       Guarantors May Consolidate, Etc.,
on Certain Terms.

 

(a)                                  A Guarantor may not sell or otherwise dispose
of all or substantially all of its assets to, or consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person), another
Person, other than the Company or another Guarantor, unless:

 

(i)                                     immediately after giving effect to that
transaction, no Default or Event of Default exists; and

 

(ii)                                  either:

 

91

 

(A)                              the Person acquiring the property in any such
sale or disposition or the Person formed by or surviving any such consolidation
or merger (if other than the Guarantor) is organized or existing under the laws
of the United States, any state thereof or the District of Columbia and assumes
all the obligations of that Guarantor under this Indenture and its Note
Guarantee pursuant to a supplemental indenture satisfactory to the Trustee; or

 

(B)                                such sale or other disposition or
consolidation or merger complies with Section 4.10.

 

(b)                                 In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by a Guarantor, such successor Person shall succeed
to and be substituted for a Guarantor with the same effect as if it had been
named herein as a Guarantor.  Such
successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Issuers and delivered to the
Trustee.  All the Note Guarantees so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Note
Guarantees had been issued at the date of the execution hereof.

 

(c)                                  Except as set forth in Article Five, and
notwithstanding clauses (i) and (ii) of Section 10.04(a), nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.

 

Section 10.05.                       Release of Guarantor.

 

Any
Guarantor shall be released and relieved of any obligations under its Note
Guarantee;

 

(a)                                  in connection with any sale or other
disposition of all of the Capital Stock of that Guarantor to a Person that is
not (either before or after giving effect to such transaction) a Restricted
Subsidiary of the Company, if the sale of all such Capital Stock of that
Guarantor complies with Section 4.10;

 

(b)                                 if the Company properly designates any
Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary under
this Indenture; or

 

(c)                                  upon the release or discharge of the
Guarantee (including the Guarantee under the Credit Agreement) which resulted
in the creation of such Note Guarantee pursuant to Section 4.18 (except a
discharge or release by or as a result of payment under such Guarantee); provided that such Guarantor does not have
any Preferred Stock outstanding at such time that is not held by the Company or
any Guarantor.

 

92

 

Upon
delivery by the Company to the Trustee of an Officers’ Certificate and an
Opinion of Counsel to the effect that one of the foregoing requirements has
been satisfied and the conditions to the release of a Guarantor under this
Section 10.05 have been met, the Trustee shall execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Note Guarantee.

 

Section 10.06.                       Subordination of Note Guarantee.

 

Payments
under the Note Guarantees shall be subordinated to the prior payment in full of
all Senior Debt of such Guarantor, including Senior Debt incurred after the
date of this Indenture, on the same basis as the payments by the Issuers on the
Notes are subordinated to the prior payment in full of Senior Debt of the
Issuers.  Each Holder by accepting a Note
agrees to such subordination.  For the
purposes of the foregoing sentence, the Trustee and the Holders shall have the
right to receive and/or retain payments by any of the Guarantors only at such
times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article Twelve.

 

ARTICLE ELEVEN

SATISFACTION AND DISCHARGE

 

Section 11.01.                       Satisfaction and Discharge.

 

(a)                                  This Indenture shall be discharged and shall
cease to be of further effect as to all Notes issued hereunder, when:

 

(i)                                     either:

 

(A)                              all Notes that have been authenticated under
this Indenture (except lost, stolen or destroyed Notes that have been replaced
or paid and Notes for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Issuers) have been delivered to the Trustee
for cancellation; or

 

(B)                                all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason of the making of
a notice of redemption or otherwise or shall become due and payable within one
year and the Issuers or any Guarantor have irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust solely for the benefit of
the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as shall be sufficient
without consideration of any reinvestment of interest, to pay and discharge the
entire indebtedness on the Notes not delivered to the Trustee for cancellation
for principal, premium, if any, and accrued interest to the date of maturity or
redemption;

 

(ii)                                  no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or shall occur as a result of
such deposit and such deposit shall not result in a breach or violation of, or
constitute a default under, any other instrument to which the Issuers or any
Guarantor are a party or by which the Issuers or any Guarantor are bound;

 

93

 

(iii)                               the Issuers or any Guarantor have paid or
caused to be paid all sums payable by them under this Indenture; and

 

(iv)                              the Issuers have delivered irrevocable
instructions to the Trustee under this Indenture to apply the deposited money
toward the payment of the Notes at maturity or the redemption date, as the case
may be.

 

(b)                                 The Issuers must deliver an Officers’
Certificate and an Opinion of Counsel to the Trustee stating that all
conditions precedent to satisfaction and discharge have been satisfied.

 

(c)                                  Notwithstanding the above, the Trustee shall
pay to the Issuers or any Guarantor from time to time upon their request any
cash or Government Securities held by it as provided in this
section which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification delivered
to the Trustee, are in excess of the amount thereof that would then be required
to be deposited to effect a satisfaction and discharge under this
Article Eleven.

 

(d)                                 After the conditions to discharge contained
in this Article Eleven have been satisfied, the Trustee upon written
request shall acknowledge in writing the discharge of the obligations of the
Issuers and the Guarantors under this Indenture (except for those surviving
obligations specified Section 11.01).

 

Section 11.02.                       Deposited Money and Government Securities
to Be Held in Trust; Other Miscellaneous Provisions.

 

Subject
to Section 11.03 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee pursuant to
Section 11.01 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including either of the Issuers acting as Paying Agent) as the Trustee
may determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium and interest, but such money need not
be segregated from other funds except to the extent required by law.

 

Section 11.03.                       Repayment to the Issuers.

 

Any
money deposited with the Trustee or any Paying Agent, or then held by the
Issuers, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Issuers on their request or (if then held by the Issuers) shall be
discharged from such trust; and the Holder of such Note shall thereafter look
only to the Issuers for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Issuers as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuers cause to be published once, in the
New York Times or The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the

 

94

 

date
of such notification or publication, any unclaimed balance of such money then
remaining shall be repaid to the Issuers.

 

ARTICLE TWELVE

SUBORDINATION

 

Section 12.01.                       Agreement to Subordinate.

 

The
Issuers agree, and each Holder by accepting a Note agrees, that the
Indebtedness evidenced by the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article Twelve, to the prior
payment in full in Cash Equivalents of all Senior Debt of the Issuers,
including Senior Debt of the Issuers incurred after the date hereof.

 

Section 12.02.                       Liquidation; Dissolution;
Bankruptcy.

 

The
holders of Senior Debt of the Issuers shall be entitled to receive payment in
full in Cash Equivalents of all Obligations due in respect of Senior Debt of
the Issuers before the Holders of the Notes shall be entitled to receive any
payment with respect to the Notes (except that Holders of the Notes may receive
and retain Permitted Junior Securities and payments made from the trust
pursuant to Article Eight), in the event of any distribution to creditors
of either Issuer in connection with:

 

(a)                                  any liquidation, dissolution or winding up of
either Issuer;

 

(b)                                 any bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to either of the Issuers or their
respective properties;

 

(c)                                  any assignment for the benefit of creditors;
or

 

(d)                                 any marshaling of either of the Issuers’
assets and liabilities.

 

Section 12.03.                       Default on Designated Senior Debt.

 

(a)                                  Neither Issuer may make any payment in
respect of the Notes (except in Permitted Junior Securities or from the trust
pursuant to Article Eight) if:

 

(i)                                     a payment default on Designated Senior Debt
of either Issuer occurs and is continuing beyond any applicable grace period;
or

 

(ii)                                  any other default (a “non-payment default”) occurs and is
continuing on any series of Designated Senior Debt of either Issuer that
permits holders of that series of Designated Senior Debt to accelerate its
maturity and the Trustee receives a notice of such default (a “Payment Blockage Notice”) from a
representative of the holders of such Designated Senior Debt.

 

(b)                                 Payments on the Notes may and shall be
resumed:

 

95

 

(i)                                     in the case of a payment default on
Designated Senior Debt of either Issuer, upon the date on which such default is
cured or waived; and

 

(ii)                                  in the case of a non-payment default on
Designated Senior Debt of either Issuer, the earlier of (A) the date on which
such default is cured or waived, (B) 179 days after the date on which the
applicable Payment Blockage Notice is received and (C) the date the Trustee
receives notice from the representative for such Designated Senior Debt
rescinding the Payment Blockage Notice, unless the maturity of such Designated
Senior Debt has been accelerated.

 

(c)                                  No new Payment Blockage Notice may be
delivered unless and until:

 

(i)                                     360 days have elapsed since the delivery of
the immediately prior Payment Blockage Notice; and

 

(ii)                                  all scheduled payments of principal, interest
and premium, if any, on the Notes that have come due have been paid in full in
cash.

 

(d)                                 No non-payment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice unless such default has been cured or waived for a period of not less
than 90 days.

 

(e)                                  If the Trustee or any Holder of the Notes
receives a payment in respect of the Notes (except in Permitted Junior Securities
or from the trust pursuant to Article Eight) when:

 

(i)                                     the payment is prohibited by this
Article Twelve; and

 

(ii)                                  the Trustee or the Holder has actual
knowledge that the payment is prohibited (provided
that such actual knowledge shall not be required in the case of any payment
default on Designated Senior Debt),

 

the
Trustee or the Holder, as the case may be, shall hold the payment in trust for
the benefit of the holders of Senior Debt of the Issuers. Upon the proper
written request of the holders of Senior Debt of either Issuer or if there is
any payment default on any Designated Senior Debt, the Trustee or the Holder,
as the case may be, shall deliver the amounts in trust to the holders of Senior
Debt of the applicable Issuer or their proper representative.

 

Section 12.04.                       Acceleration of Securities.

 

If
payment of the Notes is accelerated because of an Event of Default, the Issuers
shall promptly notify holders of Senior Debt of the acceleration.

 

Section 12.05.                       When Distribution Must Be Paid Over.

 

In
the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (except in Permitted Junior Securities or
from the trust pursuant to Article Eight hereof) at a time when the
Trustee or such Holder, as applicable, has

 

96

 

actual knowledge that such payment is
prohibited by Article Twelve, such payment shall be held by the Trustee or
such Holder, as applicable, in trust for the benefit of, and shall be paid forthwith
over and delivered, upon written request, to the holders of Senior Debt or
their Representative, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with
their terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt.

 

With
respect to the holders of Senior Debt, the Trustee undertakes to perform only such
obligations on the part of the Trustee as are specifically set forth in this
Article Twelve, and no implied covenants or obligations with respect to
the holders of Senior Debt shall be read into this Indenture against the
Trustee.  The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Debt, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Issuers or any other Person money or assets to which
any holders of Senior Debt shall be entitled by virtue of this
Article Twelve, except if such payment is made as a result of the willful
misconduct or gross negligence of the Trustee.

 

Section 12.06.                       Notice by the Issuers.

 

The
Issuers shall promptly notify the Trustee and the Paying Agent in writing of
any facts known to the Issuers that would cause a payment of any Obligations
with respect to the Notes to violate this Article Twelve, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt as provided in this Article Twelve.

 

Section 12.07.                       Subrogation.

 

After
all Senior Debt is paid in full and until the Notes are paid in full, Holders
of Notes shall be subrogated (equally and ratably with all other Indebtedness pari  passu
with the Notes) to the rights of holders of Senior Debt to receive
distributions applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of Notes have been applied to the payment of
Senior Debt.  A distribution made under
this Article Twelve to holders of Senior Debt that otherwise would have
been made to Holders of Notes is not, as between the Issuers and Holders, a
payment by the Issuers on the Notes.

 

Section 12.08.                       Relative Rights.

 

This
Article Twelve defines the relative rights of Holders of Notes and holders
of Senior Debt.  Nothing in this
Indenture shall:

 

(a)                                  impair, as between the Issuers and Holders of
Notes, the obligation of the Issuers, which is absolute and unconditional, to
pay principal of and interest on the Notes in accordance with their terms;

 

(b)                                 affect the relative rights of Holders of
Notes and creditors of the Issuers other than their rights in relation to
holders of Senior Debt; or

 

(c)                                  prevent the Trustee or any Holder of Notes
from exercising its available remedies upon a Default or Event of Default,
subject to the prior notice requirement set

 

97

 

forth
in Section 6.02(a) and the rights of holders and owners of Senior Debt to
receive distributions and payments otherwise payable to Holders of Notes.

 

If
the Issuers fail because of this Article Twelve to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.

 

Section 12.09.                       Subordination May Not Be Impaired by
the Issuers.

 

No
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Issuers or any Holder or by the failure of the Issuers or any Holder
to comply with this Indenture.

 

Section 12.10.                       Distribution or Notice to
Representative.

 

Whenever
a distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.

 

Upon
any payment or distribution of assets of the Issuers referred to in this
Article Twelve, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Issuers, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article Twelve.

 

Section 12.11.                       Rights of Trustee and Paying Agent.

 

Notwithstanding
this Article Twelve or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts that would
prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article Twelve.  Only the
Issuers or a Representative may give the notice.  Nothing in this Article Twelve shall
impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.06 hereof.

 

The
Trustee in its individual or any other capacity may hold Senior Debt with the
same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.

 

Section 12.12.                       Authorization to Effect
Subordination.

 

Each
Holder of Notes, by the Holder’s acceptance thereof, authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this
Article Twelve, and appoints the Trustee to act as such Holder’s attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09

 

98

 

hereof at least 30 days before the expiration
of the time to file such claim, the lenders under the Credit Agreement are
hereby authorized to file an appropriate claim for and on behalf of the Holders
of the Notes.

 

Section 12.13.                       Trustee Not Fiduciary for Holders of
Senior Indebtedness.

 

The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if the Trustee shall in good
faith mistakenly pay over or distribute to Holders of Notes or to the Company
or to any other person cash, property or securities to which any holders of
Senior Debt shall be entitled by virtue of this Article or otherwise.  With respect to the holders of Senior Debt,
the Trustee undertakes to perform or to observe only such of its covenants or
obligations as are specifically set forth in this Article and no implied
covenants or obligations with respect to holders of Senior Debt shall be read
into this Indenture against the Trustee.

 

ARTICLE THIRTEEN

MISCELLANEOUS

 

Section 13.01.                       Trust Indenture Act Controls.

 

If
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by TIA Section 318(c), the imposed duties shall control.

 

Section 13.02.                       Notices.

 

(a)                                  Any notice or communication by the Issuers or
any Guarantor, on the one hand, or the Trustee on the other hand, to the other
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others’ address:

 

If
to the Issuers and/or any Guarantor:

 

Rainbow
National Services LLC

200 Jericho Quadrangle

Jericho, NY 11753

Facsimile:  516-803-3003

Attention:  Joshua W. Sapan

 

And to:

 

Rainbow
National Services LLC

200 Jericho Quadrangle

Jericho, NY 11753

Facsimile:  516-803-3003

Attention:  Chief Financial Officer

 

99

 

If
to the Trustee:

 

The
Bank of New York

101 Barclay Street, 8W

New York, NY 10286

Facsimile: 212-815-5707

Attention: Corporate Trust Administration

 

(b)                                 The Issuers, the Guarantors or the Trustee,
by notice to the others may designate additional or different addresses for
subsequent notices or communications.

 

(c)                                  All notices and communications (other than
those sent to Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; three Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business
Day after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.

 

(d)                                 Any notice or communication to a Holder shall
be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
address shown on the register kept by the Registrar.  Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA.  Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders. 
Any notice when mailed to a Holder in the aforesaid manner shall be
conclusively deemed to have been received by such Holder whether or not
actually received by such Holder.

 

(e)                                  Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice.  Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance on
such waiver.

 

(f)                                    In case by reason of the suspension of
regular mail service or by reason of any other cause it shall be impracticable
to give such notice by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder.

 

(g)                                 If a notice or communication is mailed in the
manner provided above within the time prescribed, it is duly given, whether or
not the addressee receives it.

 

(h)                                 If the Issuers mail a notice or communication
to Holders, they shall mail a copy to the Trustee and each Agent at the same
time.

 

Section 13.03.                       Communication by Holders of Notes
with Other Holders of Notes.

 

Holders
may communicate pursuant to TIA Section 312(b) with other Holders with
respect to their rights under this Indenture or the Notes.  The Issuers, the Trustee, the Registrar and
any other Person shall have the protection of TIA Section 312(c).

 

100

 

Section 13.04.                       Certificate and Opinion as to
Conditions Precedent.

 

Upon
any request or application by the Issuers to the Trustee to take any action
under this Indenture, the Issuers shall furnish to the Trustee if requested:

 

(i)                                     an Officers’ Certificate (which shall include
the statements set forth in Section 13.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
satisfied; and

 

(ii)                                  an Opinion of Counsel (which shall include
the statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel (who may rely upon an Officers’ Certificate as to
matters of fact), all such conditions precedent and covenants have been
satisfied;

 

except
that, in the case of such request or application as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular request or application, no additional certificate
or opinion need be furnished.

 

Section 13.05.                       Statements Required in Certificate
or Opinion.

 

(a)                                  Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to TIA Section 314(a)(4)) shall
comply with the provisions of TIA Section 314(e) and shall include:

 

(i)                                     a statement that the Person making such
certificate or opinion has read such covenant or condition;

 

(ii)                                  a brief statement as to the nature and scope
of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;

 

(iii)                               a statement that, in the opinion of such
Person, he or she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

 

(iv)                              a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied with.

 

Section 13.06.                       Rules by Trustee and Agents.

 

The
Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.

 

101

 

Section 13.07.                       No Personal Liability of Directors,
Officers, Employees and Stockholders.

 

No
director, officer, employee, incorporator, member, manager, partner or
stockholder of either Issuer or of any Guarantor, as such, shall have any
liability for any obligations of the Issuers or the Guarantors under the Notes,
this Indenture, the Note Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.

 

Section 13.08.                       Governing Law.

 

THE
LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

 

Section 13.09.                       Consent to Jurisdiction.

 

Any
legal suit, action or proceeding arising out of or based upon this Indenture or
the transactions contemplated hereby (“Related
Proceedings”) may be instituted in the federal courts of the United
States of America located in the City of New York or the courts of the State of
New York in each case located in the City of New York (collectively, the “Specified Courts”), and each party and each
Holder by accepting the Notes irrevocably submits to the non-exclusive
jurisdiction of such courts in any such suit, action or proceeding.  Service of any process, summons, notice or
document by mail (to the extent allowed under any applicable statute or rule of
court) to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such
court.  The parties and each Holder by
accepting the Notes irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in
any such court has been brought in an inconvenient forum.

 

Section 13.10.                       Form of Documents Delivered to
Trustee.

 

In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

Any
certificate or opinion of an officer of the Issuers or Guarantors may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous.  Any such certificate or
opinion, including any Officers’ Certificate or Opinion of Counsel, may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representation by, an officer or officers of an Issuer or Guarantor
stating that the information with respect to such factual matters is in the
possession of the Issuer or Guarantor, as applicable, unless such counsel
knows, or in the exercise of reasonable care

 

102

 

should show, that the certificate or opinion
or representations with respect to such matters are erroneous.

 

Section 13.11.                       Successors.

 

All
agreements of the Issuers in this Indenture and the Notes shall bind any of
their successors.  All agreements of the
Trustee in this Indenture shall bind its successors.  All agreements of each Guarantor in this
Indenture shall bind such Guarantor’s successors, except as otherwise provided
in Section 10.04.

 

Section 13.12.                       Severability.

 

In
case any provision in this Indenture or the Notes 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.

 

Section 13.13.                       Counterpart Originals.

 

The
parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.

 

Section 13.14.                       Acts of Holders.

 

(a)                                  Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by the Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in
person or by agents duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Issuers.  Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the “Act”
of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Issuers if made
in the manner provided in this Section 13.14.

 

(b)                                 The fact and date of the execution by any
Person of any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such witness,
notary or officer the execution thereof. 
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority.  The fact
and date of the execution of any such instrument or writing, or the authority
of the Person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.

 

(c)                                  Notwithstanding anything to the contrary
contained in this Section 13.14, the principal amount and serial numbers
of Notes held by any Holder, and the date of holding the

 

103

 

same, shall be proved by the register of the Notes
maintained by the Registrar as provided in Section 2.04.

 

(d)                                 If the Issuers shall solicit from the Holders
of the Notes any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Issuers may, at their option, by or pursuant to a
resolution of the Board of Directors of the Company, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Issuers
shall have no obligation to do so. 
Notwithstanding TIA Section 316(c), such record date shall be the
record date specified in or pursuant to such resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith or the date of the most recent list of
Holders forwarded to the Trustee prior to such solicitation pursuant to
Section 2.06 and not later than the date such solicitation is
completed.  If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of the then outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the then outstanding Notes shall be computed as
of such record date; provided
that no such authorization, agreement or consent by the Holders on such record
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than eleven months after the record
date.

 

(e)                                  Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the Holder of any Note shall
bind every future Holder of the same Note and the Holder of every Note issued
upon the registration or transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, the Paying Agent or the Issuers in reliance thereon, whether or not
notation of such action is made upon such Note.

 

(f)                                    Without limiting the foregoing, a Holder
entitled hereunder to take any action hereunder with regard to any particular
Note may do so itself with regard to all or any part of the principal amount of
such Note.

 

Section 13.15.                       Benefit of Indenture.

 

Nothing
in this Indenture, the Notes or the Note Guarantees, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent, any Registrar and the Holders, any benefit or any
legal or equitable right, remedy or claim under this Indenture.

 

Section 13.16.                       Table of
Contents, Headings,
Etc.

 

The
Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.

 

104

 

[SIGNATURE PAGES FOLLOW]

 

105

 

	
  IN WITNESS WHEREOF, the parties have executed this Indenture as of
  August    , 2004.

  
	
   

  	
   

  	
   

  
	
   

  	
  RAINBOW
  NATIONAL SERVICES LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  RNS
  CO-ISSUER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN
  MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
  By:
  RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN
  MOVIE CLASSICS IV HOLDING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-1

 

	
   

  	
  AMC
  PRODUCTIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WE:
  WOMEN’S ENTERTAINMENT PRODUCTIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  IFC
  PROGRAMMING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMC
  FILM HOLDINGS LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMC
  MOVIE COMPANION LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-2

 

	
   

  	
  AMC
  NEW MEDIA LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  MONSTERS
  VOD SERVICES LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WE:
  WOMEN’S ENTERTAINMENT LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WE
  NEW MEDIA LLC

  
	
   

  	
  By:
  WE: WOMEN’S ENTERTAINMENT LLC

  
	
   

  	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-3

 

	
   

  	
  IFC
  DIGITAL MEDIA LLC

  
	
   

  	
  By:
  THE INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
   

  	
  By:
  RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  IFC
  VOD SERVICES LLC

  
	
   

  	
  By:
  THE INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
   

  	
  By:
  RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-4

 

	
   

  	
  THE
  BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

S-5

 

EXHIBIT A

 

[Face of Note]

 

THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
ISSUERS.

