Document:

Exhibit
10.2

 

AMENDMENT NO. 1 AND AGREEMENT

 

This AMENDMENT NO. 1 AND AGREEMENT (“Amendment”)
entered into and made effective as of December 30, 2009 (“Effective Date”),
is among Cano Petroleum, Inc., a Delaware corporation (“Borrower”), the
Guarantors (as defined below), the Lenders (as defined below), and UnionBanCal
Equities, Inc., as administrative agent for such Lenders (in such capacity, the
“Administrative Agent”).

 

RECITALS

 

A.                                    The Borrower is
party to that certain Subordinated Credit Agreement dated as of December 17,
2008 (as amended, restated and otherwise modified from time to time, the “Credit
Agreement”) among the Borrower, the lenders party thereto from time to time
(the “Lenders”), the Administrative Agent.

 

B.                                    The Lenders,
subject to the terms and conditions set forth herein, wish to amend the Credit
Agreement as provided herein.

 

THEREFORE,
the Borrower, the Guarantors, the Lenders and the Administrative Agent hereby
agree as follows:

 

Section 1.                                          Defined
Terms; Other Definitional Provisions.  As used in this Amendment, each of the terms
defined in the opening paragraph and the Recitals above shall have the meanings
assigned to such terms therein.  Each
term defined in the Credit Agreement and used herein without definition shall have
the meaning assigned to such term in the Credit Agreement, unless expressly
provided to the contrary.  The words “hereof”,
“herein”, and “hereunder” and words of similar import when used in this
Amendment shall refer to this Amendment as a whole and not to any particular
provision of this Amendment.  Paragraph
headings have been inserted in this Amendment as a matter of convenience for
reference only and it is agreed that such paragraph headings are not a part of
this Amendment and shall not be used in the interpretation of any provision of
this Amendment.

 

Section
2.                                          Amendments to Credit
Agreement.

 

(a)                                 Section 6.18 (Leverage
Ratio) of the Credit Agreement is hereby amended by adding a new sentence to
the end thereof as follows:

 

Notwithstanding the foregoing,
this Section 6.18 shall not apply for the fiscal quarter ending December 31,
2009.

 

(b)                                 Section 6.19 (Interest
Coverage Ratio) of the Credit Agreement is hereby amended by adding a new
sentence to the end thereof as follows:

 

Notwithstanding the foregoing,
this Section 6.19 shall not apply for the fiscal quarter ending December 31,
2009.

 

 

Section 3.                                          Agreement.  The Borrower hereby agrees to pay on or
before January 5, 2010, (a) an amendment fee in the amount of $22,500 to the
Administrative Agent for the pro rata account of the Lenders and (b) all costs
and expenses that have been invoiced prior to such date and are payable
pursuant to Section 9.04 of the Credit Agreement.

 

Section 4.                                          Representations and Warranties.  The Borrower and each Guarantor represents
and warrants that: (a) the representations and warranties contained in the
Credit Agreement and the representations and warranties contained in the other
Loan Documents are true and correct in all material respects on and as of the
Effective Date as if made on as and as of such date except to the extent that
any such representation or warranty expressly relates solely to an earlier
date, in which case such representation or warranty is true and correct in all
material respects as of such earlier date; (b) no Default has occurred and is continuing; (c) the execution,
delivery and performance of this Amendment are within the corporate, limited
liability company, or partnership power and authority of such Person and have
been duly authorized by appropriate corporate, limited liability company, or
partnership actions and proceedings; (d) this Amendment constitutes the legal,
valid, and binding obligation of such Person enforceable in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the rights of creditors generally and
general principles of equity; (e) there are no governmental or other third
party consents, licenses and approvals required in connection with the
execution, delivery, performance, validity and enforceability of this Amendment;
(f) the Liens under the Security Instruments are valid and subsisting and
secure the Borrower’s and such Person’s obligations under the Loan Documents;
and (g) as to each Guarantor, it has no defenses to the enforcement of the
Guaranty.

 

Section 5.                                          Conditions to Effectiveness.  This Amendment and the
amendments to the Credit Agreement provided herein shall become effective on and as of the Effective Date and
enforceable against the parties hereto upon the occurrence (whether before or after the Effective
Date) of the following conditions precedent: (a) the Administrative Agent
shall have received multiple original counterparts, as requested by the
Administrative Agent, of this Amendment duly and validly executed and delivered
by duly authorized officers of the Borrower, the Guarantors, the Administrative
Agent, and the Lenders, (b) no Default shall have occurred and be continuing as
of the Effective Date, (c) the representations and warranties in this Amendment
shall be true and correct in all material respects, and (d) the Borrower shall have paid all costs and
expenses that have been invoiced prior to the Effective Date and are payable
pursuant to Section 9.04 of the Credit Agreement.

 

Section 6.                                          Acknowledgments and Agreements.

 

(a)                                         The Borrower
acknowledges that on the date hereof all Obligations are payable without
defense, offset, counterclaim or recoupment.

 

(b)                                         The
Administrative Agent and the Lenders hereby expressly reserve all of their
rights, remedies, and claims under the Loan Documents.  Nothing in this Amendment shall constitute a
waiver or relinquishment of (i) any Default or Event of Default under any of
the Loan Documents, (ii) any of the agreements, terms or conditions contained
in any of the Loan Documents, (iii) any rights or remedies of the
Administrative Agent or any Lender with respect 

 

2

 

to the Loan Documents, or (iv)
the rights of the Administrative Agent or any Lender to collect the full
amounts owing to them under the Loan Documents.

 

(c)                                          Each of the
Borrower, the Guarantors, the Lenders and the Administrative Agent does hereby
adopt, ratify, and confirm the Credit Agreement, as amended hereby, and
acknowledges and agrees that the Credit Agreement, as amended hereby, is and
remains in full force and effect, and the Borrower and the Guarantors
acknowledge and agree that their respective liabilities and obligations under
the Credit Agreement, as amended hereby, and the Guaranty, are not impaired in
any respect by this Amendment.

 

(d)                                         From and after
the Effective Date, all references to the Credit Agreement and the Loan
Documents shall mean such Credit Agreement and such Loan Documents as amended
by this Amendment.

 

(e)                                          This Amendment
is a Loan Document for the purposes of the provisions of the other Loan
Documents.  Without limiting the
foregoing, any breach of representations, warranties, and covenants under this Amendment
shall be a Default or Event of Default, as applicable, under the Credit
Agreement.

 

Section 7.                                          Reaffirmation of the Guaranty.  Each Guarantor hereby ratifies, confirms,
acknowledges and agrees that its obligations under the Guaranty are in full
force and effect and that such Guarantor continues to unconditionally and
irrevocably guarantee the full and punctual payment, when due, whether at
stated maturity or earlier by acceleration or otherwise, all of the Guaranteed
Obligations (as defined in the Guaranty), as such Guaranteed Obligations may
have been amended by this Amendment, and its execution and delivery of this Amendment
does not indicate or establish an approval or consent requirement by such
Guarantor under the Guaranty in connection with the execution and delivery of
amendments, consents or waivers to the Credit Agreement, the Notes or any of
the other Loan Documents.

 

Section 8.                                          Counterparts;
Invalidity.  This Amendment may be signed in any number of
counterparts, each of which shall be an original and all of which, taken
together, constitute a single instrument. 
This Amendment may be executed by facsimile signature and all such
signatures shall be effective as originals. 
In the event that any one or more of the provisions contained in this
Amendment shall for any reason be held invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Amendment.

 

Section 9.                                          Successors
and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted pursuant to the Credit Agreement.

 

Section 10.                                   Governing
Law.  This Amendment
shall be deemed to be a contract made under and shall be governed by and
construed in accordance with the laws of the State of Texas.

 

Section 11.                                   Entire
Agreement.  THIS AMENDMENT, THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT, THE
NOTES, AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG
THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER 

 

3

 

HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL,
WITH RESPECT THERETO.

 

THERE ARE NO UNWRITTEN
ORAL AGREEMENTS AMONG THE PARTIES.

 

[signature pages follow]

 

4

 

EXECUTED effective as of the
date first above written.

 

	
  BORROWER:

  	
  CANO
  PETROLEUM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ben Daitch

  
	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
  Title:

  	
  SVP & CFO 

  
	
   

  	
   

  
	
   

  	
   

  
	
  GUARANTORS:

  	
  SQUARE
  ONE ENERGY, INC.

  
	
   

  	
  LADDER
  COMPANIES, INC.

  
	
   

  	
  W.O.
  ENERGY OF NEVADA, INC.

  
	
   

  	
  WO
  ENERGY, INC.

  
	
   

  	
  CANO
  PETRO OF NEW MEXICO, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Each by:

  	
  /s/ Ben Daitch

  
	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
  Title:

  	
  VP & CFO 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  W.O.
  OPERATING COMPANY, LTD.

  
	
   

  	
  W.O.
  PRODUCTION COMPANY, LTD.

  
	
   

  	
  Each
  by: WO Energy, Inc., its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ben Daitch

  
	
   

  	
   

  	
  Name:

  	
  Ben Daitch

  
	
   

  	
   

  	
  Title:

  	
  VP & CFO 

  
					

 

Signature Page to
Amendment No. 1

 

 

	
   

  	
  UNIONBANCAL
  EQUITIES, INC.,

  
	
   

  	
  as
  Administrative Agent and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W. Schmidt

  
	
   

  	
  Name:

  	
  John W. Schmidt

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Margaret Elower

  
	
   

  	
  Name:

  	
  Margaret Elower

  
	
   

  	
  Title:

  	
  Vice President

  

 

Signature Page to
Amendment No. 1Exhibit 10.1

 

EXECUTION
COPY

	
   

  

 

 

LOAN
AGREEMENT

 

Dated
as of December 31, 2009,

 

among

 

IDEARC
INC.,

as
Borrower,

 

 

The
Lenders from Time to Time Parties Hereto

 

 

and

 

 

JPMORGAN
CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent

 

	
   

  

 

 

Table of Contents

 

	
   

  	
  Page

  

 

ARTICLE I

Definitions

 

	
  SECTION 1.01 Defined Terms

  	
  1

  
	
  SECTION 1.02 Type of Loans
  and Borrowings

  	
  27

  
	
  SECTION 1.03 Terms Generally

  	
  27

  
	
  SECTION 1.04 Accounting
  Terms; GAAP

  	
  27

  

 

ARTICLE II

The Credits

 

	
  SECTION 2.01 Loans Deemed
  Made on the Closing Date

  	
  28

  
	
  SECTION 2.02 Loans and
  Borrowings

  	
  28

  
	
  SECTION 2.03 Conversion and
  Continuation Options

  	
  28

  
	
  SECTION 2.04 Evidence of
  Debt

  	
  29

  
	
  SECTION 2.05 Repayment of
  Loans

  	
  30

  
	
  SECTION 2.06 Prepayment of
  Loans

  	
  30

  
	
  SECTION 2.07 Fees

  	
  31

  
	
  SECTION 2.08 Interest

  	
  31

  
	
  SECTION 2.09 Alternate Rate
  of Interest

  	
  32

  
	
  SECTION 2.10 Increased Costs

  	
  33

  
	
  SECTION 2.11 Break Funding
  Payments

  	
  34

  
	
  SECTION 2.12 Taxes

  	
  34

  
	
  SECTION 2.13 Payments
  Generally; Pro Rata Treatment; Sharing of Setoffs

  	
  36

  
	
  SECTION 2.14 Mitigation
  Obligations; Replacement of Lenders

  	
  37

  
	
  SECTION 2.15 Voluntary
  Prepayments

  	
  38

  

 

ARTICLE III

Representations and Warranties

 

	
  SECTION 3.01 Organization;
  Powers

  	
  40

  
	
  SECTION 3.02 Authorization;
  Enforceability

  	
  40

  
	
  SECTION 3.03 Governmental
  Approvals; No Conflicts

  	
  40

  
	
  SECTION 3.04 Financial
  Condition; No Material Adverse Change

  	
  40

  
	
  SECTION 3.05 Properties

  	
  41

  
	
  SECTION 3.06 Litigation and
  Environmental Matters

  	
  41

  
	
  SECTION 3.07 Compliance with
  Laws and Agreements; Absence of Default

  	
  42

  
	
  SECTION 3.08 Investment
  Company Status

  	
  42

  
	
  SECTION 3.09 Taxes

  	
  42

  
	
  SECTION 3.10 Employee
  Benefit Plans

  	
  42

  
	
  SECTION 3.11 Disclosure

  	
  43

  
	
  SECTION 3.12 Subsidiaries

  	
  43

  
	
  SECTION 3.13 Insurance

  	
  43

  
	
  SECTION 3.14 Labor Matters

  	
  43

  
	
  SECTION 3.15 Margin
  Regulations

  	
  43

  
	
  SECTION 3.16 Certain
  Agreements

  	
  43

  

 

 

	
  SECTION 3.17 Security
  Documents

  	
  44

  

 

ARTICLE IV

Conditions

 

ARTICLE V

Affirmative Covenants

 

	
  SECTION 5.01 Financial
  Statements and Other Information

  	
  46

  
	
  SECTION 5.02 Notices of
  Material Events

  	
  48

  
	
  SECTION 5.03 Information
  Regarding Collateral

  	
  48

  
	
  SECTION 5.04 Existence;
  Conduct of Business

  	
  49

  
	
  SECTION 5.05 Payment of
  Obligations

  	
  49

  
	
  SECTION 5.06 Maintenance of
  Properties

  	
  49

  
	
  SECTION 5.07 Insurance

  	
  49

  
	
  SECTION 5.08 Casualty and
  Condemnation

  	
  49

  
	
  SECTION 5.09 Books and
  Records; Inspection and Audit Rights

  	
  49

  
	
  SECTION 5.10 Compliance with
  Laws

  	
  50

  
	
  SECTION 5.11 Additional
  Subsidiaries

  	
  50

  
	
  SECTION 5.12 Further
  Assurances

  	
  50

  
	
  SECTION 5.13 Account Control
  Agreements

  	
  50

  
	
  SECTION 5.14 Credit Ratings

  	
  51

  

 

ARTICLE VI

Negative Covenants

 

	
  SECTION 6.01 Indebtedness;
  Certain Equity Securities

  	
  51

  
	
  SECTION 6.02 Liens

  	
  53

  
	
  SECTION 6.03 Fundamental
  Changes

  	
  55

  
	
  SECTION 6.04 Investments,
  Loans, Advances, Guarantees and Acquisitions

  	
  56

  
	
  SECTION 6.05 Asset Sales

  	
  57

  
	
  SECTION 6.06 Sale and
  Leaseback Transactions

  	
  59

  
	
  SECTION 6.07 Swap Agreements

  	
  59

  
	
  SECTION 6.08 Restricted
  Payments; Certain Payments of Indebtedness

  	
  59

  
	
  SECTION 6.09 Transactions
  with Affiliates

  	
  60

  
	
  SECTION 6.10 Restrictive
  Agreements

  	
  61

  
	
  SECTION 6.11 Fiscal Year

  	
  62

  
	
  SECTION 6.12 Amendment of
  Material Documents

  	
  62

  
	
  SECTION 6.13 Financial
  Covenants

  	
  62

  
	
  SECTION 6.14 Capital
  Expenditures

  	
  63

  

 

2

 

ARTICLE VII

Events of Default

 

ARTICLE VIII

The Agent

 

ARTICLE IX

Miscellaneous

 

	
  SECTION 9.01 Notices

  	
  68

  
	
  SECTION 9.02 Waivers; Amendments

  	
  68

  
	
  SECTION 9.03 Expenses;
  Indemnity; Damage Waiver

  	
  69

  
	
  SECTION 9.04 Successors and
  Assigns

  	
  71

  
	
  SECTION 9.05 Survival

  	
  73

  
	
  SECTION 9.06 Counterparts;
  Integration; Effectiveness

  	
  74

  
	
  SECTION 9.07 Severability

  	
  74

  
	
  SECTION 9.08 Right of Setoff

  	
  74

  
	
  SECTION 9.09 Governing Law;
  Jurisdiction; Consent to Service of Process

  	
  74

  
	
  SECTION 9.10 WAIVER OF JURY
  TRIAL

  	
  75

  
	
  SECTION 9.11 Headings

  	
  75

  
	
  SECTION 9.12 Confidentiality

  	
  75

  
	
  SECTION 9.13 U.S.A. PATRIOT
  Act

  	
  76

  
	
  SECTION 9.14 Termination or
  Release

  	
  76

  
	
  SECTION 9.15 No Fiduciary
  Relationship

  	
  77

  
	
  SECTION 9.16
  No Requirement of Lender Signatures

  	
  77

  

 

	
  Schedule
  1.01A

  	
  —

  	
  Certain
  EBITDA Adjustments

  
	
  Schedule
  1.01B

  	
  —

  	
  Institutional
  Holders

  
	
  Schedule
  1.01C

  	
  —

  	
  Post-Closing
  Items

  
	
  Schedule
  2.01

  	
  —

  	
  Loans
  Deemed Made on the Closing Date

  
	
  Schedule
  3.05

  	
  —

  	
  Properties

  
	
  Schedule
  3.06

  	
  —

  	
  Disclosed
  Matters

  
	
  Schedule
  3.12

  	
  —

  	
  Subsidiaries

  
	
  Schedule
  3.13

  	
  —

  	
  Insurance

  
	
  Schedule
  6.01

  	
  —

  	
  Existing
  Indebtedness

  
	
  Schedule
  6.02

  	
  —

  	
  Existing
  Liens

  
	
  Schedule
  6.04

  	
  —

  	
  Existing
  Investments

  
	
  Schedule
  6.05(j) 

  	
  —

  	
  Asset
  Sales

  
	
  Schedule
  6.09

  	
  —

  	
  Affiliate
  Transactions

  
	
  Schedule
  6.10

  	
  —

  	
  Existing
  Restrictions

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  —

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit B-1

  	
  —

  	
  Form of
  Opinion of Ballard Spahr LLP

  
	
  Exhibit B-2

  	
  —

  	
  Form of
  Opinion of Fulbright & Jaworski L.L.P.

  
	
  Exhibit C

  	
  —

  	
  Form of
  Guarantee and Collateral Agreement

  
	
  Exhibit D

  	
  —

  	
  Form of
  Perfection Certificate

  
	
  Exhibit E

  	
  —

  	
  U.S.
  Tax Compliance Certificate

  

 

3

 

LOAN AGREEMENT dated as of December 31,
2009 (this “Agreement”), among IDEARC INC., a Delaware corporation (the “Borrower”),
which is a reorganized company pursuant to Reorganization Plan referred to
below, the several banks and other financial institutions or entities from time
to time parties hereto (consisting initially of holders of the Class 3
Claims referred to below, the “Lenders”) and JPMORGAN CHASE BANK, N.A.,
as administrative agent and collateral agent for such lenders.

 

WHEREAS, on March 31, 2009 (the “Petition
Date”), the Debtors filed voluntary petitions for relief under the
Bankruptcy Code in the Bankruptcy Court and continued in the possession of
their property and in the management of their businesses pursuant to Sections
1107 and 1108 of the Bankruptcy Code;

 

WHEREAS, on December 22, 2009, the Bankruptcy
Court entered the Confirmation Order confirming the Reorganization Plan; and

 

WHEREAS, in connection with the confirmation and
implementation of the Reorganization Plan, and in partial satisfaction of the Class 3
Claims, the holders of the Class 3 Claims shall automatically become
parties to this Agreement on the Reorganization Effective Date.

 

NOW, THEREFORE, the parties hereto hereby agree as
follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01  Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:

 

“ABR”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, bear interest at a rate determined by reference to the Alternate
Base Rate.

 

“Acceptable Payment Percentage” has
the meaning assigned to such term in Section 2.15.

 

“Adjusted LIBO Rate” means, with
respect to any Eurodollar Borrowing for any Interest Period, an interest rate
per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the
LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve
Rate.

 

“Administrative Agent” means JPMorgan
Chase Bank, N.A., in its capacity as administrative agent for the Lenders
hereunder and its Affiliates and permitted successors acting in such capacity.

 

“Administrative Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Advance Prepayment Certificate” means
a certificate of a Responsible Officer furnished to the Administrative Agent
with respect to a fiscal quarter certifying in reasonable detail the expected
increase in Available Cash during such fiscal quarter.

 

 

“Advance Prepayments” has the meaning
set forth in Section 2.06(c).

 

“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.  Notwithstanding
anything to the contrary in this definition, none of Verizon and its Affiliates
will be deemed to be an Affiliate of the Borrower or any Subsidiary unless (x) any
of such Persons is the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934), directly or indirectly, of
shares representing 10% or more of the total voting power of the Equity
Interests of the Borrower and (y) the first such Person would otherwise be
such an Affiliate within the meaning of this definition.

 

“Agents” means the collective
reference to the Administrative Agent and the Collateral Agent.

 

“Agreement” has the meaning set forth
in the introductory paragraph hereto.

 

“Alternate Base Rate” means, for any
day, a rate per annum equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1⁄2 of 1% and (c) the LIBO Rate that would be calculated as of
such day (or, if such day is not a Business Day, as of the next preceding
Business Day) in respect of a proposed Eurodollar Loan with a one-month
Interest Period plus 1%.  Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or such LIBO Rate shall be effective from and including the effective
date of such change in the Prime Rate, the Federal Funds Effective Rate or such
LIBO Rate, as the case may be.

 

“Applicable Margin” means (a) with
respect to any ABR Loan, 7.00%, and (b) with respect to any Eurodollar
Loan, 8.00%.

 

“Applicable Payment Percentage” has
the meaning assigned to such term in Section 2.15.

 

“Approved Fund” has the meaning
assigned to such term in Section 9.04.

 

“Asset Disposition” means (a) any
sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of the Borrower or any Subsidiary other
than sales, transfers or other dispositions described in clause (a), (b), (c),
(d), (e), (f), (g) or (i) of Section 6.05 and (b) any
casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of
the Borrower or any Subsidiary, but, in the case of this clause (b), only to
the extent that the Net Proceeds therefrom have not been applied to repair,
restore or replace such property or asset within 180 days after such event.

 

“Assignment and Assumption” means an
assignment and assumption entered into by a Lender and an assignee (with the
consent of any party whose consent is required by Section 9.04), and
accepted by the Administrative Agent, substantially in the form of Exhibit A
or any other form approved by the Administrative Agent.

 

“Available Cash” means, on any
Determination Date, an amount (which may be a negative amount) equal to the sum
(without duplication) of the following in respect of the Borrower and its
Wholly Owned Subsidiaries on a consolidated basis for the period commencing

 

2

 

on the Closing Date and
ending on the last day of the most recent fiscal quarter for which a
certificate shall have been delivered to the Administrative Agent pursuant to Section 5.01(d):

 

(a)  Consolidated Adjusted EBITDA for such period; plus

 

(b)  to the extent not included in calculating such Consolidated
Adjusted EBITDA, any extraordinary or non-recurring cash gain during such
period, other than any such gain resulting from any sale, transfer or other
disposition of assets; plus

 

(c)  without duplication, decreases in Consolidated Working
Capital for such period; minus

 

(d)  without duplication, increases in Consolidated Working
Capital for such period; minus

 

(e)  without duplication and to the extent included in determining
such Consolidated Adjusted EBITDA, the sum of (i) Consolidated Interest
Expense for such period, (ii) all taxes of the Borrower and the
Subsidiaries paid in cash during such period, (iii) any extraordinary or
nonrecurring loss, expense or charge paid in cash during such period and (iv) the
aggregate amount of Capital Expenditures made during such period, other than
Capital Expenditures financed with (1) Net Proceeds from an Asset
Disposition not otherwise required to be applied to prepay Loans pursuant to Section 2.06(b) or
(2) the proceeds of Indebtedness permitted by Section 6.01 (other
than proceeds of Indebtedness incurred in reliance on Section 6.01(a)(iii));
provided that amounts shall be included in this clause (e) for any
period only to the extent not duplicative of any cost or expense which was (x) included
in determining Consolidated Net Income for such period and (y) not added
back to Consolidated Net Income in determining Consolidated Adjusted EBITDA for
such period.

 

“Available Retained Cash” means, on
any Determination Date, an amount (which may be a negative amount) equal to the
sum of:

 

(a)           Available Cash
as of the Determination Date; minus

 

(b)           the aggregate
principal amount of Loans prepaid or required to be prepaid prior to or in
conjunction with such Determination Date pursuant to Section 2.06(c) (including
Advance Prepayments).

 

“Bankruptcy Code” means the United
States Bankruptcy Code (11 U.S.C. §101 et  seq.), as amended from
time to time, and any successor statute.

 

“Bankruptcy Court” means the United
States Bankruptcy Court for the Northern District of Texas.

 

“Billing
Services Agreement” means the Billing Services Agreement dated as of November 17,
2006, between Idearc Media LLC (formerly known as Idearc Media Corp.) and
Verizon Services Corp.

 

“Board” means the Board of Governors
of the Federal Reserve System of the United States of America.

 

3

 

“Borrower” has the meaning assigned to
such term in the preamble hereto.

 

“Borrowing” means Loans of the same
Type made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.

 

“Branding Agreement” means the
Branding Agreement dated as of November 17, 2006, between Idearc Media LLC
(formerly known as Idearc Media Corp.) and Verizon.

 

“Business Day” means any day that is
not a Saturday, Sunday or other day on which commercial banks in New York City
are authorized or required by law to remain closed; provided that, when
used in connection with a Eurodollar Loan, the term “Business Day” shall
also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market.

 

“Capital Expenditures” means, for any period,
with respect to any Person, the aggregate of all expenditures by such Person
and its Subsidiaries for the acquisition or leasing (pursuant to a capital
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period) that
should be capitalized under GAAP on a consolidated balance sheet of such Person
and its Subsidiaries.

 

“Capital Lease Obligations” of any
Person means the obligations of such Person to pay rent or other amounts under
any Capitalized Lease, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.

 

“Capitalized Leases” means all leases
that have been or should be, in accordance with GAAP, recorded as capitalized
leases.

 

“Cash Consideration” means the
consideration received by the Borrower or any Subsidiary for any Asset Disposition
that is in the form of cash, Permitted Investments or a combination of the
foregoing. For purposes of this provision, each of the following will be deemed
to be cash:

 

(a)           any liabilities
(as shown on the Borrower’s most recent consolidated balance sheet) of the
Borrower or any Subsidiary that are assumed by the transferee of any such
assets or Equity Interests pursuant to a written assignment and assumption
agreement that releases the Borrower or applicable Subsidiary from further
liability therefor; and

 

(b)           any securities,
notes or other obligations received by the Borrower or any Subsidiary from such
transferee that are converted by the Borrower or any Subsidiary into cash or
Permitted Investments within 180 days of the receipt thereof.

 

“Change in Control” means:

 

(a)  the failure of the Borrower to own, directly or indirectly
through one or more Wholly Owned Subsidiaries, 100% of the outstanding Equity
Interests in Idearc Information Services LLC;

 

(b)  the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or “group” (within the meaning of the
Securities Exchange Act of 1934 

 

4

 

and the rules of the Securities and
Exchange Commission thereunder as in effect on the date hereof) of Equity
Interests in the Borrower representing more than 35% of the aggregate voting
power represented by the outstanding Equity Interests in the Borrower,
excluding from such calculation of Equity Interests held by any such Person or “group”
any Institutional Holder Equity Interests held by any Institutional Holder so
long as no Institutional Holder is part of a “group” (as defined above) that
includes Persons that are not Institutional Holders;

 

(c)  the acquisition of ownership, directly or indirectly,
beneficially or of record, by the Institutional Holders and their respective
Affiliates of Equity Interests in the Borrower representing more than 45% of
the aggregate voting power represented by the outstanding Equity Interests in the
Borrower; or

 

(d)  the occupation of a majority of the seats (excluding, for
purposes of this clause, vacant seats) on the board of directors of the
Borrower by Persons who are not (i) members of the board of directors on
the Closing Date, (ii) nominated by the board of directors of the Borrower
or (iii) appointed by Persons referred to in clause (i) and (ii) above.

 

“Change in Law” means (a) the
adoption of any law, rule or regulation after the Closing Date, (b) any
change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the Closing Date or (c) compliance
by any Lender (or, for purposes of Section 2.10(b), by any lending office
of such Lender or by such Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Closing Date.

 

“Chattel Paper” has the meaning
assigned to such term in the Collateral Agreement.

 

“Class 3 Claims” has the meaning
assigned to such term in the Reorganization Plan.

 

“Closing Date” means the date on which
the conditions specified in Article IV are satisfied (or waived in
accordance with Section 9.02).

 

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

 

“Collateral” means any and all “Collateral”,
as defined in any applicable Security Document.

 

“Collateral Agent” means JPMorgan
Chase Bank, N.A., in its capacity as collateral agent for the Secured Parties
and its Affiliates and permitted successors in such capacity.

 

“Collateral Agreement” means the
Guarantee and Collateral Agreement among the Borrower, the Subsidiary Loan
Parties and the Collateral Agent, substantially in the form of Exhibit C.

 

“Collateral and Guarantee Requirement”
means the requirement that:

 

5

 

(a)  the Collateral Agent shall have received from the Borrower
and each Subsidiary (other than Excluded Subsidiaries) either (i) a
counterpart of the Collateral Agreement duly executed and delivered on behalf
of such Person or (ii) in the case of any Person that becomes a Subsidiary
(other than an Excluded Subsidiary) after the Closing Date, a supplement to the
Collateral Agreement, in substantially the form specified therein (or in such
other form as the Borrower and the Collateral Agent may agree), duly executed
and delivered on behalf of such Person (within the time frames required by the
Loan Documents);

 

(b)  all outstanding Equity Interests in each Subsidiary directly
owned by any Loan Party shall have been pledged pursuant to the Collateral
Agreement (except that the Loan Parties shall not be required to pledge more
than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary)
and the Collateral Agent shall have received all certificates or other
instruments representing such Equity Interests, if any, together with stock
powers or other instruments of transfer with respect thereto endorsed in blank;

 

(c)  all Indebtedness of the Borrower and each Subsidiary that is
owing to any Loan Party shall have been pledged pursuant to the Collateral
Agreement and, if any such Indebtedness is evidenced by a promissory note
(which may be a master note), the Collateral Agent shall have received all such
promissory notes (other than promissory notes evidencing items of Indebtedness
with a principal amount of $500,000 or less; provided that the aggregate
principal amount of all such items of Indebtedness shall not exceed
$1,000,000), together with note powers or other instruments of transfer with
respect thereto endorsed in blank;

 

(d)  all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create the Liens
intended to be created by the Collateral Agreement (including any supplements
thereto) and perfect such Liens to the extent required by, and with the
priority required by, the Collateral Agreement, shall have been filed,
registered or recorded (or arrangements reasonably satisfactory to the
Collateral Agent shall have been made to provide for the foregoing) or
delivered to the Collateral Agent for filing, registration or recording;

 

(e)  subject to Schedule 1.01C, the Collateral Agent shall
have received (i) counterparts of a Mortgage with respect to each
Mortgaged Property duly executed and delivered by the record owner of such
Mortgaged Property, (ii) a policy or policies of title insurance issued by
a nationally recognized title insurance company insuring the Lien of each such
Mortgage as a valid and perfected Lien on the Mortgaged Property described
therein and (iii) such surveys, abstracts and other documents as the
Collateral Agent may reasonably request with respect to any such Mortgage or
Mortgaged Property;

 

(f)  each Loan Party shall have used commercially reasonable
efforts to obtain all consents and approvals required to be obtained by it in
connection with the execution and delivery of all Security Documents (or
supplements thereto) to which it is a party, the performance of its obligations
thereunder and the granting by it of the Liens thereunder, except in each case
to the extent the failure to obtain such contents and approvals does not
materially and adversely affect the interests of the Secured Parties; and

 

(g)  each Loan Party shall have executed and delivered to the
Administrative Agent account control agreements in accordance with Section 5.13.

 

6

 

“Confirmation Order” means that
certain order confirming the Reorganization Plan pursuant to applicable
sections of the Bankruptcy Code entered by the Bankruptcy Court on December 22,
2009.

 

“Consolidated Adjusted EBITDA” means,
for any period, Consolidated Net Income for such period plus (or minus),
without duplication:

 

(a)           provision for
taxes based on income or profits of the Borrower and the Subsidiaries for such
period, to the extent deducted in computing Consolidated Net Income; plus

 

(b)           Interest
Expense of the Borrower and the Subsidiaries for such period, to the extent
deducted in computing Consolidated Net Income; plus

 

(c)           depreciation,
amortization (including amortization of intangibles and amortization and
write-off of financing costs) and impairment charges (solely with respect to
goodwill or other intangibles) of the Borrower and the Subsidiaries for such
period to the extent that such depreciation, amortization and impairment
charges were deducted in computing Consolidated Net Income; plus

 

(d)           any non-cash
compensation charge arising from any grant of stock, stock options or other
equity-based awards, to the extent deducted in computing Consolidated Net
Income; plus

 

(e)           any
extraordinary, unusual or non-recurring non-cash losses or non-cash charges, to
the extent deducted in computing Consolidated Net Income; plus

 

(f)            restructuring
charges or reserves relating to the transactions contemplated by the
Reorganization Plan as described on Schedule 1.01A, to the extent deducted in
computing Consolidated Net Income; plus

 

(g)           (i) any
non-recurring charges consisting of any severance or relocation charges
incurred in connection with a restructuring and (ii) other non-recurring
restructuring charges not to exceed in the aggregate $10,000,000 in any fiscal
year, each to the extent deducted in computing Consolidated Net Income; plus

 

(h)           any non-cash
impact attributable to (i) the reduction in deferred revenue or reduction
in deferred costs to balance sheet accounts as a result of the fair value
exercise undertaken as required by purchase accounting for the transactions
contemplated by any acquisition or (ii) the adoption of fresh start
accounting in connection with the transactions under the Reorganization Plan,
all in accordance with GAAP; plus

 

(i)            any non-cash
Statement of Financial Accounting Standards No. 133 income (or loss)
related to hedging activities, to the extent deducted in computing Consolidated
Net Income; minus

 

(j)            extraordinary
gains and non-recurring gains (for the avoidance of doubt, to the extent that
any Voluntary Prepayment results in a gain that would be reflected in
Consolidated Net Income in any period, such gain shall be subtracted in
calculating Consolidated Adjusted EBITDA for such period pursuant to this
clause (j)); minus

 

7

 

(k)           non-cash items
increasing Consolidated Net Income for such period, other than (i) the
accrual of revenue consistent with past practice and (ii) the reversal in
such period of an accrual of, or cash reserve for, cash expenses in a prior
period, but only to the extent such accrual or reserve was not added back to
Consolidated Net Income in calculating Consolidated Adjusted EBITDA in a prior
period; minus

 

(l)            any cash
payments made during such period in respect of items described in clause (e) above
subsequent to the fiscal quarter in which the relevant non-cash losses or
charges were reflected as a charge in the statement of Consolidated Net Income;

 

in each case determined on a consolidated
basis in accordance with GAAP.

 

For the purposes of calculating Consolidated
Adjusted EBITDA for any period of four consecutive fiscal quarters (each, a “Reference
Period”), (i) if at any time during such Reference Period (and after
the Closing Date) the Borrower or any of its Subsidiaries shall have made any
Material Disposition (as defined below), the Consolidated Adjusted EBITDA for
such Reference Period shall be reduced by an amount equal to the Consolidated
Adjusted EBITDA (if positive) attributable to the property that is the subject
of such Material Disposition for such Reference Period or increased by an
amount equal to the Consolidated Adjusted EBITDA (if negative) attributable
thereto for such Reference Period and (ii) if during such Reference Period
(and after the Closing Date) the Borrower or any of its Subsidiaries shall have
made a Material Acquisition, Consolidated Adjusted EBITDA for such Reference
Period shall be calculated after giving pro forma
effect thereto in accordance with Regulation S-X or in such other manner
acceptable to the Administrative Agent as if such Material Acquisition occurred
on the first day of such Reference Period. 
As used in this definition, “Material Acquisition” means any
acquisition of property or series of related acquisitions of property that (x) constitutes
assets comprising all or substantially all of an operating unit of a business
or constitutes all or substantially all of the common stock of a Person and (y) involves
the payment of consideration by the Borrower or any of its Subsidiaries in
excess of $5,000,000; and “Material Disposition” means any disposition
of property or series of related dispositions of property that (x) constitutes
assets comprising all or substantially all of an operating unit of a business
or constitutes all or substantially all of the common stock of a Person and (y) yields
gross proceeds to the Borrower or any of its Subsidiaries in excess of
$5,000,000.  In addition, Consolidated
Adjusted EBITDA for any Reference Period including the first four full fiscal
quarters following the Closing Date shall be subject to any adjustment with
respect to such quarters required to be made by the Borrower’s independent
certified public accountants as a result of “fresh start” accounting and set
forth in reasonable detail in a certificate of a Responsible Officer delivered
to the Administrative Agent, and, with respect to the Reference Period
immediately prior to the Closing Date, Consolidated Adjusted EBITDA shall be so
adjusted on a pro forma basis as though the
Reorganization Plan had become effective on the first day of such Reference
Period.

 

“Consolidated Current Assets” means, at any
date, all amounts (other than cash and Permitted Investments) that would, in
conformity with GAAP, be set forth opposite the caption “total current assets”
(or any like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries at such date.

 

“Consolidated Current Liabilities” means, at
any date, all amounts that would, in conformity with GAAP, be set forth
opposite the caption “total current liabilities” (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date,
but excluding the current portion of any Funded Debt of the Borrower and its
Subsidiaries.

 

8

 

“Consolidated Fixed Charge Coverage Ratio”
means, for any period, the ratio of (a) Consolidated Adjusted EBITDA for
such period less the aggregate amount actually paid by the Borrower and its
Subsidiaries during such period on account of (i) Capital Expenditures (other than
Capital Expenditures financed with (1) Net Proceeds from an Asset
Disposition not otherwise required to be applied to prepay Loans pursuant to Section 2.06(b) or
(2) the proceeds of Indebtedness permitted by Section 6.01 (other than
proceeds of Indebtedness incurred in reliance on Section 6.01(a)(iii)) and (ii) Taxes
to (b) Consolidated Fixed Charges for such period.

 

“Consolidated Fixed Charges” means, for any
period, the sum (without duplication) of (a) Interest Expense for such period
and (b) scheduled payments made during such period on account of principal
of Indebtedness of the Borrower or any of its Subsidiaries.

 

“Consolidated Interest Coverage Ratio”
means, for any period, the ratio of (a) Consolidated Adjusted EBITDA for
such period to (b) Interest Expense for such period.

 

“Consolidated Interest Expense” means,
for any period, the interest expense (including that attributable to
Capitalized Leases) of the Borrower and the Subsidiaries, determined on a
consolidated basis in accordance with GAAP. 
For the avoidance of doubt, Consolidated Interest Expense shall not
include any PIK Interest Amount.

 

“Consolidated Net Income” means, for
any period, the net income (loss) of the Borrower and the Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP and before
any reduction in respect of Preferred Stock dividends; provided that (a) the
net income of any Person that is not a Subsidiary or that is accounted for by
the equity method of accounting will be included only to the extent of the
amount of dividends or other distributions actually paid in cash to the
Borrower or any Subsidiary during such period, (b) the net loss of any
such Person will be included only to the extent such loss is funded in cash by
the Borrower or a Subsidiary during such period and (c) the income or loss
of any Person will be excluded to the extent such income or loss is accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated
with the Borrower or any Subsidiary or the date that such Person’s assets are
acquired by the Borrower or any Subsidiary.

 

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

 

“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise.  “Controlling”
and “Controlled” have meanings correlative thereto.

 

“Core Verizon Agreements” means the
Publishing Agreement, the Non-Competition Agreement and the Branding Agreement.

 

“Debt Issuance” means the incurrence
by the Borrower or any Subsidiary of any Indebtedness in reliance on Section 6.01(a)(xx).

 

“Debtors” means the Borrower and its
Domestic Subsidiaries in their capacities as debtors and debtors-in-possession
under Chapter 11 of the Bankruptcy Code.

 

9

 

“Default” means any event or condition
that constitutes an Event of Default or which upon notice, lapse of time or
both would, unless cured or waived, become an Event of Default.

 

“Defaulting Lender” means any Lender
that has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.

 

“Determination Date” means any date on
which the amount of Available Cash is determined hereunder, which shall be each
date on which a certificate shall have been delivered to the Administrative
Agent pursuant to Section 5.01(d).

 

“Disclosed Matters” means the actions,
suits and proceedings and the environmental matters disclosed in
Schedule 3.06.

 

“Disclosure Statement” means the
Disclosure Statement for the Reorganization Plan, dated September 9, 2009,
in the form approved by the Bankruptcy Court and distributed to certain holders
of claims (as defined in Section 101(5) of the Bankruptcy Code)
against the Debtors.

 

“Disinterested Director” has the
meaning assigned to such term in Section 6.09.

 

“Disqualified Stock” means any Equity
Interest 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 is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year after the Maturity Date; provided, however,
that only the portion of such Equity Interests which so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable
at the option of the holder thereof prior to such dates shall be deemed to be
Disqualified Stock; provided further that any such Equity Interests (including
any options, warrants or other rights in respect thereof) issued or sold as
compensation and held by future, present or former directors, officers, members
of management, employees or consultants of the Borrower or any of its
Subsidiaries or family members or relatives thereof, or trusts, partnerships or
limited liability companies for the benefit of any of the foregoing, or any of
their heirs, executors, successors and legal representatives shall not
constitute Disqualified Stock. 
Notwithstanding the preceding sentence, any Equity Interests that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Borrower or any of its Subsidiaries to repurchase such Equity
Interests upon the occurrence of a change of control or a sale of all or
substantially all its assets will not constitute Disqualified Stock if the
terms of such Equity Interest provide that the Borrower or any Subsidiary may
not repurchase or redeem any such Equity Interest pursuant to such provisions
unless such repurchase or redemption complies with Section 6.08.  Subject to all of the preceding provisos in
this definition, the term “Disqualified Stock” will 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 one year after the Maturity Date.

 

“Documents” has the meaning assigned
to such term in the Collateral Agreement.

 

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

 

“dollars” or “$” refers to
lawful money of the United States of America.

 

10

 

“Environmental Laws” means all
applicable federal, state, and local laws (including common law), regulations,
rules, ordinances, codes, decrees, judgments, directives, orders (including
consent orders), and binding agreements with any Governmental Authority in each
case, relating to protection of the environment, natural resources, human
health and safety or the presence, Release of, or exposure to, Hazardous
Materials, or the generation, manufacture, processing, distribution, use,
treatment, storage, transport, recycling or handling of, or the arrangement for
such activities with respect to, Hazardous Materials.

 

“Environmental Liability” means any
liability, claim, action, suit, judgment or order under or relating to any
Environmental Law for any damages, injunctive relief, losses, fines, penalties,
fees, expenses (including reasonable fees and expenses of attorneys and
consultants) or costs, whether contingent or otherwise, including those arising
from or relating to: (a) compliance or non-compliance with any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to
any Hazardous Materials, (d) the presence or Release of any Hazardous
Materials or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equity Interests” means shares of
capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a Person of whatever nature, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any of the
foregoing, but excluding any debt security that is convertible into, or
exchangeable for, any of the foregoing.

 

“Equity Issuance” means the issuance
by the Borrower or any Subsidiary of any Equity Interest, provided that
Equity Interests (including any options, warrants or other rights in respect
thereof) issued, transferred, granted or sold as compensation to future,
present or former directors, officers, members of management, employees or
consultants of the Borrower or any of its Subsidiaries or family members
(including current and former spouses) or relatives thereof, or trusts,
partnerships or limited liability companies for the benefit of any of the
foregoing, or any of their heirs, executors, successors and legal
representatives shall not constitute “Equity Issuances”.

 

“Equity Proceeds”  means the Net Proceeds received by the
Borrower or any Subsidiary after the Closing Date from any Equity Issuance
(other than to the Borrower or any Subsidiary), but excluding any amounts
received pursuant to any Core Verizon Agreement.

 

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

 

“ERISA Affiliate” means any trade or
business (whether or not incorporated) that, together with any Loan Party, is
treated as a single employer under Section 414(b) or (c) of the
Code or, solely for purposes of Section 302 of ERISA and Section 412
of the Code, is treated as a single employer under Section 414 of the
Code.

 

“ERISA Event” means (a) any
Reportable Event; (b) the existence with respect to any Plan of a
non-exempt Prohibited Transaction; (c) any failure by any Pension Plan to
satisfy the minimum funding standards (within the meaning of Sections 412 or
430 of the Code or Section 302 of ERISA) applicable to such Pension Plan,
whether or not waived; (d) the filing pursuant to Section 412 of the
Code or Section 303 of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan, the failure to make by its
due date a required installment under Section 430(j) of the Code with
respect to any Pension Plan or

 

11

 

the failure by any Loan
Party or any of its ERISA Affiliates to make any required contribution to a
Multiemployer Plan; (e) the incurrence by the Loan Party or any of its
ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Pension Plan, including but not limited to the
imposition of any Lien in favor of the PBGC or any Pension Plan; (f) a
determination that any Pension Plan is, or is expected to be, in “at risk”
status (within the meaning of Section 430 of the Code or Title IV of
ERISA); (g) the receipt by any Loan Party or any of its ERISA Affiliates
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Pension Plan or to appoint a trustee to administer any Pension
Plan under Section 4042 of ERISA; (h) the incurrence by any Loan
Party or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (i) the
receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt
by any Multiemployer Plan from a Loan Party or any ERISA Affiliate of any
notice, concerning the imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, Insolvent or in ERISA
Reorganization or in endangered or critical status, within the meaning of Section 432
of the Code or Section 305 or Title IV of ERISA.

 

“ERISA Reorganization” means, with
respect to any Multiemployer Plan, the condition that such plan is in
reorganization within the meaning of Section 4241 of ERISA.

 

“Eurodollar”, when used in reference
to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, bear interest at a rate determined by reference to the Adjusted
LIBO Rate.

 

“Event of Default” has the meaning
assigned to such term in Article VII.

 

“Excluded Subsidiary” means (a) any
Subsidiary that is prohibited by applicable law from guaranteeing the Obligations,
(b) any Domestic Subsidiary that is a Subsidiary of a Foreign Subsidiary, (c) any
Foreign Subsidiary, (d) any Domestic Subsidiary that is not a Wholly Owned
Subsidiary, and (e) any Insignificant Subsidiary.

 

“Excluded Taxes” means, with respect
to the Administrative Agent, any Lender or any other recipient of any payment
to be made by or on account of any obligation of the Borrower hereunder, (a) income
taxes imposed on (or measured by) its net income or net profits and franchise
taxes, capital taxes or net worth taxes imposed, in each case, in lieu of net
income or net profits taxes by the United States of America, by any State
thereof or by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office
is located or by any jurisdiction by reason of any connection between such
jurisdiction and the Administrative Agent, Lender or recipient (other than
arising solely from the Loan Documents), (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction described in clause (a) above and (c) in the case of a
Lender, (i) any withholding tax that is in effect at the time such Lender
becomes a party to this Agreement (or designates a new lending office), except
to the extent that such Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to any withholding tax
pursuant to Section 2.12(a) or such Lender is an assignee pursuant to
a request by the Borrower under Section 2.14(b) or (ii) any tax
that is attributable to such Lender’s failure to comply with Section 2.12(e).

 

“Existing Credit Agreement”  means the Credit Agreement, dated as of November 17,
2006, among the Borrower, the several lenders and agents parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent.

 

12

 

“Expanded Core Verizon Agreements”
means the Publishing Agreement, the Non-Competition Agreement, the Branding
Agreement, the Intellectual Property Agreement, the Listings License Agreement
and the Billing Services Agreement.

 

“Fair Market Value” means a 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 in good faith by a Financial Officer of the
Borrower, whose determination will be conclusive if evidenced by an officer’s
certificate.

 

“Federal Funds Effective Rate” means,
for any day, the weighted average (rounded upwards, if necessary, to the next
1/100 of 1%) of the rates on overnight Federal funds transactions with 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 that is a
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing selected
by it.

 

“Financial Covenants” means each of
the covenants set forth in Section 6.13.

 

“Financial Officer” means the chief
financial officer, the principal accounting officer, the treasurer or the
controller of the Borrower or any assistant treasurer or assistant controller
of the Borrower designated in writing by the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower for so long as such
designation is effective in accordance with its terms.

 

“Financing Transactions” means the
execution, delivery and performance by the Borrower and each Loan Party of the
Loan Documents to which it is to be a party and the deemed making of Loans
hereunder on the Closing Date.

 

“Foreign Benefit Arrangement” means
each employee benefit arrangement mandated by non-US law that is maintained or
contributed to by the Borrower or any ERISA Affiliate.

 

“Foreign Lender” means any Lender that
is organized under the laws of a jurisdiction other than that in which the
Borrower is located.  For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Plan” means each employee
benefit plan (within the meaning of section 3(3) of ERISA, whether or not
subject to ERISA) that is not subject to US law and is maintained or
contributed to by any Loan Party or any ERISA Affiliate.

 

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

 

“Funded Debt” means, as to any Person,
all Indebtedness of such Person that matures more than one year from the date
of its creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year from
such date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more than
one year from such date, including all current maturities and current sinking
fund payments in respect of such Indebtedness whether or 

 

13

 

not required to be paid
within one year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.

 

“GAAP” means generally accepted
accounting principles in the United States of America.

 

“Governmental Authority” means the
government of the United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or other obligation; provided,
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business.

 

“Guarantors” means the Subsidiary Loan
Parties.

 

“Hazardous Materials” means (i) any
petroleum products or byproducts and all other hydrocarbons, coal ash, radon
gas, asbestos or asbestos-containing materials, urea formaldehyde foam
insulation, polychlorinated biphenyls, chlorofluorocarbons and all other
ozone-depleting substances; or (ii) any chemical, material, substance or
waste that is prohibited, limited or regulated by or pursuant to any applicable
Environmental Law.

 

“Indebtedness” of any Person means, on
any date, without duplication, (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person under conditional sale
agreements relating to property acquired by such Person reflected as a
liability on a balance sheet of such Person in accordance with GAAP (or, if no
such balance sheet of such Person has been prepared as of such date, as would
be reflected as a liability on such balance sheet in accordance with GAAP), (d) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding (i) current accounts payable incurred in
the ordinary course of business and (ii) any earn-out obligation reflected
as a liability on the balance sheet of such Person (or, if no such balance
sheet of such Person has been prepared as of such date, as would be reflected
as a liability on such balance sheet in accordance with GAAP)), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of other Persons, (g) all Capital Lease Obligations of such
Person, (h) all

 

14

 

obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (i) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances and (j) all obligations of
such Person under Swap Agreements, after giving effect to applicable netting
arrangements; provided, however, that “Indebtedness” shall
not include any deferred payment obligation for Local Tax Claims.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.  The
amount of any obligation under any Swap Agreement on any date shall be deemed
to be the Swap Termination Value thereof as of such date.  The amount of Indebtedness of any Person for
purposes of clause (e) shall be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Indebtedness and (ii) the Fair Market
Value of the property encumbered thereby.

 

“Indemnified Taxes” means Taxes other
than Excluded Taxes and Other Taxes.

 

“Insignificant Subsidiary” means a
Subsidiary of the Borrower that (a) neither has total assets with a book
value of $10,000 or more nor had revenues for the period of four fiscal
quarters most recently completed of $10,000 or more, and (b) is designated
by the Borrower as an “Insignificant Subsidiary” in a written notice to the
Administrative Agent, provided, that the Borrower may designate at any one time
no more than five then existing Subsidiaries as “Insignificant Subsidiaries.”

 

“Insolvent” with respect to any
Multiemployer Plan, means the condition that such Plan is insolvent within the
meaning of Section 4245 of ERISA.

 

“Institutional Holder” means an
institutional investor, and its Affiliates, as described on Schedule 1.01B
hereto.

 

“Institutional Holder Equity Interest”
means any Equity Interest in the Borrower acquired by an Institutional Holder
under any one or more agreements executed on or prior to the Closing Date
between such Institutional Holder and the Borrower.

 

“Instrument” has the meaning assigned
to such term in the Collateral Agreement.

 

“Intellectual Property” has the
meaning assigned to such term in the Collateral Agreement.

 

“Intellectual
Property Agreement” means the Intellectual Property Agreement dated as of November 17,
2006, between Verizon and between Idearc Media LLC (formerly known as Idearc
Media Corp.).

 

“Interest Election Request” means a
request by the Borrower to convert or continue a Borrowing in accordance with Section 2.03.

 

“Interest Expense” means, with respect
to any Person for any period, the sum, without duplication, of:

 

(a)           the
consolidated interest expense of such Person and its subsidiaries for such period,
whether paid or accrued, including, without limitation, original issue
discount, non-cash interest payments, the interest component of any deferred
payment 

 

15

 

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 net of the effect of all payments made or received
pursuant to Swap Agreements, but excluding the amortization or write-off of
debt issuance costs; plus

 

(b)           the
consolidated interest of such Person and its subsidiaries that was capitalized
during such period; plus

 

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

 

in each case determined on a consolidated
basis in accordance with GAAP; provided, however, that “Interest
Expense” shall exclude interest expense arising in connection with any deferred
payment of Local Tax Claims.

 

“Interest Payment Date” means (a) with
respect to any ABR Loan, the last day of each March, June, September and December and
(b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part.

 

“Interest Period” means, with
respect to any Eurodollar Borrowing, the period commencing on the date of such
Borrowing and ending on the numerically corresponding day in the calendar month
that is one, two or three months thereafter, as the Borrower may elect; provided,
that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing
of Eurodollar Loans initially shall be the effective date of the most recent
conversion or continuation of such Borrowing.

 

“Investment” means purchasing, holding
or acquiring (including pursuant to any merger with any Person that was not a
Wholly Owned Subsidiary prior to such merger) any Equity Interest, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, or making or permitting to exist any loans
or advances (other than commercially reasonable extensions of trade credit) to,
guaranteeing any obligations of, or making or permitting to exist any
investment in, any other Person, or purchasing or otherwise acquiring (in one
transaction or a series of transactions) any assets of any Person constituting
a business unit.  The amount, as of any
date of determination, of any Investment shall be the original cost of such
Investment minus the amount, as of such date, of any portion of such Investment
repaid to the investor in cash as a repayment of principal or a return of
capital, as the case may be.  In
determining the amount of any Investment or repayment involving a transfer of
any property other than cash, such property shall initially be valued at its
Fair Market Value at the time of such transfer.

 

“Lender” has the meaning assigned to
such term in the preamble hereto.

 

16

 

“Leverage Ratio” means, on any date,
the ratio of (a) Total Indebtedness as of such date to (b) Consolidated
Adjusted EBITDA for the most recently ended period of four consecutive fiscal
quarters of the Borrower.

 

“LIBO Rate” means, with respect to any
Eurodollar Borrowing for any Interest Period, the rate appearing on the Reuters
“LIBOR01” screen displaying British Bankers’ Association Interest Settlement
Rates (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period in an
amount comparable to such Eurodollar Borrowing. 
In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which dollar deposits and for a
maturity comparable to such Interest Period in an amount comparable to such
Eurodollar Borrowing are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period. 
Notwithstanding the foregoing, for the purposes of this Agreement, the
LIBO Rate shall in no event be less than 3.00%.

 

“Lien” means, with respect to any
asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation,
encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and (c) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.

 

“Listings License Agreement” means the
Listings License Agreement dated as of November 17, 2006, between Idearc
Media LLC (formerly known as Idearc Media Corp.) and certain subsidiaries of
Verizon parties thereto.

 

“Loan Document Obligations” has the
meaning assigned to such term in the Collateral Agreement.

 

“Loan Documents” means this Agreement
and the Security Documents.

 

“Loan Parties” means the Borrower and
the Subsidiary Loan Parties.

 

“Loans” has the meaning assigned to
such term in Section 2.01 and shall include all PIK Interest Amounts added
to the principal amount of the Loans pursuant to Section 2.08(d).

 

“Local Tax Claims” means state or
local Tax claims accruing for operations of the Borrower or its Subsidiaries on
or prior to the Petition Date, regardless of when asserted against the Borrower
or its Subsidiaries.”

 

“Margin Stock” shall have the meaning assigned
to such term in Regulation U of the Board.

 

17

 

“Material Adverse Effect” means a
material adverse effect on (a) the business, operations, assets, or
financial condition of the Borrower and the Subsidiaries, taken as a whole,
excluding any material adverse effect resulting directly from the taking of any
action required by any Expanded Core Verizon Agreement or (b) the validity
or enforceability of, or the rights and remedies, taken as a whole, of the
Agents or the Lenders under the Loan Documents.

 

“Material Indebtedness” means
Indebtedness (other than the Loans), including obligations in respect of one or
more Swap Agreements, of any one or more of the Borrower and its Subsidiaries
in an aggregate principal amount exceeding $20,000,000.  For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any
Subsidiary in respect of any Swap Agreement on any date shall be deemed to be
the Swap Termination Value thereof as of such date.

 

“Maturity Date” means December 31,
2015, or, if such day is not a Business Day, the next preceding Business Day.

 

“Minimum
Prepayment Amount” means, on any date on
which “Minimum Prepayment Amount” is to be determined, (i) for any such
date during the four-quarter period ending March 31, 2011, $150,000,000, (ii) for
any such date during the four-quarter period ending March 31, 2012,
$200,000,000, (iii) for any such date during the four-quarter period
ending March 31, 2013, $250,000,000, (iv) for any such date during
the four-quarter period ending March 31, 2014, $300,000,000, (v) for
any such date during the four-quarter period ending March 31, 2015,
$350,000,000.

 

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

 

“Mortgage” means any mortgage, deed of
trust, assignment of leases and rents or other security document granting a
Lien on any real property and improvements thereto to secure the
Obligations.  Each Mortgage shall be
reasonably satisfactory in form and substance to the Collateral Agent and the
Borrower.

 

“Mortgaged Property” means, initially,
each parcel of real property and the improvements thereto owned by a Loan Party
and identified on Schedule 3.05, and includes each other parcel of real
property and improvements thereto owned by a Loan Party with respect to which a
Mortgage is granted pursuant to Section 5.12.

 

“Multiemployer Plan” means a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Net Proceeds” means,
(a) with respect to any Asset Disposition, the aggregate cash proceeds
(including (x) payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not the interest component, thereof)
and (y) any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Disposition) received by the
Borrower or any of its Subsidiaries in respect of any Asset Disposition, net of
(i) the direct costs relating to such Asset Disposition and the sale or
other disposition of any such non-cash consideration, including legal,
accounting, investment banking and brokerage fees and sales commissions and any
relocation expenses incurred as a result thereof, (ii) 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 (including, in
respect of any proceeds received in connection with an Asset Disposition of any
asset of any Foreign Subsidiary, deductions in respect of withholding taxes
that are or would be payable in cash if 

 

18

 

such
funds were repatriated to the United States), (iii) 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 Disposition or
required to be paid as a result of such Asset Disposition, (iv) any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP, (v) in the case of any Asset
Disposition by a Subsidiary of the Borrower, payments to holders of Equity
Interests in such Subsidiary in such capacity (other than such Equity Interests
held by the Borrower or any Subsidiary) to the extent that such payment is
required to permit the distribution of such proceeds in respect of the Equity
Interests in such Subsidiary held by the Borrower or such Subsidiary and (vi) appropriate
amounts to be provided by the Borrower or its Subsidiaries as a reserve against
liabilities associated with such Asset Disposition, 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 Disposition, all as determined in
accordance with GAAP; provided that (a) any excess amounts set
aside for payment of Taxes pursuant to clause (ii) above that are
remaining after such Taxes have been paid in full or the statute of limitations
therefor has expired and (b) the amount of any release or reversal of a
reserve pursuant to clause (vi), will, in each case when no longer so held,
become Net Proceeds; and

 

(b) with respect to any
Debt Issuance or Equity Issuance by the Borrower or any Subsidiary, the
aggregate cash proceeds received by the Borrower or any of its Subsidiaries in
respect of any Debt Issuance or Equity Issuance, net of the direct costs
relating to such Debt Issuance or Equity Issuance, including, without
limitation, the investment banking fees, underwriting discounts, commissions,
costs and other out-of-pocket expenses and other customary expenses, incurred
by the Borrower or such Subsidiary (or, in the case of Taxes, any member
thereof) in connection with such incurrence or issuance and, in the case of Indebtedness
of any Foreign Subsidiary, deductions in respect of withholding taxes that are
or would otherwise be payable in cash if such funds were repatriated to the
United States.

 

“Non-Competition Agreement” means the
Non-Competition Agreement dated as of November 17, 2006, between Idearc
Media LLC (formerly known as Idearc Media Corp.) and Verizon.

 

“Non-Consenting Lender” means any
Lender that withholds its consent to any proposed amendment, modification or
waiver to a Loan Document consented to by the Required Lenders, if such
proposed amendment, modification or waiver cannot become effective under Section 9.02
without the consent of such Lender.

 

“Obligations” has the meaning assigned
to such term in the Collateral Agreement.

 

“Other Taxes” means any and all
present or future recording, stamp, documentary, excise, transfer, sales,
property or similar taxes, charges or levies arising from any payment made
under any Loan Document or from the execution, delivery or enforcement of, any
Loan Document.

 

“Participant” has the meaning set
forth in Section 9.04.

 

“Payment Percentage” has the meaning
assigned to such term in Section 2.15.

 

“PBGC” means the Pension Benefit
Guaranty Corporation referred to and defined in ERISA and any successor entity
performing similar functions.

 

19

 

“Pension Plan” means any Plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA.

 

“Perfection Certificate” means a
certificate in the form of Exhibit D to the Collateral Agreement or
any other form approved by the Collateral Agent.

 

“Permitted Acquisitions” means any
acquisition (by merger, consolidation or otherwise) by the Borrower or a
Subsidiary Loan Party of all or substantially all the assets of, or all the
Equity Interests in, a Person or division or line of business of a Person, if (a) immediately
after giving effect thereto, no Default has occurred and is continuing or would
result therefrom, (b) each Subsidiary resulting from such acquisition (and
which survives such acquisition) shall be a Subsidiary Loan Party and the
Equity Interests of each such Subsidiary shall be owned directly by the
Borrower and/or Subsidiary Loan Parties and shall have been (or within 10
Business Days (or such longer period as may be acceptable to the Agent) after
such acquisition shall be) pledged pursuant to the Collateral Agreement, (c) the
Collateral and Guarantee Requirement shall have been (or within 10 Business
Days (or such longer period as may be acceptable to the Agent) after such
acquisition shall be) satisfied with respect to each such Subsidiary (whether
or not it is an Excluded Subsidiary), (d) the aggregate consideration for
all Permitted Acquisitions made after the Closing Date (excluding (x) consideration
in the form of common Equity Interests of the Borrower, (y) cash proceeds
from the issuance or sale of common Equity Interests of the Borrower used to
pay the purchase price for such acquisition within 90 days after receipt
thereof and (z) Indebtedness incurred pursuant to Section 6.01(a)(vi) as
part of such consideration) shall not exceed the sum of (i) $50,000,000
and (ii) the aggregate amount of Available Retained Cash which has not
been used to make Voluntary Prepayments, (e) the Borrower and the
Subsidiaries are in Pro Forma Compliance, after giving effect to such
acquisition and (f) in the case of any such acquisition for aggregate
consideration in excess of $10,000,000, the Borrower has delivered to the Agent
an officer’s certificate to the effect set forth in clauses (a), (d) and (e) above,
together with all relevant financial information for the Person or assets
acquired and reasonably detailed calculations demonstrating satisfaction of the
requirements set forth in clauses (d) and (e) above.

 

“Permitted Business” means any
businesses or business activity conducted by the Borrower or any Subsidiary on
the Closing Date and any business or business activity reasonably incidental or
ancillary thereto, or any business or activity that is reasonably similar
thereto or a reasonable extension, development or expansion thereof or
ancillary thereto.

 

“Permitted Encumbrances” means:

 

(a)  Liens imposed by law for Taxes, assessments or governmental
charges which are not delinquent for a period of more than 60 days or are being
contested in compliance with Section 5.05;

 

(b)  carriers’, warehousemen’s, mechanics’, materialmen’s,
landlord’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 60 days or are being contested in compliance with Section 5.05;

 

(c)  (i) pledges and deposits made in the ordinary course of
business in compliance with workers’ compensation, unemployment insurance and
other social security laws or regulations, (ii) Liens incurred in the
ordinary course of business securing insurance premiums or reimbursement
obligations under insurance policies and (iii) Liens securing obligations
in respect of letters of credit or bank guarantees that have

 

20

 

been posted by the Borrower or any of its
Subsidiaries to support the payment of the items set forth in clauses (i) and
(ii) of this clause (c);

 

(d)  (i) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business and (ii) Liens securing obligations in respect of
letters of credit or bank guarantees that have been posted by a Borrower or any
of its Subsidiaries to support the payment of items set forth in clause (i) of
this clause (d);

 

(e)  judgment liens in respect of judgments or attachments that do
not constitute an Event of Default under clause (j) of Article VII;
and

 

(f)  easements, zoning restrictions, rights-of-way, restrictive
covenants, irregularities in title and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that are not
substantial in amount and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;

 

provided that the term “Permitted
Encumbrances” shall not include any Lien securing Indebtedness.

 

“Permitted Investments” means (a) securities
issued or fully guaranteed or insured by the United States government or any
agency or instrumentality thereof, (b) time deposits, certificates of
deposit or bankers’ acceptances of (i) any Lender or Affiliate thereof or (ii) any
commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or any successor rating agency or at least P-1 or
the equivalent thereof by Moody’s or any successor rating agency (or if at such
time neither is issuing ratings, then a comparable rating of such other
nationally recognized rating agency as shall be approved by the Administrative
Agent in its reasonable judgment), (c) commercial paper rated at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof
by Moody’s (or if at such time neither is issuing ratings, then a comparable
rating of such other nationally recognized rating agency as shall be approved
by the Administrative Agent in its reasonable judgment), (d) investments
in money market funds complying with the risk limiting conditions of Rule 2a-7
or any successor rule of the Securities and Exchange Commission under the
Investment Company Act, (e) fully collateralized repurchase agreements
with a term of not more than 30 days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria described
in clause (b) above and (f) investments similar to any of the
foregoing denominated in foreign currencies approved by the board of directors
of the Borrower, in each case provided in clauses (a), (b), (c) and (f) above
only, maturing within twelve months after the date of acquisition.

 

“Permitted Subordinated Indebtedness”
means Indebtedness of the Borrower which (i) does not mature, and is not
subject to mandatory repurchase, redemption or amortization (other than
pursuant to customary asset sale or change in control provisions requiring
redemption or repurchase only if and to the extent then permitted by this
Agreement), in each case, prior to the date that is one year after the Maturity
Date, (ii) is not secured, directly or indirectly, by any assets of the
Borrower or any Subsidiary, (iii) is not exchangeable or convertible into
Indebtedness of the Borrower or any Subsidiary (other than Indebtedness which
would qualify as “Permitted Subordinated Indebtedness” hereunder) or
Disqualified Stock and 

 

21

 

(iv) is, together with
any Guarantee thereof by any Subsidiary (a “Permitted Subordinated Guarantee”),
subordinated to the Obligations pursuant to subordination provisions that are
no less favorable to the Lenders than those applicable to offerings of “high
yield” subordinated debt by similar issuers of similar debt at or about the
same time or pursuant to other subordination provisions on terms reasonably
satisfactory to the Administrative Agent.

 

“Person” means any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.

 

“PIK Interest Amount”  has the meaning set forth in Section 2.08(d).

 

“Plan” 
means any employee benefit plan as defined in Section 3(3) of
ERISA, including any employee welfare benefit plan (as defined in Section 3(1) of
ERISA), any employee pension benefit plan (as defined in Section 3(2) of
ERISA), and any plan which is both an employee welfare benefit plan and an
employee pension benefit plan, and in respect of which any Loan Party or any
ERISA Affiliate is (or, if such plan were terminated, would under Section 4069
of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Preferred Stock” means, with respect
to any Person, any Equity Interests in such Person that have preferential
rights to any other Equity Interests in such Person with respect to dividends
or redemptions upon liquidation.

 

“Prepayment Agent” means JPMorgan
Chase Bank, N.A., in its capacity as prepayment agent in connection with any
Voluntary Prepayment and its permitted successors in such capacity.

 

“Prepayment Amount” has the meaning
assigned to such term in Section 2.15.

 

“Prepayment Notice” has the meaning
assigned to such term in Section 2.15.

 

“Prime Rate” means the rate of interest
per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as
its prime rate in effect at its principal office in New York City; each change
in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.

 

“Pro Forma Compliance” means, with
respect to any event, that the Borrower is in pro forma
compliance with each of the Financial Covenants recomputed as if the event with
respect to which Pro Forma Compliance is being tested had occurred on the first
day of each relevant period with respect to which current compliance with any
Financial Covenant would be determined (for example, in the case of any
Financial Covenant based on Consolidated Adjusted EBITDA, as if such event had occurred
on the first day of the four fiscal quarter period ending on the last day of
the most recent fiscal quarter in respect of which financial statements have
been delivered pursuant to Section 5.01(a) or (b)).  Pro forma
calculations made pursuant to this definition that require the calculation of
Consolidated Adjusted EBITDA on a pro forma basis
will be made in accordance with the last paragraph of the definition of such
term, except that, when testing Pro Forma Compliance with respect to any
acquisition or disposition, references to Material Acquisition and Material
Disposition in such last paragraph will be deemed to include such acquisition
and disposition.

 

“Prohibited Transaction” has the
meaning assigned to such term in Section 406 of ERISA and Section 4975(f)(3) of
the Code.

 

22

 

“Projections” has the meaning assigned
to such term in Section 3.11.

 

“Publishing Agreement” means the
Publishing Agreement dated as of November 17, 2006 between Idearc Media
LLC (formerly known as Idearc Media Corp.) and Verizon.

 

“Qualifying Loans” has the meaning
assigned to such term in Section 2.15.

 

“Range” has the meaning assigned to
such term in Section 2.15.

 

“Refinancing Indebtedness” means
Indebtedness issued or incurred (including by means of the extension or renewal
of existing Indebtedness) to extend, renew, refinance, replace, defease or
refund, or in exchange for existing Indebtedness (“Refinanced Debt”); provided
that (i) such extending, renewing, refinancing, replacing, defeasing or
refunding Indebtedness is in an original aggregate principal amount not greater
than the aggregate principal amount of, and unpaid interest on, the Refinanced
Debt plus the amount of any premiums paid thereon and fees and expenses associated
therewith, (ii) such Indebtedness has an equal or later final maturity and
an equal or longer Weighted Average Life than the Refinanced Debt, (iii) if
the Refinanced Debt or any Guarantees thereof are subordinated to the
Obligations, such Indebtedness and Guarantees thereof are subordinated to the
Obligations on terms no less favorable in any material respect to the holders
of the Obligations than the subordination terms of such Refinanced Debt or
Guarantees thereof (and no Loan Party that has not guaranteed such Refinanced
Debt Guarantees such Indebtedness), (iv) if such Refinanced Debt or any
Guarantees thereof are secured, such Indebtedness and any Guarantees thereof
are either unsecured or secured only by such assets as secured the Refinanced Debt
and Guarantees thereof, (vii) if such Refinanced Debt and any Guarantees
thereof are unsecured, such Indebtedness and Guarantees thereof are also
unsecured, (v) such Indebtedness is issued only by the issuer of such
Refinanced Debt and (vi) such Indebtedness is incurred not more than 30
days prior to and not more than 30 days after the date on which such Refinanced
Debt is repaid, extended or renewed.

 

“Register” has the meaning set forth
in Section 9.04.

 

“Regulation S-X” means Regulation S-X
adopted by the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as in effect on the Closing Date.

 

“Related Parties” means, with respect
to any specified Person, such Person’s Affiliates and the directors, officers,
employees, agents, trustees, Controlling Persons and advisors of such Person
and of each of such Person’s Affiliates.

 

“Release” means any actual or
threatened release, spill, emission, leaking, dumping, injection, pouring,
deposit, disposal, discharge, dispersal, leaching or migration into or through
the environment or within or upon any building, structure, facility or fixture.

 

“Reorganization Effective Date” means
the date on which the Reorganization Plan became effective as provided therein,
which date is December 31, 2009.

 

“Reorganization Plan” means the
Debtors’ First Amended Joint Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, dated September 9, 2009 as in effect on the date of the
confirmation thereof pursuant to the Confirmation Order and as may be amended
thereafter in accordance with the terms thereof and the Bankruptcy Code.

 

23

 

“Replacement Assets” means (a) non-current
assets (including any such assets acquired by capital expenditures) that will
be used or useful in a Permitted Business or (b) substantially all the
assets of a Permitted Business or the voting stock of any Person engaged in a
Permitted Business that will become on the date of acquisition thereof a
Subsidiary Loan Party.

 

“Reportable Event” means any “reportable
event,” as defined in Section 4043(c) of ERISA or the regulations
issued thereunder, other than those events as to which the 30-day notice period
referred to in Section 4043(c) of ERISA has been waived, with respect
to a Pension Plan.

 

“Required Lenders” means, at any time,
Lenders having Loans representing more than 50% of the total outstanding
principal amount of the Loans at such time.

 

“Responsible Officer” means (a) the
chief executive officer and/or the president of the Borrower, (b) the
chief operating officer of the Borrower, (c) any Financial Officer, (d) the
general counsel of the Borrower and (e) any vice president of the Borrower
who has been designated in writing as a Responsible Officer by the chief
executive officer or the president of the Borrower.

 

“Restricted Payment” means any
dividend or other distribution (whether in cash, securities or other property)
with respect to any Equity Interests in the Borrower or any Subsidiary, or any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation, termination or amendment of any Equity Interests in
the Borrower or any Subsidiary or of any option, warrant or other right to
acquire any such Equity Interests in the Borrower or any Subsidiary.

 

“S&P” means Standard &
Poor’s Ratings Group, Inc.

 

“Sale and Leaseback Transaction” has
the meaning assigned to such term in Section 6.06.

 

“Sale and Leaseback Indebtedness” means, in respect
of a Sale and Leaseback Transaction, as at the time of determination, the
present value (discounted at the interest rate implicit in the transaction) of
the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale and Leaseback Transaction (including
any period for which such lease has been extended), determined in accordance
with GAAP; provided, that if such Sale and Leaseback Transaction results
in a Capitalized Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of “Capitalized
Lease Obligations”.

 

“SEC” means the U.S. Securities and
Exchange Commission.

 

“Secured Parties” has the meaning
assigned to such term in the Collateral Agreement.

 

“Security Documents” means the
Collateral Agreement, the Mortgages and each other security agreement or other
instrument or document executed and delivered pursuant to Section 5.11 or
5.12 or pursuant to the Collateral Agreement to secure any of the Obligations.

 

24

 

“Specified Asset” means owned real
property and patents, trademarks, trade names, copyrights and other
intellectual property.

 

“Statutory Reserve Rate” means a fraction
(expressed as a decimal carried to the sixth decimal place), the numerator of
which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Administrative Agent is subject with respect to
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board).  Such
reserve percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. 
The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.

 

“subsidiary” means, with respect to
any Person (the “parent”) at any date, any corporation, limited
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities
or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
Controlled or held by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of
the Borrower.

 

“Subsidiary Loan Party” means any
Subsidiary (other than an Excluded Subsidiary) that is a party to the
Collateral Agreement.

 

“Swap Agreement” means any agreement
with respect to any swap, forward, future or derivative transaction or option
or similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

 

“Swap Termination Value” means, in
respect of any one or more Swap Agreements, after taking into account the effect
of any legally enforceable netting agreement relating to such Swap Agreements, (a) for
any date on or after the date such Swap Agreements have been closed out and
termination values determined in accordance therewith, such termination values
and (b) for any date prior to the date referenced in clause (a), the
amounts determined as the mark-to-market values for such Swap Agreements, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Agreements (which may
include a Lender or any Affiliate of a Lender).

 

25

 

“Taxes” means any and all present or
future taxes (including documentary taxes), levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Total Indebtedness” means, as of any
date, the aggregate principal amount of Indebtedness of the Borrower and its
Subsidiaries outstanding as of such date, determined on a consolidated basis in
accordance with GAAP and which would be reflected as long-term debt or
short-term debt on a consolidated balance sheet of the Borrower in accordance
with GAAP if such balance sheet were prepared on such date.  Total Indebtedness shall in all cases be
calculated without giving effect to Statement of Financial Accounting Standards
No. 133.

 

“Trigger
Date” means, during any four-quarter period ending March 31 in which a
Voluntary Prepayment may be commenced in accordance with Section 2.15, the
date on which the aggregate amount of mandatory prepayments pursuant to Section 2.06(c) and
any Advance Prepayments, in each case made after the Closing Date, exceeds the
Minimum Prepayment Amount.

 

“Type”, when used in reference to any
Loan or Borrowing, refers to whether the rate of interest on such Loan, or on
the Loans comprising such Borrowing, is determined by reference to the Adjusted
LIBO Rate or the Alternate Base Rate.

 

“Unrestricted Cash” means the amount
of cash and Permitted Investments of the Borrower and the other Loan Parties on
such date, excluding cash and Permitted Investments (i) subject to any
consensual Lien (other than Liens referred to in Section 6.02(a), Section 6.02(h) or
Section 6.02(i)) or (ii) subject to any other contractual restriction
specifically requiring the application thereof or of the proceeds thereof to a
particular use.

 

“Verizon” means Verizon Communications
Inc., a Delaware corporation.

 

“Voluntary Prepayment” has the meaning
assigned to such term in Section 2.15.

 

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

 

(a)  the sum of the products obtained by multiplying (i) 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 (ii) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by

 

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

 

“Wholly Owned Subsidiary” means, as to
any Person, any other Person all of the Equity Interests of which (other than
directors’ qualifying shares required by law) is owned by such Person directly
and/or through other Wholly Owned Subsidiaries.

 

“Withdrawal Liability” means liability
to a Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.

 

26

 

SECTION 1.02  Type of Loans and Borrowings.  For purposes of this Agreement, Loans may be
referred to by Type (e.g., a “Eurodollar Loan”).  Borrowings also may be referred to by Type (e.g.,
a “Eurodollar Borrowing”).

 

SECTION 1.03  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.  When the
performance of any covenant, duty or obligation under any Loan Document is
required on a day that is not a Business Day, the date of such required
performance shall be extended to the immediately succeeding Business Day.

 

SECTION 1.04  Accounting Terms; GAAP.  Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
the Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof (including any definition) to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required 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 such notice shall have been withdrawn or such provision amended in
accordance herewith.  Upon any such
request for an amendment, the Borrower, the Required Lenders and the
Administrative Agent agree to consider in good faith any such amendment in
order to amend the provisions of this Agreement so as to reflect equitably such
accounting changes so that the criteria for evaluating the Borrower’s financial
condition shall be the same after such accounting changes as if such accounting
changes had not occurred. 
Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all computations
of amounts and ratios referred to herein shall be made, without giving effect
to any election under Statement of Financial Accounting Standards 159 (or any
other Financial Accounting Standard having a similar result or effect) to value
any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair
value”, as defined therein.