 

THIS
NOTE AND THE GUARANTEES ENDORSED HEREON HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS.  NEITHER THIS NOTE NOR
THE GUARANTEES ENDORSED HEREON NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT.  THE HOLDER OF THIS NOTE AND THE
GUARANTEES ENDORSED HEREON, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
ISSUERS OR ANY AFFILIATE OF THE ISSUERS WERE THE OWNER OF THIS NOTE AND THE
GUARANTEES ENDORSED HEREON (OR ANY PREDECESSOR OF THIS NOTE AND THE GUARANTEES
ENDORSED HEREON) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES AND GUARANTEES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)
TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUERS’ AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(I) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE 40 DAY DISTRIBUTION
COMPLIANCE PERIOD WITHIN THE

 

A-1

 

MEANING
OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE (E) PRIOR TO THE
RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE.  THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.

 

[Additional
language for Regulation S Note to be inserted after paragraph 1]

 

THE
RIGHTS ATTACHING TO THIS REGULATION S GLOBAL NOTE, AND THE CONDITIONS AND
PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN
THE INDENTURE (AS DEFINED HEREIN).

 

A-2

 

	
   

  	
  CUSIP

  
	
   

  	
   

  
	
  No.

  	
  **$               **

  

 

RAINBOW NATIONAL SERVICES LLC

RNS CO-ISSUER CORPORATION

 

103/8% SENIOR SUBORDINATED NOTES DUE 2014

 

Issue
Date:

 

Rainbow
National Services LLC, a Delaware limited liability company (the “Company”), and RNS Co-Issuer Corporation, a
Delaware corporation (the “Co-Issuer Corp.”
and, together with the Company, the “Issuers,”
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to CEDE & CO., or its registered
assigns, the principal sum of $500,000,000 on September 1, 2014.

 

Interest
Payment Dates:  March 1 and
September 1, commencing March 1, 2005.

 

Record
Dates:  February 15 and
August 15.

 

Reference
is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.

 

[SIGNATURE PAGE FOLLOWS]

 

[Attach Notation
of Guarantee for Guarantors]

 

A-3

 

IN
WITNESS WHEREOF, the Issuers have caused this Note to be signed manually or by
facsimile by its duly authorized officer.

 

	
   

  	
  RAINBOW
  NATIONAL SERVICES LLC, a

  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RNS
  CO-ISSUER CORPORATION, a Delaware

  corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
								

 

A-4

 

(Trustee’s Certificate of Authentication)

 

This
is one of the 103/8% Senior Subordinated Notes due 2014
described in the within-mentioned Indenture.

 

Dated:  August 20, 2004

 

 

THE
BANK OF NEW YORK,

as
Trustee

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  

 

A-5

 

[Reverse Side of Note]

 

RAINBOW NATIONAL SERVICES LLC

RNS CO-ISSUER CORPORATION

 

103/8% Senior Subordinated Notes due 2014

 

Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

 

1.                                       Interest.  The
Issuers promise to pay interest on the principal amount of this Note at 103/8%
per annum from the date hereof until maturity. 
The Issuers shall pay interest semi-annually in arrears on March 1
and September 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each an “Interest
Payment Date”).  Interest on
the Notes shall accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest Payment
Date; provided  further that the first Interest Payment
Date shall be March 1, 2005.  The
Issuers shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal from time to time on demand at
the same rate; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. 
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months.

 

2.                                       Method of Payment.  The
Issuers shall pay interest on the Notes (except defaulted interest) to the
Persons who are registered Holders of Notes at the close of business on the
record date immediately preceding the Interest Payment Date, even if such Notes
are canceled after such record date and on or before such Interest Payment
Date, except as provided in Section 2.13 of the Indenture with respect to
defaulted interest.  If a Holder has
given wire transfer instructions to the Issuers, the Issuers shall pay all
principal, interest and premium, if any, on that Holder’s Notes in accordance
with those instructions.  All other
payments on Notes shall be made at the office or agency of the Paying Agent and
Registrar within the City and State of New York unless the Issuers elect to make
interest payments by check mailed to the Holders at their addresses set forth
in the register of Holders.  Such payment
shall be in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts.

 

3.                                       Paying Agent and Registrar. 
Initially, the Trustee under the Indenture shall act as Paying Agent and
Registrar.  The Issuers may change any
Paying Agent or Registrar without prior notice to any Holder.  The Issuers or any of their Subsidiaries may
act in any such capacity.

 

4.                                       Indenture.  The
Issuers issued the Notes under an Indenture dated as of August 20, 2004 (“Indenture”) among the Company, Co-Issuer
Corp., the Guarantors and the Trustee. 
The terms of the Notes include those stated in the Indenture and those
specifically made

 

A-6

 

part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended. 
The Notes are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms.  To the extent any provision of this Note
conflicts with the express provisions of the Indenture, the provisions of the
Indenture shall govern and be controlling. 
The Indenture pursuant to which this Note is issued provides that an
unlimited aggregate principal amount of Additional Notes may be issued
thereunder.

 

5.                                       Optional Redemption. 
(a)  Except as set forth in
paragraphs 5(b) and (c) below, the Issuers shall not have the option to redeem
the Notes prior to September 1, 2009. 
On or after September 1, 2009, the Issuers may redeem all or part
of the Notes, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest, if any, thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on September 1 of the years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2009

  	
   

  	
  105.188

  	
  %

  
	
  2010

  	
   

  	
  103.458

  	
  %

  
	
  2011

  	
   

  	
  101.729

  	
  %

  
	
  2012 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 At any time prior to September 1, 2007,
the Issuers may, on any one or more occasions, redeem up to 35% of the
aggregate principal amount of Notes issued under the Indenture (including any
Additional Notes) at a redemption price of 110.375% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the applicable
redemption date, with the net cash proceeds of one or more Qualified Equity
Offerings; provided that (1) at
least 65% of the aggregate principal amount of Notes issued under the Indenture
(including any Additional Notes) remains outstanding immediately after the
occurrence of such redemption, excluding Notes held by the Issuers and their
Subsidiaries; and (2) the redemption must occur within 90 days of the date of
the closing of such Qualified Equity Offering.

 

(c)                                  If at any time prior to September 1,
2009: (i)(A) the Company has made an Asset Sale Offer for 50% or more of the
outstanding Notes in compliance with Section 4.10, (B) the Company has
purchased all Notes tendered and (C) less than all of the outstanding Notes
have been tendered and purchased pursuant to such Asset Sale Offer; or (ii) the
Company or a Restricted Subsidiary thereof has entered into a binding agreement
related to a transaction that is subject to Section 5.01 pursuant to which
the Company or any of its Restricted Subsidiaries is entitled to receive net
proceeds in excess of the sum of the principal amount of all Senior Debt and
Notes outstanding at such time, then the Company may redeem all or part of the
Notes at a redemption price equal to the sum of (A) 100% of the principal
amount thereof, plus (B) the
Applicable Premium as of the date of redemption, plus (C) accrued and unpaid interest, if any, to the date of
redemption.

 

6.                                       Repurchase at Option of
Holder.  Upon the occurrence of (a) a Change of
Control, the Holders of the Notes shall have the right to require the Company
to purchase such Holder’s outstanding Notes on the terms set forth in the
Indenture and (b) an Asset Sale, the Company may be obligated to make offers to
purchase Notes with a portion of the Net Proceeds of such Asset Sale on the
terms set forth in the Indenture.

 

A-7

 

7.                                       Denominations, Transfer,
Exchange.  The Notes are in registered form without
coupons in minimum denominations of $5,000 and integral multiples of $1,000 in
excess thereof.  The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and the Issuers may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Issuers are not required to
transfer or exchange any Note selected for redemption.

 

8.                                       Persons Deemed Owners.  The
registered Holder of a Note shall be treated as its owner for all purposes.

 

9.                                       Amendment, Supplement and
Waiver.  The Indenture and the Notes may be amended or
supplemented and any existing default or compliance with any provision of the
Indenture or the Notes may be waived only in accordance with the Indenture.

 

10.                                 Defaults and Remedies.  In
the case of an Event of Default arising from events of bankruptcy or insolvency
specified in the Indenture, all outstanding Notes may become due and payable in
the manner and with the effect provided in the Indenture.

 

11.                                 Trustee Dealings with
Issuers.  The Trustee in its individual or any other
capacity may become the owner or pledgee of Notes and may become a creditor of,
or otherwise deal with the Issuers or any of their Affiliates, with the same
rights it would have if it were not Trustee.

 

12.                                 No Recourse Against Others.  No
director, officer, employee, incorporator, member, manager, partner or
stockholder of the Issuers or any Guarantor, as such, shall have any liability
for any obligations of the Issuers or the Guarantors under the Notes, the
Indenture, the Note Guarantees or for any claim based on, in respect of, or by
reason of, such obligations or their creation. 
Each Holder of Notes by accepting a Note waives and releases all such
liability.  This waiver and release are
part of the consideration for issuance of the Notes.

 

13.                                 Authentication.  This
Note shall not be valid until authenticated by the manual signature of the Trustee
or an authenticating agent.

 

14.                                 CUSIP Numbers. 
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers have caused CUSIP numbers to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. 
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.

 

15.                                 Guarantee.  The
Issuers’ obligations under the Notes are fully and unconditionally guaranteed,
jointly and severally, by the Guarantors.

 

16.                                 Copies of Documents.  The
Company shall furnish to any Holder upon written request and without charge a
copy of the Indenture.  Requests may be
made to:

 

Rainbow
National Services LLC

 

A-8

 

200
Jericho Quadrangle

Jericho, New York  11753

Attention:  Joshua W. Sapan, President
and Chief Executive Officer

 

And to:

 

Rainbow
National Services LLC

200 Jericho Quadrangle

Jericho, NY 11753

Attention:  Chief Financial Officer

 

A-9

 

ASSIGNMENT FORM

 

	
  To
  assign this Note, fill in the form below:

  
	
  (I)
  or (we) assign and transfer this Note to:

  	
   

  
	
   

  	
  (INSERT ASSIGNEE’S LEGAL NAME)

  
	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code)

  
	
   

  
	
  and
  irrevocably appoint

  
	
  to
  transfer this Note on the books of the Issuers.  The agent may substitute another to act for
  him.

  
			

 

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name appears on the face of this Note)

  
	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  
	
   

  
	
  
  

  

  

  
	
  *
  Participant in a recognized Signature Guarantee Medallion Program (or other
  signature guarantor acceptable to the Trustee).

  
						

 

A-10

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If
you want to elect to have this Note purchased by the Company or the Issuers
pursuant to Section 4.10(c) or 4.14 of the Indenture, respectively, check
the appropriate box below:

 

	
  o Section 4.10(c)

  	
  o Section 4.14

  

 

If
you want to elect to have only part of the Note purchased by the Company or the
Issuers pursuant to Section 4.10(c) or Section 4.14 of the Indenture,
respectively, state the amount you elect to have purchased:

 

$                 

 

	
  Date:

  	
   

  	
   

  
	
   

  
	
  Your Signature:

  	
   

  
	
  (Sign exactly as your name appears on the face of this Note)

  
	
  Tax Identification No.:

  	
   

  
	
  Signature
  Guarantee*:

  	
   

  	
   

  
	
   

  
	
  
  

  

  

  
	
  *
  Participant in a recognized Signature Guarantee Medallion Program (or other
  signature guarantor acceptable to the Trustee).

  
							

 

A-11

 

[To be inserted
for Rule 144A Global Note]

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

 

The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another Global
Note or Definitive Note for an interest in this Global Note, have been made:

 

	
  Date of Exchange

  	
   

  	
  Amount
  of Decrease in 

  Principal Amount at 

  Maturity 

  of this Global Note

  	
   

  	
  Amount
  of Increase in
 Principal Amount at
 Maturity 

  of this Global Note

  	
   

  	
  Principal
  Amount at 

  Maturity
 of this Global Note 

  Following such 

  decrease (or increase)

  	
   

  	
  Signature
  of 

  Authorized Officer

  of Trustee or 

  Custodian

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

[To be inserted
for Regulation S Global Note]

 

SCHEDULE OF EXCHANGES OF REGULATION S GLOBAL NOTE

 

The
following exchanges of a part of this Regulation S Global Note for an interest
in another Global Note or of other Restricted Global Notes for an interest in
this Regulation S Global Note, have been made:

 

 

	
  Date of Exchange

  	
   

  	
  Amount
  of Decrease in 

  Principal Amount at 

  Maturity 

  of this Global Note

  	
   

  	
  Amount
  of Increase in
 Principal Amount at
 Maturity 

  of this Global Note

  	
   

  	
  Principal
  Amount at 

  Maturity
 of this Global Note 

  Following such 

  decrease (or increase)

  	
   

  	
  Signature
  of 

  Authorized Officer

  of Trustee or 

  Custodian

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

A-12

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

Rainbow
National Services LLC

200
Jericho Quadrangle

Jericho,
New York  11753

Attention:  Joshua W. Sapan, President and Chief
Executive Officer

 

The
Bank of New York

101
Barclay Street, 8W

New
York, New York 10286

Attention:  Corporate Trust Administration

 

Re:  103/8% Senior
Subordinated Notes due 2014

 

Reference
is hereby made to the Indenture, dated as of August 20, 2004 (the “Indenture”), among Rainbow National
Services LLC, a Delaware limited liability company (the “Company”), RNS Co-Issuer Corporation, a
Delaware corporation (the “Co-Issuer Corp.”
and, together with the Company, the “Issuers”),
the Guarantors, and The Bank of New York, a New York banking corporation, as
trustee.  Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.

 

                    
(the “Transferor”) owns and
proposes to transfer the Note[s] or interest in such Note[s] specified in Annex
A hereto, in the principal amount at maturity of $           
in such Note[s] or interests (the “Transfer”),
to                                     
(the “Transferee”), as further
specified in Annex A hereto.  In
connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

o            1.             Check if Transferee will take delivery of a
beneficial interest in the 144A Global Note or a Definitive Note Pursuant to
Rule 144A.  The Transfer is being effected pursuant to
and in accordance with Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Note for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and
such Person and each such account is a “qualified institutional buyer” within
the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A
and such Transfer is in compliance with any applicable blue sky securities laws
of any state of the United States.  Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

 

o            2.             Check if Transferee will take delivery of a
beneficial interest in a Legended Regulation S Global Note, or a Definitive
Note pursuant to Regulation S.  The 

 

B-1

 

Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and, accordingly, the Transferor hereby further certifies
that (i) the Transfer is not being made to a person in the United States and
(A) at the time the buy order was originated, the Transferee was outside the
United States or such Transferor and any Person acting on its behalf reasonably
believed and believes that the Transferee was outside the United States or (B)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither such Transferor nor any Person acting on
its behalf knows that the transaction was prearranged with a buyer in the
United States, (ii) no directed selling efforts have been made in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (iii) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act and (iv) the transfer is
not being made to a U.S. Person or for the account or benefit of a U.S.
Person  (other than an Initial
Purchaser).  Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Legended Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.

 

o            3.             Check and complete if Transferee will take
delivery of a Restricted Definitive Note pursuant to any provision of the
Securities Act other than Rule 144, Rule 144A or Regulation S.  The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):

 

o            (a)           such Transfer is being effected to the
Company or a subsidiary thereof; or

 

o            (b)           such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A, Rule 144
or Rule 904, and the Transferor hereby further certifies that it has not
engaged in any general solicitation within the meaning of Regulation D under
the Securities Act and the Transfer complies with the transfer restrictions
applicable to Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) an Opinion
of Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), to the effect that such
Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer in
accordance with the terms of the Indenture, the transferred Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Definitive Notes and in the Indenture and the
Securities Act.

 

4.             Check if Transferee will take delivery of a
beneficial interest in an Unrestricted Global Note or of an Unrestricted
Definitive Note.

 

o            (a)           Check if Transfer is Pursuant to Rule
144.  (i) The Transfer is being effected
pursuant to and in accordance with Rule 144 under the Securities Act and in
compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities 

 

B-2

 

laws
of any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest
or Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.

 

o            (b)           Check if Transfer is Pursuant to Regulation
S.  (i) The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and, in the case of a transfer from a Restricted Global Note or a Restricted
Definitive Note, the Transferor hereby further certifies that (a) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (b) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (c) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (d) the transfer is not being made to a
U.S. Person or for the account or benefit of a U.S. Person, and (ii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities
Act.  Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.

 

o            (c)           Check if Transfer is Pursuant to Other
Exemption.  (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any State of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act.  Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will not be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.

 

B-3

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issuers.

 

	
  Dated:

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

1.             The Transferor owns and proposes to transfer
the following:

 

[CHECK ONE OF (a) OR (b)]

 

o            (a)           a beneficial interest in the:

 

                (i)            144A Global Note (CUSIP             );
or

 

                (ii)           Regulation S Global Note (CUSIP            );
or

 

o            (b)           a Restricted Definitive Note.

 

2.             After the Transfer the Transferee will hold:

 

[CHECK ONE]

 

o            (a)           a beneficial interest in the:

 

                (i)            144A Global Note (CUSIP             );
or

 

                (ii)           Regulation S Global Note (CUSIP             );
or

 

                (iii)          Unrestricted Global Note (CUSIP             );
or

 

o            (b)           a Restricted Definitive Note; or

 

o            (c)           an Unrestricted Definitive Note,

 

in
accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

Rainbow
National Services LLC

200
Jericho Quadrangle

Jericho,
New York  11753

Attention:  Joshua W. Sapan, President and Chief
Executive Officer

 

The
Bank of New York

101
Barclay Street, 8W

New
York, New York 10286

Attention:
Corporate Trust Administration

 

Re:  103/8% Senior
Subordinated Notes due 2014

 

Reference
is hereby made to the Indenture, dated as of August 20, 2004 (the “Indenture”), among Rainbow National
Services LLC, a Delaware limited liability company (the “Company”), RNS Co-Issuer Corporation, a
Delaware corporation (the “Co-Issuer Corp.”
and, together with the Company, the “Issuers”),
the Guarantors and The Bank of New York, a New York banking corporation, as trustee.  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

                           
(the “Owner”) owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount at maturity of $            
in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner
hereby certifies that:

 

1.             Exchange of Restricted Definitive Notes or
Beneficial Interests in a Restricted Global Note for Unrestricted Definitive
Notes or Beneficial Interests in an Unrestricted Global Note

 

o            (a)           Check if Exchange is from beneficial interest
in a Restricted Global Note to beneficial interest in an Unrestricted Global
Note.  In connection with the Exchange of
the Owner’s beneficial interest in a Restricted Global Note for a beneficial
interest in an Unrestricted Global Note in an equal principal amount at
maturity, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner’s own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the “Securities
Act”), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.

 

o            (b)           Check if Exchange is from beneficial interest
in a Restricted Global Note to Unrestricted Definitive Note.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for an Unrestricted Definitive
Note, the Owner hereby certifies (i) the Definitive Note is being acquired for
the Owner’s own account without transfer, 

 

C-1

 

(ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive Note is
being acquired in compliance with any applicable blue sky securities laws of
any state of the United States.

 

o            (c)           Check if Exchange is from Restricted
Definitive Note to beneficial interest in an Unrestricted Global Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for a beneficial interest in an Unrestricted Global
Note, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner’s own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act and (iv) the beneficial interest is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.

 

o            (d)           Check if Exchange is from Restricted
Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner
hereby certifies (i) the Unrestricted Definitive Note is being acquired for the
Owner’s own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted Definitive
Notes and pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the Unrestricted Definitive Note is being acquired in compliance with
any applicable blue sky securities laws of any state of the United States.

 

2.             Exchange of Restricted Definitive Notes or
Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes
or Beneficial Interests in Restricted Global Notes

 

o            (a)           Check if Exchange is from beneficial interest
in a Restricted Global Note to Restricted Definitive Note.  In connection with the Exchange of the Owner’s
beneficial interest in a Restricted Global Note for a Restricted Definitive
Note with an equal principal amount at maturity, the Owner hereby certifies
that the Restricted Definitive Note is being acquired for the Owner’s own
account without transfer.  Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

o            (b)           Check if Exchange is from Restricted
Definitive Note to beneficial interest in a Restricted Global Note.  In connection with the Exchange of the Owner’s
Restricted Definitive Note for a beneficial interest in the [CHECK ONE] :

 

144A Global Note, :

 

C-2

 

o            Regulation
S Global Note, :

 

with
an equal principal amount at maturity, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner’s own account without transfer
and (ii) such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to and in
accordance with the Securities Act, and in compliance with any applicable blue
sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.

 

This
certificate and the statements contained herein are made for your benefit and
the benefit of the Issues.

 

	
  Dated:

  	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  [Insert Name of Transferor]

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
			

 

C-3

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

Rainbow
National Services LLC

200
Jericho Quadrangle

Jericho,
New York  11753

Attention:  Joshua W. Sapan, President and Chief
Executive Officer

 

The
Bank of New York

101
Barclay Street, 8W

New
York, New York 10286

Attention:
Corporate Trust Administration

 

Re:  103/8% Senior
Subordinated Notes due 2014

 

Reference
is hereby made to the Indenture, dated as of August 20, 2004 (the “Indenture”), among Rainbow National
Services LLC, a Delaware limited liability company (the “Company”), RNS Co-Issuer Corporation, a
Delaware corporation (the “Co-Issuer Corp.”
and, together with the Company, the “Issuers”),
the Guarantors and The Bank of New York, a New York banking corporation, as
trustee (the “Trustee”).  Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

 

In
connection with our proposed purchase of $            
aggregate principal amount of:

 

(a)           o            beneficial interest in a Global
Note, or

 

(b)           o            a Definitive Note,

 

we
confirm that:

 

1.             We understand that any subsequent transfer of
the Notes or any interest therein is subject to certain restrictions and
conditions set forth in the Indenture and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Notes or any interest
therein except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities
Act”).