 

27

 

ARTICLE II

 

The Credits

 

SECTION 2.01  Loans Deemed Made on the Closing Date.  Subject to the terms and conditions set forth
herein and to give effect to the Reorganization Plan and provide for the
repayment, in part, of the Class 3 Claims, each Lender shall be deemed to
have made a term loan to the Borrower on the Closing Date in an amount set
forth opposite such Lender’s name on Schedule 2.01 (each, a “Loan” and,
collectively, the “Loans”). 
Amounts repaid or prepaid in respect of Loans may not be reborrowed.

 

SECTION 2.02  Loans and Borrowings.  (a)  Each Loan shall be maintained
ratably by the Lenders as part of a Borrowing consisting of Loans of the same
Type.

 

(b)   The Loans deemed made
pursuant to Section 2.01 shall be made without any actual funding and, to
the extent deemed practicable by the Administrative Agent, each Eurodollar
Borrowing under and as defined in the Existing Credit Agreement shall be
continued as a Eurodollar Borrowing hereunder, with an Interest Period ending
on the same day it otherwise would have ended. 
Subject to Section 2.09, after the Closing Date, each Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request in accordance herewith.

 

(c)   At the commencement of each
Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$1,000,000.  At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $1,000,000.  Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time
be more than a total of 10 Eurodollar Borrowings outstanding.

 

(d)   Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to elect to
convert or continue any Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

 

SECTION 2.03  Conversion and Continuation Options.  (a)  The Borrower may elect from time to
time to convert Eurodollar Loans to ABR Loans by giving the Administrative
Agent prior irrevocable notice of such election no later than 11:00 a.m.,
New York City time, on the Business Day preceding the proposed conversion date,
provided that any such conversion of Eurodollar Loans may only be made
on the last day of an Interest Period with respect thereto.  The Borrower may elect from time to time to
convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 11:00 a.m., New York
City time, on the third Business Day preceding the proposed conversion date
(which notice shall specify the length of the initial Interest Period
therefor).

 

(b)   Any Eurodollar Loan may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the Borrower giving irrevocable notice (not later than
11:00 A.M., New York City time, on the date that is three Business Days
prior to the last day of the then current Interest Period with respect thereto) to the
Administrative Agent of the length of the next Interest Period to be applicable
to such Loans.

 

(c)   To make an election pursuant
to this Section, the Borrower shall notify the Administrative Agent of such
election by telephone.  Each such
telephonic Interest Election

 

28

 

Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower.  Each telephonic and written Interest Election
Request shall specify the following information:

 

(i)            the Borrowing
to which such Interest Election Request applies and, if different options are
being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);

 

(ii)           the effective
date of the election made pursuant to such Interest Election Request, which
shall be a Business Day;

 

(iii)          whether the
resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

 

(iv)          if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request
requests a Eurodollar Borrowing but does not specify an Interest Period, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration.

 

(d)   Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
Lender of the details thereof.

 

(e)   If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to a Eurodollar Borrowing with an
Interest Period of one month’s duration. 
Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as such Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.

 

SECTION 2.04  Evidence of Debt.  (a)  Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan held by
such Lender, including the amounts of principal and interest (including,
without limitation, any PIK Interest Amount) payable and paid to such Lender
from time to time hereunder.

 

(b)   The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each
Loan outstanding hereunder, the Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest (including, without
limitation, any PIK Interest Amount) due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender’s share thereof.

 

29

 

(c)   The entries made in the
accounts maintained pursuant to paragraph (a) or (b) of
this Section shall be conclusive evidence of the existence and amounts of
the obligations recorded therein, absent demonstrable error; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.

 

(d)   Any Lender may request that
Loans held by it be evidenced by a promissory note.  In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to such Lender
(or, if requested by such Lender, to such Lender and its registered assigns)
and in a form reasonably satisfactory to the Administrative Agent and the
Borrower; provided that, in order for any such promissory note to be
delivered on the Closing Date, the request therefor shall be delivered no later
than two Business Days prior to the Closing Date.  Such promissory note shall state that it is
subject to the provisions of this Agreement. 
Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 9.04)
be represented by one or more promissory notes in such form.

 

SECTION 2.05  Repayment of Loans.  The Borrower hereby unconditionally promises
to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Loan of such Lender on the Maturity Date.

 

SECTION 2.06  Prepayment of Loans.  (a)  The Borrower shall have the right
at any time and from time to time to prepay any Borrowing in whole or in part,
without premium or penalty (but subject to Section 2.11), in an aggregate
principal amount that is an integral multiple of $1,000,000 and not less than
$1,000,000 or, if less, the amount outstanding, subject to the requirements of
this Section.

 

(b)   (i)  In the event and
on each occasion that any Net Proceeds are received by or on behalf of the
Borrower or any Subsidiary in respect of any Asset Disposition, the Borrower
shall, not later than the fifth Business Day after the date on which such Net
Proceeds are received, prepay Borrowings in an aggregate principal amount equal
to such Net Proceeds; provided that if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that
the Borrower or a Subsidiary intends to apply the Net Proceeds from such event
(or a portion thereof specified in such certificate) within 365 days after
receipt of such Net Proceeds to acquire Replacement Assets and certifying that
no Default has occurred and is continuing, then no prepayment shall be required
pursuant to this paragraph in respect of the Net Proceeds from such event (or
the portion of such Net Proceeds specified in such certificate, if applicable)
except to the extent of any such Net Proceeds that have not been so applied by
the end of such 365 day period, at which time a prepayment shall be required in
an amount equal to such Net Proceeds that have not been so applied.  Notwithstanding the foregoing, in each fiscal
year, the Borrower may exclude up to $5,000,000 of Net Proceeds of Asset
Dispositions from the requirements of this paragraph (b).

 

(ii)           In the event
and on each occasion that any Net Proceeds are received by or on behalf of the
Borrower or any Subsidiary in respect of any Debt Issuance, the Borrower shall,
not later than the fifth Business Day after the date on which such Net Proceeds
are received, prepay Borrowings in an aggregate principal amount equal to 100%
of such Net Proceeds.

 

30

 

(iii)          In the event and on each occasion that any Equity
Proceeds are received by or on behalf of the Borrower or any Subsidiary (other
than Equity Proceeds from common Equity Interests of the Borrower used to
finance any Investment permitted by Section 6.04(f) or (u) within
90 days after receipt thereof), the Borrower shall, not later than the fifth
Business Day after the date on which such Equity Proceeds are received, prepay
Borrowings in an aggregate principal amount equal to 50% of such Equity
Proceeds.

 

(c)   Within five Business Days
following the date on which financial statements are delivered by the Borrower
pursuant to Section 5.01(a) or (b), the Borrower will prepay
Borrowings in an aggregate amount equal to (i) (A) 67.50% of the
amount of any increase in Available Cash during such fiscal quarter less (B) the
principal amount of any voluntary prepayments of Loans pursuant to Section 2.06(a) made
during the period from the last day of the fiscal period covered by such
financial statements to the date the mandatory prepayment for such quarter is
made pursuant to this paragraph (c) not to exceed the amount set forth in
an Advance Prepayment Certificate for such fiscal quarter (“Advance
Prepayments”).

 

(d)   The aggregate amount
required to be applied to prepayments pursuant to paragraph (b) and (c) above
will be applied on a pro rata
basis, in accordance with the relative amounts of the then outstanding
Borrowings first to the then outstanding ABR Borrowings and second
to the then outstanding Eurodollar Borrowings (and if more than one Interest
Period is applicable to Eurodollar Borrowings, to the Eurodollar Borrowings
with the least number of days remaining in the Interest Period applicable
thereto and ending with the Eurodollar Borrowings with the most number of days
remaining in the Interest Period applicable thereto in each case, subject to Section 2.11).

 

(e)   The Borrower shall notify
the Administrative Agent by telephone (confirmed by email of a “pdf” copy or
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 2:00 p.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 2:00 p.m., New York City
time, one Business Day before the date of prepayment.  Each such notice shall be irrevocable and
shall specify the prepayment date, the principal amount of each Borrowing or
portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount thereof; provided that the
Borrower may provide that such notice is conditioned upon the occurrence or
non-occurrence of any event specified therein (including the consummation of an
acquisition, sale or other similar transaction, the receipt of proceeds from
the incurrence or issuance of Indebtedness or Equity Interests or the
effectiveness of other credit facilities), in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to the
specified effective date) if such condition is not satisfied.  Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the contents
thereof.  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued
interest and other amounts to the extent required by Sections 2.08 and 2.11.

 

SECTION 2.07  Fees. 
The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

 

SECTION 2.08  Interest.  (a)  The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Margin.

 

31

 

(b)   The Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin.

 

(c)   Notwithstanding the
foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2.00% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section or
(ii) in the case of any other amount, 2.00% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.

 

(d)   Accrued interest on each
Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall
be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan, accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment, (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion, (iv) a portion of the interest, not to
exceed 2.50% per annum, accrued during and after the first fiscal quarter
commencing after the first anniversary of the Closing Date for which the
Consolidated Fixed Charge Coverage Ratio (determined on a trailing four-quarter
basis ending with such quarter) is less than 1.25 to 1.00, may be paid at the
Borrower’s option (as notified to the Administrative Agent in writing at least
three Business Days prior to each relevant Interest Payment Date) through an
increase in the principal amount of the Loans equal to the amount of such
interest (the “PIK Interest Amount”).

 

(e)   All interest hereunder shall
be computed on the basis of a year of 360 days, except that interest computed
by reference to the Alternate Base Rate at times when the Alternate Base Rate
is based on the Prime Rate shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last
day).  The applicable Alternate Base Rate
or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent demonstrable error.

 

SECTION 2.09  Alternate Rate of Interest.  If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:

 

(a)   the Administrative Agent
determines (which determination shall be conclusive absent demonstrable error)
that adequate and reasonable means do not exist for ascertaining the Adjusted
LIBO Rate for such Interest Period; or

 

(b)   the Administrative Agent is
advised by the Required Lenders that the Adjusted LIBO Rate for such Interest
Period will not adequately and fairly reflect the cost to Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;

 

then the Administrative Agent
shall give notice thereof to the Borrower and the Lenders by telephone or
telecopy as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective; provided, 

 

32

 

however, that, in the case
of a notice received pursuant to clause (b) above, if the Administrative
Agent is able prior to the commencement of such Interest Period to ascertain,
after using reasonable efforts to poll the Lenders giving such notice, that a
rate other than the Alternate Base Rate would adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period, the Administrative Agent shall notify the
Borrower of such alternate rate and the Borrower may agree by written notice to
the Agent prior to the commencement of such Interest Period to have the Loans
included in such Borrowing bear interest for such Interest Period at an
interest rate equal to such alternate rate, in which case such alternate
interest rate shall apply to all the Eurodollar Loans included in the relevant
Borrowing.

 

SECTION 2.10  Increased Costs.  (a)  If any Change in Law (except with
respect to Taxes, which shall be governed by Section 2.12) shall:

 

(i)            impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or

 

(ii)           impose on any Lender or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans held by such
Lender;

 

and the result of any of the
foregoing shall be to increase the cost to such Lender of maintaining any
Eurodollar Loan or to increase the cost to such Lender or to reduce the amount
of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise), then the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.

 

(b)   If any Lender determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the
capital of such Lender’s holding company, if any, as a consequence of this
Agreement or the Loans held by such Lender to a level below that which such
Lender or such Lender’s holding company could have achieved but for such Change
in Law (taking into consideration such Lender’s policies and the policies of
such Lender’s holding company with respect to capital adequacy), then from time
to time after submission by such Lender to the Borrower of a written request
therefor, the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any
such reduction suffered.

 

(c)   A certificate of a Lender
setting forth in reasonable detail the matters giving rise to a claim under
this Section 2.10 and the calculation of such claim by such Lender or its
holding company, as the case may be, shall be delivered to the Borrower and
shall be conclusive absent demonstrable error. 
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 15 Business Days after receipt thereof.

 

(d)   Failure or delay on the part
of any Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than 180 days
prior to the date that such Lender notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor; provided  further that,
if 

 

33

 

the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof.

 

SECTION 2.11  Break Funding Payments.  In the event of (a) the payment by or on
behalf of the Borrower of any principal of any Eurodollar Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (b) the conversion of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto, (c) the failure
by the Borrower to convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.06(e) and is revoked in
accordance therewith) or (d) the assignment of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.14, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall consist of
an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan (but excluding the Applicable Margin), for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to convert or continue, for the period
that would have been the Interest Period for such Loan) over (ii) the
amount of interest that would accrue on such principal amount for such period
at the interest rate that such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market.  A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall
be delivered promptly to the Borrower and shall be conclusive absent
demonstrable error.  The Borrower shall
pay such Lender the amount shown as due on any such certificate within 15 days
after receipt thereof.

 

SECTION 2.12  Taxes. 
(a)  Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall be made free and
clear of, and without deduction for, any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b)   In addition, the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 

(c)   The Borrower shall indemnify
the Administrative Agent and each Lender, within 30 Business Days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Administrative Agent or such Lender, as the case may be, directly
or indirectly to a Governmental Authority on or with respect to any payment by
or on account of any obligation of the Borrower hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A copy of a receipt or any other certificate
documenting payment and reasonably acceptable to the Borrower as to the 

 

34

 

amount
of such payment or liability delivered to the Borrower by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent demonstrable error.

 

(d)   As soon as reasonably
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

 

(e)   Each Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), on or before
the date that such Foreign Lender becomes a Lender hereunder or becomes
entitled to any payments under any other Loan Document and at such times
prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without or at a reduced rate of withholding. 
In addition, any Lender, at the time or times prescribed by applicable
law or reasonably requested by the Borrower or the Administrative Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent as will enable the
Borrower or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.  Each Lender shall promptly notify the Borrower
and the Administrative Agent of any change in circumstances which would modify
or render invalid any claimed exemption of or reduction in withholding and
deliver to the Borrower and the Administrative Agent further copies of any
documentation on or before the date that any such documentation expires or
becomes obsolete and after the occurrence of any event requiring a change in
the most recent documentation previously delivered.

 

Without
limiting the generality of the foregoing, any Foreign Lender shall deliver to
the Borrower and the Administrative Agent on or before the date that such
Foreign Lender becomes a Lender hereunder or becomes entitled to any payments
under any other Loan Document (and from time to time therafter upon the
reasonable request of the Borrower or the Administrative Agent or at such times
prescribed by applicable law, but only if such Foreign Lender is legally
entitled to do so), whichever of the following is applicable

 

(i)            in the case of
any Foreign Lender that is claiming the benefits of an income tax treaty to which
the United States is a party, two duly completed copies of United States
Internal Revenue Service Form W-8BEN (certifying that it is a resident of
the applicable country within the meaning of the income tax treaty between the
United States and that country) or successor applicable form;

 

(ii)           in the case of
any Foreign Lender that is claiming an exemption from United States federal
withholding tax because the payments made hereunder are effectively connected
with a United States trade or business of such Foreign Lender, two duly
completed copies of United States Internal Revenue Service Form W-8ECI, or
successor applicable form;

 

(iii)          in the case of
any Foreign Lender that is claiming the so-called “portfolio interest exemption”,
under Section 871(h) or 881(c) of the Code, (A) two duly 

 

35

 

completed certificates substantially in the form of Exhibit E (any
such certificate, a “U.S. Tax Compliance Certificate”) and (B) two duly
completed copies of Internal Revenue Service Form W-8BEN, or successor
applicable form, together with any information required to be provided with
such form;

 

(iv)          in the case of
any Foreign Lender that is an intermediary or flow-through entity for United
States federal withholding tax purposes, two duly completed copies of Internal
Revenue Service Form W-8IMY, or successor applicable form, together with
any information required to be provided with such form; or

 

(v)           two duly
completed copies of any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States federal withholding tax
together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made.

 

(f)    If the Administrative Agent
or a Lender determines, in its sole discretion and good faith, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.12, it shall pay over such
refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.12 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority.  This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its Taxes that it deems
confidential) to the Borrower or any other Person.

 

SECTION 2.13  Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.  (a)  The
Borrower shall make each payment required to be made by it hereunder or under
any other Loan Document (whether of principal, interest or fees, or of amounts
payable under Section 2.10, 2.11 or 2.12, or otherwise) prior to the time
expressly required hereunder or under such other Loan Document for such payment
(or, if no such time is expressly required, prior to 3:00 p.m., New York
City time), on the date when due, in immediately available funds, without
setoff or counterclaim.  Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Administrative Agent to such account as the Administrative Agent shall from
time to time specify in a notice delivered to the Borrower, except that
payments pursuant to Sections 2.10, 2.11, 2.12 and 9.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. 
The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof.  If any
payment under any Loan Document shall be due on a day that is not a Business
Day, the date for payment shall be extended to the next succeeding Business
Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. 
All payments under each Loan Document shall be made in dollars.

 

36

 

(b)   If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully
all amounts of principal, interest and fees then due hereunder (after giving
effect to all applicable grace periods and cure periods, if any), such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts
of interest and fees then due to such parties, and (ii) second, towards
payment of principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.

 

(c)   If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the relative aggregate amounts of principal
of and accrued interest on their Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of setoff and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

 

(d)   Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of any Lender
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to such Lender
the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(e)   If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.13(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are
fully paid.

 

SECTION 2.14  Mitigation Obligations; Replacement of
Lenders.  (a)  If any Lender
requests compensation under Section 2.10, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender to Section 2.12, then such Lender
shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to 

 

37

 

another of its offices,
branches or affiliates, if, in the good faith judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.10 or 2.12, as the case may be, in the future and (ii) would
not subject such Lender to any unreimbursed cost or expense that such Lender
deems material and would not otherwise be, in the reasonable judgment of such
Lender, materially disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable out-of-pocket costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

(b)   If (i) any Lender
requests compensation under Section 2.10, (ii) the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.12 or (iii) any
Lender becomes a Non-Consenting Lender, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and such Lender shall be released from all obligations hereunder and (iii) in
the case of any such assignment resulting from the status of such Lender as a
Non-Consenting Lender, such assignment, together with any assignments by other
Non-Consenting Lenders, will enable the Borrower to obtain sufficient consents
to cause the applicable amendment, modification or waiver to become
effective.  A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.

 

SECTION 2.15  Voluntary Prepayments.  (a)  The Borrower may elect to notify
the Administrative Agent and the Lenders that it may wish to make below par
voluntary prepayments of the Loans (each such payment a “Voluntary Prepayment”)
pursuant to the procedures set forth in this Section 2.15; provided
that (i) no Voluntary Prepayment shall be made prior to the date that is 18 months after the Closing Date, (ii) no Voluntary
Prepayment shall be made more than once during any fiscal year, except that two
Voluntary Prepayments may be during a single fiscal year if each such Voluntary
Prepayment is made on account of a different four-quarter period referred to in
the definition of “Minimum Prepayment Amount” for which a Trigger Date has
occurred, (iii) no Voluntary Prepayment shall be made until after a
Trigger Date, and (iv) the Borrower shall commence its efforts to effect a
Voluntary Prepayment (evidenced by delivery of a Prepayment Notice) within 30
days following a Trigger Date.  At the time of
any Voluntary Prepayment, (i) the Borrower shall certify, with reasonable
supporting detail (as determined by the Administrative Agent), that no Event of
Default pursuant to Section 6.13 could reasonably be expected to occur
during the succeeding four calendar quarters if such Voluntary Prepayment is
not made and (ii) such Voluntary Prepayment shall have been approved by at
least 66 2/3% of the Borrower’s Board of
Directors.  In addition, immediately
prior to and after giving effect to any Voluntary Prepayment, (i) no
Default or Event of Default shall have occurred and be continuing and (ii) the
Loan Parties shall have Unrestricted Cash of at least $150,000,000.

 

(b)   In connection with any
Voluntary Prepayment, the Borrower shall notify the Lenders (the “Prepayment
Notice”) that the Borrower desires to prepay Loans with cash proceeds 

 

38

 

in
an aggregate amount (each, a “Prepayment Amount”) specified by the
Borrower (which amount shall be not less than $10,000,000) at a price within a
range (the “Range”) to be specified by the Borrower equal to a
percentage of par (the “Payment Percentage”) of the principal amount of
the Loans to be prepaid; provided that the aggregate cash amount paid by
the Borrower for all Voluntary Prepayments undertaken by the Borrower pursuant
to this Section 2.15 shall not exceed the lesser of (i) the aggregate
amount of Available Retained Cash less cash paid (and, (x) for the
avoidance of doubt, without regard to any other form of consideration paid or
assumed, and (y) excluding from the phrase “cash paid” as used herein, any
cash proceeds of common Equity Issuances of the Borrower which are used to
effect Permitted Acquisitions or the incurrence of Indebtedness permitted by Section 6.01(a)(vi))
for Permitted Acquisitions since the Closing Date (excluding the first
$50,000,000 of such cash paid) and (ii) $250,000,000.

 

(c)   In connection with any
Voluntary Prepayment, the Borrower shall allow each Lender to specify a Payment
Percentage (the “Acceptable Payment Percentage”) for a principal amount
(subject to rounding requirements specified by the Prepayment Agent) of Loans
at which such Lender is willing to permit such Voluntary Prepayment.  Based on the Acceptable Payment Percentages
and principal amounts of Loans specified by Lenders, the applicable Payment
Percentage (the “Applicable Payment Percentage”) for the Voluntary
Prepayment shall be the lowest Acceptable Payment Percentage at which the
Borrower can complete the Voluntary Prepayment for the applicable Prepayment
Amount that is within the applicable Range; provided that if the offers
received from Lenders are insufficient to allow the Borrower to complete the
Voluntary Prepayment for the applicable Prepayment Amount, then the Applicable
Payment Percentage shall instead be the highest Acceptable Payment Percentage
that is within the applicable Range.  The
Borrower shall prepay Loans (or the respective portions thereof) offered by Lenders
at the Acceptable Payment Percentages specified by each such Lender that are
equal to or less than the Applicable Payment Percentage (“Qualifying Loans”)
by remitting an amount to each Lender to be prepaid equal to the product of the
face amount, or par, of the Loan being prepaid multiplied by the Applicable
Payment Percentage; provided that if the aggregate cash proceeds
required to prepay Qualifying Loans (disregarding any interest payable under Section 2.15(d))
would exceed the applicable Prepayment Amount for such Voluntary Prepayment, the
Borrower shall prepay such Qualifying Loans at the Applicable Payment
Percentage ratably based on the respective principal amounts of such Qualifying
Loans (subject to rounding requirements specified by the Prepayment Agent).

 

(d)   All Loans prepaid by the
Borrower pursuant to this Section 2.15 shall be accompanied by payment of
accrued and unpaid interest on the par principal amount so prepaid to, but not
including, the date of prepayment.

 

(e)   Each Voluntary Prepayment
shall be consummated pursuant to procedures (including as to rounding and
minimum amounts, Type and Interest Periods of accepted Loans, irrevocability of
Prepayment Notice and other notices by the Borrower and Lenders and
determination of Applicable Payment Percentage) reasonably established by the
Prepayment Agent in consultation with the Borrower and not inconsistent with
the terms hereof.

 

(f)    Each Voluntary Prepayment
shall constitute an optional prepayment of Loans for all purposes under this
Agreement, including for purposes of Section 2.06(a).

 

(g)   Notwithstanding anything to
the contrary in this Agreement (including, without limitation, Sections 2.06
and 2.13), the Lenders hereby consent to the transactions described in this Section 2.15
and further acknowledge that in connection with any Voluntary 

 

39

 

Prepayment,
principal and interest payments may be made on a non-pro rata basis, as
determined by the Prepayment Agent, to the applicable Lenders.

 

(h)   This Section 2.15 shall
not require the Borrower to undertake or any Lender to participate in any
Voluntary Prepayment.

 

ARTICLE III

 

Representations and
Warranties

 

The Borrower represents and
warrants to the Lenders that:

 

SECTION 3.01  Organization; Powers.  Each of the Borrower and its Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required by
applicable law.

 

SECTION 3.02  Authorization; Enforceability.  The Financing Transactions entered into and
to be entered into by each Loan Party are within such Loan Party’s corporate
(or other organizational) powers and have been duly authorized by all necessary
corporate (or other organizational) and, if required, stockholder or member
action.  This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document to which any Loan Party is to be a party, when executed and delivered
by such Loan Party, will constitute, a legal, valid and binding obligation of
the Borrower or such Loan Party (as the case may be), enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

 

SECTION 3.03  Governmental Approvals; No Conflicts.  The Financing Transactions and the
Reorganization Plan (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect and except filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate (i) any applicable law or regulation,
(ii) the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or (iii) any order of any Governmental
Authority applicable to the Borrower or such Subsidiary, (c) will not
violate or result in a default under any material indenture, agreement or other
instrument binding upon the Borrower or any of its Subsidiaries or any of their
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, except Liens permitted under Section 6.02 and except with
respect to clauses (a), (b)(i) and (iii) and (c) to the extent
any of the foregoing would not reasonably be expected to have a Material
Adverse Effect.

 

SECTION 3.04  Financial Condition; No Material Adverse
Change.  (a)  The Borrower has
heretofore furnished to the Lenders (i) its audited consolidated balance
sheet and related consolidated statements of income, shareowners’ investment
and cash flows as of and for the fiscal years ended December 31, 2008, December 31,
2007 and December 31, 2006, reported on by Ernst & Young LLP,
independent registered public accounting firm, without qualification and (ii) its
unaudited consolidated balance sheet and related unaudited consolidated
statements of

 

40

 

income and cash flows as of
and for the fiscal quarter and the portion of the fiscal year ended September 30,
2009, certified by a Financial Officer. 
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.

 

(b)   The Borrower has heretofore
furnished to the Lenders its pro forma
consolidated balance sheet as of September 30, 2009 prepared giving effect to
the Financing Transactions and the Reorganization Plan as if such Financing
Transactions and Reorganization Plan had occurred on such date.  Such pro forma
consolidated balance sheet (i) accurately reflects all adjustments
reasonably believed by the Borrower to be necessary to give effect to the
Financing Transactions and the Reorganization Plan and (ii) presents
fairly, in all material respects, on a pro forma
basis, the financial position of the Borrower and its consolidated Subsidiaries
as of such date, as if the Financing Transactions and the Reorganization Plan
had occurred on such date.

 

(c)   Since December 31,
2008, except as set forth in the Disclosure Statement, there has been no
change, development, event, effect, condition or occurrence that, individually
or in the aggregate, has had a Material Adverse Effect.

 

SECTION 3.05  Properties.  (a)  Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to their business (including its Mortgaged
Properties), taken as a whole, except for Liens permitted by Section 6.02
and minor defects in title that do not interfere with its ability to conduct
their business as currently conducted and except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect.

 

(b)   Each the Borrower and its
Subsidiaries owns, or has the right to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to their business,
taken as a whole, and, to the knowledge of the Borrower, the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except, in each case, for such failure to own or have the right to use
or such infringement that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.

 

(c)   Schedule 3.05 sets forth the
address of each real property that has an individual Fair Market Value
(including fixtures and improvements) equal to or greater than $1,000,000 and
is owned by the Borrower or any of its Subsidiaries as of the Closing Date and
indicates each such property that is a Mortgaged Property as of the Closing
Date.

 

SECTION 3.06  Litigation and Environmental Matters.  (a)  Except for the Disclosed Matters,
there are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its
Subsidiaries which would reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters).

 

(b)   Except for either the
Disclosed Matters or any other matters that, individually or in the aggregate,
would not reasonably be expected to result in a Material Adverse Effect, none
of the Borrower or its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any 

 

41

 

Environmental
Law, (ii) has become subject to any Environmental Liability, (iii) has
received written notice of any claim with respect to any Environmental
Liability or (iv) knows of any Environmental Liability.

 

SECTION 3.07  Compliance with Laws and Agreements;
Absence of Default.  Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority, in each case applicable to it or its
property and all indentures, agreements and other instruments binding upon it
or its property, except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect.  No Default has occurred and is
continuing.

 

SECTION 3.08  Investment Company Status.  None of the Borrower or its Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

 

SECTION 3.09  Taxes. 
Each of the Borrower and its Subsidiaries has timely filed (taking into
account any extensions) or caused to be filed all material Tax returns and reports
required to have been filed and has paid or caused to be paid all material
Taxes required to have been paid by it, except (a) any Taxes that are
being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as applicable, has set aside on its books adequate
reserves or (b) to the extent that the failure to do so has not had and
would not reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.10  Employee Benefit Plans.  (a)  Except as could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect: (i) each
Loan Party and each of their respective ERISA Affiliates is in compliance with
the applicable provisions of ERISA and the provisions of the Code relating to
Plans and the regulations and published interpretations thereunder; (ii) no
ERISA Event has occurred or is reasonably expected to occur; and (iii) all
amounts required by applicable law with respect to or by the terms of, any
retiree welfare benefit arrangement maintained by any Loan Party or any ERISA
Affiliate or to which any Loan Party or any ERISA Affiliate has an obligation
to contribute have been accrued in accordance with Statement of Financial
Accounting Standards No. 106.  The
Fair Market Value of the assets of each Plan was not materially less than the
present value of either the accumulated benefit obligations or projected
benefit obligations under such Plan (based on the assumptions used for purposes
of the Statement of Financial Accounting Standards No. 87) as of the close
of the most recent Plan year, as reported in the most recent financial
statements reflecting such amounts, and if all of the Plans were terminated
(disregarding any Plans with surpluses), the unfunded liabilities with respect
to the Plans, individually and in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

(b)   Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect: (i) all
employer and employee contributions required by applicable law or by the terms
of any Foreign Benefit Arrangement or Foreign Plan have been made, or, if
applicable, accrued in accordance with normal accounting practices; (ii) the
accrued benefit obligations of each Foreign Plan (based on the assumptions used
to fund such Foreign Plan) with respect to all current and former participants
do not exceed the assets of such Foreign Plan; (iii) each Foreign Plan
that is required to be registered has been registered and has been maintained
in good standing with applicable regulatory authorities; and (iv) each
such Foreign Benefit Arrangement and Foreign Plan is in compliance (A) with
all material provisions of applicable law and all material applicable
regulations and published interpretations thereunder with respect to 

 

42

 

such Foreign Benefit Arrangement or Foreign
Plan and (B) with the terms of such plan or arrangement.

 

SECTION 3.11  Disclosure.  None of the written reports, financial
statements, certificates or other written information (other than projections,
budgets or other estimates or forward-looking statements or information of a
general economic or industry nature or reports or studies prepared by third
parties that were not expressly commissioned by the Borrower or its Affiliates
(collectively, the “Projections”)), taken as a whole, furnished by or on
behalf of any Loan Party to the Administrative Agent, any Lender or the
Bankruptcy Court prior to the Closing Date in connection with the transactions
contemplated by this Agreement or any other Loan Document or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished prior to the Closing Date) contains any material misstatement of fact
or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not materially
misleading; provided that, with respect to Projections, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed by the Borrower to be reasonable at the time such
Projections were prepared, it being understood that projections by their nature
are uncertain and no assurance is given that the results reflected in such
projections will be achieved.

 

SECTION 3.12  Subsidiaries.  Schedule 3.12 sets forth the name
of, and the ownership interest of the Borrower in, each Subsidiary of the
Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Closing Date.

 

SECTION 3.13  Insurance.  Schedule 3.13 sets forth a description
of all insurance for risks associated with casualty, workers compensation
claims, general liability, automobiles, excess liabilty, directors and officers
risks, errors and omissions, fiduciary claims, EPLI, environmental matters,
crime, property risks, business travel and accident claims and flood
risks, maintained by or on behalf of the Borrower and its Subsidiaries as
of the Closing Date.  As of the Closing
Date, all premiums due and payable in respect of such insurance have been paid.

 

SECTION 3.14  Labor Matters.  As of the Closing Date, there are no strikes,
lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the
knowledge of the Borrower, threatened. 
As of the Closing Date, except as would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect:  (a) the hours worked by and payments
made to employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters; (b) all payments
due from the Borrower or any Subsidiary, or for which any claim may be made
against the Borrower or any Subsidiary, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary; and (c) the
consummation of the Financing Transactions will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Borrower or any Subsidiary is
bound.

 

SECTION 3.15  Margin Regulations.  None of the
Borrower or any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock.

 

SECTION 3.16  Certain Agreements.  As of the Closing Date, each of the Core
Verizon Agreements has been duly authorized, executed and delivered by the
Borrower, and to the knowledge of the Borrower, each of the other parties
thereto and constitutes a legal, valid and 

 

43

 

binding obligation of the Borrower, and to the knowledge of the
Borrower, each other party thereto, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.  As of the Closing
Date, a true, correct and complete copy (including any amendments and waivers)
of each of the Core Verizon Agreements has been furnished to the Administrative
Agent.

 

SECTION 3.17  Security Documents.  (a)  The Collateral Agreement is
effective to create in favor of the Collateral Agent, for the benefit of the
Secured Parties, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof to the extent described therein.  When (a) the actions specified in Section 4.02(b) to
the Collateral Agreement have been duly taken, (b) all applicable
Instruments, Chattel Paper and Documents in which a security interest is
perfected by possession have been delivered to, and/or are in the continued
possession of, the Collateral Agent, (c) all deposit accounts, electronic
chattel paper and Pledged Equity Interests (each, as defined in the Collateral
Agreement), a security interest in which is required to be or is perfected by “control”
(as described in the Uniform Commercial Code as in effect in the State of New
York from time to time) are under the “control” of the Collateral Agent and (d) the
Mortgages have been duly recorded, the security interests granted pursuant
thereto shall constitute (to the extent described therein) a perfected security
interest in, all right, title and interest of each pledgor or mortgagor (as
applicable) party thereto in the Collateral described therein with respect to
such pledgor or mortgagor (as applicable), subject, in each case to no other
Lien other than Liens permitted under Section 6.02.

 

(b)   When the Collateral
Agreement or a summary thereof is properly filed in the United States Patent
and Trademark Office and the United States Copyright Office, and, with respect
to Collateral composed of Intellectual Property in which a security interest
cannot be perfected by such filings, upon the proper filing of the financing
statements referred to in paragraph (a) above, the Collateral Agent shall have,
for the ratable benefit of the Secured Parties, a perfected security interest
in, all right, title and interest of the Loan Parties in such Collateral and
the proceeds thereof, as security for the Obligations, in each case subject to
no other Lien other than Liens permitted under Section 6.02, it being
understood that subsequent recordings in the United States Patent and Trademark
Office and the United States Copyright Office may be necessary to perfect a
lien on registered trademarks and patents, trademark and patent applications
and registered copyrights acquired by the grantors after the date hereof.

 

(c)   The Mortgages entered into
on the Closing Date and the Mortgages, if any, entered into after the Closing
Date pursuant to Section 5.12 shall be effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable Lien on all of the Loan Parties’ right, title and
interest in and to the Mortgaged Property thereunder and the proceeds thereof,
and when such Mortgages are filed in the proper real estate filing offices,
such Mortgages shall constitute a perfected security interest in, all right,
title and interest of Loan Parties in such Mortgaged Property and the proceeds
thereof, as security for the Obligations, in each case subject to no other Lien
other than Liens permitted under Section 6.02.

 

ARTICLE IV

 

Conditions

 

This Agreement shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):

 

44

 

(a)           The
Administrative Agent (or its counsel) shall have received from the Borrower,
the Administrative Agent and the Collateral Agent a counterpart of this
Agreement signed on behalf of such party.

 

(b)           The
Administrative Agent shall have received a written opinion of (i) Ballard
Spahr LLP, counsel for the Borrower, and (ii) Fulbright &
Jaworski L.L.P., counsel for the Borrower, substantially in the form of Exhibits B-1
and B-2 respectively.  The
Borrower hereby requests each such counsel to deliver such opinions.

 

(c)           The
Administrative Agent shall have received such customary documents and
certificates for financing transactions of the type contemplated by this
Agreement as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Financing Transactions, the Reorganization Plan and
any other legal matters relating to the Loan Parties, the Loan Documents, the
Financing Transactions or the Reorganization Plan, all in form and substance
reasonably satisfactory to the Administrative Agent.

 

(d)           The Administrative
Agent shall have received a certificate, dated the Closing Date and signed by
the President, a Vice President or a Financial Officer of the Borrower,
confirming that (i) the representations and warranties of each Loan
Party set forth in the Loan Documents are true and correct in all material
respects on and as of the Closing Date and (ii) at the time of and
immediately after giving effect to the Financing Transactions, no Default shall
have occurred and be continuing.

 

(e)           The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Closing Date, including, to the extent invoiced,
reimbursement or payment of all reasonable out-of-pocket expenses (including
reasonable invoiced fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder, or under any other Loan
Document or the Reorganization Plan.

 

(f)            Except as set
forth on Schedule 1.01C, the Collateral and Guarantee Requirement shall
have been satisfied and the Administrative Agent shall have received a
completed Perfection Certificate dated the Closing Date and signed by an
executive officer or Financial Officer of the Borrower, together with all
attachments contemplated thereby, including the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to the Loan
Parties in the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by such
search and evidence reasonably satisfactory to the Administrative Agent that
the Liens indicated by such financing statements (or similar documents) are
permitted by Section 6.02 or have been (or substantially simultaneously
with the closing of the Financing Transactions shall be) released.

 

(g)           The
Administrative Agent shall have received evidence that the insurance required
by Section 5.07 is (or substantially simultaneously with the closing of
the Financing Transactions shall be) in effect.

 

(h)           After giving
effect to the Financing Transactions to be consummated on the Closing Date, the
Borrower and the Subsidiaries shall have outstanding no Indebtedness or
preferred Equity Interests other than (i) the Loans and (ii) the
Indebtedness set forth in Schedule 6.01.

 

45

 

(i)            All consents
and approvals required to be obtained from any Governmental Authority or
material third parties in connection with the Financing Transactions and the
Reorganization Plan shall have been obtained to the extent such consents or
approvals are required under applicable laws or agreements or otherwise, and
all applicable regulatory appeal periods shall have expired.  The Administrative Agent shall have received
a certificate of a Financial Officer of the Borrower, certifying that there is
no claim, action or proceeding pending or, to the knowledge of the Borrower,
threatened, by any Governmental Authority to enjoin, restrain or prohibit (or
by any other Person that has a reasonable likelihood of enjoining, restraining
or prohibiting) the Financing Transactions or the Reorganization Plan that has
a reasonable likelihood of enjoining, restraining or prohibiting the Financing
Transactions or the Reorganization Plan, or by any Person that has a reasonable
likelihood of imposing burdensome conditions on the Financing Transactions or
the Reorganization Plan.

 

(j)            The
Reorganization Effective Date shall have occurred (and all conditions precedent
thereto as set forth therein shall have been satisfied).

 

(k)           The Administrative
Agent shall have received a copy of the Confirmation Order, as duly certified
and entered on the docket by the clerk of the Bankruptcy Court, which (i) shall
be in full force and effect and shall not have been stayed, reversed, modified
or amended and (ii) shall approve and authorize the transactions
contemplated by this Agreement, the other Loan Documents and the Reorganization
Plan and otherwise shall not be inconsistent with the provisions hereof and
thereof.

 

The Administrative Agent
shall notify the Borrower and the Lenders of the Closing Date, and such notice
shall be conclusive and binding.

 

ARTICLE V

 

Affirmative Covenants

 

Until the principal of and
interest on each Loan and all fees which are due and payable hereunder shall
have been paid in full, the Borrower covenants and agrees with the Lenders
that:

 

SECTION 5.01  Financial Statements and Other Information.  The Borrower will furnish to the
Administrative Agent for prompt distribution to each Lender:

 

(a)           no later than
90 days after the end of each fiscal year of the Borrower, the Borrower’s
audited consolidated balance sheet and related audited consolidated statements
of income, shareowners’ investments and cash flows, as of the end of and for
such year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Ernst & Young LLP or other
independent registered public accounting firm of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its

 

46

 

consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied;

 

(b)           no later than
45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, (i) the Borrower’s unaudited consolidated
balance sheet and related unaudited consolidated statements of income,
shareowners’ investments and cash flows, as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by a Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of the Borrower and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

 

(c)           within 20 days
after the end of each month, (i) consolidated and consolidating financial
statements for the Debtors as of the end of the preceding month, and (ii) a
monthly statement showing revenue pacings for the preceding month, with
comparisons to those results from the preceding monthly statement delivered
pursuant to this paragraph (c);

 

(d)           concurrently
with any delivery of financial statements under clause (a) or (b) above,
a certificate of a Financial Officer of the Borrower (i) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth reasonably detailed calculations demonstrating
compliance with each of the Financial Covenants, (iii) identifying any
Permitted Acquisition that has been consummated since the end of the previous
fiscal quarter and (iv) attaching a schedule setting forth a computation
of Available Cash generated during the most recent fiscal quarter covered by
such financial statements;

 

(e)           within 90 days
after the commencement of each fiscal year of the Borrower, a detailed
consolidated budget for such fiscal year (including a projected consolidated
balance sheet and related statements of projected income and cash flow as of
the end of and for such fiscal year and setting forth the assumptions used for
purposes of preparing such budget) and, promptly when available, any
significant revisions of such budget;

 

(f)            promptly after
the same become publicly available, copies of all periodic reports, proxy
statements and registration statements filed by the Borrower or any Subsidiary
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any
national securities exchange, or any other materials distributed by the
Borrower to its shareholders generally;

 

(g)           promptly following
receipt thereof, copies of any documents described in Sections 101(k) or
101(l) of ERISA that any Loan Party or any ERISA Affiliate may request
with respect to any Multiemployer Plan; provided, that if the Loan
Parties or any of their ERISA Affiliates have not requested such documents or
notices from the administrator or sponsor of the applicable
Multiemployer Plan then, upon reasonable request of the Administrative Agent,
the Loan Parties and/or their ERISA Affiliates shall promptly make a request
for such documents or notices from such administrator or 

 

47

 

sponsor and the Borrower shall provide copies of such documents and
notices to the Administrative Agent (on behalf of each requesting Lender)
promptly after receipt thereof; and

 

(h)           promptly
following any written request therefor, such other information regarding the
operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of any Loan Document, as the
Administrative Agent (including on behalf of any Lender) may reasonably
request.

 

Any financial statement or
other information required to be delivered pursuant to this Section 5.01
shall be deemed to have been delivered on the date on which such information is
posted on the Borrower’s website on the Internet or by the Administrative Agent
on an IntraLinks or similar site to which Lenders have been granted access or
shall be available on the SEC’s website on the Internet at www.sec.gov; provided
that if the Borrower elects to post any financial statement or other
information on its website, it shall concurrently deliver to the Administrative
Agent paper copies of any such financial statement or other information.  Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of any
certificate required by Section 5.01(b) or (d) to the
Administrative Agent.  If any financial
statement or other information required to be delivered under this Agreement
shall be required to be delivered on any date that is not a Business Day, such
information may be delivered to the Administrative Agent on the next succeeding
Business Day after such date.

 

SECTION 5.02  Notices of Material Events.  The Borrower will furnish to the
Administrative Agent for prompt further distribution to each Lender written
notice of the following promptly after any Responsible Officer obtains actual
knowledge thereof:

 

(a)           the occurrence
of any Default;

 

(b)           the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or affecting the Borrower or any Subsidiary
thereof that would reasonably be expected to result in a Material Adverse
Effect;

 

(c)           the occurrence
of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, would reasonably be expected to result in a Material Adverse
Effect;

 

(d)           the occurrence,
with respect to any Foreign Benefit Arrangement or Foreign Plan of an event
that, alone or together with any other events with respect to any Foreign
Benefit Arrangement or Foreign Plan that have occurred, would reasonably be
expected to result in a Material Adverse Effect; and

 

(e)           any other
development that would be materially likely, in the reasonable judgment of the
Borrower, to result in a Material Adverse Effect.

 

Each notice delivered under
this Section shall be accompanied by a statement of a Responsible Officer
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

SECTION 5.03  Information Regarding Collateral.  The Borrower will furnish to the
Administrative Agent prompt written notice of any change (a) in any Loan
Party’s legal name,

 

48

 

as reflected in its
organization documents, (b) in any Loan Party’s jurisdiction of
organization or form of organization and (c) in any Loan Party’s identity,
Federal Taxpayer Identification Number or organization number, if any, assigned
by the jurisdiction of its organization. 
Not later than 30 Business Days after any change referred to in
clauses (a) through (c) of the preceding sentence the Borrower
shall confirm in writing to the Administrative Agent that (i) all filings
have been made under the Uniform Commercial Code or otherwise that are required
in order for the Agent to continue at all times following such change to have a
valid, legal and perfected security interest in any Collateral affected by such
change for the benefit of the Secured Parties to the extent required by the
Collateral Agreement or (ii) that the Borrower has provided to the
Administrative Agent all information required for the Collateral Agent to make
such filings.

 

SECTION 5.04  Existence; Conduct of Business.  The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done all things reasonably necessary to
preserve, renew and keep in full force and effect (i) its legal existence
and (ii) the rights, contracts, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business, except, in the case of this clause (ii), where the failure to do
so would not reasonably be expected to have a Material Adverse Effect; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03 or any sale of assets permitted
under Section 6.05.

 

SECTION 5.05  Payment of Obligations.  The Borrower will, and will cause each of its
Subsidiaries to, pay, discharge or otherwise satisfy its Taxes and other
material governmental charges or levies imposed upon it or upon its income or
profits or in respect of its property before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings and the Borrower or such
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP or (b) the failure to pay, discharge or otherwise
satisfy such Taxes, charges or levies would not reasonably be expected to have
a Material Adverse Effect.

 

SECTION 5.06  Maintenance of Properties.  Except as permitted by Section 6.05, the
Borrower will, and will cause each of its Subsidiaries to, keep and maintain
all property necessary to the conduct of its business in good working order and
condition, ordinary wear and tear, damage caused by casualty and condemnation
excepted, except where the failure to take such actions would not reasonably be
expected to have a Material Adverse Effect.

 

SECTION 5.07  Insurance.  The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies or with Verizon or any of its Affiliates, insurance in such amounts
(after giving effect to any self-insurance) and against such risks as are, in
the Borrower’s good faith judgment, customarily maintained by companies of
established repute engaged in the same or similar businesses operating in the
same or similar locations.

 

SECTION 5.08  Casualty and Condemnation.  The Borrower will furnish to the
Administrative Agent prompt written notice of any casualty or other damage to
any Collateral with a Fair Market Value of more than $5,000,000 or the
commencement of any action or proceeding for the taking of any Collateral or
any material part thereof or material interest therein under power of eminent
domain or by condemnation or similar proceeding.

 

SECTION 5.09  Books and Records; Inspection and Audit
Rights.  The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business

 

49

 

and activities to the extent
necessary to permit the preparation of financial statements in accordance with
GAAP.  The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon not fewer than five Business Days’
prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its appropriate representatives and, with the opportunity for
representatives of the Borrower to be present, independent accountants, all at
such reasonable times and as often as reasonably requested, provided that (a) the
Lenders will coordinate any visits through the Administrative Agent and (b) at
times when no Default is continuing, the Borrower shall not be required to pay for
more than two visits per year by the Administrative Agent.

 

SECTION 5.10  Compliance with Laws.  The Borrower will, and will cause each of its
Subsidiaries to, comply in all material respects with all laws, rules,
regulations, including Environmental Laws, and orders of any Governmental
Authority applicable to it, its operations or its property, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.

 

SECTION 5.11  Additional Subsidiaries.  If any additional Subsidiary (other than an
Excluded Subsidiary) is formed or acquired after the Closing Date, the Borrower
will, within 10 Business Days (or such longer period as may be acceptable to
the Collateral Agent) after such Subsidiary is formed or acquired, notify the
Administrative Agent thereof and cause the Collateral and Guarantee Requirement
to be satisfied with respect to such Subsidiary and with respect to any Equity
Interest in or Indebtedness of such Subsidiary owned by or on behalf of any
Loan Party.

 

SECTION 5.12  Further Assurances.  (a)  The Borrower will, and will cause
each Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
Mortgages and other documents), that may be required under any applicable law,
or that the Administrative Agent or the Required Lenders may reasonably
request, to cause the Collateral and Guarantee Requirement to be and remain
satisfied, all at the expense of the Loan Parties; provided that the
Collateral and Guarantee Requirement need not be satisfied with respect to (i) real
properties owned by the Borrower or any Subsidiary Loan Party with an
individual Fair Market Value (including fixtures and improvements) that is less
than $1,000,000 and (ii) any real property held by the Borrower or any
Subsidiary Loan Party as a lessee under a lease.  The Borrower also agrees to provide to the
Administrative Agent, from time to time upon reasonable request, evidence
reasonably satisfactory to the Administrative Agent as to the perfection and
priority of the Liens created or intended to be created by the Security
Documents.

 

(b)   If any Specified Asset that
has an individual Fair Market Value of more than $1,000,000 is acquired by the
Borrower or any Subsidiary Loan Party after the Closing Date or owned by an
entity at the time it becomes a Subsidiary Loan Party, the Borrower will notify
the Administrative Agent thereof (and the Administrative Agent shall notify the
Lenders thereof), and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause the Collateral and Guarantee Requirement to be
satisfied with respect to such asset.

 

SECTION 5.13  Account Control Agreements.  As promptly as possible and in any event
within 30 days following the Closing Date (or such later date as is
satisfactory to the Administrative Agent in its sole discretion), the Borrower
and each other Loan Party shall execute and deliver to the Administrative Agent
account control agreements with respect to

 

50

 

deposit accounts of the Loan
Parties containing at least 90% of the consolidated cash and Permitted
Investments of the Borrower and the other Loan Parties pursuant to which a
first priority perfected security interest shall be created in favor of the Administrative
Agent in such deposit accounts and all amounts on deposit therein.  Thereafter, the Borrower and the other Loan
Parties shall cause at least 90% of the cash and Permitted Investments of the
Borrower and the other Loan Parties to be held in deposit accounts which are
subject to such control agreements.  Each
such account control agreement shall be in form and substance reasonably
satisfactory to the Administrative Agent.

 

SECTION 5.14  Credit Ratings.  The Borrower will use its commercially reasonable
efforts to maintain at all times monitored public ratings of the Loans by Moody’s
and S&P and a corporate family rating for the Borrower from Moody’s and a
corporate issuer rating for the Borrower from S&P.

 

ARTICLE VI

 

Negative Covenants

 

Until the principal of and interest on each
Loan and all fees which are due and payable hereunder have been paid in full,
the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01  Indebtedness; Certain Equity Securities.  (a)  The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:

 

(i)            Indebtedness
created under the Loan Documents;

 

(ii)           Indebtedness
existing on the date hereof and set forth in Schedule 6.01;

 

(iii)          Indebtedness of the
Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other
Subsidiary; provided that Indebtedness of any Subsidiary that is not a
Loan Party to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;

 

(iv)          Guarantees by the
Borrower of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of the Borrower or any other Subsidiary; provided that
Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any
Subsidiary that is not a Loan Party shall be subject to Section 6.04;

 

(v)           Indebtedness
incurred to finance the acquisition, construction or improvement of any fixed
or capital assets, including Capital Lease Obligations and any Indebtedness
assumed in connection with the acquisition of any such assets or secured by a
Lien on any such assets prior to the acquisition thereof; provided that (1) such
Indebtedness is incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement and (2) the aggregate
principal amount of Capital Lease Obligations and Indebtedness incurred
pursuant to this clause (v), when added to the aggregate principal amount of
Sale and Leaseback Indebtedness incurred pursuant to Section 6.06, shall
not exceed $15,000,000 at any time outstanding;

 

51

 

(vi)          Indebtedness of any
Person that becomes a Subsidiary after the date hereof; provided that (A) such
Indebtedness exists at the time such Person becomes a Subsidiary and is not
created in contemplation of or in connection with such Person becoming a
Subsidiary, (B) such Indebtedness does not prevent the Collateral and
Guarantee Requirement from being fully satisfied with respect to any such
Subsidiary that is required to become a Subsidiary Loan Party, (C) the
Borrower is in Pro Forma Compliance after giving effect to the acquisition of
such Subsidiary and (D) the aggregate principal amount of Indebtedness
incurred pursuant to this clause (vi) shall not exceed $20,000,000 at any
time outstanding;

 

(vii)         Indebtedness of the
Borrower or any Subsidiary in respect of letters of credit obtained in the
ordinary course of business so long as the aggregate amount of the
reimbursement obligations (contingent or otherwise) in respect thereof is
expressly limited to $15,000,000;

 

(viii)        Indebtedness of the
Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal
bonds, surety bonds, performance and completion guarantees and similar
obligations (other than in respect of Indebtedness for borrowed money);

 

(ix)           Indebtedness in
respect of Swap Agreements permitted by Section 6.07;

 

(x)            Indebtedness of the
Borrower or any Subsidiary 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 that
such Indebtedness is extinguished within five Business Days of its incurrence;

 

(xi)           Indebtedness that
constitutes an Investment permitted under Section 6.04;

 

(xii)          Indebtedness of
Foreign Subsidiaries in an aggregate principal amount at any time outstanding
not exceeding $5,000,000;

 

(xiii)         Indebtedness
incurred by the Borrower or any Subsidiary representing deferred compensation
to employees of the Borrower or any Subsidiary incurred in the ordinary course
of business;

 

(xiv)        Indebtedness
consisting of promissory notes issued by the Borrower or any Subsidiary to
future, present or former directors, officers, members of management, employees
or consultants of the Borrower or any of its Subsidiaries or their respective
estates, heirs, family members, spouses or former spouses to finance the
purchase or redemption of Equity Interests in the Borrower as permitted by Section 6.08(a)(iii);

 

(xv)         Indebtedness incurred
by the Borrower or any Subsidiary in connection with any Permitted Acquisition
consisting of obligations in respect of indemnification, the adjustment of the
purchase price or similar adjustments;

 

52

 

(xvi)        Indebtedness
consisting of obligations of the Borrower or any Subsidiary under deferred
compensation or other similar arrangements incurred by such Person in
connection with Permitted Acquisitions;

 

(xvii)       Indebtedness incurred
by Borrower or any Subsidiary in respect of netting services, overdraft
protections and similar arrangements in each case in connection with cash
management and deposit accounts;

 

(xviii)      Indebtedness
consisting of (A) the financing of insurance premiums or (B) take-or-pay
obligations of the Borrower or any Subsidiary contained in supply arrangements,
in each case, in the ordinary course of business;

 

(xix)         Refinancing
Indebtedness of the Borrower or any Subsidiary incurred in exchange for, or the
Net Proceeds of which are used to refund, refinance or replace Indebtedness
(other than Indebtedness of the Borrower to any Subsidiary or of any Subsidiary
to the Borrower or any other Subsidiary) that was permitted to be incurred
under clause (ii), (v), (vi), (xix) or (xx) of this Section 6.01(a);

 

(xx)          Permitted
Subordinated Indebtedness, without any limitation as to amount, so long as the
Borrower and the Subsidiaries are in Pro Forma Compliance;

 

(xxi)         other Indebtedness
of the Borrower or any Subsidiary, in an aggregate principal amount at any time
outstanding pursuant to this clause (xxi) not in excess of $30,000,000; and

 

(xxii)        all premium (if
any), interest (including post-petition interest), fees, expenses, charges and
additional or contingent interest on obligations described above.

 

(b)   The Borrower will not, nor
will it permit any Subsidiary to, issue any Disqualified Stock.

 

SECTION 6.02  Liens. 
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:

 

(a)           Liens created under
the Loan Documents;

 

(b)           Permitted
Encumbrances;

 

(c)           any Lien existing on
the date hereof and set forth in Schedule 6.02 on any property or
asset of the Borrower or any Subsidiary; provided that (A) such
Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary (other than proceeds) and (B) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals,
refinancings and replacements thereof that do not increase the outstanding
principal amount thereof (other than by an amount not in excess of accrued interest
thereon and fees and expenses, including premium and defeasance costs,
associated therewith);

 

(d)           any Lien existing on
any property or asset prior to the acquisition thereof by the Borrower or any
Subsidiary or existing on any property or asset of any Person that

 

53

 

becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (A) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (B) such Lien shall not
apply to any other property or assets of the Borrower or any Subsidiary (other
than proceeds), (C) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be and extensions, renewals, refinancings and
replacements thereof that do not increase the outstanding principal amount
thereof (other than by an amount not in excess of accrued interest and fees and
expenses, including premium and defeasance costs, associated therewith) and (D) the
aggregate principal amount of the obligations secured pursuant to this clause (d) shall
not exceed $20,000,000 at any time outstanding;

 

(e)           Liens on fixed or
capital assets acquired, constructed or improved by the Borrower or any
Subsidiary (including any such assets made the subject of a Capital Lease
Obligation); provided that (A) such Liens secure Indebtedness
permitted by clause (v) of Section 6.01(a), (B) such Liens
and the Indebtedness secured thereby are incurred prior to or within 90 days
after such acquisition or the completion of such construction or improvement, (C) the
Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets and (D) such Liens
shall not apply to any other property or assets of the Borrower or any
Subsidiary (other than proceeds);

 

(f)            Liens on property
of any Foreign Subsidiary securing Indebtedness of such Foreign Subsidiary (or
Guarantees of such Indebtedness), in each case to the extent permitted under Section 6.01(a);

 

(g)           Liens in favor of
the Borrower or any Subsidiary Loan Party;

 

(h)           Liens that are
contractual rights of set-off (i) relating to the establishment of
depository relations with banks not given in connection with the issuance of
Indebtedness, (ii) relating to pooled deposit or sweep accounts of the
Borrower or any Subsidiary to permit satisfaction of overdraft or similar
obligations incurred in the ordinary course of business of the Borrower or any
Subsidiaries, (iii) relating to purchase orders and other agreements
entered into with customers of the Borrower or any Subsidiary in the ordinary
course of business or (iv) arising under or pursuant to banking
relationships;

 

(i)            Liens arising
solely by virtue of any statutory or common law provision relating to banker’s
liens, rights of set-off or similar rights;

 

(j)            Liens arising out
of conditional sale, title retention, consignment or similar arrangements for
the sale of goods, in each case entered into in the ordinary course of
business;

 

(k)           Liens securing
Refinancing Indebtedness; provided that such Liens do not extend to any
property or assets other than the property or assets that secure the
Indebtedness being refinanced;

 

(l)            Liens (i) attaching
to advances to a seller of any property to be acquired, (ii) consisting of
an agreement to dispose of property and (iii) on cash earnest money
deposits in connection with Investments permitted under Section 6.04;

 

54

 

(m)          Liens on insurance
policies and the proceeds thereof granted in the ordinary course to secure the
financing of insurance premiums with respect thereto;

 

(n)           any sale or assignment
of accounts receivable permitted by Section 6.05(e);

 

(o)           licenses,
sublicenses, leases or subleases granted to third Persons in the ordinary
course of business of the Borrower or any of its Subsidiaries;

 

(p)           precautionary UCC
financing statements in respect of operating leases permitted by this
Agreement;

 

(q)           any interest or
title of a licensor, lessor, sublicensor or sublessor under any license or
lease permitted by this Agreement;

 

(r)            Liens arising under
Environmental Laws which (i) are being contested in good faith and by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP or (ii) arise by operation of law (and not as a
result of any grant or consent by the Borrower or any Subsidiary) to secure
performance by the Borrower or its Subsidiaries of remediation activity, so
long as the Borrower and its Subsidiaries are in compliance with all
requirements applicable to such remediation activity;

 

(s)           in the case of
Equity Interests issued by a joint venture or a non-Wholly Owned Subsidiary,
any call or similar right in the nature of a right of first offer or a first
refusal right of a third party that is also an investor in such joint venture
or Subsidiary and, in the case of Equity Interests issued by a joint venture or
Subsidiary, any call or similar right on any nominee, trust or directors’
qualifying shares or similar arrangements designed to satisfy requirements of
applicable local laws

 

(t)            cash collateral
provided on customary terms securing reimbursement obligations in respect of
letters of credit described in Section 6.01(a)(vii); and

 

(u)           Liens not otherwise
permitted by this Section 6.02 securing obligations and Indebtedness in an
aggregate amount not in excess of $10,000,000 at any time outstanding;

 

provided that
notwithstanding the foregoing, no consensual Liens shall exist on Pledged
Equity Interests that constitute Collateral other than pursuant to
clauses (a) or (s) above.

 

SECTION 6.03  Fundamental Changes.  (a)  The Borrower will not, nor will it
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing, (i) any
Person may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Person may merge into any other
Subsidiary in a transaction in which the surviving entity is (or upon
consummation of such merger becomes a Subsidiary in accordance with the terms
of this Agreement) a Subsidiary and, if any party to such merger is a
Subsidiary Loan Party, a Subsidiary Loan Party, (iii) any Subsidiary may
merge or consolidate with any other Person in order to effect a Permitted
Acquisition and (iv) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution

 

55

 

is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders; provided
that any such merger involving a Person that is not a Wholly Owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.04.

 

(b)   The Borrower will not, and
will not permit any of its Subsidiaries to, engage to any material extent in
any business other than a Permitted Business.

 

SECTION 6.04  Investments, Loans, Advances, Guarantees
and Acquisitions.  The Borrower will
not, and will not permit any of its Subsidiaries to, make, purchase, hold or
acquire (including pursuant to any merger with any Person that was not a Wholly
Owned Subsidiary prior to such merger) any Investment, except:

 

(a)           Permitted
Investments;

 

(b)           Investments existing
on the Closing Date or made pursuant to binding commitments in effect on the
Closing Date and, in each case, set forth on Schedule 6.04;

 

(c)           Investments by the
Borrower in any Subsidiary and made by any Subsidiary in the Borrower or any
Subsidiary; provided that the aggregate amount of Investments made after
the Closing Date by Loan Parties in Subsidiaries that are not Loan Parties
shall not exceed $10,000,000 during the term of this Agreement;

 

(d)           Guarantees
constituting Indebtedness permitted by Section 6.01; provided that
the aggregate principal amount of Indebtedness of Subsidiaries that are not
Loan Parties that is Guaranteed by any Loan Party shall be subject to the
limitation set forth in clause (c) above;

 

(e)           Guarantees made in the
ordinary course of business by the Borrower or any Subsidiary of obligations
other than Indebtedness of any Excluded Subsidiary, provided that the
funding of any such guarantees by the Borrower or any Subsidiary Loan Party
shall be deemed to constitute an Investment subject to Section 6.04(c) unless
reimbursed by such Excluded Subsidiary;

 

(f)            Permitted
Acquisitions (including any cash earnest money deposits required in connection
therewith);

 

(g)           Investments
(including debt obligations and equity securities) acquired (x) in
connection with the bankruptcy or reorganization of, or settlement of
delinquent accounts and disputes with, customers and suppliers, in each case in
the ordinary course of business or (y) as a result of a foreclosure by the
Borrower or any Subsidiary with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default;

 

(h)           extensions of trade
credit in the ordinary course of business;

 

(i)            Investments
received in connection with the sale, transfer, lease or other disposition of
any asset permitted by Section 6.05;

 

(j)            Swap Agreements
entered into in compliance with Section 6.07;

 

56

 

(k)           loans and advances
by the Borrower and any of its Subsidiaries to their employees, officers,
members of management, consultants, agents, customers or suppliers (i) in
connection with relocation expenses and (ii) for other purposes in an
aggregate amount at any time outstanding not in excess of $2,500,000;

 

(l)            Investments
consisting of purchases and acquisitions of inventory, supplies, materials and
equipment or purchases of contract rights or licenses or leases of intellectual
property, in each case in the ordinary course of business;

 

(m)          commission, payroll,
travel and similar advances to officers and employees to cover matters that are
expected at the time of such advances ultimately to be treated as expenses of
the Borrower or any Subsidiary in accordance with GAAP;

 

(n)           Investments in the
ordinary course of business consisting of the licensing or acquisition of, or
investment in, intellectual property pursuant to joint marketing arrangements
with other Persons;

 

(o)           Investments of any
Person existing at the time such Person becomes a Subsidiary or consolidates or
merges with the Borrower or any Subsidiary (including in connection with a
Permitted Acquisition) so long as such Investments were not made in
contemplation of such Person becoming a Subsidiary or of such consolidation or
merger;

 

(p)           Investments
resulting from pledges or deposits described in clause (c) or (d) of
the definition of “Permitted Encumbrance”;

 

(q)           Investments in the
ordinary course consisting of endorsements of collection or deposit;

 

(r)            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 Borrower or any of its Subsidiaries and
endorsements for collection or deposit arising in the ordinary course of
business;

 

(s)           Investments arising
from any transaction permitted by Section 6.08;

 

(t)            Investments arising
or deemed to arise from the payment, repayment, prepayment, acquisition,
purchase or repurchase of any part of the Loans pursuant to any provision of Article II
of this Agreement; and

 

(u)           so long as no Event
of Default has occurred and is continuing or would result therefrom, additional
Investments in any Person in an aggregate amount not to exceed $30,000,000, net
of the aggregate amount of cash received by the Borrower or any Subsidiary from
any such Investment as a repayment of principal or a return of capital; provided
that any Investment made pursuant to this clause (u) in any Person that is
not a Loan Party at the time such Investment is made may, if such Person
thereafter becomes a Loan Party, from and after such date, be deemed to have
been made pursuant to clause (c) or (d) of this Section, as the case
may be, and not pursuant to this clause (u).

 

SECTION 6.05  Asset Sales.  The Borrower will not, and will not permit
any of its Subsidiaries to, sell, transfer, lease or otherwise dispose of any
asset, including any Equity Interest owned by it, nor will the Borrower permit
any of its Subsidiaries to issue any additional

 

57

 

Equity Interest in such
Subsidiary (other than issuing directors’ qualifying shares and other than
issuing Equity Interests to the Borrower or a Subsidiary), except:

 

(a)           sales, transfers,
leases and other dispositions of (x) any property (including inventory)
and (y) used, surplus, obsolete or worn-out equipment and Permitted
Investments, in each case in the ordinary course of business;

 

(b)           sales, transfers,
leases and other dispositions to the Borrower or a Subsidiary; provided
that any such sales, transfers or dispositions involving a Subsidiary that is
not a Loan Party shall be made in compliance with Section 6.09;

 

(c)           [intentionally
omitted];

 

(d)           leases or subleases
of property, and licenses or sublicenses of intellectual property, in each case
entered into in the ordinary course of business and which do not materially
interfere with the business of the Borrower and its Subsidiaries taken as a
whole;

 

(e)           dispositions or
write-downs of accounts receivable in connection with the compromise,
settlement or collection thereof in the ordinary course of business or
bankruptcy or similar proceedings;

 

(f)            sales, transfers,
leases and other dispositions permitted by Sections 6.03, 6.08 and Liens
permitted under Section 6.02;

 

(g)           sales, transfers,
leases and other dispositions of property constituting Investments permitted
under Section 6.04(g);

 

(h)           dispositions
resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary;

 

(i)            voluntary
terminations of Swap Agreements;

 

(j)            sales, leases,
transfers or other dispositions identified on Schedule 6.05;

 

(k)           Sale and Leaseback
Transactions permitted by Section 6.06; and

 

(l)            sales, transfers,
leases and other dispositions of assets that are not permitted by any other
clause of this Section; provided that the aggregate Fair Market Value of
all assets sold, transferred or otherwise disposed of in reliance on this
clause (l) shall not exceed $50,000,000;

 

provided that,
notwithstanding the foregoing, (i) Equity Interests of any Wholly Owned
Subsidiary may not be sold, transferred, leased or otherwise disposed of unless
100% of such Equity Interests are being sold, transferred, leased or otherwise
disposed of pursuant to a transaction permitted by Section 6.05(l) and
(ii) any sales, transfers, leases and other dispositions permitted by
clauses (j), (k) or (l) of this Section 6.05 shall be made (x) for
Fair Market Value and (y) for at least 75% Cash Consideration.

 

58

 

SECTION 6.06  Sale and Leaseback Transactions.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property sold or transferred
(any such transaction, a “Sale and Leaseback Transaction”), except for
Sale and Leaseback Transactions resulting in Sale and Leaseback Indebtedness in
an aggregate principal amount, when added to the aggregate principal
amount of Capital Lease Obligations and Indebtedness incurred pursuant to Section 6.01(a)(v),
not to exceed $15,000,000 at any time outstanding; provided, however,
that the Borrower applies the Net Proceeds of such Sale and Leaseback
Transactions in compliance with Section 2.06(b).

 

SECTION 6.07  Swap Agreements.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Borrower or any of its Subsidiaries) in the conduct of its business or
the management of its liabilities and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or Investment of the Borrower or
any Subsidiary.

 

SECTION 6.08  Restricted Payments; Certain Payments of
Indebtedness.  (a)  The Borrower
will not, nor will it permit any Subsidiary to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except:

 

(i)            the Borrower may
declare and pay dividends with respect to its Equity Interests payable solely
in additional Equity Interests of the same class (other than Disqualified
Stock);

 

(ii)           Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests;

 

(iii)          the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
in the Borrower or any Subsidiary held by any future, present or former directors,
officers, members of management, employees or consultants of the Borrower or
any of its Subsidiaries or their respective estates, heirs, family members,
spouses or former spouses pursuant to the terms of any employee equity
subscription agreement, stock option agreement or similar agreement; provided
that (A) the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests in any fiscal year (other than (1) any
such Equity Interests repurchased, redeemed, acquired or retired in
compensation for any taxes due or payable by the holder thereof, and (2) any
such Equity Interests that are deemed repurchased, redeemed, acquired or
retired by the Borrower in connection with the exercise of stock options or
warrants by the holder thereof in connection with the payment of all or a
portion of the exercise price of such options or warrant) will not exceed
$10,000,000 per year or $25,000,000 during the term of this Agreement and (B) such
Equity Interests shall only be repurchased, redeemed, acquired or retired in
connection with the death, resignation or retirement of, or settlement of a
dispute with, any such Person;

 

59

 

(iv)          the making of any
payment in exchange for, or out of the Net Proceeds of, a substantially
concurrent sale (other than to a Subsidiary of the Borrower) of, common Equity
Interests of the Borrower; and

 

(v)           other Restricted
Payments in an aggregate amount not exceeding $5,000,000.

 

(b)   The Borrower will not, nor will
it permit any Subsidiary to, make or agree to pay or make, directly or
indirectly, any payment or other distribution (whether in cash, securities or
other property) of or in respect of principal of or interest on any Permitted
Subordinated Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Permitted Subordinated Indebtedness, except:

 

(i)            payment of fees,
expenses and regularly scheduled interest and principal payments as and when
due in respect of such Indebtedness; and

 

(ii)           refinancings of
such Indebtedness to the extent permitted by Section 6.01(a)(xix).

 

SECTION 6.09  Transactions with Affiliates.  The Borrower will not, nor will it permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except:

 

(a)           transactions that
are at prices and on terms and conditions not less favorable to the Borrower or
such Subsidiary than could be obtained on an arm’s-length basis from unrelated
third parties;

 

(b)           the indemnification
of directors of the Borrower and the Subsidiaries in accordance with customary
practice;

 

(c)           any issuance of
securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans approved by the Board of Directors of the
Borrower;

 

(d)           loans or advances to
employees of Borrower or any of the Subsidiaries in accordance with Section 6.04;

 

(e)           transactions among
the Borrower and any Subsidiary Loan Parties and transactions among Subsidiary
Loan Parties otherwise permitted by this Agreement;

 

(f)            the payment of fees
and indemnities to directors, officers and employees of the Borrower and the
Subsidiaries in the ordinary course of business;

 

(g)           transactions
pursuant to permitted agreements in existence on the Closing Date and set forth
on Schedule 6.09 or any amendment thereto to the extent such amendment
is not adverse to the Lenders in any material respect;

 

(h)           any employment
agreements entered into by the Borrower or any of the Subsidiaries in the
ordinary course of business;

 

60

 

(i)            Restricted Payments
permitted under Section 6.08;

 

(j)            transactions with
Subsidiaries for the purchase or sale of goods, products, parts and services
and entered into in the ordinary course of business in a manner consistent with
past practice;

 

(k)           transactions with
joint ventures for the purchase or sale of equipment or services entered into
in the ordinary course of business and in a manner consistent with past
practice;

 

(l)            transactions with
any one or more Lenders pursuant to the Loan Documents including, without
limiting the generality of the foregoing, the repayment, prepayment,
acquisition, purchase or repurchase of any part of the Loans pursuant to any
provision of this Agreement; and

 

(m)          payments by the
Borrower and any Subsidiaries pursuant to tax sharing agreements among the
Borrower and the Subsidiaries on customary terms to the extent attributable to
the ownership or operation of the Borrower and the Subsidiaries.

 

For purposes of this Section 6.09, any
transaction with any Affiliate involving an amount less than $5,000,000 shall
be deemed to have satisfied the standard set forth in clause (a) above if
such transaction is approved as being on an arm’s length basis by a majority of
the Disinterested Directors of the board of directors of either the Borrower or
such Subsidiary.  “Disinterested
Director” shall mean, with respect to any Person and transaction, a member
of the board of directors of such Person who does not have any material direct
or indirect financial interest in or with respect to such transaction.

 

SECTION 6.10  Restrictive Agreements.  The Borrower will not, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets to
the Secured Parties securing the Obligations or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any shares
of its capital stock or to make or repay loans or advances to the Borrower or
any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other
Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to prohibitions, restrictions and conditions existing
on the date hereof identified on Schedule 6.10 and to any extension,
renewal or modification thereof, other than to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition, (iii) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only
to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause
(a) of the foregoing shall not apply to prohibitions, restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and the proceeds thereof, (v)(A) clause
(a) of the foregoing shall not apply to customary provisions in leases or
other contracts restricting the assignment thereof and (B) clause (b) of
the foregoing shall not apply to customary provisions in leases or other
contracts restricting the assignment thereof to the extent such provisions
restrict the distribution of such lease or other contract, (vi) the
foregoing shall not apply to prohibitions, restrictions or conditions
applicable to any Person or the property or assets of a Person acquired by the
Borrower or any of its Subsidiaries (other than pursuant to a

 

61

 

Permitted Acquisition)
existing at the time of such acquisition and not incurred in connection with or
in contemplation of such acquisition, which restriction or condition 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 restrictions and
conditions in any such amendments, modifications, restatements, renewals,
extensions, supplements, refundings, replacement or refinancings are no more
restrictive, taken as a whole, than those in effect on the date of the
acquisition, (vii) the foregoing shall not apply to prohibitions,
restrictions or conditions on cash or other deposits or net worth imposed by
customers or required by insurance, surety or bonding companies, in each case,
under contracts entered into in the ordinary course of business, (viii) the
foregoing shall not apply to restrictions or conditions imposed by any
agreement related to the refinancing of Indebtedness, provided that the
terms of any such restrictions or conditions are not materially less favorable,
taken as a whole, as determined by the Borrower in good faith, to the Lenders
than the restrictions or conditions contained in the predecessor agreements and
(ix) the foregoing shall not apply to customary provisions in joint
venture agreements, limited liability company agreements of joint ventures and
other similar agreements.

 

SECTION 6.11  Fiscal Year.  The Borrower shall not change its fiscal year
for accounting and financial reporting purposes to end on any date other than December 31.

 

SECTION 6.12  Amendment of Material Documents.  The Borrower will not, nor will it permit any
Subsidiary to, amend, modify or waive any of its rights under its certificate
of incorporation, by-laws or other organizational documents, if, taken as a
whole, such amendment, modification or waiver is materially adverse to the
interests of the Lenders.  The Borrower
will not, nor will it permit any Subsidiary to, amend, modify or waive any of
its rights under any Core Verizon Agreement, if such amendment, modification or
waiver would reasonably be expected to have a material adverse effect on the
ability of the Borrower to perform its principal obligations under the Loan
Documents.

 

SECTION 6.13  Financial Covenants.  (a)  The Borrower will not permit the
Leverage Ratio, at any time during any fiscal quarter ending during any period
set forth below, to exceed the ratio set forth opposite such fiscal quarter:

 

	
  Fiscal
  Quarter Ending:

  	
   

  	
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on or after January 1, 2010 and on or prior
  to December 31, 2010

  	
   

  	
  6.50 to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on or after January 1, 2011

  	
   

  	
  7.50 to 1.0

  	
   

  

 

(b)   The Borrower will not permit
the Consolidated Interest Coverage Ratio, for any period of four consecutive
fiscal quarters of the Borrower ending during any period set forth below, to be
less than the ratio set forth opposite such fiscal quarter:

 

	
  Fiscal
  Quarter Ending:

  	
   

  	
  Consolidated Interest

  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on or after January 1, 2010 and on or prior
  to December 31, 2010

  	
   

  	
  1.40 to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  on or after January 1, 2011

  	
   

  	
  1.10 to 1.0

  	
   

  

 

62

 

; provided, that for
the purposes of determining the ratio described above for the fiscal quarters
of the Borrower ending March 31, 2010, June 30, 2010 and September 30,
2010, Interest Expense for the relevant period shall be deemed to equal
Interest Expense for such fiscal quarter (and, in the case of the latter two
such determinations, each previous fiscal quarter commencing after the
Closing Date) multiplied by 4, 2 and 4/3, respectively.

 

SECTION 6.14  Capital Expenditures.  The Borrower will not, nor will it permit any
Subsidiary to, make or commit to make any Capital Expenditure, except Capital
Expenditures of the Borrower and its Subsidiaries in the ordinary course of
business not exceeding $80,000,000 in any fiscal year; provided, that (a) up
to $40,000,000 of any such amount referred to above, if not so expended in the
fiscal year for which it is permitted, may be carried over for expenditure in
the next succeeding fiscal year and (b) Capital Expenditures made pursuant to
this Section 6.14 during any fiscal year shall be deemed made, first,
in respect of amounts permitted for such fiscal year as provided above and, second,
in respect of amounts carried over from the prior fiscal year pursuant to
clause (a) above.