 

2.             We understand that the offer and sale of the
Notes have not been registered under the Securities Act, and that the Notes and
any interest therein may not be offered or sold except as permitted in the
following sentence.  We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell the Notes or any interest therein, we shall do
so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a “qualified
institutional buyer” (as defined therein), (C) to an institutional “accredited
investor” (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you and to the 

 

D-1

 

Issuers
a signed letter substantially in the form of this letter and an Opinion of
Counsel in form reasonably acceptable to the Issuers to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising
such purchaser that resales thereof are restricted as stated herein.

 

3.             We understand that, on any proposed resale of
the Notes or beneficial interest therein, we will be required to furnish to you
and the Issuers such certifications, legal opinions and other information as you
and the Issuers may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. 
We further understand that the Notes purchased by us will bear a legend
to the foregoing effect.

 

4.             We are an institutional “accredited investor”
(as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Notes, and we and any accounts for which we are acting are
each able to bear the economic risk of our or its investment.

 

5.             We are acquiring the Notes or beneficial
interest therein purchased by us for our own account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each
of which we exercise sole investment discretion.

 

The
Trustee and the Issuers are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Insert
  Name of Accredited Investor]

  
	
   

  
	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
					

 

D-2

 

EXHIBIT E

 

FORM OF NOTATION OF GUARANTEE

 

For
value received, each Guarantor (which term includes any successor Person under
the Indenture) has, jointly and severally, unconditionally guaranteed, to the
extent set forth in and subject to the provisions in the Indenture dated as of
August 20, 2004 (the “Indenture”)
among Rainbow National Services LLC, a Delaware limited liability company (the “Company”), RNS Co-Issuer Corporation, a
Delaware corporation (the “Co-Issuer Corp.”
and, together with the Company, the “Issuers”),
the other Guarantors (as defined in the Indenture) and The Bank of New York, a
New York banking corporation, as trustee (the “Trustee”), (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, and
the due and punctual payment of interest on overdue principal, premium, if any,
and interest on the Notes, if lawful (subject in all cases to any applicable
grace periods provided in the Indenture and the Notes), and the due and
punctual performance of all other obligations of the Issuers to the Holders or
the Trustee all in accordance with the terms of the Indenture and the Notes and
(b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, the same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.  The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article Ten of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Note Guarantee.  Each Holder of a Note, by accepting the same,
(a) agrees to and shall be bound by such provisions and (b) appoints the
Trustee attorney-in-fact of such Holder for such purpose.

 

Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Note Guarantee of such Guarantor
not constitute (i) a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal, state or foreign law to the extent
applicable to its Note Guarantee or (ii) an unlawful distribution under any
applicable state law prohibiting shareholder distributions by an insolvent
subsidiary to the extent applicable to its Note Guarantee.

 

[SIGNATURE PAGE FOLLOWS]

 

E-1

 

IN
WITNESS HEREOF, each Guarantor has caused this Notation of Guarantee to be
signed manually or by facsimile by its duly authorized officers.

 

	
   

  	
  AMERICAN
  MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  THE
  INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
  By:
  RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AMERICAN
  MOVIE CLASSICS IV HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AMC
  PRODUCTIONS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  WE:
  WOMEN’S ENTERTAINMENT PRODUCTIONS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-2

 

	
   

  	
  IFC
  PROGRAMMING, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AMC
  FILM HOLDINGS LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AMC
  MOVIE COMPANION LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AMC
  NEW MEDIA LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  MONSTERS
  VOD SERVICES LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-3

 

	
   

  	
  WE:
  WOMEN’S ENTERTAINMENT LLC

  
	
   

  	
  By:
  AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WE
  NEW MEDIA LLC

  
	
   

  	
  By:
  WE: WOMEN’S ENTERTAINMENT LLC

  
	
   

  	
  By: AMERICAN MOVIE CLASSICS COMPANY LLC

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  IFC
  DIGITAL MEDIA LLC

  
	
   

  	
  By:
  THE INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
  By: RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  IFC
  VOD SERVICES LLC

  
	
   

  	
  By:
  THE INDEPENDENT FILM CHANNEL LLC

  
	
   

  	
  By: RAINBOW NATIONAL SERVICES LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-4Exhibit 10.1

 

EXECUTION COPY

 

 

 

 

LOAN AGREEMENT

 

among

 

RAINBOW NATIONAL SERVICES LLC, as Borrower;

 

THE GUARANTORS PARTY HERETO, as Guarantors;

 

BANK OF AMERICA, N.A.,

as Syndication Agent;

 

CREDIT SUISSE FIRST BOSTON,

CITICORP NORTH AMERICA, INC. and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents;

 

JPMORGAN CHASE BANK,

as Administrative Agent;

 

and

 

THE OTHER CREDIT PARTIES PARTY HERETO

 

 

Dated as of August 20, 2004

 

 

 

J.P. MORGAN SECURITIES INC. and BANC OF AMERICA
SECURITIES LLC,

as Co-Lead Arrangers and Co-Book Runners

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1 -

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 -

  	
  LOANS

  	
   

  
	
  Section 2.1

  	
  The Loans

  	
   

  
	
  Section 2.2

  	
  Manner of Borrowing and Disbursement

  	
   

  
	
  Section 2.3

  	
  Interest

  	
   

  
	
  Section 2.4

  	
  Fees

  	
   

  
	
  Section 2.5

  	
  Optional Prepayments and Reductions

  	
   

  
	
  Section 2.6

  	
  Mandatory Commitment Reductions and
  Prepayments

  	
   

  
	
  Section 2.7

  	
  Repayment

  	
   

  
	
  Section 2.8

  	
  Swing Loans

  	
   

  
	
  Section 2.9

  	
  Notes; Loan Accounts

  	
   

  
	
  Section 2.10

  	
  Manner of Payment

  	
   

  
	
  Section 2.11

  	
  Reimbursement

  	
   

  
	
  Section 2.12

  	
  Application of Payments.

  	
   

  
	
  Section 2.13

  	
  Capital Adequacy

  	
   

  
	
  Section 2.14

  	
  Incremental Facility Loans

  	
   

  
	
  Section 2.15

  	
  Letters of Credit.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3 -

  	
  GUARANTEE

  	
   

  
	
  Section 3.1

  	
  Guarantee

  	
   

  
	
  Section 3.2

  	
  Waivers and Releases

  	
   

  
	
  Section 3.3

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4 -

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
  Section 4.1

  	
  Conditions Precedent to Closing

  	
   

  
	
  Section 4.2

  	
  Conditions Precedent to Each Advance

  	
   

  
	
  Section 4.3

  	
  Conditions Precedent to Issuance of
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5
  -

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  Section 5.1

  	
  Representations and Warranties

  	
   

  
	
  Section 5.2

  	
  Survival of Representations and
  Warranties, etc

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6 -

  	
  GENERAL COVENANTS

  	
   

  
	
  Section 6.1

  	
  Preservation of Existence and Similar
  Matters

  	
   

  
	
  Section 6.2

  	
  Compliance with Applicable Law

  	
   

  
	
  Section 6.3

  	
  Maintenance of Properties

  	
   

  
	
  Section 6.4

  	
  Accounting Methods and Financial
  Records

  	
   

  
	
  Section 6.5

  	
  Insurance

  	
   

  

 

i

 

	
  Section 6.6

  	
  Payment of Taxes and Claims

  	
   

  
	
  Section 6.7

  	
  Visits and Inspections

  	
   

  
	
  Section 6.8

  	
  Payment of Indebtedness

  	
   

  
	
  Section 6.9

  	
  Use of Proceeds

  	
   

  
	
  Section 6.10

  	
  ERISA

  	
   

  
	
  Section 6.11

  	
  Further Assurances

  	
   

  
	
  Section 6.12

  	
  Broker’s Claims

  	
   

  
	
  Section 6.13

  	
  Indemnity

  	
   

  
	
  Section 6.14

  	
  Covenants Regarding Formation of
  Subsidiaries, Investments and Acquisitions

  	
   

  
	
  Section 6.15

  	
  Interest Rate Hedging

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7
  -

  	
  INFORMATION
  COVENANTS

  	
   

  
	
  Section 7.1

  	
  Quarterly Financial Statements and
  Information

  	
   

  
	
  Section 7.2

  	
  Annual Financial Statements and
  Information; Certificate of No Default

  	
   

  
	
  Section 7.3

  	
  Performance Certificates

  	
   

  
	
  Section 7.4

  	
  Copies of Other Reports

  	
   

  
	
  Section 7.5

  	
  Notice of Litigation and Other Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8 -

  	
  NEGATIVE COVENANTS

  	
   

  
	
  Section 8.1

  	
  Indebtedness

  	
   

  
	
  Section 8.2

  	
  Investments

  	
   

  
	
  Section 8.3

  	
  Limitation on Liens

  	
   

  
	
  Section 8.4

  	
  Amendment and Waiver

  	
   

  
	
  Section 8.5

  	
  Liquidation; Disposition or
  Acquisition of Assets

  	
   

  
	
  Section 8.6

  	
  Limitation on Guaranties

  	
   

  
	
  Section 8.7

  	
  Restricted Payments and Purchases

  	
   

  
	
  Section 8.8

  	
  Total Leverage Ratio

  	
   

  
	
  Section 8.9

  	
  Senior Leverage Ratio

  	
   

  
	
  Section 8.10

  	
  Interest Coverage Ratio

  	
   

  
	
  Section 8.11

  	
  Debt Service Ratio

  	
   

  
	
  Section 8.12

  	
  Affiliate Transactions

  	
   

  
	
  Section 8.13

  	
  Real Estate

  	
   

  
	
  Section 8.14

  	
  ERISA Liabilities

  	
   

  
	
  Section 8.15

  	
  Sales and Leasebacks

  	
   

  
	
  Section 8.16

  	
  Negative Pledge

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9 -

  	
  DEFAULT

  	
   

  
	
  Section 9.1

  	
  Events of Default

  	
   

  

 

ii

 

	
  Section 9.2

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10 -

  	
  THE AGENTS

  	
   

  
	
  Section 10.1

  	
  Appointment and Authorization

  	
   

  
	
  Section 10.2

  	
  Delegation of Duties

  	
   

  
	
  Section 10.3

  	
  Interest Holders

  	
   

  
	
  Section 10.4

  	
  Consultation with Counsel

  	
   

  
	
  Section 10.5

  	
  Documents

  	
   

  
	
  Section 10.6

  	
  Security Documents; Release of
  Collateral

  	
   

  
	
  Section 10.7

  	
  Affiliates

  	
   

  
	
  Section 10.8

  	
  Responsibility of the Agents

  	
   

  
	
  Section 10.9

  	
  Action by Agents

  	
   

  
	
  Section 10.10

  	
  Notice of Default or Event of
  Default

  	
   

  
	
  Section 10.11

  	
  Responsibility Disclaimed

  	
   

  
	
  Section 10.12

  	
  Indemnification

  	
   

  
	
  Section 10.13

  	
  Credit Decision

  	
   

  
	
  Section 10.14

  	
  Successor Agents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11
  -

  	
  CHANGE IN
  CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES

  	
   

  
	
  Section 11.1

  	
  Eurodollar Basis Determination
  Inadequate or Unfair

  	
   

  
	
  Section 11.2

  	
  Illegality

  	
   

  
	
  Section 11.3

  	
  Increased Costs and Taxes

  	
   

  
	
  Section 11.4

  	
  Effect
  On Other Advances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12 -

  	
  MISCELLANEOUS

  	
   

  
	
  Section 12.1

  	
  Notices

  	
   

  
	
  Section 12.2

  	
  Expenses

  	
   

  
	
  Section 12.3

  	
  Waivers

  	
   

  
	
  Section 12.4

  	
  Set-Off

  	
   

  
	
  Section 12.5

  	
  Assignment

  	
   

  
	
  Section 12.6

  	
  Counterparts

  	
   

  
	
  Section 12.7

  	
  Governing
  Law

  	
   

  
	
  Section 12.8

  	
  Severability

  	
   

  
	
  Section 12.9

  	
  Headings

  	
   

  
	
  Section 12.10

  	
  Interest

  	
   

  
	
  Section 12.11

  	
  Entire
  Agreement

  	
   

  
	
  Section 12.12

  	
  Amendment
  and Waiver

  	
   

  
	
  Section 12.13

  	
  Other
  Relationships

  	
   

  
	
  Section 12.14

  	
  Confidentiality

  	
   

  

 

iii

 

	
  Section 12.15

  	
  Liability
  of Partners, Members and Other Persons

  	
   

  
	
  Section 12.16

  	
  Survival

  	
   

  
	
  Section 12.17

  	
  Delivery
  of Lender Addenda

  	
   

  
	
  Section 12.18

  	
  USA
  Patriot Act

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13
  -

  	
  WAIVER OF JURY
  TRIAL

  	
   

  
	
  Section 13.1

  	
  Waiver
  of Jury Trial

  	
   

  
	
  Section 13.2

  	
  Consent
  to Jurisdiction

  	
   

  

 

iv

 

Exhibits and Schedules

 

	
  Exhibit A

  	
  –

  	
  Form of Assignment and
  Assumption Agreement

  
	
  Exhibit B

  	
  –

  	
  Form of Lender Addendum

  
	
  Exhibit C

  	
  –

  	
  Form of Notice of
  Continuation/Conversion

  
	
  Exhibit D

  	
  –

  	
  Form of Pledge Agreement

  
	
  Exhibit E

  	
  –

  	
  Form of Request for
  Advance

  
	
  Exhibit F

  	
  –

  	
  Form of Request for
  Issuance of Letter of Credit

  
	
  Exhibit G

  	
  –

  	
  Form of Revolving Note

  
	
  Exhibit H

  	
  –

  	
  Form of Security Agreement

  
	
  Exhibit I

  	
  –

  	
  Form of Subordination of
  Intercompany Obligations Agreement

  
	
  Exhibit J

  	
  –

  	
  Form of Swing Loan Note

  
	
  Exhibit K

  	
  –

  	
  Form of Term B Note

  
	
  Exhibit L

  	
  –

  	
  Form of Trademark Security
  Agreement

  
	
  Exhibit M

  	
  –

  	
  Form of Swing Loan Request

  
	
  Exhibit N

  	
  –

  	
  Form of Borrower Loan
  Certificate

  
	
  Exhibit O

  	
  –

  	
  Form of Holdings Loan
  Certificate

  
	
  Exhibit P

  	
  –

  	
  Form of Subsidiary
  Guarantor Loan Certificate

  
	
  Exhibit Q

  	
  –

  	
  Form of Guarantee
  Supplement

  
	
  Exhibit R

  	
  –

  	
  Form of Performance
  Certificate

  

 

	
  Schedule 1

  	
  –

  	
  Material Affiliate
  Contracts

  
	
  Schedule 5.1(c)-1

  	
  –

  	
  Borrower Parties

  
	
  Schedule 5.1(c)-2

  	
  –

  	
  Unrestricted Subsidiaries

  
	
  Schedule 5.1(i)

  	
  –

  	
  Cash for Carriage
  Payments; Other Liabilities

  
	
  Schedule 5.1(k)

  	
  –

  	
  Investments and Guaranties

  
	
  Schedule 5.1(l)

  	
  –

  	
  Litigation

  
	
  Schedule 5.1(m)

  	
  –

  	
  ERISA

  
	
  Schedule 5.1(n)

  	
  –

  	
  Intellectual Property

  
	
  Schedule 5.1(q)

  	
  –

  	
  Film Rights Agreements and
  Affiliation Agreements

  
	
  Schedule 5.1(v)

  	
  –

  	
  Names of Borrower Parties

  
	
  Schedule 7.5(b)

  	
  –

  	
  RME Spin-Off

  
	
  Schedule 8.6

  	
  –

  	
  Permitted Guaranties

  
	
  Schedule 8.12

  	
  –

  	
  Affiliate Transactions

  

 

 

LOAN AGREEMENT

among

RAINBOW NATIONAL SERVICES LLC, as Borrower;

THE GUARANTORS PARTY HERETO, as Guarantors;

BANK OF AMERICA, N.A.,

as Syndication Agent;

CREDIT SUISSE FIRST BOSTON,

CITICORP NORTH AMERICA, INC. and

WACHOVIA BANK, NATIONAL ASSOCIATION

as Co-Documentation Agents;

JPMORGAN CHASE BANK,

as Administrative Agent

and

THE OTHER CREDIT PARTIES PARTY HERETO

 

W I T N E S S E T H:

 

WHEREAS,
the Borrower has requested that the Swing Loan Lender, the Issuing Bank and the
Lenders make available to it the Commitments, on the terms and conditions set
forth herein, to, among other things, (a) refinance the outstanding Obligations
(as defined in the RMH Loan Agreement) under the RMH Loan Agreement and the
other Loan Documents (as defined in the RMH Loan Agreement), (b) make Permitted
Investments and Acquisitions and Restricted Payments permitted under this
Agreement, and (c) fund working capital and general corporate purposes of the
Borrower and the Subsidiary Guarantors; and

 

WHEREAS,
the Swing Loan Lender, the Issuing Bank and the Lenders are willing to make the
Commitments available to the Borrower upon the terms and conditions set forth
herein;

 

NOW,
THEREFORE, in consideration of the premises and the covenants and agreements
contained herein, and in order to induce the Credit Parties (as defined herein)
to consent to the transactions contemplated hereby, as well as for other good
and valuable consideration, the receipt and adequacy of all of the foregoing as
legally sufficient consideration being hereby acknowledged, the parties hereto
each do hereby agree as follows:

 

ARTICLE 1 -  Definitions.

 

For
the purposes of this Agreement:

 

“Acquisition”
shall mean (a) any acquisition of all or substantially all of the assets of a
business or a business unit, (b) any acquisition of all or substantially all of
the capital stock or other ownership interest of any other Person, or (c) any
merger by any

 

 

Rainbow Company of or with any other Person, such that, in any such
case, such Person shall become consolidated with such Rainbow Company in
accordance with GAAP after consummating such transaction.

 

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

 

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

 

“Adjustment
Date” shall mean the second (2nd) Business Day after the date on which the
financial statements referred to in Section 7.1 hereof for the fiscal
quarter of the Borrower ending September 30, 2004, have been delivered to
the Arranger Banks.

 

“Administrative
Agent” shall mean JPMorgan Chase Bank, acting as administrative agent for
the Credit Parties, together with any successor administrative agent.

 

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

 

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

 

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

 

“Affiliation
Agreement” shall mean any agreement between any Borrower Party and a cable
television operator or a direct broadcast satellite system operator pursuant to
which such operator agrees, among other things, to distribute and exhibit to
its subscribers programming of such Borrower Party.

 

2

 

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

 

“Agreement”
shall mean this Loan Agreement.

 

“Agreement
Date” shall mean August 20, 2004.

 

“AMC”
shall mean American Movie Classics Company LLC, a New York limited liability
company (formerly known as American Movie Classics Company, a New York general
partnership).

 

“AMC
Consulting Agreement” shall mean that certain Consulting Agreement dated as
of March 29, 2001, among CSC Holdings, AMC and WE, pursuant to which CSC
Holdings has agreed to provide consulting services to AMC and WE for an annual
fee equal to three and one-half percent (3.50%) of the gross revenues of AMC
and WE during the applicable year and reimbursement of the cost and expenses
incurred by CSC Holdings in connection with the consulting services.

 

“AMC
LLC Agreement” shall mean that certain Limited Liability Agreement of
American Movie Classics Company LLC.

 

“AMC
IV” shall mean American Movie Classics IV Holding Corporation, a Delaware
corporation.

 

“Annualized
Cash Flow” shall mean, as of any calculation date for AMC, IFC and WE on a
consolidated basis, (a) the product of (i) the result of (A) Cash Flow, plus
(B) the sum, to the extent deducted in computing Net Income, of (1) Employee
Stock Compensation Plan Expense, (2) Restructuring Charges, (3) through
December 31, 2004, the fees accrued under the AMC Consulting Agreement,
(4) for any six (6) month period that includes December 31, 2003, an
amount of up to $16,600,000 in the aggregate in respect of feature film library
holdings write-offs and an amount of up to $4,600,000 in the aggregate in
respect of charges relating to the investigation of improper expense accruals
at the Subsidiaries of the Borrower and (5) for any six (6) month period that
includes March 31, 2004, an amount of up to $4,200,000 in the aggregate in
respect of charges relating to the investigation of improper expense accruals
at the Subsidiaries of the Borrower, minus (C) the sum, to the extent
added in computing Net Income, of (1) Employee Stock Compensation Plan Income,
in each case for the most recently completed six (6) month period, times
(ii) two (2), minus (b) Adjusted Stock Compensation Plan Expense, minus
(c) Restructuring Charges for the most recently completed six (6) month period.

 

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

 

3

 

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

 

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

 

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

 

“Arranger
Banks” shall mean, collectively, the Administrative Agent and the
Syndication Agent.

 

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

 

“Authorized
Debt Issuance” shall mean, with respect to the issuance of any Indebtedness
For Money Borrowed by the Borrower or Holdings, or both, (a) up to $800,000,000
in an initial aggregate principal amount raised by the Borrower or Holdings, or
both, on or before the date of the consummation of the RME Spin-Off (the “Initial
Authorized Debt Issuance”), and (b) up to $300,000,000 in an additional
aggregate principal amount raised by the Borrower or Holdings, or both
(collectively, the “Subsequent Authorized Debt Issuances”), in each
case, on terms and conditions which shall (i) have a maturity date no earlier
than six (6) months after the Final Maturity Date, (ii) not have any required
cash redemptions prior to six (6) months after the Final Maturity Date, (iii)
be unsecured, (iv) be contractually subordinated to the Obligations on terms
reasonably satisfactory to the Arranger Banks, (v) not be supported by any
guaranty of the Borrower or any Subsidiary of the Borrower (unless, with
respect to any Authorized Debt Issuance by the Borrower, such guaranty shall be
given by a Subsidiary Guarantor and be contractually subordinated to the
Obligations on terms reasonably satisfactory to the Arranger Banks), (vi) be
issued subject to demonstration to the reasonable satisfaction of the Arranger
Banks of pro forma compliance with the Financial Covenants through the Final
Maturity Date, (vii) be issued on market terms and conditions which shall be no
more restrictive on the Borrower Parties than the terms and conditions of this
Agreement and the other Loan Documents, and (viii) be otherwise reasonably
satisfactory to the Arranger Banks; provided, however, that
clauses (i) and (iv) and the subordination requirement of clause (v) of this
definition shall not apply to up to $300,000,000 of the Initial Authorized Debt
Issuance (the “Senior Authorized Debt Issuance”).

 

4

 

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

 

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

 

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

 

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

 

“Base
Rate” shall mean, as of any date, a fluctuating interest rate per annum
equal to the greater of (a) the Prime Rate and (b) the sum of (i) the Federal
Funds Effective Rate plus (ii) one-half of one percent (0.50%).  The Base Rate shall be adjusted automatically
as of the opening of business on the effective date of each change in the Prime
Rate or the Federal Funds Effective Rate, as the case may be.

 

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

 

“Borrower”
shall mean Rainbow National Services LLC, a Delaware limited liability company.

 

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

 

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

 

“Calendar
Operating Cash Flow” shall mean, as of each fiscal year end for AMC, IFC
and WE on a consolidated basis,
the result of (a) Cash Flow, plus (b) Employee Stock Compensation Plan
Expense, minus (c) Employee Stock Compensation Plan Income, minus
(d) Adjusted Stock Compensation Plan Expense, in each case for the twelve (12)
month period then ended.

 

5

 

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

 

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

 

“Cash
Equivalents” shall mean the following:

 

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

 

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

 

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

 

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

 

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

 

“Cash
Flow” shall mean, for any period, the sum of (a) Net Income (excluding any
unusual, non-recurring or extraordinary items), plus (b) the sum, in each
case to the extent deducted in calculating Net Income, of (i) Interest Expense,
(ii) depreciation, (iii) amortization (excluding Film Rights Amortization),
(iv) non-cash losses on securities and Interest Hedge Agreements, (v) taxes,
(vi) non-cash charges incurred subsequent to the Agreement Date resulting from
the application of SFAS No. 123 or SFAS No. 142, (vii) Deferred Carriage Fees,
(viii) interest expense in respect of the PIK Preferred and (ix) other non-cash
expenses (excluding any such non-cash

 

6

 

expense to the extent that it represents an accrual of or reserve for
cash expenses in any future period), minus (c) the sum, in each case to
the extent added in calculating Net Income, of (i) non-cash gains on securities
and Interest Hedge Agreements and (ii) non-cash items increasing Net Income,
other than the accrual of revenue consistent with past practice.

 

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

 

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

 

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

 

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

 

(d)                                 the Borrower shall, at any time, cease to own
and vote, directly or indirectly, one hundred percent (100%) of the Voting
Stock of each of the Subsidiary Guarantors (except to the extent that (i) the
Voting Stock of any such Subsidiary Guarantor is permitted to be disposed of,
and (ii) any such Subsidiary Guarantor is permitted to issue any additional
Voting Stock pursuant to the terms and conditions of this Agreement);

 

(e)                                  the Dolan Family Interests, collectively and
in the aggregate, shall cease to own, directly or indirectly, at least fifty
and one-tenth percent (50.1%) of the outstanding Voting Stock of RME; or

 

(f)                                    the Dolan Family Interests shall, at any
time, cease to have management control over the business and operations of the
Borrower Parties, other than as a result of a sale or other disposition of a
Subsidiary Guarantor permitted under Section 8.5 of this Agreement.

 

Notwithstanding
the foregoing, the consummation of the RME Spin-Off shall not be deemed a
Change of Control.

 

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

 

“Co-Documentation
Agents” shall mean, collectively, Credit Suisse First Boston, Citicorp
North America, Inc. and Wachovia Bank, National Association, in their

 

7

 

respective capacities as documentation agent under this Agreement, and “Co-Documentation
Agent” shall mean any one of the foregoing Co-Documentation Agents.

 

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

 

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

 

“Commitments”
shall mean, collectively, the Revolving Loan Commitment, the Term B Loan
Commitment, any Incremental Facility Commitments issued hereunder and any
replacement commitments of any of the foregoing issued hereunder.

 

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

 

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

 

“Converted
Term Loan” shall have the meaning set forth in Section 2.1(d)(ii).

 

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

 

“Credit
Party Interest Hedge Agreements” shall mean all Interest Hedge Agreements
between the Borrower, on the one hand, and any Credit Party (or any Lender
Affiliate thereof or any Person that was a Credit Party (or a Lender Affiliate
thereof) on the date of entering into such Interest Hedge Agreement), on the
other hand.

 

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

 

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

 

8

 

“Debt
Service” shall mean, as of any date of determination, for the Rainbow
Companies on a consolidated basis, the sum of (a) Annualized Interest Expense,
(b) cash taxes paid during the most recently completed twelve (12) calendar
month period, (c) payments of Obligations outstanding under the Revolving Loan
Commitment in connection with Mandatory Commitment Reductions during the
immediately succeeding twelve (12) calendar month period, (d) scheduled and
mandatory payments of the Term B Loans pursuant to Sections 2.6 and 2.7 hereof
during the immediately succeeding twelve (12) calendar month period (other than
the mandatory payments of the Term B Loans scheduled to be made on
June 30, 2011, September 30, 2011, December 31, 2011, and March 31,
2012), (e) scheduled principal payments under Capitalized Lease Obligations
during the immediately succeeding twelve (12) calendar month period and (f)
Excess Film Rights Payments during the immediately succeeding twelve (12)
calendar month period.

 

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

 

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

 

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

 

“Deferred
Carriage Fees” shall mean the amortization by AMC, IFC and WE of (a) launch
support payments and (b) payments in exchange for carriage, which expenditures
shall, at all times, be amortized in accordance with GAAP.

 

“Discretionary
Distributions Basket Amount” shall mean, for calendar year 2004 and each
calendar year thereafter during the term of this Agreement, $50,000,000.  Notwithstanding the foregoing, to the extent
that amounts available under the Discretionary Distributions Basket Amount with
respect to any calendar year are not used, such amounts may be carried forward
to increase the Discretionary Distributions Basket Amount during the years
following such year; provided, however, that the aggregate amount
available under the Discretionary Distributions Basket Amount during the term
of this Agreement shall not exceed $200,000,000.

 

“Dolan”
shall mean Charles F. Dolan.

 

“Dolan
Family Interests” shall mean (a) any Dolan Family Member, (b) any trusts
for the benefit of any Dolan Family Members, (c) any estate of any Dolan Family
Member or testamentary trust of any Dolan Family Member for the benefit of any
Dolan Family Members, (d) any executor, administrator, conservator or legal or
personal representative of any Person or Persons specified in clauses (a), (b)
and (c) above to the

 

9

 

extent acting in such capacity on behalf of any Dolan Family Member or
Members and not individually, (e) any Person, eighty percent (80%) of which is
owned and controlled by any of the foregoing or combination of the foregoing,
and (f) The Dolan Family Foundation, a New York not-for-profit corporation.

 

“Dolan
Family Members” shall mean (a) Dolan and (b) any spouse, child, child of a
spouse, parent, grandchild or other descendant of Dolan (where applicable in
each of the foregoing instances, whether natural or adopted), and any other
intestate distribute, heir or legatee of Dolan.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Eurodollar
Advance Period” shall mean, in connection with any Eurodollar Advance, the
term of such Advance selected by the Borrower, which may be one (1), two (2),
three (3) or six (6) months, and subject to the last proviso of this definition
nine (9) or twelve (12) months, or otherwise determined in accordance with this
Agreement; provided, however, notwithstanding the foregoing, (a) any
applicable Eurodollar Advance Period which would otherwise end on a day which
is not a Business

 

10

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

“Existing
Term Loan” shall mean an “Incremental Term C Loan” (as defined in the RMH
Loan Agreement).

 

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

 

“Federal
Funds Effective Rate” shall mean, as of any date, the weighted average
(rounded upwards, if necessary, to the next one-hundredth of one percent (1/100
of 1%)) of the rates on overnight federal funds transactions with the members
of the Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average (rounded upwards, if necessary, to the next one-hundredth of one
percent (1/100 of 1%)) of the quotations for such day on such transactions
received by the Administrative Agent from three (3) federal funds brokers of
recognized standing selected by the Administrative Agent.

 

“Fee
Letters” shall mean those certain Fee Letters by and between the Borrower,
on the one hand, and each of the Administrative Agent and the Arranger Banks,
J.P. Morgan Securities Inc. and Banc of America Securities LLC, as co-lead
arrangers and co-book runners, on the other hand, setting forth the applicable
fees relating to this Agreement.

 

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

 

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

 

“Final
Maturity Date” shall mean March 31, 2012, or such earlier date on
which the payment of all outstanding Obligations shall be due (whether by
acceleration or otherwise).

 

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

 

12

 

“Financial
Statements Delivery Date” shall mean (a) with respect to the delivery of
quarterly financial statements and information pursuant to Section 7.1
hereof for each fiscal quarter of the Borrower ended during the term of this
Agreement, the date which is sixty (60) days after the last day of each such
fiscal quarter, and (b) with respect to the delivery of annual financial
statements and information pursuant to Section 7.2 hereof for each fiscal
year of the Borrower ended during the term of this Agreement, the date which is
one hundred ten (110) days after the end of each such fiscal year.

 

“Flow
Through Entity” shall mean an entity that (a) for federal income tax
purposes, constitutes a business entity that is disregarded as an entity separate
from its owners under the Code, the Treasury regulations, or any published
administrative guidance of the IRS (a “Federal Flow Through Entity”),
and (b) for state and local jurisdiction tax purposes, is subject to treatment
on a basis under applicable state or local income tax law substantially similar
to a Federal Flow Through Entity.

 

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

 

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

 

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

 

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

 

“Guarantors”
shall mean, collectively, Holdings and the Subsidiary Guarantors, and “Guarantor”
shall mean any one of the foregoing Guarantors.

 

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

 

13

 

services primarily for the purpose of assuring the owner or holder of
any primary obligation of the ability of the primary obligor with respect to
such primary obligation to make payment thereof, or (iv) otherwise to assure or
hold harmless the owner or holder of such primary obligation against loss in
respect thereof.

 

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

 

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

 

“Incremental
Facility Commitments” shall mean, collectively, the aggregate commitments
of the Incremental Facility Lenders to make Advances of the Incremental
Facility Loans to the Borrower in accordance with Section 2.14
hereof.  The Borrower may obtain
Incremental Facility Commitments from more than one Incremental Facility
Lender, which commitments shall be several obligations of each such Incremental
Facility Lender.

 

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

 

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

 

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

 

“Incremental
Facility Maturity Date” shall mean the maturity date for the Incremental
Facility Loans as set forth in the Notice of Incremental Facility Commitment
applicable thereto, or such earlier date on which the payment of all
outstanding Obligations in respect of such Incremental Facility Commitment
shall be due (whether by acceleration or otherwise).

 

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

 

“Indebtedness”
shall mean, with respect to any Person, (a) all items (except items of
shareholders’ and partners’ equity or capital stock or surplus or general
contingency or deferred tax reserves or obligations with respect to the PIK
Preferred as permitted by Sections 8.5(c) and 8.7 hereof) which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, (b) all direct or indirect
obligations secured by any Lien to which any

 

14

 

property or asset owned by such Person is subject, whether or not the obligation
secured thereby shall have been assumed, (c) to the extent not otherwise
included, all Capitalized Lease Obligations of such Person, (d) all
reimbursement obligations with respect to outstanding letters of credit, and
(e) all net obligations in respect of Interest Hedge Agreements.

 

“Indebtedness
For Money Borrowed” shall mean, with respect to any Person, all money
borrowed by such Person and all Indebtedness represented by notes payable by
such Person and drafts accepted representing extensions of credit to such
Person, all obligations of such Person evidenced by bonds, debentures, notes,
or other similar instruments, all net obligations in respect of Interest Hedge
Agreements, all reimbursement obligations with respect to letters of credit, all
Indebtedness of such Person upon which interest charges, commitment fees or
letter of credit fees are customarily paid, and all Indebtedness of such Person
issued or assumed as full or partial payment for property or services, whether
or not any such notes, drafts, obligations, or Indebtedness represent
Indebtedness for money borrowed (excluding accounts payable and other accruals
incurred in the ordinary cause of business and all obligations with respect to
the PIK Preferred as permitted by Sections 8.5(c) and 8.7 hereof).  For purposes of this definition, interest
which is accrued but not paid on the original due date or within any applicable
cure or grace period as provided by the underlying contract for such interest
shall be deemed Indebtedness For Money Borrowed.

 

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

 

“Indentures”
shall mean, collectively, the Senior Notes Indenture and the Senior
Subordinated Notes Indenture.

 

“Initial
Authorized Debt Issuance” shall have the meaning set forth in the
definition of Authorized Debt Issuance.

 

“Initial
Maturity Date” shall mean September 30, 2011, or such earlier date on
which the payment of all outstanding Obligations in respect of the Revolving
Loan Commitment shall be due (whether by acceleration or otherwise).

 

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

 

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

 

15

 

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

 

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

 

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

 

“IRS”
shall mean the Internal Revenue Service.

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

“Letter
of Credit Committed Amount” shall mean $50,000,000.

 

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

 

“Liquidity”
shall mean the sum of (a) the Available Revolving Loan Commitment permitted to
be incurred pursuant to Sections 4.2 and 4.3 hereof minus outstanding
Swing Loans plus (b) the cash on hand of the Rainbow Companies.

 

“Loan
Documents” shall mean this Agreement, the Notes, the Fee Letters, the
Security Documents, the Subordination of Intercompany Obligations Agreement,
all documents executed in connection with any Incremental Facility Loans, all
Letters of Credit, all Requests for Advance, all Requests for Issuance of
Letters of Credit, all documents executed by any of the Borrower Parties pursuant
to Section 6.14 hereof and all other fee letters, documents, instruments,
certificates and agreements executed or delivered in connection with or
contemplated by this Agreement; provided, however, that,
notwithstanding the foregoing, none of the Credit Party Interest Hedge
Agreements shall constitute Loan Documents.

 

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

 

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

 

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

 

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

 

17

 

measured, over (b) the lowest amount of the Revolving Loan Commitment
during the period being measured.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Maximum
Guaranteed Amount” shall have the meaning ascribed thereto in
Section 3.3(e) hereof.

 

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

 

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

 

“Net
Cash Proceeds” shall mean, with respect to any issuance or sale by any
Person of Indebtedness or stock or other equity interests, and with respect to
any sale, lease, transfer or other disposition of assets, the amount equal to
(a) the gross cash consideration (including, without limitation, any payments
received in respect of covenants not to compete, consulting or management fees,
and any portion of the amount received in cash upon payment of a buyer
promissory note or other evidence of

 

18

 

Indebtedness) in connection with such issuance, sale, lease, transfer
or other disposition, minus (b) the sum of (i) any underwriting or
commitment fees or sales commissions required to be paid on the closing of such
transaction, (ii) any attorneys’ fees incurred by such Person in connection
with such transaction, and (iii) cash taxes related to the transaction to the
extent payable by such Person.

 

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

 

“New
Affiliated Equity” shall mean any infusion of equity by Holdings, RME, any
Affiliate of RME or any other Person satisfactory to the Majority Lenders into
the Borrower after the Agreement Date (whether the amount of such equity shall
have been obtained by any such Person in connection with the public issuance of
stock or other equity interests by such Person or otherwise), including,
without limitation, any contribution to the Borrower of the PIK Preferred as
permitted by Sections 8.5(c) and 8.7 hereof.

 

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

 

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

 

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

 

“Obligations”
shall mean (a) all payment and performance obligations of the Borrower and all
other obligors to the Lenders, the Swing Loan Lender, the Incremental Facility
Lenders, the Administrative Agent and the other Credit Parties under this
Agreement and the other Loan Documents, as they may be amended from time to
time, or as a result of making the Loans or the Incremental Facility Loans, (b)
the obligation to pay an amount equal to the amount of any and all damages
which the Lenders, the Swing Loan Lender, the Incremental Facility Lenders, the
Administrative Agent or the other Credit Parties, or any of them, or any of
their Lender Affiliates, may suffer by reason of a breach by the Borrower or
any other obligor of any obligation, covenant or undertaking with respect to
this Agreement or any other Loan Document and (c) all obligations of the
Borrower arising from or in connection with any Credit Party Interest Hedge
Agreements (only to the extent that such Credit Party Interest Hedge Agreements
are permitted pursuant to Section 8.1(d) hereof).

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

“PIK
Preferred” shall mean paid in kind preferred membership interests issued by
AMC (a) the terms of which provide that (i) no dividends thereon shall be
required to be paid in cash prior to twelve (12) years after the Agreement Date
and (ii) no mandatory redemption or sinking fund payments shall be required
prior to twenty (20) years after the Agreement Date, other than in connection
with a “Change of Control” (as defined in the AMC LLC Agreement as in effect on
the Agreement Date and as amended, modified or supplemented on terms no less
favorable to the Rainbow Companies, taken as a whole) and (b) which shall be
issued upon terms otherwise reasonably acceptable to the Arranger Banks.

 

“Plan”
shall mean, with respect to the Borrower and its Subsidiaries, an employee
benefit plan within the meaning of Section 3(2) of ERISA sponsored or
maintained by or contributed to by the Borrower or any of its Subsidiaries for
the benefit of employees of the Borrower or such Subsidiaries, as the case may
be, but excluding any Multiemployer Plan.

 

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

 

“Prime
Rate” shall mean, at any time, the rate of interest publicly announced by
JPMorgan Chase Bank as its “prime rate” in effect at its principal office in
New York City.  The Prime Rate is not
necessarily the lowest rate of interest charged to borrowers of JPMorgan Chase
Bank.

 

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

 

“Rainbow
Companies” shall mean, collectively, the Borrower and its Subsidiaries, and
“Rainbow Company” shall mean any one of the foregoing Rainbow Companies.

 

 “Rainbow DBS Holdings Basket Amount”
shall mean, for calendar year 2004 and each calendar year thereafter during the
term of this Agreement, $150,000,000. 
Notwithstanding the foregoing, to the extent that amounts available
under the Rainbow DBS Holdings Basket Amount with respect to any calendar year
are not used, such amounts may be carried forward to increase the Rainbow DBS
Holdings Basket Amount during the years following such year; provided, however,
that the aggregate amount available under the Rainbow DBS Holdings Basket
Amount during the term of this Agreement shall not exceed $600,000,000.

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

“Restricted
Payment” shall mean (a) any direct or indirect distribution, dividend or
other payment to any Person on account of any shares of capital stock or other
securities of any of the Rainbow Companies, (b) any payment of consulting or
management fees, or any interest thereon, by any of the Rainbow Companies to
CVC or to any other Affiliate of the Rainbow Companies (including, without
limitation, payments under the AMC Consulting Agreement or the Services
Agreement), (c) any  distribution,
dividend or other payment to Holdings or an Affiliate of Holdings for and in
the amount of Federal and state taxes payable by Holdings or such Affiliate
which are attributable to the operations or assets of the Borrower, and (d) any payment of principal or
interest on account of any Indebtedness of any of the Rainbow Companies or
Holdings issued in connection with an Authorized Debt Issuance or pursuant to
Sections 8.1(f) or 8.1(h) hereof.

 

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

 

22

 

“Restructuring
Charges” shall mean, as determined for any period for AMC, IFC and WE on a
consolidated basis, restructuring charges incurred by AMC, IFC and WE in
connection with exiting an activity or restructuring an operation or activity,
in accordance with GAAP.

 

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

 

“Revolving
Loan Commitment” shall mean the several obligations of certain of the
Lenders to advance the sum of up to $350,000,000 to the Borrower, on or after
the Agreement Date, in accordance with their respective Revolving Commitment
Percentages and as such amount may be reduced from time to time, all pursuant
to the terms hereof.

 

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

 

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

 

“RME”
shall mean Rainbow Media Enterprises, Inc., a Delaware corporation.

 

“RME
Spin-Off” shall mean the distribution by CVC of the outstanding equity
interests of RME and its Subsidiaries to the shareholders of CVC and the
actions taken in connection therewith.

 

“RMH”
shall mean Rainbow Media Holdings LLC, a Delaware limited liability company.

 

“RMH
Loan Agreement” shall mean that certain Amended and Restated Loan Agreement
dated as of December 19, 2003, among RMH, as borrower, the Guarantors (as
defined therein) party thereto, as guarantors, Toronto Dominion (Texas), Inc.,
as administrative agent, and the other Credit Parties (as defined therein)
party thereto, as amended, supplemented or otherwise modified prior to the
Agreement Date.

 

23

 

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

 

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

 

“Security
Agreement” shall mean that certain Security Agreement among the Borrower
Parties and the Administrative Agent, dated as of the Agreement Date, in
substantially the form of Exhibit H attached hereto.

 

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

 

“Senior
Debt” shall mean, as of any date without duplication, the result of (a)
Total Debt, minus (b) the aggregate principal amount of any Authorized
Debt Issuance (other than the Senior Authorized Debt Issuance) then outstanding
minus (c) the aggregate principal amount of any other Indebtedness For
Money Borrowed that is contractually subordinated to the Obligations on terms
reasonably satisfactory to the Arranger Banks.

 

“Senior
Authorized Debt Issuance” shall have the meaning set forth in the
definition of Authorized Debt Issuance.

 

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

 

“Senior
Notes Indenture” shall mean that certain Indenture, dated as of the
Agreement Date, among The Bank of New York, the Borrower, RNS Co-Issuer
Corporation and the “Guarantors” (as defined therein) with respect to the 8
3/4% Senior Notes Due 2012.

 

“Senior
Subordinated Notes Indenture” shall mean that certain Indenture, dated as
of the Agreement Date, among The Bank of New York, the Borrower, RNS Co-Issuer
Corporation and the “Guarantors” (as defined therein) with respect to the 10
3/8% Senior Subordinated Notes Due 2014.

 

“Services
Agreement” shall mean that certain Services Agreement identified on Schedule 8.12
attached hereto.

 

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

 

24

 

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

 

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

 

“Subsequent
Authorized Debt Issuance” shall have the meaning set forth in the
definition of Authorized Debt Issuance.