 

ARTICLE VII

 

Events of Default

 

If any of the following events (“Events of
Default”) shall occur:

 

(a)           the Borrower shall
fail to pay any principal of any Loan when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise;

 

(b)           the Borrower shall
fail to pay any interest on any Loan or any fee or any other amount (other than
an amount referred to in clause (a) of this Article) payable under this
Agreement or any other Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;

 

(c)           any representation
or warranty made or deemed made by or on behalf of the Borrower or any Loan
Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any certificate furnished
pursuant to or in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect in any
material respect when made or deemed made;

 

(d)           the Borrower shall
fail to observe or perform any covenant, condition or agreement contained in Section 5.02(a),
5.04 (with respect to the existence of the Borrower), 5.11, 5.13 or in Article VI;

 

(e)           any Loan Party shall
fail to observe or perform any covenant, condition or agreement contained in
any Loan Document (other than those specified in clause (a), (b) or (d) of
this Article), and such failure shall continue unremedied for a period of
30 days after written notice thereof from the Administrative Agent to the
Borrower (which notice will promptly be given at the request of any Lender);

 

63

 

(f)            the Borrower or any
Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable (after giving effect to any
applicable grace period specified in the agreement or instrument governing such
Indebtedness);

 

(g)           any event or
condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits the holder or holders of
any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity
and any applicable grace period specified in the agreement or instrument
evidencing such Indebtedness shall have expired; provided that this
clause (g) shall not apply to (i) secured Indebtedness that
becomes due as a result of the voluntary sale, transfer or other disposition of
the property or assets securing such Indebtedness and (ii) Indebtedness that by
its terms becomes due or is required to be repurchased as a result of changes
in tax laws, regulations or the interpretation or application thereof;

 

(h)           an involuntary
proceeding shall be commenced or an involuntary petition shall be filed seeking
(i) liquidation, reorganization or other relief in respect of the Borrower or
any Subsidiary (other than a Foreign Subsidiary or an Insignificant Subsidiary)
or its debts, or of a substantial part of its assets, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
Subsidiary (other than a Foreign Subsidiary or an Insignificant Subsidiary) or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;

 

(i)            the Borrower or any
Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of any proceeding or
petition described in clause (h) of this Article, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding that would
entitle the other party or parties to an order for relief, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

(j)            one or more
judgments for the payment of money in an aggregate amount in excess of
$20,000,000 (net of amounts covered by insurance, provided that the
insurance carriers have been notified of such judgment and have not contested
liability therefor) shall be rendered against the Borrower, any Subsidiary or
any combination thereof and the same shall remain undischarged for a period of
60 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach
or levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;

 

(k)           (i) an ERISA
Event shall have occurred, (ii) a trustee shall be appointed by a United
States district court to administer any Pension Plan, (iii) the PBGC shall
institute proceedings to terminate any Pension Plan(s), (iv) any Loan
Party or any of their

 

64

 

respective ERISA Affiliates shall have been notified by the sponsor of
a Multiemployer Plan that it has incurred or will be assessed Withdrawal
Liability to such Multiemployer Plan and such entity does not have reasonable
grounds for contesting such Withdrawal Liability or is not contesting such
Withdrawal Liability in a timely and appropriate manner or (v) any other
event or condition shall occur or exist with respect to a Plan, a Foreign Plan,
or a Foreign Benefit Arrangement that, in each case, in the opinion of the
Required Lenders, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect;

 

(l)            any Lien purported
to be created under any Security Document shall cease to be, or shall be
asserted in writing by any Loan Party not to be, a valid and, except to the
extent otherwise permitted under the Collateral Agreement or any other relevant
Security Document, perfected Lien on any Collateral having, in the aggregate, a
value in excess of $20,000,000, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other disposition
of the applicable Collateral in a transaction permitted under the Loan
Documents or (ii) as a result of the Collateral Agent’s failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Collateral Agreement or to file Uniform
Commercial Code continuation statements;

 

(m)          a Change in Control
shall occur;

 

(n)           any Guarantee under
the Collateral Agreement for any reason shall cease to be in full force and
effect (other than in accordance with its terms), or any Guarantor shall assert
in writing that the Collateral Agreement or any Guarantee thereunder has ceased
to be or is not enforceable; or

 

(o)           the material breach
of or material loss of rights under any Core Verizon Agreement that has
resulted in a material adverse effect on the business, operations, assets or
financial condition of the Borrower and the Subsidiaries, taken as a whole;

 

then, and in every such event (other than an
event with respect to the Borrower described in clause (h) or (i) of
this Article), and at any time thereafter during the continuance of such event,
the Administrative Agent may with the consent of the Required Lenders, and at
the request of the Required Lenders shall, by notice to the Borrower, declare
the Loans then outstanding to be due and payable in whole or in part, and
thereupon the principal of the Loans so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of
the Borrower accrued hereunder, shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.

 

ARTICLE VIII

 

The Agent

 

Each of the Lenders hereby irrevocably
appoints the Agent as its agent and authorizes the Agent to take such actions
on its behalf and to exercise such powers as are

 

65

 

delegated to the Agent by
the terms of the Loan Documents, together with such actions and powers as are
reasonably incidental thereto.

 

The bank serving as the Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Agent, and such bank and
its Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Agent hereunder.

 

The Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the
foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that the Agent is required to
exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth in
the Loan Documents, the Agent shall not have any duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Agent or any of its Affiliates in any capacity (other than as
Agent).  The Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02) or
in the absence of its own gross negligence or willful misconduct.  The Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to
the Agent by the Borrower or a Lender, and the Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or
in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any
Loan Document, other than to confirm receipt of items expressly required to be
delivered to the Agent.

 

The Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon other than as a
result of its gross negligence or willful misconduct.  The Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts other
than as a result of its gross negligence or willful misconduct.

 

The Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Agent in the exercise of its reasonable judgment.  The Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Related Parties.  The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of each Agent

 

66

 

and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Agent.

 

Subject to the appointment and acceptance of
a successor to the Agent as provided in this paragraph, the Agent may resign at
any time by notifying the Lenders and the Borrower.  Upon any such resignation, the Required Lenders
shall have the right, with the consent of the Borrower (such consent not to be
unreasonably withheld or delayed and such consent not to be required if an
Event of Default under clause (a), (b), (h) or (i) of Article VII
has occurred and is continuing), to appoint a successor.  If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within
30 days after the retiring Agent gives notice of its resignation, then the
retiring Agent may, with the consent of the Borrower (such consent shall not be
unreasonably withheld or delayed and such consent shall not be required if an
Event of Default under clause (a), (b), (h) or (i) of Article VII
has occurred and is continuing), on behalf of the Lenders, appoint a successor
Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank.  Upon the
acceptance of its appointment as Agent and Collateral Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed in writing between the Borrower and such successor.  After any Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect
for the benefit of such retiring Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any
of them while it was acting as Agent.

 

Pursuant to the Plan of Reorganization, the
Agent, on behalf of the Lenders, is empowered and authorized to execute and
deliver to the Loan Parties the other Loan Documents and all related
agreements, certificates, documents, or instruments as shall be necessary or
appropriate to effect the purposes of the Loan Documents.  Any action taken by the Agent or the Required
Lenders (or any other instructing group of Lenders specified by this Agreement)
in accordance with the terms of this Agreement or the other Loan Documents, and
the exercise by the Agent or the Required Lenders (or any other instructing
group of Lenders specified by this Agreement) of their respective powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.

 

Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related
agreement or any document furnished hereunder or thereunder.

 

Neither the joint lead arrangers, the
syndication agent nor the co-documentation agents listed on the cover page to
this Agreement shall have any duties or responsibilities hereunder in their
capacities as such.

 

67

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01  Notices.  (a)  Except in the case of notices and
other communications expressly permitted to be given by telephone (and subject
to paragraph (b) below), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, as
follows:

 

(i)            if to the Borrower,
to it at Idearc Inc., 2200 West Airfield Drive, DFW Airport, TX 75261,
Attention of General Counsel (Telecopy No. (972) 453-6829);

 

(ii)           if to the Agents,
to JPMorgan Chase Bank, N.A., 277 Park Avenue, 8th Floor, New
York, NY 10172-0003, Attention of Neil Boylan (Telecopy No. (212)
622-4556), with a copy to JPMorgan Chase Bank, N.A., 277 Park Avenue, 8th Floor, New York, NY 10172-0003, Attention of
Goh Siew Tan (Telecopy No. (212) 622-4556) and Loan and Agency Services,
1111 Fannin Street, Floor 10, Houston, TX 77002-6925, Attention of Lola Odutola
(Telecopy No. (713) 750-2938); and

 

(iii)          if to any other
Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.

 

(b)   Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent and the Borrower; provided that the foregoing shall not apply to
notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. 
The Administrative Agent or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

(c)   Any party hereto may change
its address or telecopy number for notices and other communications hereunder
by notice to the other parties hereto. 
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

 

SECTION 9.02  Waivers; Amendments.  (a)  No failure or delay by the Agent or
any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making, deemed making or maintenance of a Loan shall not be
construed as a waiver of any Default, regardless of whether the Agent or any
Lender may have had notice or knowledge of such Default at the time.

 

68

 

(b)   Neither this Agreement nor
any other Loan Document nor any provision hereof or thereof may be waived,
amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the
Required Lenders or, in the case of any other Loan Document, pursuant to an
agreement or agreements in writing entered into by the Agent and the Loan Party
or Loan Parties that are parties thereto, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) reduce
the principal amount of any Loan held by any Lender or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of such Lender, (ii) postpone the maturity of any Lender’s Loan,
or any scheduled date of payment of the principal amount of any Lender’s Loans
under Section 2.05, or any date for the payment of any interest or fees
payable to any Lender hereunder, or reduce the amount of, waive or excuse any
such payment, without the written consent of such Lender (it being understood
that the waiver of any mandatory prepayment of Loans shall not constitute a
postponement of any date scheduled for the payment of principal or interest), (iii) change
Section 2.13(b) or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender adversely affected thereby
(it being understood that an amendment with respect to Section 2.15, and
definitions related thereto, shall not be deemed to be a change to Section 2.13(b) or
(c)), (iv) change any of the provisions of this Section or the
percentage set forth in the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or thereunder or make
any determination or grant any consent thereunder, without the written consent
of each Lender, (v) release any Subsidiary Loan Party from its Guarantee
under the Collateral Agreement (except as expressly provided herein or in the
Collateral Agreement), or limit its liability in respect of such Guarantee,
without the written consent of each Lender or (vi) release all or
substantially all the Collateral from the Liens of the Security Documents,
without the written consent of each Lender; provided, further
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Agent without the prior written consent of the Agent.  Notwithstanding the other provisions of this
paragraph, any provision of this Agreement may be amended by an agreement in
writing entered into by the Borrower, the Required Lenders and the Agent if at
the time such amendment becomes effective, each Lender not consenting thereto
receives payment in full of the principal of and interest accrued on each Loan
held by it and all other amounts owing to it or accrued for its account under
the Loan Documents.  Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have the right to
approve or disapprove any waiver, amendment or other modification to any Loan
Document, and any such Defaulting Lender’s Loans shall be disregarded for the
purpose of calculating Required Lenders, except for waivers, amendments or
other modifications that relate to any of the matters described in the first
proviso to this Section 9.02(b).

 

SECTION 9.03  Expenses; Indemnity; Damage Waiver.  (a)  The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Agent, the joint lead
arrangers listed on the cover page of this Agreement and their Affiliates,
including the reasonable fees, charges and disbursements of (a) a single
transaction and documentation counsel for the Agent, such joint arrangers and
such Affiliates and (b) such other local counsel and special counsel as
may be required in the reasonable judgment of the Agent and whose retention has
been approved in writing by the Borrower, in connection with the structuring,
arrangement and syndication of the credit facilities provided herein, the
preparation and administration of the Loan Documents or any amendments, modifications
or waivers of the provisions thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all
documented out-of-pocket expenses incurred by the Agent or any Lender
(including the fees, charges and disbursements of counsel) in connection with
the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the
Loans, 

 

69

 

including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.

 

(b)   The Borrower shall indemnify
the Agent, each Lender, each joint lead arranger listed on the cover page of
this Agreement and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the reasonable fees, charges and disbursements of
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
(excluding Taxes, which are governed by Section 2.12) arising out of, in
connection with, or as a result of (i) the structuring, arrangement, and
syndication of the credit facilities provided for herein, (ii) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their obligations thereunder or the consummation the Financing Transactions, (iii) any
Loan or the use of the proceeds therefrom, (iv) any actual or alleged
presence or Release of Hazardous Materials on or from any Mortgaged Property or
any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries or (v) 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 such claim,
litigation, investigation or proceeding is brought by a third party or the
Borrower or any of its Affiliates 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 bad
faith, gross negligence or willful misconduct of, or breach of its obligations
under this Agreement or any other Loan Document by, such Indemnitee or any of
its Related Parties.  For the avoidance
of doubt, it is acknowledged hereby that nothing contained in this Agreement is
or shall be deemed to constitute an indemnification by the Borrower or any Subsidiary
of any Lender in its capacity as a holder of Equity Interests of the Borrower
for any loss, cause, claim, expense, liability, cause or action or damage
arising under or in connection with United States federal or state securities
laws.

 

(c)   To the extent that the
Borrower fails to pay any amount required to be paid by it to the Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to
pay to the Agent such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agent in
its capacity as such.  For purposes
hereof, a Lender’s “pro rata
share” shall be determined based upon its share of the sum of the total
outstanding Loans at the time.

 

(d)   No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the
wrongful use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby, except to the
extent arising from the bad faith, gross negligence or willful misconduct of
such Indemnitee or any of its Related Parties, nor shall any Indemnitee or any
Loan Party have any liability for any special, punitive, indirect or
consequential damages relating to this Agreement or any other Loan Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date).

 

70

 

(e)   All amounts due under this Section shall
be payable not later than 15 Business Days after written demand therefor,
together with an invoice setting forth in reasonable detail such amounts and
the basis therefor.

 

SECTION 9.04  Successors and Assigns.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
successors and assigns permitted hereby, except that (i) the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their successors and
assigns permitted hereby, Participants (to the extent provided in paragraph (c) of
this Section) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)   (i)  Subject to the
conditions set forth in paragraph (b)(ii) below and applicable law, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of the Loans at
the time owing to it), with the prior written consent (such consent not to be
unreasonably withheld or delayed) of:

 

(A)          the Borrower, provided
that no consent of the Borrower shall be required (x) for an assignment of
Loans to a Lender, an Affiliate of a Lender or an Approved Fund (as defined
below) or (y) if an Event of Default under clause (a), (b), (h) or
(i) of Article VII has occurred and is continuing, to any assignee;
and

 

(B)           the Administrative
Agent, provided that no consent of the Administrative Agent shall be
required for an assignment of Loans to an assignee that is a Lender immediately
prior to giving effect to such assignment, an Affiliate of a Lender or an
Approved Fund.

 

(ii)           Assignments shall
be subject to the following conditions:

 

(A)          except in the case of
an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, the
amount of Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$1,000,000, unless each of the Borrower and the Administrative Agent expressly
consent to the assignment of a lesser amount, provided that (i) no
such consent of the Borrower shall be required if an Event of Default under
clause (a), (b), (h) or (i) of Article VII has occurred and is
continuing and (ii) the principal amount of concurrent assignments to
related Approved Funds shall be aggregated for purposes of determining
compliance with the foregoing minimum assignment amounts.

 

(B)           each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement;

 

71

 

(C)           the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Assumption, together with a processing and recordation fee of $3,500; and

 

(D)          the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire in which the assignee designates one or more
credit contacts to whom all syndicate-level information (which may contain
material non-public information about the Loan Parties and their Related
Parties or their securities) will be made available and who may receive such
information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

 

For purposes of this Section 9.04(b),
the term “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person
(other than an natural person) that is engaged in making, purchasing, holding
or investing in bank loans and similar extensions of credit in the ordinary
course and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) any entity or an Affiliate of an entity that
administers or manages a Lender.

 

(iii)          Subject to
acceptance and recording thereof pursuant to paragraph (b)(iv) of
this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.10, 2.11, 2.12 and 9.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)          The Administrative
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders and
the principal amount of the Loans owing to each Lender pursuant to the terms
hereof from time to time, which register shall indicate that each Lender is
entitled to interest paid with respect to such Loans (the “Register”).  Absent demonstrable error, the entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

(v)           Upon its receipt of
a duly completed Assignment and Assumption executed by an assigning Lender and
an assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), 

 

72

 

the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(c)   (i)  Any Lender may,
without the consent of, or notice to, the Borrower and the Administrative Agent
sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of the Loans owing to it); provided
that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations under this Agreement. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant.  Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.10, 2.11 and 2.12 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 9.08
as though it were a Lender, provided such Participant agrees to be subject to Section 2.13(c) as
though it were a Lender.

 

(ii)           A
Participant shall not be entitled to receive any greater payment under Section 2.10
or 2.12 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.12
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.12(e) as though it were a Lender.

 

(d)   Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank, and this Section shall not apply to any such pledge or assignment of
a security interest; provided that no such pledge or assignment of a
security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 9.05  Survival.  All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall 

 

73

 

continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding.  The provisions of Sections 2.10, 2.11, 2.12
and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans or the termination of this Agreement or any
provision hereof.

 

SECTION 9.06  Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.  Except as
provided in Article IV, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this
Agreement by email or telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

SECTION 9.07  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

SECTION 9.08  Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender
(other than deposits held in a custodial, trust or fiduciary capacity),
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured.  The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

SECTION 9.09  Governing Law; Jurisdiction; Consent to
Service of Process.  (a)  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

 

(b)   Each party hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern District
of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to any Loan Document, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court.  Each party hereto agrees that a final
judgment in any 

 

74

 

such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or any
other Loan Document shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against any other party or its properties in the courts of any
jurisdiction.

 

(c)   Each of the parties hereto
hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have
to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other Loan Document in any court referred to
in paragraph (b) of this Section. 
Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

(d)   Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 9.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 9.11  Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and shall not affect the construction of, or be
taken into consideration in interpreting, this Agreement.

 

SECTION 9.12  Confidentiality.  Each of the Agent and the Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ trustees,
directors, officers, employees and agents, including accountants, legal counsel
and other advisors in connection with the Financing Transactions (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement for the benefit of the Borrower containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations 

 

75

 

under this Agreement, (ii) any
pledgee referred to in Section 9.04(d) or (iii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Agent or any Lender on a nonconfidential basis from a source
other than the Borrower (other than a source actually known by such party to be
bound by confidentiality obligations). 
For the purposes of this Section, “Information” means all
information received from the Borrower or its Related Parties relating to the
Borrower, its Subsidiaries or its business, other than any such information
that is available to the Agent or any Lender on a nonconfidential basis prior
to disclosure by the Borrower (other than a source actually known by such party
to be bound by confidentiality obligations). 
Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord
other its own confidential information.

 

Each Lender acknowledges that Information
furnished to it pursuant to this Agreement may include material non-public
information concerning the Borrower and its Related Parties or its or their
securities, and confirms that it has developed compliance procedures regarding
the use of material non-public information and that it will handle such
material non-public information in accordance with the procedures and
applicable law, including Federal, State and foreign securities laws.

 

All Information, including requests for
waivers and amendments, furnished by the Borrower or the Administrative Agent
pursuant to, or in the course of administering, this Agreement will be
syndicate-level information, which may contain material non-public information
about the Borrower and the Subsidiaries and its and their Related Parties or
securities.  Accordingly, each Lender represents
to the Borrower and the Administrative Agent that it has identified in its
Administrative Questionnaire a credit contact who may receive information that
may contain material non-public information in accordance with its compliance
procedures and applicable law, including Federal, State and foreign securities
laws.

 

SECTION 9.13  U.S.A. PATRIOT Act.  The Administrative Agent and each Lender
hereby notifies the Borrower, for itself and its Subsidiaries, that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Loan Parties, which
information includes the name and address of the Loan Parties and other
information that will allow the Administrative Agent and such Lender to
identify the Loan Parties in accordance with the Act.

 

SECTION 9.14  Termination or Release.  (a)  At such time as the Loans, all
accrued interest and fees under this Agreement and all other obligations under
the Loan Documents then due and payable (other than obligations under
Sections 2.10, 2.12 and 9.03 that are not then due and payable) shall have
been paid in full in cash, the Collateral shall be released from the Liens created
by the Security Documents and the obligations (other than those expressly
stated to survive termination) of the Administrative Agent and each Loan Party
under the Security Documents shall terminate, all without delivery of any
instrument or performance of any act by any Person.

 

(b)   A Subsidiary Loan Party
shall automatically be released from its obligations under the Collateral
Agreement and any other Loan Document and the security interests in the 

 

76

 

Collateral
of such Subsidiary Loan Party shall be automatically released upon the
consummation of any transaction permitted by this Agreement as a result of
which such Subsidiary Loan Party ceases to be a Subsidiary of the Borrower.

 

(c)   Upon any sale or other transfer
by any Loan Party of any Collateral that is permitted under this Agreement to
any Person that is not a Loan Party, or upon the effectiveness of any written
consent to the release of the security interest granted by the Collateral
Agreement in any Collateral pursuant to Section 9.02 of this Agreement,
the security interest in such Collateral shall be automatically released.

 

(d)   In connection with any
termination or release pursuant to paragraph (a), (b) or (c) of
this Section 9.14, the Collateral Agent shall execute and deliver to any
Loan Party at such Loan Party’s expense all documents that such Loan Party
shall reasonably request to evidence such termination or release.  Any execution and delivery of documents
pursuant to this Section 9.14 shall be without recourse to or warranty by
the Collateral Agent or any Lender.

 

SECTION 9.15  No Fiduciary Relationship.  The Borrower, on behalf of itself and the
Subsidiaries, agrees that in connection with all aspects of the Financing
Transactions occurring on or prior to the Closing Date and the exercise of
their rights and the performance of their obligations under the Loan Documents,
the Borrower and the Subsidiaries, on the one hand, and the Administrative
Agent,  the Lenders and their Affiliates
(each acting in their capacity as Administrative Agent or Lender hereunder), on
the other hand, will have a business relationship that does not create, by
implication or otherwise, any fiduciary duty on the part of the Administrative
Agent, the arrangers or the Lenders, and no such duty will be deemed to have
arisen in connection therewith.

 

SECTION 9.16  No Requirement of Lender Signatures.  Each Lender listed on Schedule 2.01
shall be a party hereto in accordance with the Reorganization Plan and,
pursuant to the Reorganization Plan, is bound hereby without the requirement of
any such Lender to execute a signature page hereto.

 

77

 

IN WITNESS WHEREOF, the Borrower and the
Agents have caused this Agreement to be duly executed by their respective
authorized officers or representatives as of the day and year first above
written.

 

	
  IDEARC
  INC.,

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  
	
   

  	
  /s/
  Samuel D. Jones

  	
   

  
	
   

  	
  Name:

  	
  Samuel
  D. Jones

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President, Chief Financial Officer & Treasurer

  	
   

  

 

 

	
  JPMORGAN
  CHASE BANK, N.A., 

  as Administrative Agent and Collateral Agent

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  
	
   

  	
  /s/
  Neil R. Boylan

  	
   

  
	
   

  	
  Name:

  	
  Neil
  R. Boylan

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  

 

Loan Agreement Signature Page

 

 

Schedule 1.01A

 

Certain EBITDA Adjustments

 

1. Costs, fees and expenses
for attorneys, auditors, accountants, consultants or advisors that the Borrower
is obligated to pay (without regard to the Person for whom services were
performed) incurred in connection with the events leading up to, and
throughout, the ongoing administration of the Borrower’s Chapter 11 case.

 

2. Payment of Local Tax
Claims, as well as interest expense thereon arising in connection with any
deferred payment of Local Tax Claims.

 

3. All costs and expenses
associated with rebranding of the Borrower and its Subsidiaries, including,
without limiting the generality of the foregoing, all costs and expenses
associated with (i) signage replacement costs and expenses and (ii) design
costs and expenses arising from rebranding and name changes.

 

4. All costs and expenses
associated with contract rejection.

 

5. Exit and transaction
costs of up to $850,000 associated with the administration of pre-Petition Date
shareholder lists, which costs are charged to Idearc by a transfer agent after
the Reorganization Effective Date for services rendered in connection with such
lists after the Reorganization Effective Date.

 

 

Schedule 1.01B

 

Institutional Holders

 

Investment funds and
accounts managed by Paulson & Co., Inc., including:

 

Paulson Advantage Master
Ltd.

Paulson Advantage Plus
Master Ltd.

Paulson Advantage Select
Master Ltd.

Paulson Recovery Master Fund
Ltd.

Paulson Credit Opportunities
Master Ltd.

BLT
8 LLC

 

 

Schedule 1.01C

 

Post-Closing Items

 

The Borrower shall use all
commercially reasonable efforts to deliver, or cause to be delivered, not later
than 90 days from the Closing Date (or on such later date as the Administrative
Agent shall agree in its sole reasonable discretion):

 

(i) the title insurance
policy referred to in clause (e)(ii) of the term “Collateral and Guarantee
Requirement”, which title insurance policy shall insure the Borrower’s clear
title to the following parcel of real property and the improvements thereto:

 

20 Lake Center

401 Route 73

Marlton, New Jersey 08053

Burlington
County

 

(ii) an
opinion of New Jersey counsel to the Borrower, with respect to the Mortgage
covering such real property and the improvements thereto, such opinion
to be in form and substance reasonably satisfactory to the Administrative Agent
and

 

(iii) an
opinion of Fulbright & Jaworski L.L.P., counsel to the Borrower,
with respect to the Mortgage covering such real property and the
improvements thereto, such opinion to be in form and substance
reasonably satisfactory to the Administrative Agent.

 

 

Schedule 2.01

 

Loans Deemed Made on the
Closing Date

 

	
  Lender

  	
   

  	
  $

  	
   

  
	
  1888 FUND LTD

  	
   

  	
  0.11

  	
   

  
	
  ABN AMRO BANK NV

  	
   

  	
  38,116,505.46

  	
   

  
	
  ABN AMRO LEVERAGE LOAN TRUST SERIES 1

  	
   

  	
  188,986.08

  	
   

  
	
  ACA CLO 2006-1 
  LIMITED

  	
   

  	
  779,293.44

  	
   

  
	
  ACA CLO 2006-2 LTD

  	
   

  	
  771,500.52

  	
   

  
	
  ACA CLO 2007-1 LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  ADIRONDACK GREEN ISLAND LIMITED

  	
   

  	
  1,165,019.19

  	
   

  
	
  AHAB DISTRESSED, LP

  	
   

  	
  467,426.97

  	
   

  
	
  AHAB DISTRESSED, LTD

  	
   

  	
  516,629.81

  	
   

  
	
  AHAB OPPORTUNITIES, LP

  	
   

  	
  408,392.42

  	
   

  
	
  AHAB OPPORTUNITIES, LTD

  	
   

  	
  343,001.85

  	
   

  
	
  AIB DEBT MANAGEMENT LIMITED

  	
   

  	
  29,147,465.10

  	
   

  
	
  AIG BANK LOAN FUND LTD

  	
   

  	
  385,750.26

  	
   

  
	
  SATURN CLO, LTD.

  	
   

  	
  1,320,542.37

  	
   

  
	
  SUNAMERICA SENIOR FLOATING RATE FUND, INC.

  	
   

  	
  771,500.52

  	
   

  
	
  AIMCO CLO SERIES 2005-A

  	
   

  	
  1,544,949.26

  	
   

  
	
  AIMCO CLO SERIES 2006-A

  	
   

  	
  1,737,824.39

  	
   

  
	
  AMERICAN INTERNATIONAL GROUP INCORPORATED

  	
   

  	
  8,895,575.84

  	
   

  
	
  AMERIPRISE CERTIFICATE COMPANY

  	
   

  	
  337,531.48

  	
   

  
	
  AMERIPRISE FINANCIAL INC

  	
   

  	
  175,792.13

  	
   

  
	
  AMMC CLO IV, LIMITED

  	
   

  	
  532,227.17

  	
   

  
	
  AMMC CLO V, LIMITED

  	
   

  	
  385,750.26

  	
   

  
	
  AMMC CLO VI, LIMITED

  	
   

  	
  722,194.62

  	
   

  
	
  AMMC VII, LIMITED

  	
   

  	
  2,715,996.71

  	
   

  
	
  ANCHORAGE CAPITAL MASTER OFFSHORE LTD

  	
   

  	
  88,790,908.34

  	
   

  
	
  ANCHORAGE CROSSOVER CREDIT OFFSHORE MASTER FUND
  LTD

  	
   

  	
  22,346,589.22

  	
   

  
	
  APIDOS CDO I

  	
   

  	
  1,737,326.35

  	
   

  
	
  APIDOS CDO II

  	
   

  	
  1,911,445.92

  	
   

  
	
  APIDOS CDO III

  	
   

  	
  1,524,245.45

  	
   

  
	
  APIDOS CDO IV

  	
   

  	
  2,294,779.19

  	
   

  
	
  APIDOS CDO V

  	
   

  	
  2,101,904.06

  	
   

  
	
  APIDOS CINCO CDO

  	
   

  	
  777,330.50

  	
   

  
	
  APIDOS QUATTRO CDO

  	
   

  	
  2,294,779.19

  	
   

  
	
  APOSTLE LOOMIS SAYLES CREDIT OPPORTUNITIES FUND

  	
   

  	
  2,071,365.53

  	
   

  
	
  APPALOOSA INVESTMENT LIMITED PARTNERSHIP I

  	
   

  	
  72,761,395.63

  	
   

  
	
  ARBITER PARTNERS, LP

  	
   

  	
  3,934,223.95

  	
   

  
	
  ARKANSAS PUBLIC EMPLOYEE RETIREMENT SYSTEM

  	
   

  	
  884,649.52

  	
   

  
	
  ARROW DISTRESSED SECURITIES FUND

  	
   

  	
  1,271,333.50

  	
   

  
	
  ARTUS LOAN FUND 2007-I, LTD.

  	
   

  	
  7,866,648.44

  	
   

  

 

 

	
  ATRIUM CDO

  	
   

  	
  1,928,751.29

  	
   

  
	
  ATRIUM II

  	
   

  	
  1,543,001.03

  	
   

  
	
  ATRIUM III

  	
   

  	
  2,700,251.80

  	
   

  
	
  ATRIUM IV

  	
   

  	
  3,086,002.06

  	
   

  
	
  ATRIUM V

  	
   

  	
  1,245,530.93

  	
   

  
	
  ATRIUM VI

  	
   

  	
  1,744,599.16

  	
   

  
	
  AURUM CLO 2002-1 LTD

  	
   

  	
  771,500.52

  	
   

  
	
  AVENUE CLO FUND LTD

  	
   

  	
  1,165,995.73

  	
   

  
	
  AVENUE CLO II LTD

  	
   

  	
  2,208,394.64

  	
   

  
	
  AVENUE CLO V LTD

  	
   

  	
  2,714,900.54

  	
   

  
	
  AVENUE CLO VI LTD

  	
   

  	
  1,089,448.65

  	
   

  
	
  BILL & MELINDA GATES FOUNDATION TRUST

  	
   

  	
  935,610.37

  	
   

  
	
  BABSON CLO LTD. 2003-1

  	
   

  	
  1,100,265.86

  	
   

  
	
  BABSON CLO LTD. 2004 I

  	
   

  	
  1,331,250.45

  	
   

  
	
  BABSON CLO LTD. 2004-II

  	
   

  	
  1,195,307.35

  	
   

  
	
  BABSON CLO LTD. 2005-I

  	
   

  	
  3,117,765.73

  	
   

  
	
  BABSON CLO LTD. 2005-II

  	
   

  	
  2,130,386.11

  	
   

  
	
  BABSON CLO LTD. 2005-III

  	
   

  	
  1,693,148.83

  	
   

  
	
  BABSON CLO LTD. 2006-1

  	
   

  	
  1,863,354.02

  	
   

  
	
  BABSON CLO LTD. 2006-II

  	
   

  	
  1,824,231.22

  	
   

  
	
  BABSON CLO LTD. 2007-I

  	
   

  	
  2,149,274.17

  	
   

  
	
  BABSON CLO LTD. 2008-I

  	
   

  	
  781,266.34

  	
   

  
	
  BABSON CLO LTD. 2008-II

  	
   

  	
  1,171,899.51

  	
   

  
	
  BABSON LOAN OPPORTUNITY CLO, LTD.

  	
   

  	
  3,101,509.61

  	
   

  
	
  BABSON MID-MARKET CLO LTD. 2007-II

  	
   

  	
  194,740.63

  	
   

  
	
  BACCHUS US 2006-1 LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  BAKER STREET CLO II LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  BAKER STREET FUNDING CLO 2005-1 LTD

  	
   

  	
  1,554,660.98

  	
   

  
	
  BANK MIDWEST NA

  	
   

  	
  7,457,031.46

  	
   

  
	
  BANK OF AMERICA N A

  	
   

  	
  56,948,525.66

  	
   

  
	
  BANK OF AMERICA, NA

  	
   

  	
  18,012,270.06

  	
   

  
	
  BARCLAYS BANK PLC

  	
   

  	
  51,824,955.97

  	
   

  
	
  BARCLAYS BANK PLC-NEW YORK BRANCH

  	
   

  	
  26,699,604.19

  	
   

  
	
  BAYERISCHE HYPO -UND VEREINSBANK AG, NEW YORK
  BRANCH

  	
   

  	
  9,590,881.86

  	
   

  
	
  BAYERISCHE HYPO -UND VEREINSBANK AG, NEW YORK
  BRANCH

  	
   

  	
  17,650,243.11

  	
   

  
	
  BAYERISCHE LANDESBANK

  	
   

  	
  19,625,047.14

  	
   

  
	
  BECHTEL TRUST & THRIFT PLAN BECON
  TRUST & THRIFT PLAN

  	
   

  	
  616,810.77

  	
   

  
	
  BLT 8 LLC

  	
   

  	
  192,988,333.50

  	
   

  
	
  BROOKFIELD CREDIT OPPORTUNITY FUND L P

  	
   

  	
  2,300,488.67

  	
   

  
	
  BROOKFIELD HIGH YIELD ADVANTAGE FUND, LP

  	
   

  	
  2,027,363.07

  	
   

  
	
  CALIFORNIA STATE TEACHERS’ RETIREMENT SYSTEM

  	
   

  	
  194,823.35

  	
   

  

 

 

	
  CALYON NEW YORK BRANCH

  	
   

  	
  7,823,056.26

  	
   

  
	
  CANARAS SUMMIT CLO LTD

  	
   

  	
  1,166,010.57

  	
   

  
	
  CANNINGTON FUNDING LTD

  	
   

  	
  3,471,752.32

  	
   

  
	
  CARLYLE CREDIT PARTNERS FINANCING I LTD

  	
   

  	
  308,919.09

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS 2008 1 LTD

  	
   

  	
  364,368.78

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS IV LIMITED

  	
   

  	
  216,455.39

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS IX LTD

  	
   

  	
  418,866.85

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS VI LTD

  	
   

  	
  282,951.13

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS VII LTD

  	
   

  	
  293,888.58

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS VIII LTD

  	
   

  	
  232,162.62

  	
   

  
	
  CARLYLE HIGH YIELD PARTNERS X LTD

  	
   

  	
  348,593.89

  	
   

  
	
  CARLYLE LOAN INVESTMENT LTD

  	
   

  	
  0.01

  	
   

  
	
  CASTLE GARDEN FUNDING

  	
   

  	
  1,788,730.29

  	
   

  
	
  CASTLE HILL III CLO, LIMITED

  	
   

  	
  2,110,283.05

  	
   

  
	
  CASTLERIGG MASTER INVESTMENTS LTD

  	
   

  	
  4,054,726.14

  	
   

  
	
  CCA EAGLE LOAN MASTER FUND LTD.

  	
   

  	
  63,466.59

  	
   

  
	
  CENT CDO 12 LIMITED

  	
   

  	
  1,066,295.07

  	
   

  
	
  CENT CDO 14 LIMITED

  	
   

  	
  864,762.30

  	
   

  
	
  CENT CDO XI LIMITED

  	
   

  	
  1,236,924.33

  	
   

  
	
  CENTURION CDO 8 LIMITED

  	
   

  	
  1,025,747.81

  	
   

  
	
  CHATHAM ASSET HIGH YIELD MASTER FUND LTD

  	
   

  	
  6,703,436.01

  	
   

  
	
  CHELSEA PARK CLO LTD.

  	
   

  	
  1,757,849.27

  	
   

  
	
  THE CIT GROUP\EQUIPMENT FINANCING, INC.

  	
   

  	
  14,730,501.38

  	
   

  
	
  CITIBANK, N.A.

  	
   

  	
  18,425,334.18

  	
   

  
	
  CITIBANK, N.A.

  	
   

  	
  18,190,252.10

  	
   

  
	
  CLYDESDALE CLO 2003 LTD.

  	
   

  	
  1,741,089.42

  	
   

  
	
  CLYDESDALE CLO 2004, LTD.

  	
   

  	
  1,549,854.75

  	
   

  
	
  CLYDESDALE CLO 2005, LTD.

  	
   

  	
  1,651,595.97

  	
   

  
	
  CLYDESDALE CLO 2006, LTD.

  	
   

  	
  1,543,001.03

  	
   

  
	
  CLYDESDALE CLO 2007, LTD.

  	
   

  	
  1,161,608.63

  	
   

  
	
  CLYDESDALE STRATEGIC CLO I, LTD.

  	
   

  	
  1,326,641.64

  	
   

  
	
  COA CLO FINANCING LTD

  	
   

  	
  969,221.75

  	
   

  
	
  COBANK, ACB

  	
   

  	
  9,001,963.37

  	
   

  
	
  COLE BROOK CBNA LOAN FUNDING LLC

  	
   

  	
  377,957.33

  	
   

  
	
  COLUMBUS PARK CDO LTD.

  	
   

  	
  1,558,586.90

  	
   

  
	
  COMMINGLED PENSION TRUST FUND (HIGH YIELD BOND) OF
  JPMORGAN CHASE BANK, N.A.

  	
   

  	
  681,290.84

  	
   

  
	
  COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYEES
  RETIREMENT SYSTEM

  	
   

  	
  771,500.52

  	
   

  

 

 

	
  COMSTOCK FUNDING LTD

  	
   

  	
  777,374.89

  	
   

  
	
  CONFLUENT 3 LIMITED

  	
   

  	
  958,545.66

  	
   

  
	
  CONFLUENT 4 LIMITED

  	
   

  	
  1,928,751.29

  	
   

  
	
  CONTINENTAL CASUALTY COMPANY

  	
   

  	
  1,216,417.84

  	
   

  
	
  CONTRARIAN FUNDS, LLC

  	
   

  	
  19,487,957.49

  	
   

  
	
  CORPORATE DEBT OPPORTUNITIES FUND LIMITED
  PARTNERSHIP

  	
   

  	
  7,014,676.23

  	
   

  
	
  CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

  	
   

  	
  3,966,111.22

  	
   

  
	
  CREDIT SUISSE LOAN FUNDING LLC 

  	
   

  	
  2,385,436.08

  	
   

  
	
  CREDIT SUISSE SYNDICATED LOAN FUND

  	
   

  	
  1,958,198.64

  	
   

  
	
  CSAM FUNDING II

  	
   

  	
  1,928,751.29

  	
   

  
	
  CSAM FUNDING III

  	
   

  	
  1,928,751.29

  	
   

  
	
  CSAM FUNDING IV

  	
   

  	
  1,720,131.25

  	
   

  
	
  CUNDILL VALUE CLASS

  	
   

  	
  3,806,331.62

  	
   

  
	
  DEL MAR CLO I, LTD.