 

“Subsidiary”
shall mean, as applied to any Person, (a) any corporation of which fifty percent
(50%) or more of the outstanding stock (other than directors’ qualifying
shares) having ordinary voting power to elect a majority of its board of
directors, regardless of the existence at the time of a right of the holders of
any class or classes of securities of such corporation to exercise such voting
power by reason of the happening of any contingency, or any partnership or
other Company of which fifty percent (50%) or more of the outstanding
partnership or other equity interests, is at the time owned directly or
indirectly by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person, and (b) any other
entity which is controlled or capable of being controlled by such Person, or by
one or more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person; provided that, in the case of the Borrower
and its Subsidiaries, the term “Subsidiary” shall exclude the Unrestricted
Subsidiaries, except that, notwithstanding anything in this definition to the
contrary, (a) any Companies formed pursuant to clause (a) of the definition of “Unrestricted
Subsidiaries” shall be considered Subsidiaries for purposes of determining
compliance with such clause, (b) the Unrestricted Subsidiaries shall be
considered “Subsidiaries” solely for purposes of Sections 5.1(h), 5.1(m), 6.6,

 

25

 

6.10, 7.5(a)(iv), 8.14 and 9.1(l) of this
Agreement, and (c) with respect to the definition of “Material Subsidiaries,”
the Unrestricted Subsidiaries will be considered Material Subsidiaries to the
extent such Companies would have constituted Material Subsidiaries but for
application of the exclusion set forth in this proviso.

 

“Subsidiary
Guarantors” shall mean all of the now or hereafter existing direct and
indirect Subsidiaries of the Borrower, and “Subsidiary Guarantor” shall
mean any one of the foregoing Subsidiary Guarantors.

 

“Swing
Loan Committed Amount” shall mean $5,000,000.

 

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

 

“Swing
Loan Lender” shall mean any Lender or the Administrative Agent as agreed to
at any time by the Borrower and such Lender or the Administrative Agent, in
either case as designated in accordance with this Agreement.  The initial Swing Loan Lender shall be
JPMorgan Chase Bank.

 

“Swing
Loan Note” shall mean that certain Swing Loan Note dated as of the
Agreement Date, in the principal amount of $5,000,000, issued by the Borrower
to the Swing Loan Lender, substantially in the form of Exhibit J
attached hereto, and any amendments, replacements, extensions or renewals
thereof.

 

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

 

“Syndication
Agent” shall mean Bank of America, N.A., in its capacity as syndication
agent under this Agreement.

 

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

 

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

 

“Term
B Loan Commitment” shall mean the several obligations of certain of the
Lenders to advance the sum of up to $600,000,000 to the Borrower on the
Agreement Date, in accordance with their respective Term B Commitment
Percentages, all pursuant to the terms hereof.

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

“Transaction”
shall mean the execution, delivery and performance by each Borrower Party of
this Agreement and the other Loan Documents and the Credit Party Interest Hedge
Agreements to which such Borrower Party is intended to be a party, the
borrowing of Loans, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.

 

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

 

27

 

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

 

“Unrestricted
Subsidiaries” shall mean, collectively, each of the Companies designated as
Unrestricted Subsidiaries as of the Agreement Date on Schedule 5.1(c)-2
hereto, and “Unrestricted Subsidiary” shall mean any one of the
foregoing Unrestricted Subsidiaries; provided, however, that
after the Agreement Date, the Borrower may designate as additional Unrestricted
Subsidiaries (a) any Subsidiary of the Borrower formed after the Agreement Date
so long as such Subsidiary shall have (either individually or collectively, in
the case of any holding company Subsidiaries) a “fair market value” of less
than $5,000,000, as determined by the Arranger Banks in their reasonable
discretion, and (b) other Companies with the approval of the Arranger Banks.

 

“USA
Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Pub. L. No. 107-56, 115 Stat. 272 (2001), as the same has been, or shall
hereafter be, renewed, extended, amended or replaced.

 

“Viewing
Subscribers” shall mean any household which is a subscriber carried and
paid for pursuant to (a) any Affiliation Agreement existing on the Agreement
Date or arising after the Agreement Date or (b) any such Affiliation Agreement
which expires or has expired, provided that negotiations are continuing
in good faith to renew or extend such expired Affiliation Agreement and
following the expiration of such Affiliation Agreement, the programming of the
applicable Borrower Parties continues to be exhibited, distributed and paid for
by the applicable pay television distributor under its existing terms or under
terms materially no less favorable to the Borrower Parties than such existing
terms.

 

“Voting
Stock” of a Person shall mean all classes of capital stock, partnership
interests or other equity interests of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.

 

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

 

Each
definition of an agreement in this Article 1 shall include such agreement
as amended, restated, supplemented or otherwise modified (and, to the extent
applicable, as renewed or extended) from time to time provided that, if
required pursuant to the terms of this Agreement, the prior written consent of
the Majority Lenders (or such other composition of Lenders as may be required
under Section 12.12 hereof) shall have been given with respect to such
amendment, restatement, supplement or other modification.  Except where the context otherwise requires,
definitions imparting the singular shall include the plural and vice versa.  Except where otherwise specifically

 

28

 

restricted, reference to a party to a Loan
Document or a Credit Party Interest Hedge Agreement includes that party and its
successors and assigns.  An Event of
Default shall “exist”, “continue” or be “continuing” until such Event of
Default has been waived in writing in accordance with Section 12.12
hereof.  All terms used herein which are
defined in Article 9 of the Uniform Commercial Code in effect in the State
of New York on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein.

 

Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any covenant or other provision hereof to eliminate the effect of
any change in GAAP or in the application thereof on the operation of such
covenant or provision occurring after the date hereof (or if the Administrative
Agent notifies the Borrower that the Majority Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice
is given before or after such change in GAAP or in the application thereof,
then such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until the
earlier of (a) the withdrawal by the Borrower (or the Administrative Agent) of
such notice and (b) the amendment of the relevant covenant or other provision
in accordance herewith.  Unless otherwise
expressly stated herein, all references to financial information and results of
the Borrower shall be determined on a consolidated basis among the Rainbow
Group.

 

ARTICLE 2 -  Loans.

 

Section 2.1                                      The Loans.  Subject to the terms and
conditions of, and in reliance upon the representations and warranties made in,
this Agreement and the other Loan Documents, the Lenders agree, severally in
accordance with their respective Commitment Percentages and not jointly, to
make Loans to the Borrower in an aggregate principal amount not to exceed Nine
Hundred Fifty Million Dollars ($950,000,000).

 

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

 

29

 

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

 

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

 

(d)                                 The Term B Loans.  (i)
The Lenders that have issued a Term B Loan Commitment, severally in accordance
with their respective Term B Commitment Percentages and not jointly, upon the
terms and subject to the conditions of this Agreement, agree to lend (or,
pursuant to Section 2.1(d)(ii) hereof, elect to convert all or a portion
of such Lender’s Existing Term Loans into a Term B Loan) to the Borrower on the
Agreement Date an amount equal to the Term B Loan Commitment.  After the Agreement Date, Advances under the
Term B Loan Commitment may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof; provided,
however, there shall be no increase in the aggregate principal amount of
the Term B Loans outstanding at any time after the Agreement Date.  Amounts repaid under the Term B Loan
Commitment may not be reborrowed.

 

(ii)                                  In connection with the making of the Term B
Loans pursuant to Section 2.1(d)(i) hereof, by delivering written notice
to the Administrative Agent at least one (1) Business Day prior to the
Agreement Date, any Lender of Existing Term Loans may elect to make all or any
portion of such Lender’s Term B Loan Commitment Percentage of the Term B Loans
requested by the Borrower to be made on the Agreement Date by converting all or
a portion of the outstanding principal amount of the Existing Term Loans held
by such Lender into Term B Loans in a principal amount equal to the amount of
Existing Term Loans so converted (each such Existing Term Loan, to the extent
it is to be converted, hereinafter a “Converted Term Loan”).  On the Agreement Date, the Converted Term
Loans shall be converted for all purposes of this Agreement into Term B Loans,
and the Administrative Agent shall record in the Register the aggregate amounts
of Converted Term Loans converted into Term B Loans.  Any written notice to the Administrative
Agent delivered by an applicable Lender pursuant to this Section shall
specify the amount of such Lender’s Term B Loan Commitment and the 

 

30

 

 

principal amount of Existing Term Loans held
by such Lender that are to be converted into Term B Loans.

 

(e)                                  Use of Proceeds.  The
proceeds of the Loans may be used solely to (i) finance a distribution to RMH
to be used to repay the outstanding Obligations (as defined in the RMH Loan
Agreement) under the RMH Loan Agreement and the other Loan Documents (as
defined in the RMH Loan Agreement), (ii) make Permitted Investments and
Acquisitions and Restricted Payments permitted under this Agreement, and (iii)
fund working capital and other general corporate purposes of the Borrower and
the Subsidiary Guarantors.

 

Section 2.2                                      Manner of Borrowing and Disbursement.

 

(a)                                  Choice of Interest Rate, Etc.  Any
Advance (i) under the Revolving Loan Commitment (except with respect to (A) the
initial Advance of the Revolving Loans on the Agreement Date, (B) Swing Loans
and (C) Advances in respect of reimbursement of amounts advanced to beneficiaries
under Letters of Credit, which Advances shall in all cases be Base Rate
Advances initially) shall, at the option of the Borrower, be made as a Base
Rate Advance or a Eurodollar Advance, and (ii) under the Term B Loan Commitment
shall, at the option of the Borrower, be made as a Base Rate Advance or a
Eurodollar Advance (except with respect to the initial Advance of the Term B
Loans on the Agreement Date, which Advance shall be a Base Rate Advance
initially); provided, however, that (A) if the Borrower fails to
give the Administrative Agent telephonic notice specifying whether a Eurodollar
Advance is to be repaid, continued or converted on a Payment Date, such
Eurodollar Advance shall be converted to a Base Rate Advance on such Payment
Date, and (B) the Borrower may not select a Eurodollar Advance if, at the time
of such selection, a Default or Event of Default has occurred and is
continuing.  Eurodollar Advances shall in
all cases be subject to Article 11 hereof. 
Any notice given to the Administrative Agent in connection with a
requested Advance hereunder shall be given to the Administrative Agent prior to
11:00 a.m. (New York time) in order for such Business Day to count toward the
minimum number of Business Days required.

 

(b)                                 Base Rate Advances.

 

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

 

(ii)                                  Repayments and Conversions.  The
Borrower may (A) repay or prepay a Base Rate Advance upon prior irrevocable
telephonic notice to the Administrative Agent not later than 11:00 a.m. (New
York time) on the date of

 

31

 

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

 

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

 

(c)                                  Eurodollar Advances.

 

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

 

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

 

32

 

Eurodollar Advance will,
subject to the provisions hereof, be so repaid, continued or converted, as
applicable.

 

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

 

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

 

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

 

(f)                                    Disbursement. 
Prior to 3:00 p.m. (New York time) on the date of an Advance hereunder,
the Administrative Agent shall, subject to the satisfaction of the conditions
set forth in this Section 2.2 and in Article 4 hereof, disburse the
amounts made available to the Administrative Agent by the Lenders in
immediately available funds by (i) transferring the amounts so made available
by wire transfer pursuant to the instructions of the Borrower, or (ii) in the
absence of such instructions, crediting the amounts so made available to the
account of the Borrower maintained with the Administrative Agent or an
Affiliate of the Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to 2:00 p.m. (New York time) on the date of any Advance that such Lender
will not make available to the Administrative Agent such Lender’s ratable
portion of such Advance, and so long as notice has been given as provided in
Section 2.2(e) hereof, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date
of such Advance and the Administrative Agent may, in its sole discretion and in

 

33

 

reliance upon such assumption, make available
to the Borrower on such date a corresponding amount.  If and to the extent such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at a rate equal to the daily average
Federal Funds Effective Rate for such period. 
If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender’s
portion of the applicable Advance for purposes of this Agreement.  If such Lender does not repay such
corresponding amount immediately upon the Administrative Agent’s demand
therefor, the Administrative Agent shall notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent,
together with all interest accrued thereon at the interest rate that would have
applied to such Advance had such Lender funded its portion thereof.  The failure of any Lender to fund its portion
of any Advance shall not relieve any other Lender of its obligation, if any,
hereunder to fund its respective portion of the Advance on the date of such
borrowing, but no Lender shall be responsible for any such failure of any other
Lender.  In the event that, at any time
when the Borrower is not in Default and has otherwise satisfied all of the
conditions to funding set forth in this Agreement, a Lender for any reason
fails or refuses to fund its portion of an Advance, then, until such time as
such Lender has funded its portion of such Advance, or all other Lenders have
received payment in full (whether by repayment or prepayment) of the principal
and interest due in respect to such advance, such non-funding Lender shall (i)
have no right to vote regarding any issue on which voting is required or
advisable under this Agreement or any other Loan Document and the calculation
of Majority Lenders with respect solely to such votes shall be adjusted as if
such non-funding Lender has no Commitments and no Loans outstanding, and (ii)
be entitled to receive no payments of principal, interest or fees from the
Borrower in respect of such Loans which such Lender failed to make.  Nothing in this subsection shall be
deemed to prejudice any rights that the Borrower may have against any Lender as
a result of any failure by such Lender to fund its portion of any Advance.

 

Section 2.3                                      Interest.

 

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

 

34

 

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

 

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

 

(d)                                 Interest Upon Default.  Upon
the occurrence and during the continuance of an Event of Default, the Majority
Lenders shall have the option (but shall not be required to give prior notice
thereof to the Borrower, accelerate the maturity of the Loans or exercise any
other rights or remedies hereunder in connection with the exercise of this
right) to charge interest on the outstanding principal balance of the Loans at
the Default Rate from the date of such Event of Default; provided, however,
notwithstanding the foregoing, interest shall automatically accrue on the
outstanding principal balance of the Loans at the Default Rate, without any
action necessary on the part of the Majority Lenders or any other Person, from
and after the occurrence of an Event of Default under any of Sections 9.1(b),
(i) or (j) hereof.  Such interest shall
be payable on the earlier of demand or the applicable Maturity Date, and shall
accrue until the earlier of (i) waiver or cure (to the satisfaction of the
Majority Lenders) of the applicable Event of Default, (ii) agreement by the
Majority Lenders to rescind the charging of interest at the Default Rate, or
(iii) payment in full of the Obligations.

 

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

 

35

 

(f)                                    Applicable Margins.

 

(i)                                     Advances Under the Revolving Loan Commitment.  With
respect to any Advance under the Revolving Loan Commitment (except with respect
to Swing Loans), the Applicable Margin shall be (A) on and after the Agreement
Date to and including the Adjustment Date, (x) 2.50% with respect to any Eurodollar
Advance and (y) 1.50% with respect to any Base Rate Advance, and (B) after the
Adjustment Date, the interest rate margin, based upon the Total Leverage Ratio
for the most recent calendar quarter end, expressed as a per annum rate of
interest as follows:

 

	
  If the Total Leverage:

  	
   

  	
  Then the Eurodollar

  Applicable Margin shall be:

  	
   

  	
  Then the Base Rate

  Applicable Margin shall be:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than or equal to 5.00 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than 5.00 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  

 

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

 

(ii)                                  Advances of the Term B Loans.  With
respect to any Advance of the Term B Loans, the Applicable Margin shall be (A)
2.75% per annum with respect to any Eurodollar Advance and (B) 1.75% per annum
with respect to any Base Rate Advance.

 

Section 2.4                                      Fees.

 

(a)                                  Fees Payable Under the Fee Letters.  The
Borrower agrees to pay such fees as are described in the Fee Letters.

 

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

 

36

 

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

 

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

 

Section 2.5                                      Optional Prepayments and Reductions.

 

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

 

37

 

(b)                                 Permanent Prepayments and Reductions.

 

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

 

(ii)                                  Application of Payments or Reductions.

 

(A)                              In the event that the Borrower shall make a
prepayment of the Term B Loans, such prepayment shall be applied to permanently
reduce the Term B Loans.  Each such
reduction allocated to the Term B Loans shall be applied to reduce, in the
inverse order of maturity, the remaining scheduled installments of principal
due under the Term B Loans as set forth in Section 2.7(b) hereof.  Each prepayment hereunder shall also be made
together with accrued interest on the amount so prepaid.

 

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

 

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

 

38

 

shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender’s portion of the
prepayment or the reduction, as applicable.

 

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

 

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

 

(ii)                                  If Holdings shall conduct any issuance of
Indebtedness For Money Borrowed (other than in connection with any Authorized
Debt Issuance), such issuance shall be only in exchange for cash and Holdings
shall deliver to the Borrower, and the Borrower shall apply, on the date of its
receipt thereof, fifty percent (50%) of the Net Cash Proceeds received by
Holdings in connection with such issuance to prepay the Loans as set forth in
Section 2.6(c) hereof.

 

(b)                                 Disposition of Assets.  If
the Borrower or any Subsidiary Guarantor shall sell, transfer or otherwise
dispose of any assets (including, without limitation, any assets constituting
capital stock, partnership interests or other equity interests), in each case
for cash and except as any such sale, transfer or other disposition shall be
permitted or approved under Section 8.5 hereof, such Company shall deliver
to the Borrower, and the Borrower shall apply, (i) on the date of its receipt
thereof, one hundred percent (100%) of the Net Cash Proceeds received by any
such Company in connection with such sale, transfer or other disposition that
such Company does not intend to reinvest as permitted under Section 8.5(a)
hereof, and (ii) no later than the date three hundred sixty (360) days within
its receipt thereof, one hundred percent (100%) of the Net Cash Proceeds that
are not reinvested by such Company as permitted under Section 8.5(a)
hereof, to prepay the Loans as set forth in Section 2.6(c) hereof.  In the event a Company intends to reinvest
Net Cash Proceeds as permitted under Section 8.5(a) hereof, such Company
shall deliver to the Administrative Agent (i) on or before the date of
completion thereof, notice of (A) the sale, transfer or other disposition of
the assets described in such notice, (B) the date on which such action will
occur, (C) the amount of Net Cash Proceeds to be received by such Company in
connection therewith and (D) its intent to reinvest such Net Cash Proceeds as
permitted under Section 8.5(a) hereof, and (ii) on or before the date of
the acquisition of replacement assets, notice of (A) the acquisition of
replacement assets, (B) the amount of Net Cash Proceeds used to acquire

 

39

 

such replacement assets, and (C) the amount
of Net Cash Proceeds outstanding after such acquisition, if any.

 

(c)                                  Application of Payments.  The
amount of any prepayment of the Loans required to be made pursuant to this
Section 2.6 shall be applied as follows: 
(i) first, to permanently reduce the outstanding principal amount of the
Term B Loans, with the amount allocated to the Term B Loans being applied to
reduce, in the inverse order of maturity, the remaining scheduled installments
of principal due under the Term B Loans as set forth in Section 2.7(b)
hereof, and (ii) thereafter, to prepay the outstanding principal amount of the
Revolving Loans, with a corresponding permanent reduction in the amount of the
Revolving Loan Commitment in the inverse order of scheduled reductions.  Notwithstanding anything to the contrary
contained herein, if an Event of Default has occurred and is continuing at the
time of any prepayment required to be made pursuant to this Section 2.6,
the amount of such prepayment shall be applied to prepay, on a pro rata basis,
the Term B Loans and the Revolving Loans. 
Accrued interest and fees on the principal amount of the Loans being
prepaid and the Commitments being reduced pursuant to this Section 2.6 to
the date of such prepayment or reduction shall be paid by the Borrower
concurrently with such reduction and prepayment.  In connection with any mandatory repayment
due under this Section 2.6, the Borrower shall reimburse the
Administrative Agent and the Lenders, on demand, for any loss or out-of-pocket
expense actually incurred by any of them in connection with such repayment of
any Eurodollar Advances as set forth in Section 2.11 hereof.  Notwithstanding the foregoing, the holders of
the Term B Loans each shall have the right to decline any mandatory partial
prepayment of the Term B Loans, in which case the amount of such prepayment
shall be applied to prepay the Revolving Loans, with a corresponding permanent
reduction in the Revolving Loan Commitment, in the manner set forth above.

 

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

 

(a)                                  Revolving Loan Commitment. 
Commencing on December 31, 2009, the Revolving Loan Commitment
shall be reduced automatically and permanently on the last Business Day of each
quarter and on the Initial Maturity Date (which reduction shall be inclusive of
any reduction pursuant to Section 2.5 hereof during such quarter) as set
forth below:

 

40

 

	
  Quarters Ended

  	
   

  	
  Amount of Quarterly Reduction

  (which shall include any

  reductions made during such

  quarter pursuant

  to
  Section 2.5)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2009 through
  September 30, 2010

  	
   

  	
  $

  	
  35,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  December 31, 2010 through Initial
  Maturity Date

  	
   

  	
  $

  	
  52,500,000

  	
   

  

 

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

 

(b)                                 Term B Loans.  Commencing
on June 30, 2005, and at the end of each calendar quarter thereafter, the
principal balance of the Term B Loans then outstanding shall be repaid as set
forth below:

 

	
  Quarters Ended

  	
   

  	
  Amount of Quarterly

  Repayment (which shall include

  any repayments made during

  such quarter pursuant

  to Section 2.5)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2005 through March 31,
  2011

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  June 30, 2011 through Final Maturity
  Date

  	
   

  	
  $

  	
  141,000,000

  	
   

  

 

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

 

(c)                                  Incremental Facility Loans.  Any
unpaid principal and interest of the Incremental Facility Loans and any other
outstanding Obligations under any of the Incremental Facility Commitments shall
be due and payable in full on the Incremental Facility Maturity Date applicable
thereto.

 

41

 

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

 

(e)                                  Letter of Credit Advances and Swing Loans.  All
Base Rate Advances made pursuant to draws under Letters of Credit and all Swing
Loans shall be deemed to be Advances under the Revolving Loan Commitment and
shall be due and payable on the Initial Maturity Date.

 

Section 2.8                                      Swing Loans.

 

(a)                                  Swing Loan Advances.