  	
   

  	
  952,572.36

  	
   

  
	
  DEUTSCHE BANK AG NEW YORK BRANCH

  	
   

  	
  12,503,553.67

  	
   

  
	
  DEUTSCHE BANK AG -LONDON BRANCH

  	
   

  	
  6,692,572.49

  	
   

  
	
  DRYDEN IX - SENIOR LOAN FUND 2005 P L C

  	
   

  	
  1,928,751.29

  	
   

  
	
  DRYDEN V LEVERAGED LOAN CDO 2003

  	
   

  	
  1,928,751.29

  	
   

  
	
  DRYDEN VIII - LEVERAGED LOAN CDO 2005

  	
   

  	
  2,314,501.54

  	
   

  
	
  DRYDEN VII-LEVERAGED LOAN CDO 2004

  	
   

  	
  2,121,626.42

  	
   

  
	
  DRYDEN XI-LEVERAGED LOAN CDO 2006

  	
   

  	
  3,861,379.45

  	
   

  
	
  DRYDEN XVIII LEVERAGED LOAN 2007 LIMITED

  	
   

  	
  2,320,326.69

  	
   

  
	
  DRYDEN XVI-LEVERAGED LOAN CDO 2006

  	
   

  	
  2,717,557.38

  	
   

  
	
  DUANE STREET CLO 1 LTD

  	
   

  	
  1,168,940.17

  	
   

  
	
  DUANE STREET CLO II LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  DUANE STREET CLO III LTD

  	
   

  	
  2,700,251.80

  	
   

  
	
  DUANE STREET CLO IV LTD

  	
   

  	
  1,943,326.23

  	
   

  
	
  DWS FLOATING RATE PLUS FUND

  	
   

  	
  386,717.04

  	
   

  
	
  EATON VANCE CDO IX LTD

  	
   

  	
  1,642,360.94

  	
   

  
	
  EATON VANCE CDO VII PLC

  	
   

  	
  1,350,125.90

  	
   

  
	
  EATON VANCE CDO VIII LTD

  	
   

  	
  2,414,835.58

  	
   

  
	
  EATON VANCE CDO X PLC

  	
   

  	
  1,735,876.16

  	
   

  
	
  EATON VANCE CREDIT OPPORTUNITIES FUND

  	
   

  	
  391,624.63

  	
   

  
	
  EATON VANCE FLOATING RATE INCOME TRUST

  	
   

  	
  3,152,210.60

  	
   

  
	
  GRAYSON & CO

  	
   

  	
  14,844,075.79

  	
   

  
	
  EATON VANCE INSTITUTIONAL SENIOR LOAN FUND

  	
   

  	
  10,394,590.37

  	
   

  

 

 

	
  EATON VANCE LIMITED DURATION INCOME FUND

  	
   

  	
  4,437,899.26

  	
   

  
	
  EATON VANCE LOAN OPPORTUNITIES FUND LTD

  	
   

  	
  1,165,995.73

  	
   

  
	
  EATON VANCE MEDALLION FLOATING RATE INCOME
  PORTFOLIO

  	
   

  	
  1,165,014.27

  	
   

  
	
  SENIOR DEBT PORTFOLIO

  	
   

  	
  5,607,853.95

  	
   

  
	
  EATON VANCE SENIOR FLOATING RATE TRUST

  	
   

  	
  2,871,555.21

  	
   

  
	
  EATON VANCE SENIOR INCOME TRUST

  	
   

  	
  1,534,087.27

  	
   

  
	
  EATON VANCE SHORT DURATION DIVERSIFIED INCOME FUND

  	
   

  	
  1,101,326.68

  	
   

  
	
  EATON VANCE VT FLOATING-RATE INCOME FUND

  	
   

  	
  3,992,460.96

  	
   

  
	
  ECP CLO 2008-1 LTD

  	
   

  	
  4,286,113.97

  	
   

  
	
  EQ ADVISORS TRUST - FRANKLIN INCOME PORTFOLIO

  	
   

  	
  1,180,868.14

  	
   

  
	
  ERSTE GROUP BANK AG NEW YORK 

  	
   

  	
  7,715,005.15

  	
   

  
	
  ERSTE GROUP BANK AG NEW YORK

  	
   

  	
  1,938,443.51

  	
   

  
	
  ESSEX PARK CDO LTD.

  	
   

  	
  1,088,127.18

  	
   

  
	
  FAIRWAY LOAN FUNDING COMPANY

  	
   

  	
  5,400,503.60

  	
   

  
	
  FIDELITY ADVISOR SERIES I-ADVISOR FLOATING RATE
  HIGH INCOME FUND

  	
   

  	
  1,713,138.76

  	
   

  
	
  FIDELITY ADVISORS SERIES II FIDELITY ADVISORS
  STRATEGIC INCOME FUND

  	
   

  	
  1,519,443.76

  	
   

  
	
  FIDELITY CENTRAL INVESTMENT PORTFOLIOS LLC  FIDELITY FLOATING RATE CENTRAL INVES

  	
   

  	
  2,633,265.83

  	
   

  
	
  FIDELITY SCHOOL STREET TRUST-STRATEGIC INCOME FUND

  	
   

  	
  1,266,203.13

  	
   

  
	
  FIDELITY SUMMER STREET TRUST-CAPITAL &
  INCOME FUND

  	
   

  	
  6,193,598.28

  	
   

  
	
  FIDELITY VARIABLE INSURANCE PRODUCTS V STRATEGIC
  INCOME PORTFOLIO

  	
   

  	
  98,155.28

  	
   

  
	
  FLAGSHIP CLO III

  	
   

  	
  1,157,250.77

  	
   

  
	
  FLAGSHIP CLO IV

  	
   

  	
  966,817.10

  	
   

  
	
  FLAGSHIP CLO V

  	
   

  	
  1,928,751.29

  	
   

  
	
  FLAGSHIP CLO VI

  	
   

  	
  1,555,208.32

  	
   

  
	
  FLATIRON CLO 2007-1 LTD

  	
   

  	
  1,351,092.68

  	
   

  
	
  FM LEVERAGED CAPITAL FUND II

  	
   

  	
  393,622.71

  	
   

  
	
  FOREST CREEK CLO LTD

  	
   

  	
  0.10

  	
   

  
	
  FORTIS CAPITAL CORPORATION

  	
   

  	
  15,682,129.55

  	
   

  
	
  FOUNDERS GROVE CLO LTD

  	
   

  	
  557,442.11

  	
   

  
	
  FOXE BASIN CLO 2003, LTD.

  	
   

  	
  1,543,001.03

  	
   

  
	
  FOXHILL OPPORTUNITY MASTER FUND LP

  	
   

  	
  1,760,095.66

  	
   

  
	
  FRANKLIN 4194 STRATEGIC SERIES STRATEGICINCOME
  FUND

  	
   

  	
  0.02

  	
   

  
	
  FRANKLIN 4472 TEMPLETON LTD DURATION INCOME TRUST

  	
   

  	
  0.02

  	
   

  

 

 

	
  FRANKLIN 4884 TEMPLETON VAR INSURANCE PRODUCTS
  TR-STRATEGIC INCOME SECURITIES FD

  	
   

  	
  0.01

  	
   

  
	
  FRANKLIN INCOME FUND

  	
   

  	
  27,503,637.70

  	
   

  
	
  FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS
  TRUST - FRANKLIN INCOME SECURITIES FUND

  	
   

  	
  3,148,981.69

  	
   

  
	
  FRASER SULLIVAN CLO I LTD

  	
   

  	
  3,857,502.58

  	
   

  
	
  FRASER SULLIVAN CLO II LTD

  	
   

  	
  3,857,502.58

  	
   

  
	
  FREDDIE MAC FOUNDATION

  	
   

  	
  19,507.00

  	
   

  
	
  FRIEDBERGMILSTEIN PRIVATE CAPITAL FUND I

  	
   

  	
  1,180,868.14

  	
   

  
	
  G E BUSINESS FINANCIAL SERVICE FKA MERRILL LYNCH
  CAPITAL

  	
   

  	
  4,629,003.09

  	
   

  
	
  GALAXY CLO 2003-1 LIMITED

  	
   

  	
  1,161,147.24

  	
   

  
	
  GALAXY III CLO LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  GALAXY IV CLO LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  GALAXY V CLO LTD

  	
   

  	
  1,550,793.96

  	
   

  
	
  GALAXY VI CLO LTD

  	
   

  	
  1,550,793.96

  	
   

  
	
  GALAXY VII CLO LTD

  	
   

  	
  1,336,128.24

  	
   

  
	
  GALAXY VIII CLO LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  GALAXY X CLO LTD

  	
   

  	
  1,558,586.90

  	
   

  
	
  GALE FORCE 1 CLO, LTD.

  	
   

  	
  1,161,127.65

  	
   

  
	
  GALE FORCE 2 CLO, LTD.

  	
   

  	
  1,163,085.68

  	
   

  
	
  GALE FORCE 3 CLO, LTD.

  	
   

  	
  1,163,066.10

  	
   

  
	
  GALE FORCE 4 CLO, LTD.

  	
   

  	
  2,341,019.28

  	
   

  
	
  GALLATIN CLO II 2005-1LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  GALLATIN CLO III 2007-1 LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  GALLATIN FUNDING I BSC MIGR

  	
   

  	
  1,157,250.77

  	
   

  
	
  GANNETT PEAK CLO I, LTD.

  	
   

  	
  3,844,155.91

  	
   

  
	
  GATEWAY CLO LIMITED

  	
   

  	
  1,941,417.49

  	
   

  
	
  GENERAL ELECTRIC CAPITAL CORPORATION

  	
   

  	
  94,477,716.60

  	
   

  
	
  GENERAL ELECTRIC PENSION TRUST

  	
   

  	
  2,679,639.19

  	
   

  
	
  GENESIS CLO 2007-1 LTD

  	
   

  	
  2,045,251.73

  	
   

  
	
  GENESIS CLO 2007-2 LTD

  	
   

  	
  7,793,331.70

  	
   

  
	
  GOLDENTREE LOAN OPPORTUNITIES III, LIMITED

  	
   

  	
  935,152.13

  	
   

  
	
  GOLDENTREE LOAN OPPORTUNITIES IV LIMITED

  	
   

  	
  935,152.13

  	
   

  
	
  GOLDMAN SACHS

  	
   

  	
  18,162,436.24

  	
   

  
	
  GOLDMAN SACHS ASSET MANAGEMENT CLO PLC

  	
   

  	
  1,136,638.16

  	
   

  
	
  GOLDMAN SACHS COLLECTIVE TRUST HIGH YIELD
  IMPLEMENTATION VEHICLE

  	
   

  	
  1,243,885.97

  	
   

  
	
  GOLDMAN SACHS CORPORATE CREDIT INVESTMENT FUND

  	
   

  	
  330,460.18

  	
   

  
	
  GOLDMAN SACHS CORPORATE CREDIT INVESTMENT FUND,
  LLC

  	
   

  	
  591,990.02

  	
   

  
	
  GOLDMAN SACHS GLOBAL OPPORTUNITIES FUNDLLC

  	
   

  	
  488,877.14

  	
   

  

 

 

	
  GOLDMAN SACHS LENDING PARTNERS LLC

  	
   

  	
  40,917,130.96

  	
   

  
	
  GOLDMAN SACHS LIQUIDITY PARTNERS 2007 LP

  	
   

  	
  1,412,578.38

  	
   

  
	
  GOLDMAN SACHS LIQUIDITY PARTNERS 2007
  OFFSHORE  L P

  	
   

  	
  934,652.07

  	
   

  
	
  GOLDMAN SACHS PALMETTO STATE CREDIT FUND, LP

  	
   

  	
  733,905.43

  	
   

  
	
  GOLDMAN SACHS-ABS LOANS 2007 LTD

  	
   

  	
  2,176,169.55

  	
   

  
	
  GRACIE CREDIT OPPORTUNITIES MASTER FUND, L.P.

  	
   

  	
  12,975,123.66

  	
   

  
	
  GRAND CENTRAL ASSET TRUST WAM SERIES

  	
   

  	
  1,168,940.17

  	
   

  
	
  GRAND HORN CLO LTD

  	
   

  	
  2,891,178.71

  	
   

  
	
  GRANT GROVE CLO LTD

  	
   

  	
  557,442.11

  	
   

  
	
  GRAYSTON CLO II 2004-1 LTD

  	
   

  	
  1,546,877.91

  	
   

  
	
  GREENLIGHT CAPITAL OFFSHORE, LTD

  	
   

  	
  3,039,633.51

  	
   

  
	
  GREENLIGHT CAPITAL QUALIFIED, LP

  	
   

  	
  2,118,387.29

  	
   

  
	
  GREENLIGHT CAPITAL, LP

  	
   

  	
  500,017.92

  	
   

  
	
  GREENLIGHT REINSURANCE, LTD

  	
   

  	
  935,145.00

  	
   

  
	
  GREENS CREEK FUNDING LTD

  	
   

  	
  3,471,752.32

  	
   

  
	
  GREYROCK CDO LTD

  	
   

  	
  965,833.13

  	
   

  
	
  GS GLOBAL OPPORTUNITIES FUND OFFSHORE LTD

  	
   

  	
  1,435,364.47

  	
   

  
	
  GSAM-GOLDMAN SACHS CREDIT STRATEGIES FUND

  	
   

  	
  253,420.38

  	
   

  
	
  GSC GROUP CDO FUND VIII LIMITED

  	
   

  	
  1,581,576.05

  	
   

  
	
  GSC INVESTMENT CORP CLO. 2007, LTD

  	
   

  	
  2,333,954.44

  	
   

  
	
  HAKONE FUND II LLC

  	
   

  	
  1,012,594.43

  	
   

  
	
  HALCYON LOAN INVESTORS CLO I, LTD.

  	
   

  	
  922,965.73

  	
   

  
	
  HALCYON LOAN INVESTORS CLO II, LTD.

  	
   

  	
  1,543,001.03

  	
   

  
	
  HARTFORD MUTUAL FUNDS INC-THE HARTFORD
  FLOATING  RATE FUND

  	
   

  	
  3,472,045.62

  	
   

  
	
  HEWETT S ISLAND CLO VII LTD

  	
   

  	
  967,756.94

  	
   

  
	
  HEWETTS ISLAND CLO II LTD

  	
   

  	
  771,500.52

  	
   

  
	
  HEWETT’S ISLAND CLO III LTD

  	
   

  	
  1,550,873.49

  	
   

  
	
  HEWETT’S ISLAND CLO I-R LTD

  	
   

  	
  275,912.81

  	
   

  
	
  HEWETT’S ISLAND CLO IV LTD

  	
   

  	
  1,544,894.41

  	
   

  
	
  HIGHBRIDGE INTERNATIONAL LLC

  	
   

  	
  5,068,407.68

  	
   

  
	
  HILLMARK FUNDING LTD

  	
   

  	
  4,629,003.09

  	
   

  
	
  HISCOX INSURANCE COMPANY (BERMUDA) LTD

  	
   

  	
  97,658.29

  	
   

  
	
  HISCOX SYNDICATE 33

  	
   

  	
  97,658.29

  	
   

  
	
  HOUSTON POLICE OFFICERS’ PENSION SYSTEM

  	
   

  	
  196,310.56

  	
   

  
	
  HUDSON INSURANCE COMPANY

  	
   

  	
  11,162,156.09

  	
   

  
	
  HUDSON STRAITS CLO 2004, LTD.

  	
   

  	
  210,423.27

  	
   

  
	
  IHC HEALTH SERVICES INC

  	
   

  	
  77,150.05

  	
   

  

 

 

	
  ILLINOIS MUNICIPAL RETIREMENT FUND

  	
   

  	
  259,129.95

  	
   

  
	
  ILLINOIS STATE BOARD OF INVESTMENT

  	
   

  	
  886,642.60

  	
   

  
	
  ING CAPITAL LLC

  	
   

  	
  1,968,113.56

  	
   

  
	
  ING FRANKLIN INCOME PORTFOLIO

  	
   

  	
  787,245.42

  	
   

  
	
  ING GIS DISTRESSED FUND SPC - ING CORPORATE
  OPPORTUNITIES SEGREGATED PORTFOLIO

  	
   

  	
  16,053,005.94

  	
   

  
	
  ING INTERNATIONAL (II) -SENIOR BANK LOANS
  EURO

  	
   

  	
  28,076,774.53

  	
   

  
	
  ING INVESTMENT MANAGEMENT CLO I LTD

  	
   

  	
  1,969,572.05

  	
   

  
	
  ING INVESTMENT MANAGEMENT CLO II LTD

  	
   

  	
  1,740,741.86

  	
   

  
	
  ING INVESTMENT MANAGEMENT CLO III LTD

  	
   

  	
  1,937,530.67

  	
   

  
	
  ING INVESTMENT MANAGEMENT CLO IV LTD

  	
   

  	
  2,092,362.35

  	
   

  
	
  ING INVESTMENT MANAGEMENT CLO V LTD

  	
   

  	
  1,939,459.43

  	
   

  
	
  ING INVESTMENT TRUST CO. PLAN FOR EMPLOYEE BENEFIT
  INVESTMENT FUNDS - SENIOR LOAN FUND

  	
   

  	
  981,059.65

  	
   

  
	
  ING PRIME RATE TRUST

  	
   

  	
  8,615,030.73

  	
   

  
	
  ING PIMCO HIGH YIELD PORTFOLIO

  	
   

  	
  584,470.09

  	
   

  
	
  ING SENIOR INCOME FUND

  	
   

  	
  10,991,096.46

  	
   

  
	
  INWOOD PARK CDO LTD.

  	
   

  	
  5,786,253.86

  	
   

  
	
  IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM

  	
   

  	
  289,312.69

  	
   

  
	
  J P MORGAN DISTRESSED DEBT OPPORTUNITIES  FUND LLC

  	
   

  	
  73,410.41

  	
   

  
	
  JANA MASTER FUND LTD

  	
   

  	
  32,548,893.82

  	
   

  
	
  JANA NIRVANA FUND LP

  	
   

  	
  3,675,649.80

  	
   

  
	
  JANA NIRVANA MASTER FUND LP

  	
   

  	
  4,632,048.63

  	
   

  
	
  JERSEY STREET CLO, LTD.

  	
   

  	
  1,184,545.25

  	
   

  
	
  JFIN CLO 2007 LTD.

  	
   

  	
  1,163,066.10

  	
   

  
	
  JOHN HANCOCK II HIGH YIELD FUND 

  	
   

  	
  1,289,616.70

  	
   

  
	
  JOHN HANCOCK FUND II FLOATING RATE INCOME FUND 

  	
   

  	
  3,277,467.46

  	
   

  
	
  JOHN HANCOCK FUNDS II HIGH INCOME FUND

  	
   

  	
  6,097,057.07

  	
   

  
	
  JOHN HANCOCK FUNDS II STRATEGIC INCOME FUND

  	
   

  	
  2,040,434.02

  	
   

  
	
  JOHN HANCOCK HIGH YIELD FUND

  	
   

  	
  1,177,863.38

  	
   

  
	
  JOHN HANCOCK STRATEGIC INCOME FUND

  	
   

  	
  2,698,257.95

  	
   

  
	
  JOHN HANCOCK STRATEGIC INCOME FUND

  	
   

  	
  2,834,253.57

  	
   

  
	
  JOHN HANCOCK TRUST HIGH INCOME TRUST

  	
   

  	
  7,430,618.96

  	
   

  

 

 

	
  JOHN HANCOCK TRUST - HIGH YIELD TRUST

  	
   

  	
  2,467,479.89

  	
   

  
	
  JOHN HANCOCK TRUST FLOATING RATE INCOME TRUST

  	
   

  	
  3,308,402.28

  	
   

  
	
  JOHN HANCOCK TRUST - INCOME TRUST

  	
   

  	
  590,434.07

  	
   

  
	
  JOHN HANCOCK TRUST STRATEGIC INCOME TRUST

  	
   

  	
  3,112,829.23

  	
   

  
	
  JNL SERIES TRUST - JNL/FRANKLIN TEMPLETON INCOME
  FUND

  	
   

  	
  787,245.42

  	
   

  
	
  J. P. MORGAN WHITEFRIARS INC.

  	
   

  	
  1,824,626.76

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  	
  25,539,720.29

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.

  	
   

  	
  49,108,124.26

  	
   

  
	
  JPMORGAN CHASE BANK NA AS TRUSTEE OF THE JPMORGAN
  CHASE RETIREMENT PLAN

  	
   

  	
  14,682.16

  	
   

  
	
  JPMORGAN CORE PLUS BOND FUND

  	
   

  	
  951,522.55

  	
   

  
	
  JPMORGAN HIGH YIELD FUND

  	
   

  	
  9,448,909.99

  	
   

  
	
  JPMORGAN STRATEGIC INCOME OPPORTUNITIESFUND

  	
   

  	
  4,611,202.03

  	
   

  
	
  KATONAH III LTD

  	
   

  	
  1,639,438.59

  	
   

  
	
  KATONAH IV LIMITED

  	
   

  	
  1,350,125.90

  	
   

  
	
  KATONAH VII 
  LTD

  	
   

  	
  149,528.33

  	
   

  
	
  KATONAH VIII CLO LTD

  	
   

  	
  468,386.88

  	
   

  
	
  KATONAH X CLO LTD

  	
   

  	
  781,266.34

  	
   

  
	
  KING STREET ACQUISITION COMPANY, LLC

  	
   

  	
  405,472.62

  	
   

  
	
  KKR FINANCIAL CLO 2005-2 LTD

  	
   

  	
  2,700,251.80

  	
   

  
	
  KKR FINANCIAL CLO 2007-1 LTD

  	
   

  	
  7,655,748.29

  	
   

  
	
  KKR FINANCIAL CLO 2007-A LTD

  	
   

  	
  7,773,304.94

  	
   

  
	
  LANDMARK III CDO LIMITED

  	
   

  	
  965,833.13

  	
   

  
	
  LANDMARK IV CDO LIMITED

  	
   

  	
  385,750.26

  	
   

  
	
  LANDMARK IX CDO LTD

  	
   

  	
  1,925,850.92

  	
   

  
	
  LANDMARK V CDO LIMITED

  	
   

  	
  771,500.52

  	
   

  
	
  LANDMARK VI CDO LIMITED

  	
   

  	
  965,833.13

  	
   

  
	
  LANDMARK VII CDO LTD

  	
   

  	
  772,958.00

  	
   

  
	
  LANDMARK VIII CLO LTD

  	
   

  	
  1,160,165.76

  	
   

  
	
  LEGG MASON PARTNERS ADJUSTABLE RATE INCOME
  FUND   

  	
   

  	
  387,688.71

  	
   

  
	
  LEGG MASON PARTNERS VARIABLE ADJUSTABLE RATE
  INCOME PORTFOLIO

  	
   

  	
  193,844.35

  	
   

  
	
  LEGG MASON PARTNERS GLOBAL HIGH YIELD BOND FUND

  	
   

  	
  392,621.13

  	
   

  
	
  LEGG MASON PARTNERS HIGH INCOME FUND 

  	
   

  	
  392,621.13

  	
   

  
	
  LEHMAN COMMERCIAL PAPER INCORPORATED

  	
   

  	
  26,835,569.57

  	
   

  
	
  LIBERTY HARBOR MASTER FUND I L P

  	
   

  	
  5,098,534.70

  	
   

  
	
  LOAN FUNDING III DELAWARE LLC

  	
   

  	
  2,700,251.80

  	
   

  
	
  LOAN FUNDING V LLC

  	
   

  	
  2,318,398.01

  	
   

  
	
  LOAN FUNDING VI LLC

  	
   

  	
  3,086,002.06

  	
   

  

 

 

	
  LOAN FUNDING XI LLC

  	
   

  	
  1,928,751.29

  	
   

  
	
  LOAN FUNDING XIII LLC

  	
   

  	
  1,941,417.45

  	
   

  
	
  LOAN STRATEGIES FUNDING LLC

  	
   

  	
  1,493,000.54

  	
   

  
	
  LOGAN - CITY OF ORLANDO

  	
   

  	
  58,594.97

  	
   

  
	
  LOGAN CIRCLE - ALAMEDA CONTRA COSTA TRANSIT
  RETIREMENT SYSTEM

  	
   

  	
  122,695.81

  	
   

  
	
  LOGAN CIRCLE - ALLINA HEALTH SYSTEM TRUST

  	
   

  	
  77,589.03

  	
   

  
	
  LOGAN CIRCLE - RUSSELL INVESTMENT COMPANY FIXED
  INCOME II

  	
   

  	
  44,863.62

  	
   

  
	
  LOGAN CIRCLE - RUSSELL MULTI-MANAGED BOND FUND

  	
   

  	
  2,573,345.34

  	
   

  
	
  LOGAN CIRCLE - WALT DISNEY COMPANY RETIREMENT PLAN
  MASTER TRUST

  	
   

  	
  285,188.36

  	
   

  
	
  LOGAN CIRCLE - WISCONSIN PUBLIC SERVICECORPORATION
  PENSION TRUST

  	
   

  	
  77,589.03

  	
   

  
	
  LOGAN CIRCLE-RUSSELL INST FUNDS LLC- RUSSELL CORE
  BOND FUND

  	
   

  	
  240,763.70

  	
   

  
	
  LOGAN CIRCLE-RUSSELL LONG DURATION FIXED INCOME
  FUND

  	
   

  	
  407,979.85

  	
   

  
	
  LOMBARD GENERAL INSURANCE COMPANY OF CANADA

  	
   

  	
  22,065,653.28

  	
   

  
	
  LOOMIS APOSTLE LOOMIS SAYLES SENIOR LOANFUND

  	
   

  	
  1,115,578.99

  	
   

  
	
  LOOMIS SAYLES CLO I LTD

  	
   

  	
  2,555,350.69

  	
   

  
	
  LOOMIS SAYLES FIXED INCOME FUND

  	
   

  	
  652,808.51

  	
   

  
	
  LOOMIS SAYLES FUNDS I- LOOMIS SAYLES BOND FUND
  1440N6

  	
   

  	
  17,196,026.03

  	
   

  
	
  LOOMIS SAYLES FUNDS II- LOOMIS SAYLES STRATEGIC
  INCOME FUND

  	
   

  	
  12,213,179.50

  	
   

  
	
  LOOMIS SAYLES GLOBAL MARKETS FUND

  	
   

  	
  64,494.13

  	
   

  
	
  LOOMIS SAYLES HIGH INCOME FD

  	
   

  	
  395,696.28

  	
   

  
	
  LOOMIS SAYLES INSTITUTIONAL HIGH INCOME FUND

  	
   

  	
  207,184.29

  	
   

  
	
  LOOMIS SAYLES LEVERAGED SENIOR LOAN FUND LTD

  	
   

  	
  582,021.33

  	
   

  
	
  LOOMIS SAYLES SENIOR LOAN FUND LLC

  	
   

  	
  1,587,587.81

  	
   

  
	
  LOS ANGELES COUNTY EMPLOYEE RETIREMENT ASSOCATION

  	
   

  	
  195,812.31

  	
   

  
	
  LOUISIANA STATE EMPLOYEES’ RETIREMENT SYSTEM

  	
   

  	
  1,149,772.67

  	
   

  
	
  LOYALIS SCHADE NV

  	
   

  	
  29,076.66

  	
   

  
	
  MACKAY SHIELDS CORE PLUS ALPHA FUND LTD

  	
   

  	
  196,310.56

  	
   

  
	
  MACKAY SHORT DURATION ALPHA FUND

  	
   

  	
  372,990.07

  	
   

  
	
  MACKENZIE CUNDILL RECOVERY FUND

  	
   

  	
  3,936,227.12

  	
   

  

 

 

	
  MACKENZIE CUNDILL VALUE FUND

  	
   

  	
  33,587,825.99

  	
   

  
	
  MADISON PARK FUNDING I LTD

  	
   

  	
  771,500.52

  	
   

  
	
  MADISON PARK FUNDING II LTD

  	
   

  	
  3,355,348.68

  	
   

  
	
  MADISON PARK FUNDING III LTD

  	
   

  	
  1,165,995.77

  	
   

  
	
  MADISON PARK FUNDING IV LTD

  	
   

  	
  1,342,253.45

  	
   

  
	
  MADISON PARK FUNDING V LTD

  	
   

  	
  740,010.70

  	
   

  
	
  MADISON PARK FUNDING VI LTD

  	
   

  	
  936,822.05

  	
   

  
	
  MAINSTAY FLOATING RATE FUND, A SERIES OF ECLIPSE
  FUNDS INC.

  	
   

  	
  1,144,650.89

  	
   

  
	
  MAINSTAY VP FLOATING RATE PORTFOLIO, A SERIES OF
  MAINSTAY VP SERIES FUND, INC.

  	
   

  	
  763,132.66

  	
   

  
	
  MALIBU CBNA LOAN FUNDING LLC

  	
   

  	
  5,408,257.38

  	
   

  
	
  MARATHON BLUE ACTIVE FUND LTD

  	
   

  	
  1,500,248.67

  	
   

  
	
  MARATHON CREDIT DISLOCATION FUND LP

  	
   

  	
  5,654,315.61

  	
   

  
	
  MARATHON CREDIT MASTER FUND LTD.

  	
   

  	
  1,534,852.49

  	
   

  
	
  MARATHON CREDIT OPPORTUNITY MASTER FUND LTD.

  	
   

  	
  2,988,471.81

  	
   

  
	
  MARATHON LIQUID CREDIT LONG SHORT FUND

  	
   

  	
  527,114.40

  	
   

  
	
  MARATHON SPECIAL OPPORTUNITY MASTER FUNDLIMITED

  	
   

  	
  29,470,439.87

  	
   

  
	
  MARLBOROUGH STREET CLO, LTD.

  	
   

  	
  1,161,735.08

  	
   

  
	
  MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

  	
   

  	
  882,229.50

  	
   

  
	
  MAYPORT CLO LTD

  	
   

  	
  3,086,002.06

  	
   

  
	
  MERRILL LYNCH CAPITAL SERVICES INC

  	
   

  	
  24,731,171.60

  	
   

  
	
  MERRILL LYNCH CAPITAL SERVICES, INC.

  	
   

  	
  772,313.29

  	
   

  
	
  MET/FRANKLIN INCOME PORTFOLIO

  	
   

  	
  118,755.86

  	
   

  
	
  METLIFE BANK, NATIONAL ASSOCIATION

  	
   

  	
  7,715,005.15

  	
   

  
	
  METROPOLITAN LIFE INSURANCE COMPANY

  	
   

  	
  19,297,205.10

  	
   

  
	
  METROPOLITAN WEST HIGH YIELD BOND FUND

  	
   

  	
  2,717,009.15

  	
   

  
	
  MJX VENTURE IV CDO LIMITED

  	
   

  	
  1,350,611.72

  	
   

  
	
  MONARCH MASTER FUNDING LTD

  	
   

  	
  7,459,211.17

  	
   

  
	
  MONUMENT PARK CDO LTD.

  	
   

  	
  5,786,253.86

  	
   

  
	
  MSIM CROTON, LTD.

  	
   

  	
  404,602.93

  	
   

  
	
  MORGAN STANLEY PRIME INCOME TRUST

  	
   

  	
  627,274.28

  	
   

  
	
  MORGAN STANLEY SENIOR FUNDING, INC.

  	
   

  	
  17,697,318.19

  	
   

  
	
  MOUNTAIN CAPITAL CLO III LTD.

  	
   

  	
  1,551,810.35

  	
   

  
	
  MOUNTAIN CAPITAL CLO IV LTD.

  	
   

  	
  1,546,877.91

  	
   

  
	
  MOUNTAIN CAPITAL CLO V LTD.

  	
   

  	
  1,164,121.64

  	
   

  
	
  MOUNTAIN CAPITAL CLO VI LTD.

  	
   

  	
  1,159,189.22

  	
   

  

 

 

	
  MOUNTAIN VIEW CLO II LTD

  	
   

  	
  1,928,751.29

  	
   

  
	
  MOUNTAIN VIEW CLO III LTD

  	
   

  	
  2,314,501.54

  	
   

  
	
  MOUNTAIN VIEW FUNDING CLO 2006-1 LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  MSIM PECONIC BAY, LTD.

  	
   

  	
  957,330.35

  	
   

  
	
  MT. WILSON CLO II, LTD.

  	
   

  	
  1,543,001.03

  	
   

  
	
  MT. WILSON CLO, LTD.

  	
   

  	
  1,548,875.40

  	
   

  
	
  MUIR GROVE CLO LTD

  	
   

  	
  929,070.18

  	
   

  
	
  NACM CLO I

  	
   

  	
  1,157,250.77

  	
   

  
	
  NACM CLO II

  	
   

  	
  1,356,910.45

  	
   

  
	
  NANTUCKET CLO I LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  NATIONAL RAILROAD RETIREMENT INVESTMENT TRUST

  	
   

  	
  626,639.68

  	
   

  
	
  NAVIGARE FUNDING I CLO LTD

  	
   

  	
  627,704.71

  	
   

  
	
  NAVIGARE FUNDING II CLO LTD

  	
   

  	
  752,114.66

  	
   

  
	
  NAVIGARE FUNDING III CLO LTD

  	
   

  	
  1,254,768.37

  	
   

  
	
  NAVIGATOR CDO 2003 LTD

  	
   

  	
  925,800.62

  	
   

  
	
  NAVIGATOR CDO 2004 LTD

  	
   

  	
  1,041,525.70

  	
   

  
	
  NAVIGATOR CDO 2005 LTD

  	
   

  	
  1,041,525.70

  	
   

  
	
  NAVIGATOR CDO 2006 LTD

  	
   

  	
  848,650.56

  	
   

  
	
  NCRAM LOAN TRUST

  	
   

  	
  267,998.67

  	
   

  
	
  NCRAM SENIOR LOAN TRUST 2005

  	
   

  	
  315,890.44

  	
   

  
	
  NEW YORK LIFE INSURANCE AND ANNUITY CO RPORATION

  	
   

  	
  2,889,553.15

  	
   

  
	
  NEW YORK LIFE INSURANCE COMPANY

  	
   

  	
  2,956,575.44

  	
   

  
	
  NEW YORK LIFE INSURANCE COMPANY (GUARANTEED
  PRODUCTS)

  	
   

  	
  235,572.68

  	
   

  
	
  NEW YORK LIFE INSURANCE COMPANY, GP-PORTABLE ALPHA

  	
   

  	
  372,990.07

  	
   

  
	
  NEWSTART FACTORS, INC.

  	
   

  	
  19,398,064.64

  	
   

  
	
  NOB HILL CLO II, LIMITED

  	
   

  	
  1,543,001.03

  	
   

  
	
  NOB HILL CLO, LIMITED

  	
   

  	
  1,543,001.03

  	
   

  
	
  NOMURA BOND AND LOAN FUND

  	
   

  	
  63,666.25

  	
   

  
	
  NORMANDY HILL MASTER FUND L P

  	
   

  	
  3,243,780.91

  	
   

  
	
  NUVEEN DIVERSIFIED DIVIDEND AND INCOME FUND

  	
   

  	
  771,500.52

  	
   

  
	
  NUVEEN FLOATING RATE INCOME FUND

  	
   

  	
  3,086,002.06

  	
   

  
	
  NUVEEN FLOATING RATE INCOME OPPORTUNITY FUND

  	
   

  	
  1,928,751.29

  	
   

  
	
  NUVEEN MULTI-STRATEGY INCOME AND GROWTH FUND

  	
   

  	
  381,873.38

  	
   

  
	
  NUVEEN MULTI-STRATEGY INCOME AND GROWTH FUND 2

  	
   

  	
  387,688.71

  	
   

  
	
  NUVEEN SENIOR INCOME FUND

  	
   

  	
  1,157,250.77

  	
   

  
	
  NUVEEN TAX ADVANTAGED TOTAL RETURN STRATEGY FUND

  	
   

  	
  771,500.52

  	
   

  
	
  NYLIM FLATIRON CLO 2003-1 LTD. A CAYMAN ISLANDS
  LLC

  	
   

  	
  1,350,609.30

  	
   

  
	
  NYLIM FLATIRON CLO 2004-1 LTD.

  	
   

  	
  1,351,576.09

  	
   

  
	
  NYLIM FLATIRON CLO 2005-1 LTD.

  	
   

  	
  1,159,189.22

  	
   

  

 

 

	
  NYLIM FLATIRON CLO 2006-1 LTD.

  	
   

  	
  2,314,501.54

  	
   

  
	
  NYLIM INSTITUTIONAL FLOATING RATE FUND L.P.

  	
   

  	
  385,750.26

  	
   

  
	
  OAK HILL CREDIT PARTNER II, LIMITED

  	
   

  	
  1,318,946.01

  	
   

  
	
  OAK HILL CREDIT PARTNER IV, LIMITED

  	
   

  	
  1,375,489.91

  	
   

  
	
  OAK HILL CREDIT PARTNER V, LIMITED

  	
   

  	
  2,953,132.52

  	
   

  
	
  OCEAN TRAILS CLO I

  	
   

  	
  1,157,250.77

  	
   

  
	
  OCEAN TRAILS CLO II

  	
   

  	
  1,543,001.03

  	
   

  
	
  ODYSSEY AMERICA REINSURANCE CORPORATION

  	
   

  	
  28,672,438.73

  	
   

  
	
  OHA PARK AVENUE CLO I, LTD.

  	
   

  	
  1,355,609.42

  	
   

  
	
  ONE WALL STREET CLO II

  	
   

  	
  1,928,751.29

  	
   

  
	
  OSPREY CDO 2006-1 LTD.

  	
   

  	
  83,006.58

  	
   

  
	
  OWS CLO 1 LTD

  	
   

  	
  771,500.52

  	
   

  
	
  PACHOLDER HIGH YIELD FUND INC

  	
   

  	
  314,544.01

  	
   

  
	
  PACIFIC LIFE INSURANCE COMPANY

  	
   

  	
  1,296,803.53

  	
   

  
	
  PACIFICA CDO II LIMITED

  	
   

  	
  771,500.52

  	
   

  
	
  PACIFICA CDO III LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  PACIFICA CDO VI LTD

  	
   

  	
  2,314,501.54

  	
   

  
	
  PAULSON ADVANTAGE MASTER LTD

  	
   

  	
  25,458,595.45

  	
   

  
	
  PAULSON ADVANTAGE PLUS MASTER LTD

  	
   

  	
  61,274,608.37

  	
   

  
	
  PAULSON ADVANTAGE SELECT MASTER FUND LTD

  	
   

  	
  533,272.42

  	
   

  
	
  PAULSON CREDIT OPPORTUNITIES MASTER LTD.

  	
   

  	
  89,804,745.54

  	
   

  
	
  PCI FUND L.L.C.

  	
   

  	
  815,942.78

  	
   

  
	
  PEOPLES ENERGY CORPORATION PENSION TRUST

  	
   

  	
  58,082.03

  	
   

  
	
  PIMCO FLOATING INCOME FUND 724

  	
   

  	
  360,393.26

  	
   

  
	
  PIMCO1241-PRUDENTIAL SERIES FUND INCORPORATED

  	
   

  	
  584,470.09

  	
   

  
	
  PIMCO196-IHC PENSION PLAN INTERMOUNTAINHEALTH

  	
   

  	
  192,875.13

  	
   

  
	
  PIMCO2075-GREYHOUND LINES INC AMALGAMATED TRANSIT
  UNION

  	
   

  	
  115,725.08

  	
   

  
	
  PIMCO2498-INCOME OPPORTUNITY FUND

  	
   

  	
  777,330.50

  	
   

  
	
  PIMCO2980-CALIFORNIA PUBLIC EMPLOYEES RETIREMENT
  SYSTEM

  	
   

  	
  389,646.73

  	
   

  
	
  PIMCO3813 - PIMCO CAYMAN BANK LOAN FUND

  	
   

  	
  386,717.04

  	
   

  
	
  PIMCO40-BELL ATLANTIC MASTER TRUST

  	
   

  	
  694,350.46

  	
   

  
	
  PIMCO432-MAINE STATE RETIREMENT SYSTEM

  	
   

  	
  578,625.39

  	
   

  
	
  PIMCO6180-MO PSRS- FLOATING INCOME

  	
   

  	
  580,075.57

  	
   

  
	
  PIMCO705-PIMCO HIGH YIELD FUND

  	
   

  	
  3,117,173.80

  	
   

  
	
  PIMCO706- PRIVATE HIGH YIELD PORTFOLIO

  	
   

  	
  779,293.45

  	
   

  

 

 

	
  PIMCO-PACIFIC SER TR-PACIFIC HIGH GRADE FUND-2812

  	
   

  	
  77,150.05

  	
   

  
	
  PINEHURST TRADING INC

  	
   

  	
  23,356.93

  	
   

  
	
  PORTOLA CLO LTD

  	
   

  	
  3,103,477.38

  	
   

  
	
  PPM GRAYHAWK CLO LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  PPM MONARCH BAY FUNDING LLC

  	
   

  	
  617,200.41

  	
   

  
	
  PRIMUS CLO I LTD

  	
   

  	
  1,542,014.58

  	
   

  
	
  PRIMUS CLO II LTD

  	
   

  	
  1,146,339.82

  	
   

  
	
  PRINCIPAL FUNDS, INC - HIGH YIELD FUND I

  	
   

  	
  673,706.38

  	
   

  
	
  PRINCIPAL GLOBAL STRATEGIC INCOME FUND

  	
   

  	
  385,750.26

  	
   

  
	
  PRINCIPAL LIFE INSURANCE COMPANY

  	
   

  	
  3,388,263.75

  	
   

  
	
  PRINCIPAL LIFE INSURANCE COMPANY

  	
   

  	
  12,206,102.88

  	
   

  
	
  PROSPECT PARK CDO LTD.