 

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

 

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

 

(b)                                 Repayment of Swing Loans.  Each
Advance of the Swing Loans shall be due and payable on the earliest of (i)
seven (7) days from the date of such Advance, (ii) the date of the next Advance
of the Revolving Loans, or (iii) the Initial Maturity Date; provided, however,
the Borrower may prepay any Swing Loan Advance prior to the date it is due upon
notice to the Swing Loan Lender not later than 1:00 p.m. (New York time) on the
date of prepayment of such Advance.  If
such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to such date on the
amount prepaid.  If, and to the extent,
any Swing Loans shall be outstanding on the date of any Advance of the
Revolving Loans, such Swing Loans shall be repaid from the proceeds of such
Advance of the Revolving Loans prior to any distribution of such proceeds to
the Borrower.  If, and to the extent, an
Advance of the Revolving Loans is not requested prior to earlier of (A) the
Initial Maturity Date or (B) the last day of any such seven (7) day period from
the date of any Advance of the Swing Loans, the Borrower shall be deemed to
have requested a Base

 

42

 

Rate Loan on the Business Day immediately
preceding the Initial Maturity Date or the last day of such seven (7) day
period, as applicable, in the amount of the Swing Loans then outstanding, the
proceeds of which shall be used to repay the Swing Loan Lender for such Swing
Loans.  In addition, the Swing Loan
Lender may, at any time, in its sole discretion by written notice to the
Borrower and the Administrative Agent, require repayment of its Swing Loans by
way of a Revolving Loan, in which case the Borrower shall be deemed to have
requested a Base Rate Advance of the Revolving Loans in the amount of such
Swing Loans; provided, however, that any such demand shall be
deemed to have been given one (1) Business Day prior to the Initial Maturity
Date and upon the occurrence of any Event of Default described in
Section 9.1(i) or 9.1(j) hereof and also upon acceleration of the
Obligations, whether on account of an Event of Default described in
Section 9.1(i) or 9.1(j) hereof or any other Event of Default, in
accordance with the provisions of Section 9.2 hereof following an Event of
Default (each such Revolving Loan made on account of any such deemed request
therefor as provided herein being hereinafter referred to as a “Mandatory Borrowing”).  Each Lender hereby irrevocably agrees to make
its Revolving Commitment Percentage of such Revolving Loans promptly upon any
such request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date, notwithstanding (I) the amount of Mandatory Borrowing may not comply
with the minimum amount for advances of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Article 4 are then
satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure for any such request or deemed request for Revolving Loans to be made
by the time otherwise required in Section 2.2, (V) the date of such
Mandatory Borrowing, or (VI) any reduction in the Revolving Loan Commitment or
termination of the Revolving Loan Commitment relating thereto immediately prior
to such Mandatory Borrowing or contemporaneously therewith; provided, however,
that no Lender shall be required to make such Revolving Loans if, at the time
that the Swing Loan Lender agreed to fund any Swing Loan Request, the Swing
Loan Lender had knowledge of the existence of an Event of Default or such
Mandatory Borrowing would cause a Lender to exceed its Revolving Loan Commitment.  In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of any Insolvency
Proceeding with respect to the Borrower or any other obligor hereunder), then
each Lender hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Swing Loan Lender such participations in the outstanding
Swing Loans as shall be necessary to cause each such Lender to share in such
Swing Loans ratably based upon its respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Revolving Loan
Commitment pursuant to Section 9.2), provided that (A) all interest
payable on the Swing Loans shall be for the account of the Swing Loan Lender
until the date as of which the respective participation is purchased, and (B)
at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay (to the extent not
paid by the Borrower) to the

 

43

 

Swing Loan Lender interest on the principal
amount of participation purchased for each day from and including the day upon
which the Mandatory Borrowing would otherwise have occurred but excluding the
date of payment for such participation, at the rate equal to, if paid within
two (2) Business Days of the date of the Mandatory Borrowing, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Base Rate.

 

(c)                                  Interest on Swing Loans. 
Swing Loans shall bear interest at the simple per annum interest rate equal
to the sum of (x) the Base Rate and (y) the Applicable Margin then in effect
with respect to Base Rate Advances of the Revolving Loans, computed on the
basis of a year of 365/366 days for the actual number of days elapsed; provided,
however, that (i) from and after any failure to make any payment of
principal or interest in respect of any of the Loans hereunder when due (after
giving effect to any applicable grace period), whether at scheduled or
accelerated maturity or on account of any mandatory prepayment or (ii) while
any Swing Loans in which the Lenders have acquired participations pursuant to
Section 2.8(b) hereof remain outstanding, the principal of and, to the
extent permitted by law, interest on, Swing Loans shall bear interest, payable
on demand, at the Default Rate.  Interest
on each Swing Loan shall be payable in arrears on the date payment of such
Swing Loan is due pursuant to Section 2.8(b) hereof.

 

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

 

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

 

Section 2.9                                      Notes; Loan Accounts.

 

(a)                                  The Loans shall be repayable in accordance
with the terms and provisions set forth herein. 
Upon the request of any Lender, (i) a Revolving Note shall be issued by
the Borrower to the order of such Lender in accordance with such Lender’s Revolving
Commitment Percentage, and (ii) a Term B Note shall be issued by the Borrower
to the order of such Lender in accordance with such Lender’s Term B Commitment
Percentage.  The Swing Loans shall be
evidenced by the Swing Loan Note, which Swing Loan Note shall be issued by the
Borrower and payable to the order of the

 

44

 

Swing Loan Lender in the amount of the Swing
Loan Committed Amount.  If applicable, an
Incremental Facility Loan Note shall be issued by the Borrower to the order of
any Incremental Facility Lender in accordance with its pro rata share of the
Incremental Facility Commitments.  Any
Notes issued by the Borrower shall be duly executed and delivered by one or
more Authorized Signatories of the Borrower.

 

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

 

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

 

Section 2.10                                Manner of Payment.

 

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

 

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

 

(c)                                  Except as otherwise provided below, any and
all payments by the Borrower to the Administrative Agent or any other Credit
Party under this

 

45

 

Agreement or otherwise in respect of the
Loans shall be made without set-off or counterclaim or deduction whatsoever.

 

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

 

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

 

46

 

Taxes is due pursuant to Applicable Law true
and correct copies of tax receipts evidencing payment by the Borrower.  Except as otherwise provided in this Section,
if the Borrower fails to pay any Taxes that it is required to pay pursuant to
the terms of this Agreement when due to the appropriate taxing authority or
fails to remit to any of the Credit Parties the required receipts or other
required documentary evidence, the Borrower shall indemnify the Credit Parties
for any incremental Taxes, interest or penalties that may become payable by the
Credit Parties primarily as a result of any such failure.

 

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

 

47

 

assignor was subject to, and the assignee
shall be entitled to receive Additional Amounts to such extent the assignor was
so entitled.

 

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

 

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

 

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

 

48

 

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

 

Section 2.12                                Application of Payments.

 

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

 

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

 

49

 

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

 

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

 

Section 2.13                                Capital Adequacy.  In
the event that any Lender shall have determined that a Regulatory Change has
the effect of reducing the rate of return on such Lender’s capital as a
consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking 

 

50

 

into consideration such
Lender’s policies with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time, ten (10) days after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, together with a certificate (which shall be
conclusive absent manifest error) setting forth the calculations evidencing
such requested additional amount, and the law or regulation with respect thereto
and certifying that such request is consistent with such Lender’s treatment of
other similar customers having similar provisions generally in their agreements
with such Lender and that such request is being made on the basis of a
reasonable allocation of the costs resulting from such law or regulation, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction. 
Allocations shall not be deemed reasonable unless made ratably, to the
extent practicable, to all affected assets, commitments, activities or other
relevant aspects of such Lender’s business, whether or not the Lender is
entitled to compensation with respect thereto. 
Notwithstanding the foregoing, the Borrower shall only be obligated to
compensate such Lender for any amount under this subsection arising or
occurring during (a) in the case of each such request for compensation, any
time or period commencing not more than ninety (90) days prior to the date on
which such Lender submits such request and (b) any other time or period during
which, because of the unannounced retroactive application of such law,
regulation, interpretation, request or directive, such Lender reasonably could
not have known that the resulting reduction in return might arise.  Each Lender will notify the Borrower that it
is entitled to compensation pursuant to this subsection as promptly as
practicable after it determines to request such compensation; provided, however,
that the failure to provide such notice shall not restrict the ability of such
Lender to be reimbursed under this Section 2.13.

 

Section 2.14                                Incremental Facility Loans.

 

(a)                                  Subject to the terms and conditions of this
Agreement, the Borrower may request Incremental Facility Commitments on any
Business Day; provided, however, that the Borrower may not
request Incremental Facility Commitments or an Incremental Facility Loan during
the continuance of a Default or Event of Default, including, without
limitation, any Default or Event of Default that would result after giving
effect to any Incremental Facility Loan; and provided  further,
that the Borrower may request up to three (3) Incremental Facility Commitments
(each of which commitments may be from more than one Lender) which may be no
less than $50,000,000 and no more than $300,000,000  in the aggregate.  Each
Incremental Facility Commitment shall have a weighted average life to maturity
equal to or greater than the weighted average life to maturity of the Term B
Loan Commitment.  In requesting Incremental
Facility Commitments, the Borrower shall offer each of the Lenders an
opportunity to provide an Incremental Facility Commitment; provided that
none of the Lenders shall be required to issue an Incremental Facility
Commitment and the decision of any Lender to issue or not issue an Incremental
Facility Commitment to the Borrower shall be at such Lender’s sole discretion
after being offered such right of first refusal (and 

 

51

 

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

 

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

 

(c)                                  No Incremental Facility Commitment shall by
itself result in any reduction of the Revolving Loan Commitment or the Term B
Loan Commitment or of the Commitment Percentages with respect thereto of such
Lender issuing such Incremental Facility Commitment.

 

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

 

(e)                                  Incremental Facility Loans shall be requested
by the Borrower pursuant to a request (which shall be substantially in the form
of a Request for 

 

52

 

Advance) delivered in the
same manner as a Request for Advance, but shall be funded pro rata only by
those Lenders that hold the applicable Incremental Facility Commitments.

 

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

 

Section 2.15                                Letters of Credit.

 

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

 

(b)                                 If a Letter of Credit provides that it is
automatically renewable unless notice is given by the Issuing Bank with respect
thereto that it will not be renewed, such Issuing Bank and the Borrower shall
give notice of non-renewal to the Administrative Agent at least ten (10)
Business Days prior to the last date on which a 

 

53

 

notice of non-renewal may be
given to the beneficiary of such Letter of Credit.  The Administrative Agent shall promptly
notify the Lenders and, unless so directed by the Majority Lenders at least
three (3) Business Days prior to the last date on which a notice of non-renewal
may be given to the beneficiary of such Letter of Credit, the Issuing Bank with
respect to such Letter of Credit shall not be bound to give notice of
non-renewal to the beneficiary of such Letter of Credit.

 

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

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                 If, after the Agreement Date, any change in
Applicable Law, any change in the interpretation or administration thereof, or
any change in compliance with Applicable Law by any Issuing Bank or any other
Lender as a result of any request or directive of any governmental authority,
central bank or comparable agency (whether or not having the force of law)
shall (i) impose, modify or deem applicable any reserve (including, without
limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit, capital adequacy, assessment or other requirements or
conditions against letters of credit issued by any Issuing Bank or against
participations by any other Lender in the Letters of Credit or (ii) impose
on any Issuing Bank or any other Lender any other condition regarding any
Letter of Credit or any participation therein, and the result of any of the
foregoing in the reasonable determination of such Issuing Bank or such Lender,
as the case may be, is to increase the cost to such Issuing Bank or such Lender
of issuing or maintaining any Letter of Credit or purchasing or maintaining any
participation therein, as the case may be, by an amount (which amount shall be
reasonably determined) deemed by such Issuing Bank or such Lender to be
material, and the designation of a different lending office will not avoid the
need for (or reduce the amount of) additional compensation, then, on the
earlier of ten (10) days following the date of demand (which demand shall be
made not later than six (6) months following such Issuing Bank’s or such Lender’s
determination of a need for 

 

56

 

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

 

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

 

ARTICLE 3 -  Guarantee

 

Section 3.1                                      Guarantee.  Each of the Guarantors,
jointly and severally, hereby unconditionally guarantees to the Credit Parties
and their respective permitted successors and assigns and the subsequent
holders of the Obligations (including, without

 

57

 

 limitation, any interest on the Loans accruing
after the filing of a petition initiating any Insolvency Proceeding, whether or
not such interest accrues or is recoverable against the Borrower after the
filing of such petition for purposes of the Bankruptcy Code or is an allowed
claim in such proceeding), irrespective of the validity and enforceability of
this Agreement, the other Loan Documents or the Credit Party Interest Hedge
Agreements or the Obligations of any of the Borrower Parties hereunder or
thereunder, the value or sufficiency of any Collateral or any other
circumstance that might otherwise affect the liability of a guarantor,
that:  (a) the principal of and interest
on the Loans and all other Obligations under this Agreement, the other Loan
Documents and the Credit Party Interest Hedge Agreements shall be promptly paid
in full when due, whether at stated maturity, by acceleration or otherwise, in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any of the Loans or any other of such
Obligations, the same shall be promptly paid in full when due in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.  The foregoing
guaranty is a guaranty of payment and not of collection.  Failing payment when due of any amount so
guaranteed for whatever reason, the Guarantors will be obligated, jointly and
severally, to pay the same immediately.

 

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

 

58

 

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

 

Section 3.3                                      Miscellaneous.

 

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

 

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

 

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

 

59

 

for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by such Person.

 

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

 

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

 

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

 

ARTICLE 4 -  Conditions Precedent

 

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

 

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

 

(i)                                     this duly executed Agreement;

 

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

 

60

 

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

 

(iv)                              a loan certificate of the Borrower, including
a certificate of incumbency with respect to the signature of each Authorized
Signatory of the Borrower, which loan certificate shall be in substantially the
form of Exhibit N attached hereto, together with appropriate attachments
which shall include, without limitation, the following items:  (A) a true, complete and correct copy of the
articles of organization of the Borrower, certified by the Secretary of State
of Delaware, (B) a true, complete and correct copy of the limited liability
company agreement, if any, of the Borrower, (C) a copy of the resolutions of
the board of directors, or other appropriate entity, of the Borrower,
authorizing the Borrower with respect to the borrowings hereunder and the
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which it is a party, (D) certificates of existence for
the Borrower issued by the Secretary of State or similar state official for the
State of Delaware and for each state in which the Borrower is, or is required
to be, qualified to do business, and (E) a true, complete and correct copy of
any agreement in effect with respect to the voting rights, ownership interests or
management of the Borrower;

 

(v)                                 a loan certificate of Holdings, including a
certificate of incumbency with respect to the signature of each Authorized
Signatory of Holdings, which loan certificate shall be in substantially the
form of Exhibit O attached hereto, together with appropriate attachments
which shall include, without limitation, the following items:  (A) a true, complete and correct copy of the
articles of organization of Holdings, certified by the Secretary of State of
Delaware, (B) a true, complete and correct copy of the limited liability
company agreement, if any, of Holdings, (C) a copy of the resolutions of the
board of directors, or other appropriate entity, authorizing Holdings with
respect to the execution, delivery and performance by Holdings of the Loan
Documents to which it is a party, and (D) certificates of existence for
Holdings issued by the Secretary of State or similar state official for the
State of Delaware and for each state in which Holdings is, or is required to
be, qualified to do business;

 

(vi)                              a loan certificate of each Subsidiary
Guarantor, including a certificate of incumbency with respect to the signature
of each Authorized Signatory of such Guarantor, which loan certificate shall be
in substantially the form of Exhibit P attached hereto, together with
appropriate attachments which shall include, without limitation, the following
items:  (A) a true, complete and correct
copy of the articles of incorporation, certificate of limited partnership or
certificate of organization of such Guarantor, certified by the Secretary of
State of such Guarantor’s organization, (B) a true, complete and correct copy
of by-laws, partnership agreement or limited liability company or operating
agreement of such Guarantor, (C) a copy of the resolutions of the 

 

61

 

board of directors, or other
appropriate entity, of such Guarantor, authorizing such Guarantor with respect
to the execution, delivery and performance by such Guarantor of this Agreement
and the other Loan Documents to which it is a party, (D) certificates of
existence for such Guarantor issued by the Secretary of State or similar state
official for the state of such Guarantor’s organization and for each state in
which such Guarantor is, or is required to be, qualified to do business, and
(E) a true, complete and correct copy of any agreement in effect with respect
to the voting rights, ownership interests or management of such Guarantor;

 

(vii)                           the duly executed Fee Letters;

 

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

 

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

 

(x)                                   opinions of counsel to the Borrower and the
Guarantors addressed to each Credit Party and in form and substance
satisfactory to the Arranger Banks and their counsel;

 

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

 

(xii)                             a copy of the unaudited consolidated balance
sheets, income statements and cash flow statements for the Rainbow Group for
the quarter ended March 31, 2004;

 

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

 

(xiv)                         a duly executed Request for Advance for the
initial Advance of the Loans;

 

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

 

(xvi)                         evidence that the outstanding Obligations (as
defined in the RMH Loan Agreement) under the RMH Loan Agreement and the other
Loan Documents (as defined in the RMH Loan Agreement) shall have been repaid in
full and the Liens securing such Obligations have been released; and

 

62

 

(xvii)                      evidence that all steps necessary to effect
the following ownership structure have been completed:  RME shall directly own 100% of Holdings;
Holdings shall directly own 100% of the Borrower; and the Borrower shall own
(directly or indirectly) 100% of all of the Voting Stock of the Subsidiary
Guarantors.

 

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

 

(c)                                  No Default or Event of Default shall exist,
both before and after giving effect to the application of the proceeds of
initial Advance, and the Administrative Agent shall have received a certificate
of an Authorized Signatory of the Borrower so stating.

 

(d)                                 No litigation shall have been commenced
against any of the Borrower Parties since  the
filing by RME of its Form 10 with the SEC on May 11, 2004, which, if such
litigation could reasonably be expected to be determined adversely to any such
Company, could reasonably be expected to have a Materially Adverse Effect
(other than any such litigation identified on Schedule 5.1(l)).

 

(e)                                  There shall have been no material adverse
change in the business, assets or financial condition of the Rainbow Group,
taken as a whole, from that reflected in the audited consolidated balance
sheets, income statements and cash flow statements for the Rainbow Group for
the year ended December 31, 2003.

 

(f)                                    The Arranger Banks shall have received the
results of lien searches against each of the Borrower Parties from all
applicable jurisdictions which shall be reasonably satisfactory to them and
their counsel.

 

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

 

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

 

(a)                                  The Administrative Agent, or in the case of a
Swing Loan, the Swing Loan Lender, shall have received a duly executed and
completed Request for Advance or Swing Loan Request, as applicable, signed by
an Authorized Signatory of the 

 

63

 

Borrower, which Request for
Advance or Swing Loan Request, as applicable, shall (i) certify that there does
not exist as of the date hereof, and after giving effect to the requested
Advance there shall not exist, any Default or Event of Default, (ii) certify
that, as of the date of the requested Advance and after giving effect to the
application of proceeds thereof, the representations and warranties in
Section 5.1 hereof shall be true and correct in all material respects,
except to the extent any representation or warranty is made solely as of the
Agreement Date, (iii) certify that, as of the date of the requested Advance,
there shall exist no litigation commenced against any of the Borrower Parties
since the Agreement Date, which, if such litigation could reasonably be
expected to be determined adversely to any such Company, could reasonably be
expected to have a Materially Adverse Effect, (iv) provide calculations
demonstrating compliance with Sections 8.8 and 8.9 hereof before and after
giving effect to the requested Advance and (v) certify that the incurrence of
the requested Advance (A) shall not violate the Indenture and (B) shall
constitute “Senior Debt” (as defined in the Senior Subordinated Notes
Indenture).

 

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

 

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

 

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

 

(a)                                  The Administrative Agent shall have received
a duly executed and completed Request for Issuance of Letter of Credit signed
by an Authorized Signatory of the Borrower, which Request for Issuance of
Letter of Credit shall (i) certify that there does not exist as of the date
hereof, and after giving effect to the request there shall not exist, any
Default or Event of Default, (ii) certify that as of the date of the issuance
of the requested Letter of Credit and after giving effect thereto, the
representations and warranties in Section 5.1 hereof shall be true and
correct in all material respects, except to the extent and representation or
warranty is made solely as of the Agreement Date, (iii) certify that, as of the
date of the issuance of the requested Letter of Credit, there shall exist no
litigation commenced against any of the Borrower Parties since the Agreement
Date, which, if such litigation could reasonably be expected to be determined
adversely to any such Company, could reasonably be expected to have a Materially
Adverse Effect, (iv) provide calculations demonstrating compliance with
Sections 8.8 and 8.9 hereof before and after giving effect to the issuance of
the requested 

 

64

 

Letter of Credit and (v)
certify that (A) issuance of the requested Letter of Credit shall not violate
the Indentures and (B) the L/C Obligations with respect to the requested Letter
of Credit shall constitute “Senior Debt” (as defined in the Senior Subordinated
Notes Indenture).

 

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

 

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

 

ARTICLE 5
-  Representations and Warranties

 

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

 

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

 

(b)                                 Authorization; Enforceability.  Each
of the Borrower Parties has all power, corporate or otherwise, and has taken
all necessary action to authorize it to execute, deliver, and perform this
Agreement and each of the other Loan Documents to which it is a party in
accordance with the terms thereof and to consummate the transactions
contemplated hereby and thereby.  This
Agreement and each of the other Loan Documents have been duly executed and
delivered by each of the Borrower Parties party thereto, and each of this
Agreement and each of the other Loan Documents to which any Borrower Party is a
party is a legal, valid and binding obligation of each Borrower Party party thereto,
enforceable in accordance with its terms, subject to limitations on
enforceability under bankruptcy, reorganization, insolvency and similar laws
affecting creditors’ rights generally and limitations on the availability of
the remedy of specific performance imposed by the application of general equity
principles.

 

65

 

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

 

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

 

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

 

66

 

Persons, as the case may be,
and all such action required to be taken as a condition to the initial Advance
has been or will be duly taken prior to such Advance.

 

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

 

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

 

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

 

(i)                                     Financial Statements.  The
Borrower has furnished, or caused to be furnished, to the Credit Parties the
financial statements required pursuant to Section 4.1(a)(xii) hereof, all
of which are complete and correct in all material respects and present fairly
in accordance with GAAP the financial position of the Rainbow Group as at the
dates thereof, and the results of operations for the periods ended as of such
dates, subject to normal year-end adjustments with respect to any unaudited statements.  Except as disclosed in such financial
statements or in Schedule 5.1(i) attached hereto, none of the
Rainbow Companies had any material liabilities, contingent or otherwise, and
there are no material unrealized or anticipated losses of any such Companies
which have not heretofore been disclosed in writing to the Credit Parties.

 

(j)                                     No Adverse Change. 
Since December 31, 2003, there has occurred no event which has had
or could reasonably be expected to have a Materially Adverse Effect.

 

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

 

67

 

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

 

(m)                               ERISA.  Each Plan maintained, or
contributed to, by the Borrower or any of its Subsidiaries, or any of their
ERISA Affiliates is listed on Schedule 5.1(m) attached hereto.  Each of such Plans is in compliance in all
material respects with their terms, ERISA and the Code.  None of such Plans has a material “accumulated
funding deficiency” within the meaning of ERISA or the Code.  Neither the Borrower nor any of its
Subsidiaries nor any of their respective ERISA Affiliates has incurred any
material liability to the PBGC in connection with any such Plan.  The assets of each such Plan which is subject
to Title IV of ERISA are sufficient to provide the benefits under such Plan if
such Plan were determined on an ongoing basis. 
No Reportable Event, for which the thirty (30) day notice provision has
not been waived in accordance with ERISA Section 4043(a), has occurred
with respect to any such Plan.  No party
in interest, fiduciary, trustee or administrator of any such Plan or trust
created thereunder has engaged in a “prohibited transaction” (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code which is
not statutorily or administratively exempt under Sections 407 or 408 of ERISA
or Section 4975 of the Code, each of which exemptions are disclosed on Schedule 5.1(m))
which would subject the Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates to a material tax on “prohibited transactions”
imposed by Section 4975 of the Code; provided that this
representation and warranty is based upon the Borrower’s understanding provided
by Lenders that the source of the Loans will not at any time constitute assets
of any such Plan.  No party in interest,
fiduciary, trustee or administrator of any such Plan or trust created
thereunder has committed a material breach of its fiduciary duty or knowingly
participated in any violation of ERISA which would subject the Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates to a material
penalty under Section 502 of ERISA. 
Except as set forth on Schedule 5.1(m), none of the
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
is a participant in or obliged to make any payment to a Multiemployer
Plan.  Except as required by Sections 601
through 609 of ERISA or as disclosed on Schedule 5.1(m),
Section 4980(B) of the Code and applicable state law, neither the Borrower
nor any of its Subsidiaries has made any oral or written commitments to provide
post-employment health or life insurance coverage with respect to any former or
current employee.  The Borrower, its
Subsidiaries and their respective ERISA Affiliates have properly classified
individuals providing services to the Borrower or any of its Subsidiaries or
any of their respective ERISA Affiliates as employees and 

 

68

 

non-employees, except to the
extent that a misclassification would not result in a Materially Adverse
Effect.

 

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

 

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

 

69

 

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

 

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

 

(r)                                    Compliance with Regulations U and X.  None
of the Borrower Parties is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or
carrying, and the Borrower does not own or presently intend to acquire, any “margin
security” or “margin stock” as defined in Regulations U and X (12 C.F.R. Parts
221 and 224) of the Board of Governors of the Federal Reserve System (herein
called “margin stock”).  None of the
proceeds of the Loans will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which would constitute this transaction a
“purpose credit” within the meaning of said Regulations U and X.  Neither the Borrower nor any bank acting on
its behalf has taken or will take any action which would cause this Agreement
or the Notes to violate Regulation U or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934.  If so requested by
the Administrative Agent, the Borrower will furnish the Administrative Agent
with (i) a statement or statements in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U of said Board of Governors
and (ii) other documents evidencing its compliance with the margin regulations,
including, without limitation, an opinion of counsel in form and substance
reasonably satisfactory to the Lenders.

 

(s)                                  Solvency.  Each of the Borrower,
Holdings, AMC, IFC, WE and any Material Subsidiary formed or acquired after the
Agreement Date is Solvent, and, after giving effect to the transactions
contemplated hereby and by the Loan 

 

70

 

Documents, each of the
Borrower, Holdings, AMC, IFC, WE and any Material Subsidiary formed or acquired
after the Agreement Date will be Solvent.

 

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

 

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

 

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

 

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

 

Section 5.2                                      Survival of Representations and Warranties,
etc.  All representations and warranties made under
this Agreement shall be deemed to be made, and shall be true and correct in all
material respects, at and as of the Agreement Date and on the date of each
Advance, except to the extent any representation or warranty is made solely as
of the Agreement Date in accordance with the terms hereof.  All representations and warranties made under
this Agreement shall survive, and not be waived by, the execution hereof by the
Credit Parties, any investigation or inquiry by any of the Credit Parties or
the making of any Advance under this Agreement.

 

71

 

ARTICLE 6 -  General Covenants

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)                                  maintain or cause to be maintained (i)
insurance on the assets and properties and on its operations including, but not
limited to, public liability, business interruption and fidelity coverage
insurance, from responsible insurance companies in such amounts and against
such risks as shall be reasonably acceptable to the 

 

72

 

Majority Lenders and (ii)
maintain insurance coverage comparable to that in place on the Agreement Date,
taking into account the growth of their respective businesses and operations
after the Agreement Date; and

 

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

 

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

 

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

 

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

 

Section 6.8                                      Payment of Indebtedness.  Holdings and the Borrower will pay, and will
cause each of the other Borrower Parties to pay, subject to any provisions
therein regarding subordination, any and all of their respective Indebtedness
For Money 

 

73

 

Borrowed when and as the
same becomes due, other than amounts duly disputed in good faith, the
non-payment of which is not likely to have a Materially Adverse Effect.

 

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

 

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

 

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

 

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

 

Section 6.13                                Indemnity.  Each of the Borrower Parties,
jointly and severally, will indemnify each of the Credit Parties, such Credit
Party’s Lender Affiliates, and the respective employees, agents, advisors,
trustees, officers and directors of such Credit Party and such Credit Party’s
Lender Affiliates (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and

 

74

disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance
by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by an Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.

 

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

 

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

 

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

 

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

 

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

 

75

 

(e)                                a duly executed amendment or supplement, as
applicable, to the Pledge Agreement, pursuant to which (i) all of the issued
and outstanding capital stock (or other instruments or securities evidencing
ownership) of each new Guarantor shall be pledged to the Administrative Agent
as additional Collateral for the Obligations, and (ii) all shares of capital
stock (or other instruments or securities evidencing ownership) with respect to
any Investment (including, without limitation, any Investment made pursuant to Section 8.2(d)
hereof but excluding any equity interests in any of the Unrestricted
Subsidiaries) beneficially owned or held by any of the Rainbow Companies shall
be pledged to the Administrative Agent as additional Collateral for the
Obligations, but only to the extent (except with respect to any Investment made
pursuant to Section 8.2(d) hereof) that the pledge of any such shares or
other interests in or with respect to any Company that is not wholly-owned
directly or indirectly by the Borrower will not (A) violate the Constituent
Documents applicable to such Company (and, if the pledge of any such shares or
other interests will violate any of such Constituent Documents, such shares or
other interests shall be held by the Rainbow Companies subject to the terms and
conditions of this Agreement and the other Loan Documents) and (B) require the
consent of any unaffiliated third party (which consent the Borrower is unable
to obtain after taking reasonable steps to do so), and in the case of the
foregoing clauses (i) and (ii), together with all original securities
certificates, duly executed securities powers and appropriate UCC-1 financing
statement forms; and

 

(f)                                  all other documentation, including, without
limitation, (i) an amendment or supplement, as applicable, to the Trademark
Security Agreement covering any additional registered trademarks or trademark
applications owned by any of the Rainbow Companies, and (ii) to the extent
reasonably requested by the Administrative Agent one or more opinions of
counsel satisfactory to the Administrative Agent which in the reasonable
opinion of the Administrative Agent is appropriate with respect to the
Acquisition or formation of any new Guarantor or the addition of any new
Collateral as security for the Obligations.

 

Any
document, agreement or instrument executed or issued pursuant to this
Section 6.14 shall be and constitute a “Loan Document” for purposes of
this Agreement.

 

Section 6.15                              Interest Rate Hedging.

 

(a)                                So long as the Total Leverage Ratio is
greater than 4.00 to 1.00 and the Fixed Rate Debt Percentage (as defined below)
is less than forty percent (40%), the Borrower shall maintain one or more
Interest Hedge Agreements which fix or place a limit on the Borrower’s interest
obligations at interest rates reasonably acceptable to the Arranger Banks such
that, at all times, the Fixed Rate Debt Percentage shall equal at least forty
percent (40%).  The Borrower shall enter
into such Interest Hedge Agreements as required by this Section 6.15
within ninety (90) days after the delivery of the initial performance
certificate pursuant to Section 7.3 hereof indicating the Total

 

76

 

Leverage Ratio exceeds 4.00
to 1.00.  For purposes of this
Section 6.15, “Fixed Rate Debt Percentage” shall mean the quotient
of Indebtedness For Money Borrowed bearing a fixed rate of interest (as may be
adjusted by Interest Hedge Agreements) divided by all Indebtedness For Money
Borrowed.

 

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

 

ARTICLE 7 -  Information Covenants

 

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

 

Section 7.1                                    Quarterly Financial Statements and
Information.  On or before each applicable Financial
Statements Delivery Date, with respect to each fiscal quarter of the Borrower,
a copy of the unaudited consolidated balance sheets, of the Rainbow Group as at
the end of the quarter then ended, and the related unaudited consolidated
statements of operations, equity and cash flows for the Rainbow Group for such
quarter and for the elapsed portion of the year ended with the last day of such
quarter, and setting forth, in the case of the statements of operations, the
financial performance of AMC, WE and IFC (by programming segment) by footnote,
for such quarter and for the elapsed portion of the year ended with the last
day of such quarter.

 

All
of the foregoing financial statements shall set forth in comparative form such
figures for the same period for the prior fiscal year and shall be certified by
an Authorized Signatory of the Borrower to, in his or her opinion, present
fairly, in accordance with GAAP, the consolidated financial position of the
Rainbow Group, in each case as at the end of such period, and the results of
operations for such period, and for the elapsed portion of the year ended with the
last day of such period, subject only to normal year-end adjustments.

 

Section 7.2                                    Annual Financial Statements and Information;
Certificate of No Default.  On or before each applicable Financial
Statements Delivery Date, with respect to each fiscal year of the Borrower a
copy of the audited consolidated balance sheets, and the related audited
consolidated statements of operations, equity and cash flows of the Rainbow
Group, setting forth the financial information of the Rainbow Group as at the
end of the fiscal year then ended, and setting forth, in the case of the

 

77

 

statements of operations,
the financial performance of AMC, WE and IFC and (by programming segment) by
footnote, as at the end of the fiscal year then ended.

 

All
of the foregoing financial statements shall set forth in comparative form such
figures for the same period for the prior fiscal year and, with respect to the
audited financial statements, shall be accompanied by an opinion of KPMG LLP or
a firm of independent certified public accountants of recognized standing
selected by the Borrower and satisfactory to the Majority Lenders, together
with a statement of such accountants certifying that no Default or Event of
Default under the Financial Covenants was detected during the examination of
the Rainbow Group and that such accountants have authorized the Borrower to
deliver such financial statements and opinion thereon to the Credit Parties
pursuant to this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

78

 

Section 7.4                                    Copies of Other Reports.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.5                                    Notice of Litigation and Other Matters.

 

(a)                                Prompt notice of the following events as to
which Holdings or the Borrower has received notice or otherwise become aware
thereof:

 

(i)                         The commencement of all material proceedings
and investigations by or before any governmental body and all actions and
proceedings in any court or before any arbitrator (i) against or, (ii) to the
extent known to Holdings or the Borrower, in any other way relating adversely
and directly to any of the Borrower Parties, or any of their respective
properties, assets or businesses, or which calls into question the validity of
this Agreement, any other Loan Document or any Credit Party Interest Hedge

 

79

 

Agreement, except where the
adverse outcome of such proceeding or investigation is not likely to have a
Materially Adverse Effect;

 

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

 

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

 

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

 

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

 

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

 

(b)                               Notice of the date of the proposed
consummation of the RME Spin-Off at least ten (10) Business Days in advance
thereof.  The RME Spin-Off shall be
consummated substantially in accordance with the schedule of steps set
forth on Schedule 7.5(b) attached hereto or as otherwise consented
to in writing by the Arranger Banks, and the Administrative Agent shall have
received a certificate of an Authorized Signatory of RME and the Borrower
certifying as to the foregoing and to the consummation of the RME
Spin-Off.  On or before the consummation
of the RME Spin-Off, the Borrower shall provide to the Administrative Agent (a)
notice of any new Plans of the Borrower or any of its Subsidiaries as of the
date of the RME Spin-Off, (b) a new Schedule 5.1(m), updated as of the
date of the RME Spin-Off, and (c) copies of insurance

 

80

 

binders or certificates
covering the assets of the Rainbow Companies, and otherwise meeting the
requirements of, and to the extent required by, Section 6.5 hereof, as of
the date of the RME Spin-Off.

 

ARTICLE 8 -  Negative Covenants

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                  Indebtedness of the Rainbow Companies that
is, in each case, on terms and conditions which shall (i) have a maturity date
no earlier than six (6) months after the Final Maturity Date, (ii) not have any
required cash redemptions prior to six (6) months after the Final Maturity
Date, (iii) be unsecured, (iv) be contractually subordinated to the Obligations
on terms reasonably satisfactory to the Arranger Banks, (v) not be supported by
any guaranty of the Borrower or any Subsidiary of the Borrower (unless such
guaranty shall be contractually subordinated to the Obligations on terms
reasonably satisfactory to the Arranger Banks), (vi) be issued subject to
demonstration to the reasonable satisfaction of the Arranger Banks of pro forma
compliance with the Financial Covenants through the Final Maturity Date, (vii)
be issued on market terms and

 

81

 

conditions which shall be no
more restrictive on the Borrower Parties than the terms and conditions of this
Agreement and the other Loan Documents, and (viii) be otherwise reasonably
satisfactory to the Arranger Banks;

 

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

 

(h)                               Indebtedness of Holdings that is, in each
case, on terms and conditions which shall (i) have a maturity date no earlier
than six (6) months after the Final Maturity Date, (ii) not have any required
cash redemptions prior to six (6) months after the Final Maturity Date, (iii)
be unsecured, (iv) not be supported by any guaranty of the Borrower or any
Subsidiary of the Borrower, (v) be issued on market terms and conditions which
shall be no more restrictive on the Borrower Parties than the terms and
conditions of this Agreement and the other Loan Documents, and (viii) be
otherwise reasonably satisfactory to the Arranger Banks.

 

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

 

(a)                                any of the Rainbow Companies may purchase or
otherwise acquire and own Cash Equivalents;

 

(b)                               any of the Rainbow Companies may make
payments in respect of Film Rights Agreements and Affiliation Agreements;

 

(c)                                any of the Rainbow Companies may make
Investments in any Subsidiary of such Rainbow Company, so long as such
Subsidiary is a Subsidiary Guarantor; and

 

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

 

(i)                        make cash Investments in an aggregate amount
not to exceed during any year, together with the amount of any Restricted
Payments made during such year under Section 8.7(c)(i)(A) hereof, the
Rainbow DBS Holdings Basket Amount applicable to such period;

 

(ii)                     make cash Investments in an aggregate amount
not to exceed during any year, together with the amount of any Acquisitions
made during such year under Section 8.5(d)(v)(A) hereof and the amount of
any Restricted Payments made during such year under Section 8.7(c)(i)(B)
hereof, the Discretionary Distributions Basket Amount applicable to such
period; and

 

82

 

(iii)                  make cash Investments funded by Net Cash
Proceeds received in connection with the issuance of any New Affiliated Equity
to the extent such Net Cash Proceeds are not used by the Rainbow Companies for
any other purpose.

 

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

 

Section 8.4                                    Amendment and Waiver.  None
of the Borrower Parties shall, nor shall permit any of the other Borrower
Parties to, enter into any amendment, or agree to or accept any waiver, (a)
which would materially adversely affect the rights of the Borrower Parties and
the Credit Parties, or any of them, of any of the provisions of (i) the
Constituent Documents of any of the Borrower Parties and (ii) any Material
Affiliate Contracts and (b) which would have a Materially Adverse Effect, of
any of the provisions of any agreement between any of the Borrower Parties, on
the one hand, and any of its Affiliates, on the other hand.

 

Section 8.5                                    Liquidation; Disposition or Acquisition of
Assets.

 

(a)                                (i) None of the Borrower Parties shall, nor
shall permit any of the other Borrower Parties to, liquidate or dissolve itself
(or suffer any liquidation or dissolution) or otherwise wind up, or (ii) the
Borrower shall not, and shall not permit any of the Subsidiary Guarantors to,
at any time, (A) sell, lease, abandon, transfer, exchange or otherwise dispose
of any assets (not constituting capital stock, partnership interests or other
equity interests) or business in excess of $10,000,000 in the aggregate during
the term of this Agreement, provided, however, that the Borrower
and the Subsidiary Guarantor may sell, lease, abandon, transfer, exchange or
otherwise dispose of any assets (not constituting capital stock, partnership
interests or other equity interests) or business in excess of $10,000,000 and
up to $100,000,000 in the aggregate during the term of this Agreement so long as
(1) no Default or Event of Default then exists or would be caused thereby, (2)
the Net Cash Proceeds received in connection therewith are (x) used to acquire
assets useful in the business of such Borrower Party within three hundred sixty
(360) days after receipt of such Net Cash Proceeds or (y) if not so used within
such three hundred sixty (360) day period, applied to prepay the Loans as
provided in Section 2.6(b), and (3) such new assets are subject to the
Lien of the Administrative Agent under the Security Documents, or (B) enter
into any merger or consolidation, except, in each case, for (1) sales,
dispositions, mergers, consolidations or exchanges by any Guarantor

 

83

 

of its businesses, assets or
rights to or with another Borrower Party, and (2) sales or dispositions in the
ordinary course of business by any of the Rainbow Companies of obsolete or
worn-out property or other property reasonably determined by the management of
the disposing Company to be not used or useful in its business.

 

(b)                               None of the Borrower Parties shall, nor shall
permit any of the other Borrower Parties to, sell, lease, abandon, transfer,
exchange or otherwise dispose of any assets constituting capital stock,
partnership interests or other equity interests of any Material Subsidiary,
unless in any such case the Arranger Banks shall have provided their prior
written consent to such transaction.

 

(c)                                The Borrower shall not, and shall not permit
any of the Subsidiary Guarantors to, at any time, issue any capital stock,
partnership interests or other equity interests in any of the Rainbow
Companies, except (i) for the issuance of capital stock, partnership interests
or other equity interests in the Borrower in connection with the issuance of
any New Affiliated Equity, (ii) on the Agreement Date, AMC may exchange PIK
Preferred in an initial face and fair market value not to exceed $350,000,000
in the aggregate for (A) RMH’s common membership interest in AMC and (B) part
of AMC IV’s common membership interest in AMC, (iii) so long as no Default or
Event of Default then exists or would be caused thereby, AMC may make non-cash
distributions in the form of PIK Preferred to the holders of the PIK Preferred
in accordance with Section 17(c) of the AMC LLC Agreement as in effect on
the Agreement Date and as amended, modified or supplemented on terms no less
favorable to the Rainbow Companies, taken as a whole, and (iv) on or before the
RME Spin-Off, AMC may (A) re-allocate the PIK Preferred among the holders of
the PIK Preferred and (B) issue additional common membership interests to AMC
IV or the Borrower, or both.

 

(d)                               The Borrower shall not, and shall not permit
any of the Subsidiary Guarantors to, at any time, acquire assets, property,
stock or the business of any other Person except for (i) Capital Expenditures
in the ordinary course of business of the applicable Borrower Parties, (ii)
purchases of assets in the ordinary course of business of the applicable
Borrower Parties, (iii) Film Rights Agreements, (iv) Permitted Investments and
(v) so long as no Default or Event of Default then exists or would be caused
thereby and subject to compliance with Section 6.14 hereof, (A)
Acquisitions in an aggregate amount not to exceed during any year, together with
the amount of any Investments made during such year under
Section 8.2(d)(ii) hereof and the amount of any Restricted Payments made
during such year under Section 8.7(c)(i)(B) hereof, the Discretionary
Distributions Basket Amount applicable to such period, and (B) Acquisitions
funded by Net Cash Proceeds received in connection with (1) the issuance of any
New Affiliated Equity or (2) any Subsequent Authorized Debt Issuance, in each
case to the extent such Net Cash Proceeds are not used by the Rainbow Companies
for any other purpose.

 

84

 

Section 8.6                                    Limitation on Guaranties.  The
Borrower shall not, and shall not permit any of the Subsidiary Guarantors to,
at any time guarantee, or assume, be obligated with respect to, or permit to be
outstanding any Guaranty of, any obligation of any other Person other than (a)
under any Loan Document or any Credit Party Interest Hedge Agreement, (b)
obligations under agreements to indemnify Persons who have issued bid or performance
bonds or letters of credit issued in lieu of such bonds in the ordinary course
of business of such Rainbow Company securing performance by any Rainbow Company
of activities otherwise permissible hereunder, (c) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, (d)
Guaranties constituting Investments permitted to be made pursuant to
Section 8.2(d), (f) unsecured Guaranties of the Borrower’s or Holdings’s  obligations in respect of any Authorized Debt
Issuance, and (g) those Guaranties described on Schedule 8.6
attached hereto (as such schedule may be amended by the Borrower from time
to time), undertaken in the ordinary course of business of the Rainbow
Companies, including, without limitation, Guaranties issued for purposes of
securing (i) programming or transponder rights, (ii) production and product
related arrangements, (iii) affiliation agreements, (iv) advertising
representation agreements, marketing and service arrangements, or (v) real estate
leases, and extensions, replacements and modifications of the foregoing, provided
that the aggregate amount of all such Guaranties under this Section 8.6(g)
at any time outstanding does not exceed $45,000,000.