  	
   

  	
  3,857,502.58

  	
   

  
	
  PROSPERO CLO I BV

  	
   

  	
  289,312.69

  	
   

  
	
  PROSPERO CLO II B V

  	
   

  	
  578,625.38

  	
   

  
	
  PROTECTIVE LIFE INSURANCE COMPANY

  	
   

  	
  1,267,950.43

  	
   

  
	
  PRUDENTIAL HIGH YIELD FUND OF THE PRUDENTIAL TRUST
  COMPANY COLLECTIVE TRUST

  	
   

  	
  195,320.35

  	
   

  
	
  PRUDENTIAL INSURANCE COMPANY OF AMERICA

  	
   

  	
  6,878,170.88

  	
   

  
	
  PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY
  COMPANY

  	
   

  	
  4,371,479.79

  	
   

  
	
  PYRAMIS FLOATING RATE HIGH INCOME COMMINGLED POOL

  	
   

  	
  118,086.82

  	
   

  
	
  QUALCOMM GLOBAL TRADING, INC.

  	
   

  	
  1,735,876.16

  	
   

  
	
  RACE POINT CLO LIMITED

  	
   

  	
  1,380,098.68

  	
   

  
	
  RACE POINT II CLO, LIMITED

  	
   

  	
  2,121,626.42

  	
   

  
	
  REGATTA FUNDING LTD

  	
   

  	
  1,965,746.84

  	
   

  
	
  RIVERSIDE PARK CLO, LTD.

  	
   

  	
  3,040,838.51

  	
   

  
	
  RIVERSOURCE BOND SERIES, INC. - RIVERSOURCE
  FLOATING RATE FUND

  	
   

  	
  242,944.74

  	
   

  
	
  ROSEDALE CLO LTD.

  	
   

  	
  964,817.09

  	
   

  
	
  ROSEDALE CLO II LTD.

  	
   

  	
  960,940.21

  	
   

  
	
  ROYAL BANK OF CANADA-LONDON

  	
   

  	
  3,243,781.04

  	
   

  
	
  ROYAL BANK OF SCOTLAND PLC

  	
   

  	
  18,183,042.71

  	
   

  
	
  RUSSELL INVESTMENT COMPANY PLC

  	
   

  	
  130,694.42

  	
   

  
	
  RUSSELL SHORT DURATION BOND FUND

  	
   

  	
  95,581.82

  	
   

  
	
  RUSSELL STRATEGIC BOND FUND

  	
   

  	
  2,385,647.72

  	
   

  
	
  SANKATY HIGH YIELD PARTNERS II, L.P.

  	
   

  	
  4,551,853.04

  	
   

  
	
  SAPPHIRE VALLEY CDO I, LTD.

  	
   

  	
  2,314,501.54

  	
   

  
	
  SATELLITE SENIOR INCOME FUND II LLC

  	
   

  	
  1,171,914.57

  	
   

  
	
  SATELLITE SENIOR INCOME FUND LLC

  	
   

  	
  2,733,086.31

  	
   

  
	
  SCHULTZE MASTER FUND LTD

  	
   

  	
  3,816,017.43

  	
   

  

 

 

	
  SCHUULTZE APEX MASTER FUND LTD

  	
   

  	
  125,638.76

  	
   

  
	
  SEI INSTITUTIONAL MANAGED TRUST’S CORE FIXED
  INCOME

  	
   

  	
  388,665.25

  	
   

  
	
  SERVES 2006-1 LTD

  	
   

  	
  1,928,751.29

  	
   

  
	
  SHASTA CLO I LTD.

  	
   

  	
  1,145,442.09

  	
   

  
	
  SHINNECOCK CLO 2006-1 LTD

  	
   

  	
  1,157,250.77

  	
   

  
	
  SILVERADO CLO 2006-II LIMITED

  	
   

  	
  1,543,001.03

  	
   

  
	
  SOUTHERN UTE PERMANENT FUND

  	
   

  	
  165,719.50

  	
   

  
	
  SOUTHPORTCLO LTD

  	
   

  	
  2,314,501.54

  	
   

  
	
  STATE BANK OF INDIA

  	
   

  	
  5,894,304.97

  	
   

  
	
  STATE BOARD OF ADMINISTRATION OF FLORIDA

  	
   

  	
  1,562,532.69

  	
   

  
	
  STONE HARBOR LEVERAGED LOAN PORTFOLIO

  	
   

  	
  195,316.59

  	
   

  
	
  STONE HARBOR LIBOR PLUS TOTAL RETURN FUND

  	
   

  	
  193,358.53

  	
   

  
	
  SAN JOAQUIN COUNTY EMPLOYEE’S RETIREMENT
  ASSOCIATION

  	
   

  	
  385,750.26

  	
   

  
	
  STONE HARBOR STERLING CORE PLUS BOND FUND

  	
   

  	
  193,358.53

  	
   

  
	
  STONE TOWER CLO III LTD

  	
   

  	
  0.01

  	
   

  
	
  STONEY LANE FUNDING I LTD

  	
   

  	
  4,629,003.09

  	
   

  
	
  STRUCTURED ENHANCED RETURN VEHICLE TRUST, SERIES
  1998-1

  	
   

  	
  2,684,648.65

  	
   

  
	
  SUNOCO INC MASTER RETIREMENT TRUST

  	
   

  	
  209,547.58

  	
   

  
	
  SYMPHONY CLO I LTD

  	
   

  	
  765,566.51

  	
   

  
	
  SYMPHONY CLO II LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  SYMPHONY CLO III LTD

  	
   

  	
  1,543,001.03

  	
   

  
	
  SYMPHONY CLO IV LTD

  	
   

  	
  566,698.03

  	
   

  
	
  SYMPHONY CLO V LTD

  	
   

  	
  1,363,272.80

  	
   

  
	
  SYMPHONY CLO VI LTD

  	
   

  	
  1,171,884.38

  	
   

  
	
  SYMPHONY CREDIT OPPORTUNITIES FUND LTD

  	
   

  	
  405,472.61

  	
   

  
	
  TACONIC CAPITAL PARTNERS 1 5 L P

  	
   

  	
  7,755,732.04

  	
   

  
	
  TACONIC MARKET DISLOCATION FUND II LP

  	
   

  	
  1,614,038.07

  	
   

  
	
  TACONIC MARKET DISLOCATION MASTER FUND II LP

  	
   

  	
  375,408.44

  	
   

  
	
  TACONIC OPPORTUNITY FUND LP

  	
   

  	
  35,753,124.66

  	
   

  
	
  TEMPLETON 4290 GLOBAL INVESTMENT TRUST-INCOME FUND

  	
   

  	
  0.01

  	
   

  
	
  THE NORTH RIVER INSURANCE COMPANY

  	
   

  	
  9,302,997.69

  	
   

  
	
  THE ROYAL BANK OF SCOTLAND PLC NEW YORKBRANCH

  	
   

  	
  28,455,457.39

  	
   

  
	
  THOROUGHBRED FUND LP

  	
   

  	
  57,541,074.09

  	
   

  
	
  THRIVENT FINANCIAL FOR LUTHERANS

  	
   

  	
  2,717,736.95

  	
   

  
	
  TIG INSURANCE COMPANY

  	
   

  	
  7,085,208.81

  	
   

  
	
  TRALEE CDO I LTD

  	
   

  	
  1,735,876.16

  	
   

  
	
  TRANSAMERICA LIFE INSURANCE COMPANY

  	
   

  	
  389,646.73

  	
   

  

 

 

	
  THE TRAVELERS INDEMNITY COMPANY

  	
   

  	
  1,771,302.20

  	
   

  
	
  TRIBECA PARK CLO LTD.

  	
   

  	
  1,796,912.59

  	
   

  
	
  TRS BABSON I LLC

  	
   

  	
  2,322,230.88

  	
   

  
	
  UBS AG, STAMFORD BRANCH

  	
   

  	
  5,288,926.91

  	
   

  
	
  UBS (UK) PENSIONS AND LIFE ASSURANCE SCHEME

  	
   

  	
  195,316.59

  	
   

  
	
  UNITED OVERSEAS BANK LIMITED-NEW YORK

  	
   

  	
  9,823,841.61

  	
   

  
	
  VAN KAMPEN DYNAMIC CREDIT OPPORTUNITIES FUND

  	
   

  	
  1,527,091.24

  	
   

  
	
  VAN KAMPEN SENIOR INCOME TRUST

  	
   

  	
  503,157.26

  	
   

  
	
  VAN KAMPEN SENIOR LOAN FUND

  	
   

  	
  409,342.13

  	
   

  
	
  VEER CASH FLOW CLO LTD

  	
   

  	
  388,665.25

  	
   

  
	
  VENTURE II CDO 2002 LIMITED

  	
   

  	
  772,469.74

  	
   

  
	
  VENTURE III CDO LIMITED

  	
   

  	
  1,351,095.13

  	
   

  
	
  VENTURE IX CDO LIMITED

  	
   

  	
  290,037.78

  	
   

  
	
  VENTURE V CDO LTD

  	
   

  	
  1,350,125.90

  	
   

  
	
  VENTURE VI CDO LTD

  	
   

  	
  1,350,125.90

  	
   

  
	
  VENTURE VII CDO LIMITED

  	
   

  	
  1,349,642.50

  	
   

  
	
  VENTURE VIII CDO LIMITED

  	
   

  	
  1,351,095.13

  	
   

  
	
  VERITAS CLO I LTD

  	
   

  	
  578,625.38

  	
   

  
	
  VERITAS CLO II LTD

  	
   

  	
  482,187.82

  	
   

  
	
  VINACASA CLO, LTD.

  	
   

  	
  2,700,251.80

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  	
   

  	
  47,243,712.86

  	
   

  
	
  WATERFRONT CLO 2007-1, LTD.

  	
   

  	
  2,314,501.54

  	
   

  
	
  WAVELAND-INGOTS LTD

  	
   

  	
  2,314,501.54

  	
   

  
	
  WELLINGTON TRUST COMPANY, NATIONAL ASSOCIATION
  MULTIPLE COMMON TRUST FUNDS TRUST- OPPORTUNISTIC FIXED INCOME ALLOCATION
  PORTFOLIO

  	
   

  	
  390,633.17

  	
   

  
	
  WESTERN ASSET HIGH YIELD

  	
   

  	
  785,242.25

  	
   

  
	
  WESTERN ASSET HIGH INCOME OPPORTUNITY FUND INC.
  (HIO)

  	
   

  	
  392,621.13

  	
   

  
	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  	
   

  	
  23,832,465.10

  	
   

  
	
  WESTERN ASSET HIGH INCOME FUND II INC.

  	
   

  	
  785,242.25

  	
   

  
	
  WESTERN ASSET VARIABLE RATE STRATEGIC FUND INC.

  	
   

  	
  387,688.71

  	
   

  
	
  WESTERN ASSET CORE PLUS BOND PORTFOLIO

  	
   

  	
  385,750.26

  	
   

  
	
  WESTERN ASSET ABSOLUTE RETURN PORTFOLIO

  	
   

  	
  385,750.26

  	
   

  
	
  WESTERN ASSET MANAGED HIGH INCOME PORTFOLIO INC.

  	
   

  	
  392,621.13

  	
   

  
	
  WESTERN ASSET FLOATING RATE HIGH INCOME FUND, LLC

  	
   

  	
  11,087,532.27

  	
   

  
	
  WESTERN ASSET OPPORTUNISTIC US DOLLAR HIGH YIELD
  SECURITIES PORTFOLIO, LLC

  	
   

  	
  3,631,745.42

  	
   

  

 

 

	
  WESTLB AG - NEW YORK BRANCH-

  	
  775,377.39

  	
   

  
	
  WESTWOOD CDO I LTD

  	
  2,314,501.54

  	
   

  
	
  WESTWOOD CDO II LTD

  	
  1,163,066.10

  	
   

  
	
  WG HORIZONS CLO I

  	
  1,157,250.77

  	
   

  
	
  WHITEHORSE II LTD

  	
  1,350,609.30

  	
   

  
	
  WHITEHORSE IV LTD

  	
  1,735,876.16

  	
   

  
	
  WILFRID AUBREY GROWTH FUND LP

  	
  392,621.11

  	
   

  
	
  WILFRID AUBREY INTERNATIONAL LTD

  	
  785,242.24

  	
   

  
	
  WIND RIVER CLO I LTD.

  	
  3,844,155.91

  	
   

  
	
  WIND RIVER CLO II - TATE INVESTORS, LTD.

  	
  3,844,155.93

  	
   

  
	
  WINTERSET MASTER FUND LP

  	
  1,735,876.16

  	
   

  
	
  UBS AG

  	
  18,184,335.47

  	
   

  
	
  UMC BENEFIT BOARD, INC.

  	
  390,633.17

  	
   

  
	
  YORKVILLE CBNA LOAN FUNDING LLC

  	
  385,750.26

  	
   

  
	
  ZOHAR III, LIMITED

  	
  9,815,528.17

  	
   

  
	
   

  	
   

  	
   

  
	
  Total

  	
  $

  	
  2,750,000,000

  	
   

  
				

 

 

Schedule 3.05

 

Properties

 

*20 Lake Center

401 Route 73

Marlton, New Jersey 08053

Burlington County

 

*10200 Dr. Martin Luther King Jr. St. N.

St. Petersburg, Florida 33716

Pinellas County

 

*621 Mid Atlantic Parkway

Martinsburg, West Virginia 25401

Berkeley County

 

*3131 Katella Avenue

Los Alamitos, California 90720

Orange County

 

*
designates Mortgaged Properties

 

 

Schedule 3.06

 

Disclosed Matters

 

In October 2007, the
Company received a proposed assessment from the State of New York related to
sales and use tax on printing and mailing charges.  The proposed assessment relates to the audit
period March 1998 through May 2005. On May 5, 2008, the State of
New York issued a Notice of Determination to the Company for approximately $28
million. The Company filed its response on July 25, 2008 and any further
action has been stayed beyond the outcome of a related matter. On October 1,
2009, the Department issued another Notice of Determination for Sales and Use
Tax for the period June 2005 to June 2009, in the amount of
$15,344,139.02 in tax and $5,330,675.56 in interest and $5,511,938.34 in
penalties for a total due as of that date of $26,186,752.92. The tax allegedly
due as asserted by the Department is attributable to the Department’s
disallowance of the exemption from sales tax for the cost of certain
promotional materials i.e. the Verizon Yellow Page Directories. Idearc is
expected to file a Request for Conciliation Conference shortly, asserting its
disagreement with the Notice of Determination. The Company expects both matters
to remain on hold. The State of New York has also filed multiple proofs of
claims in the Bankruptcy Court.

 

In late December 2008,
the Company received tax assessments from the State of Washington related to
operating taxes allegedly due on the Company’s inter-company transactions.  The proposed assessments totaling
approximately $12.5 million relate to the audit period January 1, 2003
through June 30, 2008.  On February 19,
2009, the Company filed appeals to these assessments.  A first hearing on the Company’s appeals was
held on October 20, 2009, before a Washington administrative law
judge.  The Company does not expect a
ruling on its appeals before the first quarter of 2010.  The State of Washington has also filed
multiple proofs of claims in the Bankruptcy Court.

 

The Company was served with
a lawsuit on January 29, 2009, originally filed on January 13, 2009,
in the U.S. District Court for the Southern District of California.  The plaintiff in this case claims that the
Company used plaintiff’s copyrighted material without a license in multiple
publications across the country. 
Plaintiff seeks an injunction and both statutory and actual
damages.  This matter has been stayed by
Idearc’s petition for relief filed with the United States Bankruptcy Court on March 31,
2009.

 

On April 20, 2009, a
lawsuit was filed in the district court of Tarrant County, Texas, against
certain of the Company’s officers and directors (but not against the Company or
its subsidiaries) on behalf of Jack B. Corwin as Trustee of The Jack B. Corwin
Revocable Trust, and Charitable Remainder Stewardship Company of Nevada, and as
Trustee of the Jack B. Corwin 2006 Charitable Remainder Unitrust.  The suit generally alleges that at various
times in 2008 and 2009, the named Company officers and directors made false and
misleading representations, or failed to state material facts which made their
statements misleading, regarding the Company’s financial performance and
condition.  The suit brings fraud and
negligent misrepresentation claims and alleges violations of the Texas
Securities Act and Section 27 of the Texas Business Commerce Code.  The plaintiffs seek unspecified compensatory
damages, exemplary damages, and reimbursement for litigation expenses.  On June 3, 2009, the plaintiffs filed an
amended complaint with the same allegations adding two additional Company
directors as party defendants.  On June 26,
2009, the Bankruptcy Court entered an injunction prohibiting the prosecution of
the Corwin litigation while the Company remains in bankruptcy. The Company
plans to honor its indemnification obligations and vigorously defend the lawsuits
on the defendants’ behalf.

 

On April 30, 2009, May 21,
2009, June 5, 2009, three separate putative class action securities
lawsuits were filed in the U.S. District Court for the Northern District of
Texas, Dallas Division,

 

 

against certain of the Company’s
current and former officers (but not on the Company or its subsidiaries).  The suits were filed by Jan Buettgen, John
Heffner, and Alan Goldberg as three separate named plaintiffs on behalf of
purchasers of the Company’s common stock between August 10, 2007, and March 31,
2009, inclusive. On May 22, 2009, a putative class action securities
lawsuit was filed in the U.S. District Court for the Eastern District of
Arkansas, against two of the Company’s current officers (but not on the Company
or its subsidiaries).  The suit was filed
by Wade L. Jones on behalf of purchasers of the Company’s bonds between March 27,
2008, and March 30, 2009, inclusive. 
On August 18, 2009, the Wade Jones case from Arkansas federal
district court was transferred to be consolidated with this case.  The complaints are virtually identical and
generally allege that the defendants violated federal securities laws by
issuing false and misleading statements regarding the Company’s financial
performance and condition.  Specifically,
the complaints allege violations by the defendants of Section 10(b) of
the Exchange Act, Rule 10b-5 under the Exchange Act, and Section 20
of the Exchange Act.  The plaintiffs are
seeking unspecified compensatory damages and reimbursement for litigation
expenses.  A class has not been
certified.  Since the filing the
complaints all four cases have been consolidated into one court in the Northern
District.  The court has named the lead
plaintiff and the lead plaintiffs’ counsel. 
The Company’s response will not be due until after an amended complaint
is filed sometime in the first quarter of 2010. 
The Company plans to honor its indemnification obligations and
vigorously defend the lawsuits on the defendants’ behalf.

 

On November 25, 2009,
three former Bell retirees brought a putative class action in the US District
Court, Northern District of Texas against both the Verizon Pension plans and
benefit committees and the Company pension plans and benefit committees. 
All three named plaintiffs are receiving the single life monthly annuity. All
complain that Verizon transferred them against their will from the Verizon
pension plans to the Company pension plans at or near the spin.  The
complaint alleges that both the Verizon and Company defendants failed to provide
requested plan documents which would entitle the plaintiffs to statutory
penalties under ERISA; that both the Verizon and Company defendants breached
their fiduciary duty for refusal to disclose pension plan information; and
other class action counts aimed directly at the Verizon defendants. The
plaintiffs seek class action status only against Verizon, statutory penalties,
damages and a reversal of the employee transfers.  The Company has waived
issuance of citation making our answer or response date February 25, 2010.

 

On December 10, 2009,
plaintiff, a former employee with a history of litigation against the Company,
filed a putative class action in the US District Court, Northern District of
Texas against certain of the Company’s current and former officers, directors
and members of the Company Employee Benefits Committee.  The complaint attempts to recover alleged
losses to the various savings and pension plans that were allegedly caused by
the breach of fiduciary duties in violation of ERISA of the defendants in
administrating the plans from November 17, 2006 to March 31,
2009.  The complaint alleges that the
defendants wrongfully allowed all the plans to invest in Idearc common stock,
alleges that the defendants made material misrepresentations regarding the
Company’s financial performance and condition, alleges the defendants had
divided loyalties, alleges the defendants mismanaged the plan assets, and
alleges certain defendants breached their duty to monitor and inform the
committee members of required disclosures. 
The plaintiffs are seeking unspecified compensatory damages and
reimbursement for litigation expenses.  A
class has not been certified.  The
plaintiffs have recently asked for a waiver of service.  The Company plans to honor its indemnification
obligations and vigorously defend the lawsuit on the defendants’ behalf.

 

2

 

Schedule 3.12

 

Subsidiaries

 

	
  Name

  	
   

  	
  Anticipated Name

  Change

  	
   

  	
  Owner

  	
   

  	
  Ownership

  Percentage

  	
   

  	
  Subsidiary

  Loan Party?

  
	
  Idearc
  Information Services LLC

  	
   

  	
  SuperMedia
  Information Services LLC

  	
   

  	
  Idearc
  Inc.

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Media LLC

  	
   

  	
  SuperMedia
  LLC

  	
   

  	
  Idearc
  Information Services LLC

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Media Sales — West Inc.

  	
   

  	
  SuperMedia
  Sales — West Inc.

  	
   

  	
  Idearc
  Media LLC

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Media Sales — East LLC

  	
   

  	
  SuperMedia
  Sales — East LLC

  	
   

  	
  Idearc
  Media Sales — West Inc.

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Media Sales — East Co.

  	
   

  	
  SuperMedia
  Sales — East Co.

  	
   

  	
  Idearc
  Media Sales — West Inc. 

  	
   

  	
  10.5%

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Idearc
  Media Sales — East LLC

  	
   

  	
  89.5%

  	
   

  	
   

  
	
  Idearc
  Media Services — West Inc.

  	
   

  	
  SuperMedia
  Services — West Inc.

  	
   

  	
  Idearc
  Media LLC

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Media Services — East Inc.

  	
   

  	
  SuperMedia
  Services — East Inc.

  	
   

  	
  Idearc
  Media LLC

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  License
  Application Corporation

  	
   

  	
  N/A

  	
   

  	
  Idearc
  Media LLC

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Second
  License Application Corporation

  	
   

  	
  N/A

  	
   

  	
  License
  Application Corporation

  	
   

  	
  100%

  	
   

  	
  Yes

  
	
  Idearc
  Inceptor Ltd.

  	
   

  	
  N/A

  	
   

  	
  Idearc
  Media LLC

  	
   

  	
  100%

  	
   

  	
  No

  

 

 

Schedule 3.13

 

Insurance

 

	
  Coverage

  	
   

  	
  Deductible

  	
   

  	
  Limit

  	
   

  	
  Primary Carrier

  	
   

  	
  Notes

  
	
  On-going Policies

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Workers Comp.

  	
   

  	
  $250K

  	
   

  	
  Stat/$2M

  	
   

  	
  Zurich

  	
   

  	
   

  
	
  Workers Comp. - Washington

  	
   

  	
  $0

  	
   

  	
  Statutory

  	
   

  	
  Dept
  of Labor and Indusrty - Washington

  	
   

  	
   

  
	
  Workers Comp. — Ohio

  	
   

  	
  $0

  	
   

  	
  Statutory

  	
   

  	
  Bureau
  of Workers Comp - Ohio

  	
   

  	
   

  
	
  General Liability

  	
   

  	
  $150K

  	
   

  	
  $2M

  	
   

  	
  Zurich

  	
   

  	
   

  
	
  Auto Liability

  	
   

  	
  $0

  	
   

  	
  $2M

  	
   

  	
  Zurich

  	
   

  	
   

  
	
  Excess Liability

  	
   

  	
  $1M

  	
   

  	
  $100M

  	
   

  	
  Liberty

  	
   

  	
   

  
	
  D&O

  	
   

  	
  $1M

  	
   

  	
  $100M

  	
   

  	
  AIG/Chartis

  	
   

  	
  Covers
  all events since 3/31/09

  
	
  E&O

  	
   

  	
  $1M

  	
   

  	
  $50M

  	
   

  	
  HISCOX

  	
   

  	
   

  
	
  Fiduciary

  	
   

  	
  $250K - $1M

  	
   

  	
  $50M

  	
   

  	
  AIG/Chartis

  	
   

  	
   

  
	
  EPLI

  	
   

  	
  $500K

  	
   

  	
  $50M

  	
   

  	
  AIG/Chartis

  	
   

  	
   

  
	
  Environmental Policy

  	
   

  	
  $100K

  	
   

  	
  $15M

  	
   

  	
  Steadfast

  	
   

  	
  For
  property existing on 11/17/2006

  
	
  Environmental - pre exisitng contamination

  	
   

  	
  $100K

  	
   

  	
  $10M

  	
   

  	
  AIG/Chartis

  	
   

  	
  Covers
  Des Plaines Print Plant

  
	
  Crime

  	
   

  	
  $250K

  	
   

  	
  $25M

  	
   

  	
  Liberty

  	
   

  	
   

  
	
  Property

  	
   

  	
  $100K to $250K

  	
   

  	
  $250M

  	
   

  	
  XL

  	
   

  	
   

  
	
  Business Travel Accident

  	
   

  	
  0

  	
   

  	
  3 times pay

  	
   

  	
  Zurich

  	
   

  	
   

  
	
  Flood Insurance

  	
   

  	
  $500

  	
   

  	
  $100K

  	
   

  	
  Fidelity
  National Prop & Casualty

  	
   

  	
  Covers
  4 locations in flood zones

  
	
  UK liability Policy

  	
   

  	
  Statutory

  	
   

  	
  Statutory

  	
   

  	
  Norwich
  Union

  	
   

  	
  Covers
  UK Inceptor Office

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Run-Off Policies

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D&O Run-off 

  	
   

  	
  $7.5M

  	
   

  	
  $100M

  	
   

  	
  AIG/Chartis

  	
   

  	
  Covers
  Verizon 11/17/06 Transaction and is shared 50/50 with Verizon

  
	
  D&O Run-off 

  	
   

  	
  $1M

  	
   

  	
  $100M

  	
   

  	
  AIG/Chartis

  	
   

  	
  Covers
  all claims from events occuring from 11/17/06 though 3/31/09.

  

 

 

Schedule 6.01

 

Existing Indebtedness

 

$3,750,000 letter of credit issued by The Frost
National Bank in favor of Zurich in connection with workers compensation
insurance.

 

Everycarlisted.com Earn out pursuant to that certain
Asset Purchas Agreement dated as of February 10, 2009 by and among YPAUTOS.COM,
INC., 5 Tribe, Inc., Idearc Media LLC and Darrell Campbell.

 

American
Towns Earn Out—pursuant to that certain Purchase Agreement dated as of September 4,
2007 (the “AT Purchase Agreement”) by and among American Town Network, L.L.C.,
AmericanTowns.com L.L.C. and Idearc Media LLC (as successor in interest to
Idearc Media Corp.), no later than March 31, 2013 Idearc Media LLC will
pay to American Town Network, L.L.C. an amount equal to the lesser of (a) 10%
of the aggregate Net Revenues (as defined in the AT Purchase Agreement)
collected by Idearc Media LLC that are derived from and attributable to the
website represented by LocalSearch.com during calendar year 2012 or (b) $15,000,000.

 

 

Schedule 6.02

 

Existing Liens

 

UCC filing #2008 2143418 filed against Idearc Media
Services – West Inc. on June 23, 2008 with the Delaware Secretary of State
by Pitney Bowes Global Financial Services LLC.

 

UCC filing #2008 4267918 filed against Idearc Media
Corp. on December 23, 2008 with the Delaware Secretary of State by Xerox
Corporation.

 

Lien on certificate of deposit in respect of
the letter of credit described on Schedule 6.01.

 

 

Schedule 6.04

 

Existing Investments

 

State Street Account #12400605 – SSGA Prime Money
Market 236/SVPXX

 

Oppenheimer Account #74700142 – Oppenheimer
Institutional MMF (IOLXX)

 

Investment in Statewide Zone Capital Corp. by Idearc
Information Services LLC in the amount of $400,000

 

Investment
by Idearc Media LLC in Americantown.com L.L.C. in the amount of $3,000,236

 

 

Schedule 6.05(j)

 

Asset Sales

 

None.

 

 

Schedule 6.09

 

Affiliate Transactions

 

None.

 

 

Schedule 6.10

 

Existing
Restrictions

 

None.

 

 

EXHIBIT A

 

Form of
Assignment and Assumption

 

[see attached]

 

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and
Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between the Assignor (as
defined below) and the Assignee (as defined below). Each capitalized term used
but not defined herein shall have the meaning assigned to such term in the Loan
Agreement dated as of December 31, 2009 (as amended, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among
Idearc Inc. (the “Borrower”), the lenders from time to time party
thereto and JPMorgan Chase Bank, N.A., as administrative agent under the Loan
Agreement, receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex I attached hereto
(the “Standard Terms and Conditions”) are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For an agreed consideration,
the Assignor hereby irrevocably sells and assigns to the Assignee, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Loan
Agreement, as of the Effective Date inserted by the Administrative Agent as
contemplated below (a) all the Assignor’s rights and obligations in its
capacity as a Lender under the Loan Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the facilities identified below (including
any letters of credit, guarantees and swingline loans included in such
facilities) and (b) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Loan Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (a) above (the rights and obligations
sold and assigned pursuant to clauses (a) and (b) above being
referred to herein collectively as the “Assigned Interest”). Such sale
and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by the Assignor.

 

 

	
  1.

  	
  Name
  of Assignor: [                            ]

  
	
   

  	
   

  
	
  2.

  	
  Name
  of Assignee: [                            ]

  
	
   

  	
   

  
	
   

  	
     (a)

  	
  Assignee
  is an Affiliate of: [                            ]

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Borrower:  Idearc Inc.

  
	
   

  	
   

  
	
  4.

  	
  Administrative Agent:  JPMorgan Chase Bank, N.A., as administrative
  agent under the Loan Agreement

  
	
   

  	
   

  
	
  5.

  	
  Loan Agreement: The Loan Agreement dated as of
  December 31, 2009, among Idearc Inc., the lenders from time to time
  party thereto and JPMorgan Chase Bank, N.A., as administrative agent
  thereunder

  
	
   

  	
   

  
	
  6.

  	
  Assigned
  Interest:

  

 

	
  Facility
  Assigned

  	
   

  	
  Aggregate Amount of

  Loans for all Lenders

  	
   

  	
  Amount of Loans

  Assigned

  	
   

  	
  Percentage Assigned

  of Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B Term Loan Facility

  	
   

  	
  $

  	
  [              ]

  	
   

  	
  $

  	
  [              ]

  	
   

  	
   [              ]

  	
  %

  
										

 

Effective Date:

 

The Assignee agrees to deliver to
the Administrative Agent a completed Administrative Questionnaire in which the
Assignee designates one or more credit contacts to whom all syndicate-level
information (which may contain material non-public information about the Borrower,
the other Loan Parties and their Related Parties or their respective
securities) will be made available and who may receive such information in
accordance with the Assignee’s compliance procedures and applicable laws,
including Federal and state securities laws.

 

 

The terms set forth in this Assignment and
Assumption are hereby agreed to:

 

	
   

  	
  [NAME
  OF ASSIGNOR],

  
	
   

  	
  as
  Assignor,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:  [                      ]

  
	
   

  	
   

  	
  Title:    [                      ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [
  NAME OF ASSIGNEE],

  
	
   

  	
  as
  Assignee,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:
  [                      ]

  
	
   

  	
   

  	
  Title:   [                      ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [CONSENTED
  TO BY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  IDEARC,
  INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  [                      ]

  	
   

  	
   

  
	
   

  	
  Title:   [                      ]](1)

  	
   

  	
   

  

 

(1) If required pursuant to Section 9.04
of the Loan Agreement

 

 

ANNEX I

 

Idearc Inc. Loan Agreement

 

STANDARD TERMS AND
CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1           Assignor. The Assignor (a) represents and
warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien,
encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Loan Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, the Subsidiaries or any of their Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, the Subsidiaries or any of their Affiliates or any
other Person of any of their respective obligations under any Loan Document.

 

1.2.          Assignee. The Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Loan Agreement, (ii) it satisfies the requirements, if any, specified
in the Loan Agreement that are required to be satisfied by it in order to
acquire the Assigned Interest and become a Lender, (iii) from and after
the Effective Date, it shall be bound by the provisions of the Loan Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received and/or had
the opportunity to review a copy of the Loan Agreement to the extent it has in
its sole discretion deemed necessary, together with copies of the most recent
financial statements delivered pursuant to Section 5.01(a), 5.01(b) or
5.01(c) thereof, as applicable, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Assumption and to purchase the Assigned Interest
on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent, the Assignor or any other Lender
and (v) if it is a Foreign Lender, attached to this Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Loan Agreement, duly completed and executed by the Assignee and (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor (including its representations and warranties) or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking action under
the Loan Documents, (ii) appoints and authorizes each of the
Administrative Agent and the Collateral Agent to take such action as agents on
its behalf and to exercise such powers under the Loan Agreement and other Loan
Documents as are delegated to or otherwise conferred upon the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto and (iii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

 

 

2.             Payments. From and after the Effective Date, the
Administrative Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to but excluding the Effective Date and
to the Assignee for amounts which have accrued from and after the Effective
Date.

 

3.             General Provisions. This Assignment and
Assumption shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. This Assignment and Assumption may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption
by facsimile transmission or other electronic imaging means shall be as
effective as delivery of a manually executed counterpart of this Assignment and
Assumption. THIS ASSIGNMENT AND ASSUMPTION SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

2

 

EXHIBIT
B-1

 

Form of Opinion of Ballard Spahr
LLP

 

[see attached]

 

 

 

300
East Lombard Street, 18th Floor

Baltimore,
MD 21202-3268

TEL
410.528.5600

FAX
410.528.5600

www.ballardspahr.com

 

December 31, 2009

 

JPMorgan
Chase Bank, N.A.,

as Administrative Agent and Collateral Agent

277
Park Avenue, 8th Floor

New
York, New York  10172-0003

 

	
  Re:

  	
  $2,750,000,000 loan (the
  “Loan”) from the Lenders to Idearc Inc., a Delaware corporation (the
  “Borrower”), and guaranteed by Idearc Media Sales - East Co., a Maryland general
  partnership (the “Guarantor”) 

  

 

Ladies and Gentlemen:

 

We
have acted as local counsel in the State of Maryland (the “State” or “Maryland”)
for the Borrower and the Guarantor in connection with the above captioned
transaction (the “Transaction”).  This
letter is furnished to satisfy the conditions set forth in Article IV of
the Loan Agreement (as defined below). 
All capitalized terms used in this letter that are not otherwise defined
herein shall have the meanings assigned to them in the Transaction Documents
(as defined below).

 

I.                                        Documents
Reviewed and Matters Considered

 

In
our capacity as counsel to the Borrower and the Guarantor and for purposes of
this letter, we have examined the following documents (all of which are
collectively called the “Documents”):

 

(i)                                     the Loan
Agreement dated as of December 31, 2009 (the “Closing Date”) among the
Borrower, the Lenders (as defined therein), and JPMorgan Chase Bank, N.A. (the “Agent”),
as Administrative Agent and Collateral Agent for the Lenders (the “Loan
Agreement”);

 

(ii)                                  the Guarantee
and Collateral Agreement dated as of the Closing Date among the Borrower, the
Guarantor, certain other subsidiaries of the Borrower, and the Agent (the “Guarantee”);

 

(iii)                               the Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing dated as
of the Closing Date from the Guarantor to the Agent (the “Mortgage”);

 

(iv)                              two (2) Uniform
Commercial Code financing statements authorized by the Guarantor for filing
with the Maryland State Department of Assessments and Taxation (“SDAT”)
(collectively, the “Financing Statements”);

 

Atlanta |  Baltimore | 
Bethesda |  Denver |  Las Vegas | 
Los Angeles |  New Jersey |  Philadelphia |  Phoenix | 
Salt Lake City |  Washington, DC
|  Wilmington

 

 

(v)                                 certified copies of the
following documents filed with SDAT with respect to the Guarantor
(collectively, the “Filed Partnership Documents”):

 

1.                                       “Statement of Partnership
Authority for Chesapeake Directory Sales Company (a Maryland general
partnership)” filed January 31, 2002;

 

2.                                       “Articles of Merger of
National Telephone Directory Company and Penn-Del Directory Company into
Chesapeake Directory Sales Company” filed January 31, 2002, which Articles
of Merger included a change of name of the surviving partnership to Verizon
Mid-Atlantic Directory Sales Company;

 

3.                                       “Amended and Restated
Statement of Partnership Authority for Verizon Mid-Atlantic Directory Sales
Company (a Maryland General Partnership)” filed August 21, 2003;

 

4.                                       “Amended and Restated
Statement of Partnership Authority for ‘Verizon Directories Sales — East Co.’
formerly known as ‘Verizon Mid-Atlantic Directory Sales Company’ (a Maryland
General Partnership)” filed February 2, 2004; and

 

5.                                       “Amendment to the Amended
and Restated Statement of Partnership for Verizon Directories Sales — East Co.
(formerly known as Verizon Mid-Atlantic Directory Sales Company) (a Maryland
General Partnership)” filed October 18, 2006, which amendment included a
change of name of the partnership to Idearc Media Sales — East Co.

 

(vi)                              the Second
Amended and Restated Partnership Agreement of the Guarantor dated as of November 2006
(the “Partnership Agreement”);

 

(vii)                           a certificate
of the secretary of the managing partner of the Guarantor, dated as of December 31,
2009, as to such matters as we deem necessary and appropriate to enable us to
render this letter; and

 

(viii)                        such other
documents and matters as we have deemed necessary and appropriate to render the
opinions set forth in this letter, subject to the assumptions, qualifications,
and limitations noted below.

 

The
Loan Agreement, the Guarantee, and the Mortgage are herein collectively
referred to as the “Transaction Documents.” 
The Guarantee and the Mortgage are herein collectively referred to as
the “Guarantor Documents.”

 

II.                                   Definition of “Knowledge”

 

In
basing the opinions and other matters set forth herein on “our knowledge,” the
words “our knowledge” and similar language used herein signify that, in the
course of our representation of the Borrower and the Guarantor in matters with
respect to which we have been engaged by the Borrower and the Guarantor as
counsel, no information has come to our attention that would give us actual 

 

2

 

knowledge
or actual notice that any such opinions or other matters are not accurate or
that any of the foregoing documents, certificates, reports, and information on
which we have relied are not accurate and complete.  Except as otherwise stated herein, we have
undertaken no independent investigation or verification of such matters.  The words “our knowledge” and similar
language used herein are limited to the knowledge of the lawyers within our
firm who are involved in the Transaction, or who have worked on matters on
behalf of the Borrower or the Guarantor within the prior twelve months and are
presently at the firm.

 

III.                              Assumptions

 

In
reaching the opinions set forth below, we have assumed the following:

 

(a)                                  Each individual
executing any of the Documents, whether on behalf of such individual or another
person, is legally competent to do so.

 

(b)                                 Each individual
executing any of the Documents on behalf of a party (other than the Guarantor)
is duly authorized to do so.

 

(c)                                  All Documents
submitted to us as originals are authentic. 
All Documents submitted to us as certified or photostatic copies conform
to the original documents.  All Documents
upon which we have relied are accurate and complete.  All public records reviewed or relied upon by
us or on our behalf are true and complete and remain so as of the date of this
letter.

 

(d)                                 The form and
content of all Transaction Documents submitted to us as unexecuted drafts do
not differ in any respect relevant to this letter from the form and content of
such Transaction Documents as executed and delivered.

 

(e)                                  All
representations, warranties, statements and information contained in the
Transaction Documents are accurate and complete.

 

(f)                                    All signatures
on all Transaction Documents and any other documents submitted to us for
examination are genuine.

 

(g)                                 There has been
no oral or written modification of or amendment to any of the Documents, and
there has been no waiver of any of provision of any of the Documents, by
actions or omission of the parties or otherwise.

 

(h)                                 Each individual
executing a certificate is authorized to do so and has knowledge about all
matters stated therein.  The contents of
each such certificate is accurate and complete and remain so as of the date of
this letter.