 

Section 8.7                                    Restricted Payments and Purchases.  The
Borrower shall not, and shall not permit any of the Subsidiary Guarantors to,
directly or indirectly, declare or make any Restricted Payment or Restricted
Purchase, except that:

 

(a)                                the Subsidiary Guarantors may make Restricted
Payments to the Borrower;

 

(b)                               the Borrower may make payments in respect of
Employee Stock Compensation Plan Expense;

 

(c)                                so long as no Default or Event of Default
then exists or would be caused thereby, the Borrower may:

 

(i)                         so long as the Administrative Agent shall
have received satisfactory evidence (x) that the aggregate amount of Liquidity,
both before and after giving effect to such Restricted Payment, is at least
$35,000,000, (y) that the Borrower is permitted to borrow the aggregate amount
of clause (a) of the definition of Liquidity both before and after giving
effect to such Restricted Payment and (z) of pro forma compliance with the
Financial Covenants, both before and after giving effect to such Restricted
Payment,

 

(A)        make cash distributions to Holdings for the
benefit of Rainbow DBS Holdings, Inc., and its Subsidiaries in an aggregate
amount not to exceed during any year, together with the amount of any
Investments made during

 

85

 

such year under
Section 8.2(d)(i) hereof, the Rainbow DBS Holdings Basket Amount
applicable to such period,

 

(B)          make cash distributions to Holdings in an
aggregate amount not to exceed during any year, together with the amount of any
Investments made during such year under Section 8.2(d)(ii) hereof and the
amount of any Acquisitions made during such year under
Section 8.5(d)(v)(A) hereof, the Discretionary Distributions Basket Amount
applicable to such period, and

 

(C)          so long as the Total Leverage Ratio is less
than or equal to the lesser of (1) 5.00 to 1.00 and (2) the Total Leverage
Ratio required by Section 8.8 hereof for the relevant period, make cash
distributions to Holdings funded by the Net Cash Proceeds received in
connection with any Subsequent Authorized Debt Issuance by the Borrower
substantially concurrently with the closing of such Subsequent Authorized Debt
Issuance,

 

(ii)                      so long as the Borrower is a Flow Through
Entity, make Restricted Payments to Holdings or an Affiliate of Holdings for
and in the amount of Federal and state taxes payable by Holdings or such
Affiliate which are attributable to the operations or assets of the Borrower,

 

(iii)                   make regularly scheduled payments of interest
in respect of (A) Indebtedness outstanding in connection with an Authorized
Debt Issuance by the Borrower and (B) Indebtedness incurred pursuant to
Section 8.1(f) hereof,

 

(iv)                  make cash distributions to Holdings to fund
regularly scheduled payments of interest in respect of Indebtedness outstanding
in connection with an Authorized Debt Issuance by Holdings,

 

(v)                     prior to the RME Spin-Off, make Restricted
Payments, subject to the Subordination of Intercompany Obligations Agreement,
for payment of fees under the AMC Consulting Agreement,

 

(vi)                  make Restricted Payments, subject to the
Subordination of Intercompany Obligations Agreement, for reimbursement of
services to the extent set forth in the Services Agreement,

 

(vii)               on the Agreement Date, make a cash
distribution to Holdings funded by the Term B Loans and the Net Cash Proceeds
received in connection with the Initial Authorized Debt Issuance by the
Borrower in an amount equal to the result of (A) the sum of the Term B Loans plus
the proceeds of the Initial Permitted Debt Offering minus (B) all fees
and expenses incurred in connection with the Initial Permitted Debt Offering,
and

 

86

 

(viii)            make cash distributions to Holdings funded by
Net Cash Proceeds received in connection with the issuance of any New
Affiliated Equity to the extent such Net Cash Proceeds are not used by the
Rainbow Companies for any other purpose; and

 

(d)                               AMC may, as permitted by Section 8.5(c)
hereof (i) exchange PIK Preferred for common membership interests, (ii) make
non-cash distributions to the holders of the PIK Preferred and (iii) exchange
common membership interests for PIK Preferred.

 

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

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreement
  Date through December 31, 2006

  	
   

  	
  6.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2007 through December 31, 2007

  	
   

  	
  6.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2008 through June 30, 2008

  	
   

  	
  6.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1,
  2008 through December 31, 2008

  	
   

  	
  5.75 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2009 through December 31, 2009

  	
   

  	
  5.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1,
  2010 and thereafter

  	
   

  	
  5.00 to 1.00

  	
   

  

 

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

 

	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  Agreement Date through
  September 30, 2005

  	
   

  	
  5.00 to 1.00

  
	
   

  	
   

  	
   

  
	
  October 1, 2005
  through March 31, 2006

  	
   

  	
  4.75 to 1.00

  
	
   

  	
   

  	
   

  
	
  April 1, 2006 through
  December 31, 2007

  	
   

  	
  4.50 to 1.00

  
	
   

  	
   

  	
   

  
	
  January 1, 2008
  through June 30, 2008

  	
   

  	
  4.00 to 1.00

  
	
   

  	
   

  	
   

  
	
  July 1, 2008 through
  December 31, 2008

  	
   

  	
  3.75 to 1.00

  
	
   

  	
   

  	
   

  
	
  January 1, 2009 and
  thereafter

  	
   

  	
  3.50 to 1.00

  

 

 

87

 

 

Section 8.10                              Interest Coverage Ratio.  The
Borrower shall not permit, as of the end of any fiscal quarter ending during
the term of this Agreement, the Interest Coverage Ratio to be less than 1.75 to
1.00.

 

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

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreement Date through December 31,
  2006

  	
   

  	
  1.25 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2007 and thereafter

  	
   

  	
  1.50 to 1.00

  	
   

  

 

Section 8.12                              Affiliate Transactions. None of the Borrower Parties shall, nor
shall they permit any of the other Borrower Parties to, at any time engage in
or amend any transaction with any Affiliate, or make an assignment or other
transfer of any of its assets to any Affiliate, on terms less advantageous to
such Borrower Party than would be the case if such transaction had been
effected with a non-Affiliate, in each case other than as set forth on Schedule 8.12
attached hereto or as otherwise permitted under this Agreement.

 

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

 

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

 

88

 

through 609 of ERISA, Section 4980(B)
of the Code and applicable state law, nor terminate any Plan if its termination
would reasonably be expected to have a Materially Adverse Effect.

 

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

 

Section 8.16                              Negative Pledge.  (a)
None of the Rainbow Companies shall, nor shall they or Holdings permit any of
the Rainbow Companies to, directly or indirectly, enter into any agreement
(other than the Loan Documents) with any Person that prohibits or restricts or
limits the ability of any such Borrower Party to create, incur, pledge or
suffer to exist any Lien upon any of its respective assets, or restricts the
ability of any Subsidiary Guarantor to make Restricted Payments to the Borrower,
and (b) Holdings shall not enter into any agreement (other than the Loan
Documents) with any Person that prohibits or restricts or limits the ability of
Holdings to create, incur, pledge or suffer to exist any Lien upon the capital
stock or other equity interests of the Borrower.

 

ARTICLE 9 -  Default

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)                                  There shall have occurred a Change of
Control;

 

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

 

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

 

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

 

(j)                                   The Borrower, any of its Material
Subsidiaries, Holdings, RME or, prior to the RME Spin-Off, CVC shall file a
petition, answer, or consent seeking relief under the Bankruptcy Code, or the
Borrower, any of its Material Subsidiaries, Holdings, RME or, prior to the RME
Spin-Off, CVC shall consent to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment or

 

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taking of possession of a
receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of the Borrower, any of its Material Subsidiaries, Holdings,
RME or, prior to the RME Spin-Off, CVC, or of any substantial part of their
respective properties, or the Borrower, any of its Material Subsidiaries,
Holdings, RME or, prior to the RME Spin-Off, CVC shall fail generally to pay
their respective debts as they become due, or the Borrower, any of its Material
Subsidiaries, Holdings, RME or, prior to the RME Spin-Off, CVC shall take any
action in furtherance of any such action;

 

(k)                                A final judgment shall be entered by any
court against any of the Borrower Parties for the payment of money which
exceeds $5,000,000, or a warrant of attachment or execution or similar process
shall be issued or levied against property of any of the Borrower Parties
which, together with all other property of any of the Borrower Parties subject
to other such process, exceeds in value $5,000,000 in the aggregate, and if,
within thirty (30) days after the entry, issue, or levy thereof, such judgment,
warrant, or process shall not have been paid or discharged or stayed pending
appeal, or if, after the expiration of any such stay, such judgment, warrant,
or process shall not have been paid or discharged;

 

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

 

(m)                             There shall occur any default under any
indenture, agreement, or instrument evidencing Indebtedness For Money Borrowed
of any of the

 

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Borrower Parties (including,
without limitation, any Authorized Debt Issuance) in an aggregate principal
amount exceeding $15,000,000 (determined singly or in the aggregate with other
Indebtedness For Money Borrowed);

 

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

 

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

 

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

 

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

 

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

 

(b)                               Upon the occurrence and continuance of an
Event of Default specified in Sections 9.1(i) or 9.1(j) hereof, the principal
of and interest on the Loans and all other Obligations hereunder and under the
other Loan Documents shall thereupon and concurrently therewith become due and
payable, and the Commitments shall forthwith terminate and any obligations of
the Swing Loan Lender to advance the Swing Loan Committed Amount shall
forthwith terminate, all without any action by the Credit Parties or the
Majority Lenders and without presentment, demand, protest, or other

 

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notice of any kind, all of
which are expressly waived, anything in this Agreement or in the other Loan
Documents to the contrary notwithstanding.

 

(c)                                With respect to any outstanding Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of any acceleration of the Obligations pursuant to this
Section 9.2, the Borrower shall promptly upon demand by any Issuing Bank
deposit in an account of such Issuing Bank for the benefit of such Issuing Bank
an amount equal to the aggregate undrawn and unexpired amount of each
outstanding Letter of Credit issued by such Issuing Bank, which cash will be
held by such Issuing Bank and applied to the payment of drafts drawn under such
Letters of Credit and the unused portion thereof after such Letters of Credit
shall have expired or been fully drawn upon, if any, shall be applied to repay
other Obligations hereunder in the manner set forth in Section 2.12(b)
hereof.

 

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

 

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

 

ARTICLE 10 -  The Agents

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                               Each Lender and each Issuing Bank hereby
directs, in accordance with the terms of this Agreement, the Administrative
Agent to release any Lien held by the Administrative Agent for the benefit of
the Credit Parties:

 

(i)                         against all of the Collateral, upon final and
indefeasible payment in full of the Obligations and termination of the
Commitments; or

 

(ii)                      against any part of the Collateral sold or
disposed of by the Borrower Parties if such sale or disposition is permitted by
Section 8.5(a) or (b) hereof or is otherwise consented to by the requisite
Lenders for such release as set forth in Section 12.12, as certified to
the Administrative Agent by the Borrower in a certificate of an Authorized
Signatory.

 

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(c)                                Each Lender and each Issuing Bank hereby
directs the Administrative Agent to execute and deliver or file or authorize
the filing of such termination and partial release statements and do such other
things as are necessary to release Liens to be released pursuant to Section 10.6(b)
hereof promptly upon the effectiveness of any such release.  Upon request by the Administrative Agent at
any time, the Lenders and the Issuing Bank will confirm in writing the
Administrative Agent’s authority to release particular types or items of
Collateral pursuant to this Section 10.6.

 

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

 

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

 

Section 10.9                              Action by Agents.

 

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

 

95

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 10.12                        Indemnification.  Each
of the Lenders agrees to indemnify each of the Agents in their respective
capacities as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so) pro rata according to their
respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including fees and expenses of experts, agents, consultants and
counsel), or

 

96

 

disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
such Agent in any way relating to or arising out of this Agreement, any of the
other Loan Documents, or any other document contemplated by this Agreement or
any action taken or omitted by such Agent under this Agreement, any of the
other Loan Documents, or any other document contemplated by this Agreement,
except that no Lender shall be liable to such Agent for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements resulting from the gross negligence or
willful misconduct of such Agent.

 

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

 

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

 

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

 

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

 

97

 

ARTICLE 11 -  Change in Circumstances

Affecting Eurodollar Advances

 

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

 

Section 11.2                              Illegality.  If any Applicable Law, or any
change therein, or any interpretation or change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank or comparable agency, shall
make it unlawful or impossible for any Lender to make, maintain or fund its
Eurodollar Advances, such Lender shall so notify the Administrative Agent, and
the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower.  Before giving
any notice to the Administrative Agent pursuant to this Section 11.2, such
Lender shall designate a different lending office if such designation will
avoid the need for giving such notice and will not, in the judgment of such
Lender, be otherwise disadvantageous to such Lender.  Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full
the then outstanding principal amount of each Eurodollar Advance of such Lender
so affected, together with accrued interest thereon, either (a) on the last day
of the then current Eurodollar Advance Period applicable to such Advance if
such Lender may lawfully continue to maintain and fund such Eurodollar Advance
to such day or (b) immediately if such Lender may not lawfully continue to fund
and maintain such Eurodollar Advance to such day.  Concurrently with repaying each Eurodollar
Advance of such Lender, notwithstanding anything contained in Article 2 or
Article 4 hereof, the Borrower shall borrow a Base Rate Advance from such
Lender, and such Lender shall make such Base Rate Advance in an amount such
that the outstanding principal amount of the Loans held by such Lender shall
equal the outstanding principal amount of such Loans immediately prior to such
repayment.

 

Section 11.3                              Increased Costs and Taxes.

 

(a)                                If any Regulatory Change:

 

(i)                         Shall subject any Lender to any tax, duty or
other charge with respect to its obligation to make Eurodollar Advances, or its
Eurodollar

 

98

 

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

 

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

 

and
the result of any of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining any such Eurodollar Advances,
or to reduce the amount of any sum received or receivable by such Lender under
this Agreement or otherwise in respect of its Loans, then, in any such case, on
the earlier of demand by such Lender or the applicable Maturity Date, the
Borrower agrees to pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased costs.  Each Lender requesting compensation will
promptly notify the Borrower and the Administrative Agent of any event of which
it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 11.3 and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole judgment of such
Lender, be otherwise disadvantageous to such Lender.

 

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

 

99

 

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

 

ARTICLE 12 -  Miscellaneous

 

Section 12.1                                Notices.

 

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

 

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

 

Rainbow
National Services LLC

200
Jericho Quadrangle

Jericho,
New York 11753-2701

Attn:  President

Telecopy
No.:  (516) 803-4824

 

with
copies to:

 

Rainbow
National Services LLC

200
Jericho Quadrangle

Jericho,
New York 11753-2701

Attn:  General Counsel

Telecopy
No.:  (516) 803-4824

 

and

 

Rainbow
Media Enterprises, Inc.

200
Jericho Quadrangle

Jericho,
New York 11753-2701

Attn:  Chief Financial Officer

Telecopy
No.:  (516) 803-4824

 

100

 

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

 

JPMorgan
Chase Bank

1111
Fannin Street, 10th Floor

Houston,
Texas  77002

Attn:  Christie Tran

Telecopy
No.: 713-750-2358

 

with a
copy to:

 

JPMorgan
Chase Bank

270
Park Avenue, 4th Floor

New
York, New York 10017

Attn:  Joan Fitzgibbon, Managing Director

Telecopy
No.:  (212) 270-4584

 

and

 

Paul,
Hastings, Janofsky & Walker LLP

600
Peachtree Street, N.E., Suite 2400

Atlanta,
Georgia  30308

Attn:  Chris D. Molen, Esq.

Telecopy
No.: (404) 815-2424

 

(iii)                               If to Bank of America, N.A., as an Arranger
Bank, to it at:

 

Bank of America, N.A.

901
Main Street, 64th Floor

Dallas,
Texas  75202

Attn:  Todd Shipley, Managing Director

Telecopy
No.: (214) 209-9390

 

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

 

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

 

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

 

101

 

Section 12.2                                Expenses.  The Borrower agrees to
promptly pay:

 

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

 

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

 

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

 

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

 

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

 

102

 

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

 

Section 12.5                                Assignment.

 

(a)                                  No Borrower Party may assign or transfer any
of its rights or obligations hereunder or under the other Loan Documents
without the prior written consent of each of the Lenders.

 

(b)                                 Each of the Lenders (other than the Swing
Loan Lender with respect to the Swing Loans) may at any time enter into
assignment agreements or participations with respect to its interest hereunder
and under the other Loan Documents with one or more Eligible Assignees, provided
that (x) any such assignment shall be in an aggregate amount, with respect to
each assignment or series of related assignments, of (A) in the case of any
assignment of the Term B Loans, not less than $1,000,000 and (B) in the case of
any assignment of the Revolving Loans and Revolving Loan Commitments, not less
than $5,000,000 (in the case of each of the foregoing clauses (A) and (B),
unless such assignment is to another Lender or an assignment of all of the
assigning Lender’s rights and obligations hereunder), and (y) after giving
effect to any assignment or series of related assignments, the aggregate amount
of the assigning Lender’s Loans and Commitments under this Agreement shall (A)
in the case of any assignment of the Term B Loans, not be less than $1,000,000
(which amount shall be in the aggregate in the event

 

103

 

of contemporaneous assignments by a Lender to one or more funds that
invest in commercial loans that are managed or advised by the same investment
advisor), and (B) in the case of any assignment of the Revolving Loans and
Revolving Loan Commitments, not be less than $5,000,000 (in the case of each of
the foregoing clauses (A) and (B), unless such assignment is an assignment of
all of the assigning Lender’s rights and obligations hereunder).  All of the foregoing assignments and
participations shall be subject to the following:

 

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

 

(ii)                                  Except for (A) assignments made to any
Federal Reserve Bank or which are otherwise permitted under
Section 12.5(d) below and (B) assignments of the Term B Loans, no assignment
shall be made or sold without the consent of the Issuing Bank, which consent
shall not be unreasonably withheld or delayed.

 

(iii)                               The Borrower and the Credit Parties agree
that assignments permitted hereunder (including the assignment of any Advance
or portion thereof) may be made with all voting rights, and shall be made
pursuant to an Assignment and Assumption Agreement which shall be delivered to
the Administrative Agent.  An
administrative fee of $3,500 with respect to each Assignment and Assumption
Agreement delivered hereunder shall be payable to the Administrative Agent by
the assigning Lender at the time of any assignment hereunder (except that in
the case of assignments on the same day by a Lender to more than one fund
managed or advised by the same investment advisor, only a single $3,500 fee
shall be payable for all such assignments by such Lender to such funds).  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain a copy of each
Assignment and Assumption Agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of and interest on the Loans owing to, each Lender
pursuant to the terms of this Agreement from time to time (the “Register”).  Upon receipt of any Assignment and Assumption
Agreement delivered in accordance with the terms hereof (and payment of the
$3,500 administrative fee related thereto), the Administrative Agent shall
record the information contemplated by the foregoing sentence in the
Register.  No assignments shall be
effective hereunder until the Loans and Commitments set forth in the Assignment
and Assumption Agreement are recorded in the Register by the Administrative
Agent.  The entries in the Register shall
be conclusive, and the Borrower, the Administrative Agent and the Lender shall
treat each

 

104

 

Person whose name is recorded in the Register
pursuant to the terms of this Agreement as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary.

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)                                 Notwithstanding anything contained herein to
the contrary, any Lender may, without the consent of the Administrative Agent
or the Borrower, at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement and the Notes, if any, issued to
such Lender to secure obligations of such Lender, including, without
limitation, any pledge or assignment to secure obligations to a Federal Reserve
Bank or its trustee in support of its obligations thereto; provided,

 

105

 

however, that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.

 

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

 

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

 

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

 

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

 

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

 

Section 12.10                          Interest.

 

(a)                                  In no event shall the amount of interest due
or payable hereunder or otherwise in respect of the Loans exceed the maximum
rate of interest allowed by Applicable Law, and in the event any such payment
is inadvertently made by

 

106

 

any Borrower Party or is inadvertently received by any Lender, then
such excess sum shall be credited as a payment of principal, unless such
Borrower Party shall notify such Lender in writing that it elects to have such
excess sum returned forthwith.  It is the
express intent hereof that the Borrower Parties not pay and the Lenders not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by the Borrower Parties under Applicable Law.

 

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

 

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

 

Section 12.12                          Amendment and Waiver.  Neither this Agreement nor any
Loan Document, nor any term or provision hereof or thereof, may be amended or
waived orally, but only by an instrument in writing signed by the Majority
Lenders (or, in the case of Security Documents executed by the Administrative
Agent, signed by the Administrative Agent and approved by the Majority Lenders)
and, in the case of an amendment, also by the Borrower, except that (a) any
decrease (other than pro rata) or increase in the amount of the Commitments of
any Lender shall require the consent of such Lender, (b) any issuance of an
Incremental Facility Commitment shall require only the consent of the Incremental
Facility Lenders, the Borrower and the Administrative Agent, and (c) in the
event of (i) any postponement in the scheduled time as set forth in
Section 2.7 hereof  for the
payment of, or any reduction of, any scheduled payments of principal, interest or
fees due hereunder or any extension of the Initial Maturity Date or the Final
Maturity Date, (ii) any change in the Applicable Margin as set forth in
Section 2.3(f) hereof, (iii) any release or impairment of any Collateral
pledged by, or Guaranties of, AMC, IFC or WE (other than as provided in
Section 10.6(b)), (iv) any release of the Borrower from the Obligations or
any release or impairment of substantially all of the other Collateral or
Guaranties issued in favor of the Administrative Agent (other than as provided
in Section 10.6(b)), (v) any waiver of any Event of Default due to the
failure by the Borrower to pay any sum due hereunder, (vi) except in connection
with the implementation of the Incremental Facility Indebtedness to the extent
necessary to accord the various types of Incremental Facility Loans treatment
similar to the treatment accorded Loans of a similar type thereunder, any
change to the application of payments made to the Administrative Agent and the
other Credit Parties described in Sections 2.6(c), 2.12(a) and 2.12(b) hereof,
or any change in the sharing of payment procedures described in
Section 2.12(c) hereof, or (vii) any amendment of this Section 12.12
or of the definition of “Majority Lenders” or of any provision of this
Agreement which refers

 

107

 

to “Majority Lenders” if the effect thereof would be to amend the
definition of “Majority Lenders”, as used in such provision, any amendment or
waiver may be made only by an instrument in writing signed by each of the
Lenders and, in the case of an amendment, also by the Borrower; provided,
however, notwithstanding anything to the contrary contained herein, any
amendment of Section 2.14 or any other term or provision of this Agreement
or any other Loan Document required in connection with the implementation of
the Incremental Facility Indebtedness shall require only the consent of the
Majority Lenders and the Borrower.  Any
amendment, modification, waiver, consent, termination or release of any Credit
Party Interest Hedge Agreement may be effected by the parties thereto without
the consent of the Lender Group.

 

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

 

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

 

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

 

108

 

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

 

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

 

Section 12.18                          USA Patriot Act.  Each Lender hereby notifies the
Borrower that, pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the USA Patriot Act.

 

ARTICLE 13 -  Waiver of Jury Trial

 

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

 

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

 

[Remainder of page
intentionally left blank.]

 

109

 

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

 

	
  BORROWER:

  	
  RAINBOW NATIONAL SERVICES
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  GUARANTORS:

  	
   

  
	
   

  	
   

  
	
   

  	
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