 

(i)                                     The Guarantor
currently has rights in all of the Article 9 Collateral (as defined in the
Guarantee), within the meaning of the Uniform Commercial Code, as currently in
effect in the State of New York (the “NY UCC”) and as currently in effect in
the State of Maryland (the “MD UCC”).

 

3

 

(j)                                     We note that
the Transaction Documents provide that the Transaction Documents and all issues
arising thereunder shall be governed by the laws of the State of New York,
without regard to principles of conflicts of law.  We express no opinion as to whether such
provisions are enforceable or as to the law that is applicable to the
Transaction Documents or the transactions contemplated thereby, including the
Security Interest (as defined in the Guarantee) created pursuant to the Guarantee.  We express no opinion regarding the laws of
the State of New York, but rather, with your permission, we have assumed,
solely for the purposes of our opinions herein, that Maryland law governs the
perfection, the effect of perfection or nonperfection, and the priority of the
Security Interest in the Article 9 Collateral.

 

(k)                                  All
descriptions of the personal property or other items or interests as to which
the Security Interest (as defined in the Guarantee) attaches under the
Guarantee, as contained in the Guarantee and the Financing Statements,
reasonably identify the personal property or other items or interests described
or intended to be described.

 

(l)                                     There is no
agreement between the Agent or the Lenders and the Borrower or the Guarantor
postponing the time of attachment of the Security Interest.

 

(m)                               Value has been
given for the Security Interest.

 

(n)                                 The Guarantor
is not a “transmitting utility” (as defined in Section 9-102 of the MD
UCC).

 

IV.                               Opinions

 

Based
on our review of the foregoing and subject to the assumptions, qualifications,
and limitations set forth herein, it is our opinion that, as of the date of
this letter:

 

(1)                                  All necessary
partnership action has been taken by the Guarantor to authorize its execution,
delivery, and performance of the Guarantor Documents.

 

(2)                                  The Guarantor
Documents have been duly executed and delivered by the Guarantor.

 

(3)                                  The Financing
Statements are in appropriate form for due filing among the financing statement
records of SDAT pursuant to the Maryland UCC.

 

(4)                                  Upon the filing
of the Financing Statements with SDAT, the Security Interest will be perfected
as to that portion of the Article 9 Collateral in which a security
interest may be perfected by the filing of a financing statement with SDAT
under the Maryland UCC.

 

(5)                                  The execution
and delivery of the Guarantor Documents and the performance of the Guarantor’s
obligations under the Guarantor Documents will not conflict with the Filed
Partnership Documents or the Partnership Agreement of the Guarantor.

 

4

 

V.                                    Qualifications

 

In
addition to the qualifications set forth above, the opinions set forth herein
are also subject to the following qualifications:

 

(i)                                     We express no
opinion with respect to (a) the title to or the rights or interest of the
Guarantor in the Article 9 Collateral, (b) the adequacy of the
description of the Article 9 Collateral, or (c) the creation,
attachment, priority, or, except as explicitly set forth herein, perfection of
any liens thereon and/or security interests therein.  Such opinions are given only to the extent
set forth in opinion paragraph (4) and are subject to the additional
assumptions, qualifications and limitations applicable to such opinion as set
forth herein.

 

(ii)                                  As to the due
filing of the Financing Statements with SDAT, you are not relying upon this
firm to effect such filing and we assume that the Financing Statements have
been or will be properly filed and indexed.

 

(iii)                               We express no
opinion as to whether the Guarantor is a “registered organization” (as such
term is defined in the NY UCC and/or the MD UCC) or as to whether the Guarantor
is located in Maryland within the meaning of the NY UCC and/or the MD UCC.

 

VI.                               Limitations

 

(A)                              We express no
opinion as to the laws of any jurisdiction other than the laws of the State of
Maryland.  We express no opinion as to
the principles of conflict of laws of any jurisdiction, including the laws of
the State of Maryland.

 

(B)                                We assume no
obligation to supplement our opinions if any applicable law changes after the
date of this letter or if we become aware of any facts that might change the
opinions expressed in this letter after the date of this letter.

 

(C)                                The opinions
expressed in this letter are limited to the matters set forth in this letter,
and no other opinions shall be implied or inferred beyond the matters expressly
stated.

 

(D)                               The opinions
expressed in this letter are solely for the use of the Agent, the Lenders,
subsequent beneficiaries of the Guarantor Documents, and their counsel, and
these opinions may not be relied on by any other persons without our prior
written approval.  Subsequent
beneficiaries of the Guarantor Documents may only rely on these opinions to the
extent such reliance is actual and reasonable and is not based on different or
changing facts or circumstances.

 

VII.                          Reference to
Report

 

This
letter is to be interpreted in accordance with the 2007 Report on Lawyers’
Opinions in Business Transactions by the Special Joint Committee of the Section of
Business Law and the Section of Real 

 

5

 

Property,
Planning and Zoning of the Maryland State Bar Association, Inc., as
revised on October 6, 2009.

 

Very truly yours,

 

6

 

EXHIBIT B-2

 

Form of
Opinion of Fulbright & Jaworski L.L.P.

 

[see attached]

 

 

Fulbright &
Jaworski l.l.p.

A Registered
Limited Liability Partnership

1301 McKinney, Suite 5100

Houston, Texas 77010-3095

telephone: 713/651-5151

facsimile: 713/651-5246

 

December 31,
2009

 

JPMorgan
Chase Bank, N.A.

as Administrative Agent and Collateral Agent for each of the Lenders

party to the Loan Agreement referenced below, 

and each of such Lenders

277
Park Avenue, 8th Floor

New
York, New York 10172

 

Ladies and Gentlemen:

 

We have acted as counsel
to Idearc Inc., a Delaware corporation (the “Borrower”), Idearc
Information Services LLC, a Delaware limited liability company (“Info”),
Idearc Media LLC, a Delaware limited liability company (“Media”),
License Application Corporation, a Delaware corporation (“License”),
Second License Application Corporation, a Delaware corporation (“License 2”),
Idearc Media Sales-West Inc., a Delaware corporation (“Sales West”),
Idearc Media Services-West Inc., a Delaware corporation (“Services West”),
Idearc Media Services-East Inc., a Delaware corporation (“Services East”),
Idearc Media Sales-East LLC, a Delaware limited liability company (“East LLC”),
and Idearc Media Sales-East Co., a Maryland general partnership (“East Co”,
and together with Info, Media, License, License 2, Sales West, Services West,
Services East and East LLC, the “Subsidiary Guarantors” and, together
with the Borrower, the “Loan Parties”), in connection with the execution
and delivery of that certain Loan Agreement, dated as of the date hereof (the “Loan
Agreement”), among the Borrower, the lenders from time to time party
thereto (collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent (the “Collateral Agent”), and
the transactions contemplated thereby.

 

This opinion is delivered
to you pursuant to clause (b) of Article IV of the Loan
Agreement.  Each capitalized term used
herein and not otherwise defined herein shall have the meaning specified for
such term in the Loan Agreement.

 

In connection with this
opinion, we have examined executed copies of the following:

 

(a)           the Loan Agreement;

 

(b)           that certain Guarantee and Collateral
Agreement dated as of the date hereof, by and among the Loan Parties and the
Collateral Agent (the “Collateral Agreement”);

 

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(c)           that certain Copyright Security
Agreement dated as of the date hereof made by Idearc Media LLC in favor of the
Collateral Agent (the “Copyright Security Agreement”);

 

(d)           that certain Patent and Trademark
Security Agreement dated as of the date hereof made by Idearc Media LLC in
favor of the Collateral Agent (the “Media Patent and Trademark Security
Agreement”);

 

(e)           that certain Patent and Trademark
Security Agreement dated as of the date hereof made by Second License
Application Corporation in favor of the Collateral Agent (the “License 2
Patent and Trademark Security Agreement”);

 

(f)            that certain Patent and Trademark
Security Agreement dated as of the date hereof made by Info in favor of the
Collateral Agent (the “Info Patent and Trademark Security Agreement” and,
together with the License 2 Patent and Trademark Security Agreement and the
Media Patent and Trademark Security Agreement, the “Patent and Trademark
Security Agreements”);

 

(g)           the Mortgages listed on Exhibit A
hereto (the “Mortgages”);

 

(h)           the Uniform Commercial Code financing
statements (Form UCC-1), attached as Exhibit B hereto (in the
form reviewed by us, the “Financing Statements”); and

 

(i)            such certificates of public
officials, certificates of officers of the Loan Parties and copies certified or
otherwise identified to our satisfaction of corporate documents and records of
the Loan Parties and of other papers, and have made such other investigations,
as we have deemed necessary or appropriate for purposes of the following
opinions, provided we have made no effort to independently verify the facts set
forth in such certificates and documents.

 

We express no opinion as
to any documents or agreements other than the Transaction Documents (as defined
below).

 

In giving our opinions
set forth herein we have assumed (a) the legal capacity of all natural
persons, (b) the genuineness of all signatures of the persons signing the
Transaction Documents on behalf of the parties thereto, (c) the validity,
binding effect and enforceability of each of the Loan Documents against each of
the parties thereto other than the Loan Parties, (d) the authenticity of
all original documents examined by us, (e) the conformity to original
authentic documents of all documents submitted to us as copies, (f) that
each party to the Transaction Documents (other than the Delaware Entities) has
full power, authority, and legal right to execute, deliver, and perform its
obligations under the Loan Documents to which it is a party, (g) that each
party to the Transaction Documents (other than the Delaware Entities) has

 

2

 

duly authorized by all
requisite action its execution, delivery and performance thereof, (h) that
East Co. is a general partnership under the laws of the State of Maryland, and (i) that
each party to the Transaction Documents (other than the Delaware Entities) has
duly executed and delivered such documents by its duly authorized officer.  As to questions of fact material to such
opinions we have, to the extent we deemed appropriate, relied upon the
representations set forth in the Transaction Documents (other than statements,
directly or in effect, of any legal conclusion expressed herein) and
certifications by officers and other representatives of the Loan Parties.

 

For purposes of this
opinion, (a) “Loan Documents” means the Loan Agreement; the Collateral
Agreement, the Copyright Security Agreement and the Patent and Trademark
Security Agreements; (b) “Transaction Documents” means the Loan
Documents and the Mortgages; (c) “NY UCC” means the Uniform
Commercial Code as adopted in the State of New York; (d) “DE UCC”
means the Uniform Commercial Code as adopted in the State of Delaware; (e) “Delaware
Corporations” means each of the Borrower, License, License 2, Sales West,
Services West and Services East; (f) “Delaware LLCs” means each of
Info, Media and East LLC; (g) “Delaware Entities” means each of the
Delaware Corporations and the Delaware LLCs; and (h) “Applicable Law”
means, with respect to each Loan Party, the General Corporation Law of the
State of Delaware, the Limited Liability Company Act of the State of Delaware,
the DE UCC, the internal, substantive laws, rules, and regulations of the State
of New York,  and those laws,
rules, and regulations of the United States of America which in our experience
are normally applicable to such Loan Party and to transactions of the type
provided for in the Loan Documents to which such Loan Party is a party.

 

In rendering the opinions
expressed herein, we have assumed that:

 

(a)           no order, consent, approval,
authorization, permit, license or notice to, or filing, recording or
registration with, or exemption by, any court, governmental body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with, the execution and delivery by any person or entity identified
in any Transaction Document as a party thereto, or in connection with the
performance of its obligations thereunder or the consummation of the
transactions contemplated thereby, other than those that have been obtained or
made and are in full force and effect (provided,
that we make no such assumption with respect to consents, approvals and the
like applicable to the Loan Parties to the extent that we express our opinions
rendered in paragraphs 1 and 3(b) below); and

 

(b)           the Collateral Agent has been and is
the duly appointed agent of each of the other Lenders.

 

Based upon the foregoing,
and in reliance thereon, and subject to the limitations, qualifications,
assumptions and exceptions stated herein, we are of the opinion, having due
regard for such legal considerations as we deem relevant, that:

 

3

 

1.             Each of the Delaware Corporations (a) is
a corporation validly existing and in good standing under the laws of its state
of incorporation, and (b) has all requisite corporate power and authority
to enter into the Transaction Documents to which it is a party, and to perform
its obligations thereunder.  Each of the
Delaware LLCs (a) is a limited liability company validly existing and in
good standing under the laws of its state of organization, and (b) has all
requisite limited liability company authority to enter into the Transaction
Documents to which it is a party, and to perform its obligations thereunder.

 

2.             Each Delaware Entity has duly authorized the execution,
delivery and performance by it of each Transaction Document to which it is a
party.  Each of the Loan Documents
constitutes, under the laws of the State of New York, the legal, valid and
binding obligation of each of the Loan Parties party thereto, enforceable against
each of such Loan Parties in accordance with its respective terms.

 

3.             The execution and delivery by the
Loan Parties of the Transaction Documents, and the performance by the Loan
Parties of their respective obligations thereunder, (a) do not breach or
violate Applicable Law or any provision of the charter, bylaws or other
organizational documents of any Delaware Entity, and (b) do not require
any governmental orders, consents, approvals, authorizations, permits, licenses
or filings, recordings or registrations with or any notices to any Governmental
Authority under Applicable Law except for (i) the filing of the Financing
Statements contemplated therein, and the filing of any continuation statements
related to such Financing Statements, (ii) any filings required by the
securities laws of the United States of America, and (iii) the filings
with the United States Patent and Trademark Office and the United States
Copyright Office referred to in numbered paragraph 9 below; provided however,
that we express no opinion as to (A) the extent to which any such consent,
approval, authorization, permit, registration, filing or notice may be required
upon the disposition, or any offer or sale, of any Collateral by laws generally
affecting the offering and sale of securities or real property or (B) any
filings or other actions that may be necessary to record or perfect the liens
purported to be granted pursuant to the Mortgages.

 

4.             The execution and delivery by each
Loan Party of the Transaction Documents to which it is a party and the
performance of its obligations thereunder, do not result in the breach of, or
constitute a default or require a consent under, or give rise to any obligation
to prepay or offer to prepay, any indebtedness, or result in the creation of any
lien upon or security interest in any of the Loan Parties’ properties or assets
pursuant to any agreement or instrument listed on Exhibit C
attached hereto.

 

5.             No Loan Party is an “investment company” or a company
controlled by an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

 

4

 

6.                                      (a)            The Collateral Agreement is
effective to create in favor of the Collateral Agent for the benefit of the
Lenders a security interest in all of the right, title and interest of each
Loan Party in that part of the Collateral thereunder in which a security
interest may be created under Article 9 of the NY UCC, all as security for
the repayment of the Obligations (the “Delaware Entities Collateral”).

 

(b)           Each of the Patent and Trademark Security Agreements is
effective to create in favor of the Collateral Agent for the benefit of the
Lenders a security interest in the Intellectual Property that is listed in each
such Patent and Trademark Security Agreement and issued by, or registered with,
the United States Patent and Trademark Office (collectively, the “Pledged
Patent and Trademark Property”).

 

(c)           The Copyright Security Agreement is effective to create in
favor of the Collateral Agent for the benefit of the Lenders a security
interest in the Intellectual Property that is listed in the Copyright Security
Agreement and registered with the United States Copyright Office (the “Pledged
Copyright Property”).

 

7.                                       Under the NY UCC, in the case of
subparagraph 7(a) below, and the DE UCC, in the case of subparagraphs
7(b), (c) and (d) below,

 

(a)                                  the local law of the State of Delaware
governs perfection, by the filing of financing statements, of the Collateral
Agent’s security interest in the Delaware Entities Collateral in which a
security interest may be created under the DE UCC (the “Delaware UCC
Collateral”); and

 

(b)                                 the Office of the Secretary of State of
the State of Delaware is the proper office in which to file financing
statements in order to perfect a security interest in that portion of the
Delaware UCC Collateral in which a security interest may be perfected by the
filing of a financing statement in the State of Delaware (the “Delaware
Filing Collateral”); and

 

(c)                                  the Financing Statements are sufficient
within the meaning of §9.502 of the DE UCC; and

 

(d)                                 upon the proper filing of the Financing
Statements in the Delaware Filing Office, the security interest of the
Collateral Agent for the benefit of the Lenders will be perfected in the
Delaware Filing Collateral.

 

8.                                       Under the NY UCC,

 

(a)                                  upon the delivery in the State of New
York to the Collateral Agent of the certificates representing the Pledged
Equity Interests (as defined in the Collateral Agreement)

 

5

 

listed on Exhibit D
hereto (the “Pledged Stock”), the security interest of the Collateral
Agent for the benefit of the Lenders in such Pledged Stock will be perfected;
and

 

(b)          assuming that the certificates representing
such Pledged Stock are indorsed to the Collateral Agent or in blank by
effective indorsement and that the Collateral Agent acquired its interest in
such Pledged Stock without notice of any adverse claim, the Collateral Agent’s
interest in such Pledged Stock is free of any adverse claim, within the meaning
of and to the extent set forth in §8-303 of the NY UCC.

 

9.            (a)            Upon
the proper filing of (i) the Financing Statements covering the Pledged
Patent and Trademark Property in the Office of the Secretary of State of the
State of Delaware, and (ii) the Patent and Trademark Security Agreements
in the United States Patent and Trademark Office, with all applicable filing
fees paid and the filings in such offices in the correct reel and frame
listings, the security interest of the Collateral Agent for the benefit of the
Lenders will be perfected in that part of the Collateral consisting of the
Pledged Patent and Trademark Property in which a security interest may be
perfected by the filing of both (A) a financing statement in Delaware, and
(B) appropriate filings in the United States Patent and Trademark
Office.  No other filing or recording is
necessary in the State of Delaware, or in the United States Patent and
Trademark Office, to perfect a security interest in the Delaware Entities
Collateral covering the Pledged Patent and Trademark Property in which a
security interest may be perfected by filing both (A) financing statements
in the State of Delaware, and (B) appropriate filings in the United States
Patent and Trademark Office.

 

(b)          Upon the proper filing of (i) the
Financing Statements covering the Pledged Copyright Property in the Office of
the Secretary of State of the State of Delaware, and (ii) the Copyright
Security Agreement in the United States Copyright Office, with all applicable
filing fees paid and the filings in such offices in the correct reel and frame
listings, the security interest of the Collateral Agent for the benefit of the
Lenders will be perfected in that part of the Collateral consisting of
federally registered copyrights in which a security interest may be perfected
by the filing of both (A) a financing statement in Delaware, and (B) appropriate
filings in the United States Copyright Office. 
No other filing or recording is necessary in the State of Delaware, or
in the United States Copyright Office, to perfect a security interest in the
Delaware Entities Collateral covering the federally registered copyrights in
which a security interest may be perfected by filing both (A) financing
statements in the State of Delaware, and (B) appropriate filings in the
United States Copyright Office.

 

We hereby confirm to you
that to our knowledge there are no actions, suits or proceedings by or before
any arbitrator or Governmental Authority pending or threatened against or
affecting any Loan Party that question the validity or enforceability of the
Loan Documents or the transactions contemplated thereunder, except as set forth
on December 31, 2009 in the docket sheet for Case No. 09-31828 (BJH),
In re Idearc Inc., et al., Debtors (Chapter 11) (Jointly

 

6

 

Administered) and associated cases thereto
pending in the United States Bankruptcy Court for the Northern District of
Texas, Dallas Division.

 

The opinions expressed
herein are subject to the following exceptions, limitations, qualifications and
assumptions:

 

a.             The enforceability of each of the Loan Documents, and
the enforceability of any security interests created thereby, are subject to,
and may be limited by, (i) bankruptcy, insolvency, reorganization,
liquidation, fraudulent conveyance, fraudulent transfer, preference,
conservatorship, rearrangement, moratorium and other similar laws (including
court decisions) in effect and affecting the rights and remedies of creditors
generally or providing for relief of debtors, (ii) the refusal of a
particular court (A) to grant equitable remedies, including, without
limiting the generality of the foregoing, specific performance, or (B) to
grant a particular remedy sought under any of the Loan Documents as opposed to
another remedy provided for therein or another remedy available at law or in
equity, (iii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law), and (iv) judicial
discretion.

 

b.             The opinions expressed in numbered paragraph 2 and the
enforceability of any security interests created by the Collateral Agreement,
the Copyright Security Agreement and the Patent and Trademark Agreements are
subject to, and may be limited by, obligations and standards of good faith,
fair dealing, materiality, impracticability or impossibility of performance,
unconscionability, diligence, reasonableness and care established by applicable
law, including without limitation (A) such obligations and standards as
arise pursuant to §§1-102(3), 1-203, 1-208, 5-109 and 9-207 of the NY UCC,
common law and judicial decisions, and (B) concepts of the course of
dealings between the parties, the applicable usage of trade and similar
provisions of common law and judicial decisions.

 

c.             We express no opinion as to the enforceability of the
following provisions and remedies set forth in the Loan Documents, as the case
may be:  (i) provisions which
purport to restrict access to legal and equitable remedies, (ii) self-help
remedies, (iii) provisions affecting rights to notices or relating to
waivers of present or future rights by any of the Loan Parties or precluding
the Loan Parties from asserting certain remedies, (iv) indemnity or
contribution to the extent prohibited by public policy or to the extent
indemnification or contribution is required for losses or expenses caused by
gross negligence, willful misconduct, fraud or illegal action on the part of a
party entitled to indemnification or contribution, (v) severability, (vi) restrictions
on the transfer, alienation or hypothecation of property or rights to the
extent that such restrictions are found by a court of competent jurisdiction to
be unreasonable, (vii) provisions purporting to establish evidentiary
standards for suits or proceedings to enforce the Loan Documents or
presumptions with respect to the foregoing, and (viii) provisions to the
effect that rights or remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in

 

7

 

addition to or with any other right or
remedy, where the election of a particular remedy or remedies does not preclude
recourse to one or more other remedies. 
We have assumed that in enforcing any of the Loan Documents the
Collateral Agent and the Lenders will proceed thereunder in accordance with the
enforceable provisions thereof and all requirements of applicable law.

 

d.                                      We call your
attention to the fact that some of the Delaware LLCs may have failed to elect
effectively, under the applicable state version of Uniform Commercial Code
§8-103, that interests therein issued thereby will constitute securities.  The failure to so elect would render
ineffective any effort to perfect a security interest in such interests by
possession of the certificates purporting to represent such interests.  We have assumed that each of the Delaware
LLCs have elected effectively under §8-103 of the DE UCC that interests therein
issued thereby will constitute securities.

 

e.                                       In rendering
our opinion in paragraph 3 above, we express no opinion regarding whether any
consent or authorization of, approval by, notice to, filing with or other act
by or in respect of, any federal or New York governmental authority would be
required with respect to any offer or sale of any Pledged Securities (as
defined in the Collateral Agreement) upon disposition thereof pursuant to the
NY UCC or the DE UCC.

 

f.                                         We express no
opinion herein as to the creation of any security interests except as set forth
in the opinions in paragraphs 2, 6, 7, 8 and 9 above.  The opinions set forth in paragraphs 2, 6, 7,
8 and 9 above regarding the creation of security interests, and in paragraph 2
regarding the enforceability of security interests, are subject to the
following:

 

1)             We express no opinion regarding the
accuracy, completeness or sufficiency of any property or collateral
descriptions contained in the Loan Documents.

 

2)             We express no opinion as to any
security interest to which Article 8 or 9 of the NY UCC or the DE UCC is
inapplicable pursuant to §9-109 thereof.

 

3)             We have made no examination of, and
express no opinion as to, the title of any Person to any of the Collateral or
the value of any security granted to the Collateral Agent and the Lenders.  We have assumed that each of the Loan Parties
has rights in the Collateral in which it purports to grant a security interest
pursuant to the Loan Documents for the purpose of attachment as contemplated by
§9-203 of the NY UCC and we express no opinion as to the nature or extent of
the rights or title of the Loan Parties in or to any of the Collateral, whether
real or personal, tangible or intangible.

 

4)             We express no opinion as to the
creation of a security interest or Lien on any of the Collateral consisting of
real property or interests therein, including without limitation, any
Collateral constituting fixtures or easements.

 

8

 

5)             Under §9-315 of the
NY UCC, the security interests in the Collateral, other than with respect to
identifiable proceeds, if any, received in exchange therefor, will be lost to
the extent that the Collateral Agent or any of the Lenders authorizes a sale,
lease, license, exchange or other disposition of any part thereof free of the
security interest.

 

6)             Section 9-408(c) of
the NY UCC imposes restrictions on the effectiveness of a security interest in
a “general intangible” (as defined in the NY UCC) that contains terms that
prohibit, restrict or require the consent to the assignment or transfer of, or
creation, attachment or perfection of a security interest in, such general
intangible.

 

7)             We express no
opinion on the ability of the Collateral Agent or any Lender, as a secured
party, to become the owner of, or validly transfer or assume, any of the rights
and duties of any Loan Party as a party to any contract or agreement under
which such Loan Party’s rights, obligations or duties are not freely or unconditionally
assignable or transferable.  In addition,
we note that the rights and benefits of the Collateral Agent and each Lender as
a secured party are in all relevant regards at least subject to the nature,
extent and type of rights, restrictions, limitations, agreements and the like
as to which the Loan Party granting such security interest is or may be
subject.

 

8)             The rights of the
Loan Parties to create a security interest in any accounts consisting of claims
against any government or governmental agency (including, without limitation,
the United States of America or any state thereof or any agency or department
thereof or of any state) may be limited by the Federal Assignment of Claims Act
or similar state or local statute.

 

g.                                      We express no
opinion herein as to the perfection of any security interests except as set
forth in the opinions in paragraphs 7, 8 and 9 above.  The opinions set forth in paragraphs 7, 8 and
9 above regarding the perfection of security interests are subject to the
following:

 

1)             We call to your
attention that §§9-301 and 9-316 of the NY UCC and the DE UCC contain and refer
to rules under which the laws of jurisdictions other than New York and
Delaware would apply to the perfection, and the effect of perfection or
nonperfection, of a security interest. 
We further call to your attention that §§9-310 and 9-312 of the NY UCC
and DE UCC describe situations in which filing is not necessary or is
ineffective to perfect a security interest.

 

2)             The perfection of
the Collateral Agent’s security interest in any proceeds of the Delaware Filing
Collateral will be limited as provided in §9-315 of the DE UCC.

 

3)             In rendering the
opinions set forth in paragraph 7(b) above, we have assumed that no part
of the Delaware Entities Collateral consists of as-extracted 

 

9

 

collateral,
timber to be cut, goods that are or are to become fixtures or, as to paragraph
7(b) only, cooperative interests, each within the meaning of §9-501(a) of
the NY UCC and DE UCC, or farm products, as defined in §9-102 of the NY UCC and
DE UCC.

 

4)             We call to your
attention that: (a) under §9-316 of the DE UCC, perfection of any security
interest in the Delaware Filing Collateral and will lapse (i) four months
after the applicable Delaware Entity changes its location to another
jurisdiction or (ii) one year after the applicable Loan Party transfers
the Collateral to a Person who thereby becomes a debtor under the Loan
Documents and who is located in another jurisdiction, unless, in either case,
appropriate steps are taken to perfect such security interest in such other
jurisdiction before the expiration of such four-month or one-year period, as
applicable; (b) under §9-507 of the DE UCC, if the applicable Delaware
Entity changes its name so as to make the applicable Financing Statement
seriously misleading, then perfection will lapse as to any Collateral acquired
more than four months after such change unless one or more appropriate
financing statements indicating the new name of the applicable Delaware Entity
are properly filed before the expiration of such four-month period, (c) §9-508
of the DE UCC requires the filing of a new financing statement to continue
perfection where the financing statement becomes seriously misleading as a
result of the difference between the name of an original debtor and a new
debtor, and (d) §9-515 of the DE UCC requires the filing of continuation
statements within six months prior to the expiration of five years from the
date of the filing of the Financing Statements and within six months prior to
each five year anniversary of the date of filing of the Financing Statements in
order to maintain the effectiveness of the Financing Statements.

 

h.                                      The opinions
set forth in paragraphs 2, 6, 7, 8 and 9 above regarding the enforceability,
creation and perfection of security interests are subject to the following:

 

1)             We express no
opinion herein as to the ranking or priority of any security interests, rights
or claims of any kind on any Collateral.

 

2)             We express no
opinion with respect to the effect of §552 of the Bankruptcy Code (11 U.S.C.
§552) (relating to property acquired by a pledgor after the commencement of a
case under the United States Bankruptcy Code with respect to such pledgor) or
§506(c) of the Bankruptcy Code (11 U.S.C. §506(c)) (relating to certain
costs and expenses of a trustee in preserving or disposing of Collateral).

 

3)             We note that the
effectiveness, validity or perfection of the security interests in the Delaware
Entities Collateral created by the Collateral Agreement, may be impaired, lost
or adversely affected as to such property, or portions thereof, that (A) as
provided in §9-336 of the NY UCC and the DE UCC, lose its or their identity or
become part of a product or mass, (B) pursuant to §9-320 of the NY UCC and
DE UCC, are 

 

10

 

goods
purchased by a buyer in the ordinary course of business, (C) pursuant to
§9-321 of the NY UCC and DE UCC, are general intangibles licensed or goods
leased in the ordinary course of business, (D) are goods purchased by a
buyer other than in the ordinary course of business as provided in §9-323(d) of
the NY UCC and the DE UCC, (E) are chattel paper, instruments, documents,
securities, financial assets or security entitlements with respect to which a
purchaser may take free of a security interest under §§9-330 and 9-331 of the
NY UCC and DE UCC, or (F) are goods with respect to which certain buyers
may take free of a security interest under §9-337 of the NY UCC and DE UCC.

 

i.              In rendering the opinions expressed herein (i) our
opinions relate only to statutory laws, rules, orders, and regulations that we,
in the exercise of customary professional diligence, would reasonably recognize
as being applicable to the Loan Parties or the transactions contemplated in the
Loan Documents, and (ii) we have reviewed such orders, judgments or
decrees of Governmental Authorities as have been identified to us by the Loan
Parties as applicable to the Loan Parties or their respective businesses.

 

j.              In rendering the foregoing opinions we do not express
any opinion as to the Collateral Agent’s or any Lender’s compliance (or the
compliance of any successor or assign of any of the foregoing) with any
applicable and relevant regulatory or administrative statutes or regulations,
directives, orders, rulings or the like governing or applicable to it or its
execution, delivery or performance of the Transaction Documents to which it is
a party or the consummation of the transactions contemplated thereby.

 

k.             With respect to references herein to “to our knowledge”
or words or phrases of similar import (whether or not modified by any
additional phrases), such references mean the actual, current knowledge that
those attorneys of Fulbright & Jaworski L.L.P. have obtained from (i) their
representation of the Loan Parties within one year prior to the date hereof,
and (ii) representations of the Loan Parties set forth in the Loan
Documents, or otherwise made to us in certifications and other writings.  We call your attention to the fact that, in
rendering this opinion, we have not reviewed the records of any federal, state
or county governmental entity or the records of any court; except that we have
reviewed the pleadings, and court orders of the United States Bankruptcy Court
for the Northern District of Texas, Dallas Division, identified in the docket
sheet as it existed at exactly 8:45 a.m. Central Standard Time on December 31,
2009, for Case No. 09-31828 (BJH), In re Idearc Inc., et al., Debtors (Chapter
11) (Jointly Administered) and associated cases thereto pending in the United
States Bankruptcy Court for the Northern District of Texas, Dallas Division.

 

l.              We express no opinion herein with respect to compliance
with any of the anti-fraud provisions of applicable federal or state securities
laws, rules or regulations.

 

11

 

The foregoing opinions are
expressly limited to matters under and governed by Applicable Law.

 

This
opinion is furnished as of its date at the request and direction of the Loan
Parties, and may be relied upon solely by the addressees hereof and, as of the
date of this opinion, assignees of any of the Lenders and their respective
assignees, in connection with the transactions contemplated by the Loan
Agreement, and may not be relied upon by any other Person or by any Person in
any other context without our express written consent.  This opinion may not be furnished to any
other Person or entity without our prior written consent, except that this
opinion may be provided (i) to the independent auditors and attorneys of
the addressees hereof, (ii) to any Governmental Authority having
regulatory jurisdiction over the addressees hereof, (iii) pursuant to an
order or legal process of any court of competent jurisdiction or governmental
agency with regulatory authority over the addressees hereto, (iv) in
connection with any litigation relating to the Loan Documents or the
transactions described therein, (v) to Persons that are assignees or prospective
purchasers of the Loans, and (vi) to Persons engaged in the administration
of the Loan Documents.  The opinions
expressed herein are as of the date hereof, and we make no undertaking to
supplement such opinions as facts and circumstances come to our attention
(including, without limitation, amendments to any of the Transaction Documents
or subsequent judicial proceedings, including bankruptcy court proceedings,
which might affect the enforceability of any confirmation order or plan of
reorganization of any of the Loan Parties) or changes in the law occur which
could affect such opinions.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Fulbright &
  Jaworski L.L.P.

  

 

12

 

EXHIBIT
A

 

Mortgages

 

Mortgage,
Assignment Of Leases And Rents, Security Agreement And Fixture Filing dated as
of December 31, 2009, from Idearc Media Services — West Inc., as
Mortgagor, to JPMorgan Chase Bank, N.A., as Collateral Agent, as Mortgagee

 

Credit
Line Deed Of Trust, Assignment Of Leases And Rents, Security Agreement And
Fixture Filing dated as of December 31, 2009, from Idearc Media Services —
East Inc., as Trustor, to James B. Crawford, III, as Trustee for the
benefit of JPMorgan Chase Bank, N.A., as Collateral Agent, as Beneficiary

 

Deed
Of Trust, Assignment Of Leases And Rents, Security Agreement And Fixture Filing
dated as of December 31, 2009, from Idearc Media Services — West Inc., as
Trustor, to Stewart Title Of California, as Trustee for the benefit of JPMorgan
Chase Bank, N.A., as Collateral Agent, as Beneficiary

 

 

EXHIBIT
B

 

Financing
Statements

 

See
attached.

 

 

EXHIBIT
C

 

Material
Agreements

 

1.               Publishing Agreement, dated November 17,
2006, among Verizon Communications Inc., Verizon Services Corp. and Idearc
Media LLC (formerly known as Idearc Media Corp.) (Exhibit 10.2 to Idearc’s
Current Report on Form 8-K, filed November 21, 2006)

 

2.               Non-Competition Agreement,
dated November 17, 2006, between Verizon Communications Inc. and
Idearc Media LLC (formerly known as Idearc Media Corp.) (Exhibit 10.3 to
Idearc’s Current Report on Form 8-K, filed November 21, 2006)

 

3.               Branding Agreement, dated November 17,
2006, between Verizon Licensing Company and Idearc Media LLC (formerly known as
Idearc Media Corp.) (Exhibit 10.4 to Idearc’s Current Report on Form 8-K,
filed November 21, 2006)

 

4.               Listings License Agreement,
dated November 17, 2006, between specified Verizon telephone operating
companies and Idearc Media LLC (formerly known as Idearc Media Corp.) (Exhibit 10.5
to Idearc’s Current Report on Form 8-K, filed November 21, 2006)

 

5.               Billing Services Agreement,
dated November 17, 2006, between Verizon Services Corp. and Idearc Media
LLC (formerly known as Idearc Media Corp.) (Exhibit 10.6 to Idearc’s
Current Report on Form 8-K, filed November 21, 2006)

 

6.               Intellectual Property
Agreement, dated November 17, 2006, between Verizon Services Corp. and
Idearc Media LLC (formerly known as Idearc Media Corp.) (Exhibit 10.7 to
Idearc’s Current Report on Form 8-K/A, filed November 22, 2006)

 

7.               Amendment to Sublease
Agreement dated as of March 1, 2009 between Verizon Realty Group and
Idearc Media LLC (Exhibit 10.2 to Idearc’s Quarterly Report on Form 10-Q,
filed May 8, 2009)

 

8.               Master Outsourcing Services
Agreement, dated October 30, 2009, between Idearc Media Services — West
Inc., TATA America International Corporation and TATA Consultancy Services
Limited (Exhibit 10.1 to Idearc’s Current Report on Form 8-K, filed November 5,
2009)

 

 

EXHIBIT
D

 

Pledged
Stock

 

	
  Issuer

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Number and

  Class of

  Equity Interest

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Information Services LLC

  	
   

  	
  Idearc
  Inc.

  	
   

  	
  Unnumbered

  	
   

  	
  155,000 limited liability company interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media LLC

  	
   

  	
  Idearc
  Information Services LLC

  	
   

  	
  1

  	
   

  	
  3,000 common shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  License
  Application Corporation

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  2

  	
   

  	
  1 share

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Second
  License Application Corporation

  	
   

  	
  License
  Application Corporation

  	
   

  	
  2

  	
   

  	
  1 share

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Sales – West Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  5

  	
   

  	
  2,000 shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Services – West Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  6

  	
   

  	
  1,000 shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Services – East Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  3

  	
   

  	
  1 share

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Sales – East LLC

  	
   

  	
  Idearc
  Media Sales – West Inc.

  	
   

  	
  Unnumbered

  	
   

  	
  100 common units

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Inceptor Limited

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  4

  	
   

  	
  65

  

 

 

EXHIBIT
C

 

Form of Guarantee and
Collateral Agreement

 

[see attached]

 

	
   

  	
   

  

 

 

GUARANTEE AND COLLATERAL AGREEMENT

 

dated as of December 31, 2009,

 

among

 

IDEARC INC.,

 

THE SUBSIDIARIES from time to time party hereto

 

and

 

JPMORGAN CHASE BANK, N.A.,

 

as the Agent

 

	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I Definitions

  	
  1

  
	
   

  	
   

  
	
  SECTION 1.01.  
  Loan Agreement

  	
  1

  
	
  SECTION 1.02.  
  Other Defined Terms

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II Guarantee

  	
  4

  
	
   

  	
   

  
	
  SECTION 2.01.  
  Guarantee

  	
  4

  
	
  SECTION 2.02.  
  Guarantee of Payment

  	
  5

  
	
  SECTION 2.03.   No
  Limitations

  	
  5

  
	
  SECTION 2.04.  
  Reinstatement

  	
  6

  
	
  SECTION 2.05.  
  Agreement To Pay

  	
  6

  
	
  SECTION 2.06.  
  Information

  	
  6

  
	
  SECTION 2.07.  
  Taxes

  	
  6

  
	
  SECTION 2.08.  
  Maximum Liability

  	
  6

  
	
   

  	
   

  
	
  ARTICLE III Pledge of Securities

  	
  6

  
	
   

  	
   

  
	
  SECTION 3.01.  
  Pledge

  	
  6

  
	
  SECTION 3.02.  
  Delivery of the Pledged Collateral

  	
  7

  
	
  SECTION 3.03.  
  Representations, Warranties and Covenants

  	
  8

  
	
  SECTION 3.04.  
  Certification of Limited Liability Company and Limited Partnership Interests

  	
  9

  
	
  SECTION 3.05.  
  Registration in Nominee Name; Denominations

  	
  9

  
	
  SECTION 3.06.  
  Voting Rights; Dividends and Interest

  	
  9

  
	
   

  	
   

  
	
  ARTICLE IV Security Interests in Personal Property

  	
  11

  
	
   

  	
   

  
	
  SECTION 4.01.  
  Security Interest

  	
  11

  
	
  SECTION 4.02.  
  Representations and Warranties

  	
  13

  
	
  SECTION 4.03.  
  Covenants

  	
  14

  
	
  SECTION 4.04.  
  Covenants Regarding Patent, Trademark and Copyright Collateral

  	
  16

  
	
   

  	
   

  
	
  ARTICLE V Remedies

  	
  18

  
	
   

  	
   

  
	
  SECTION 5.01.  
  Remedies Upon Default

  	
  18

  
	
  SECTION 5.02.  
  Application of Proceeds

  	
  19

  
	
  SECTION 5.03.  
  Grant of License to Use Intellectual Property

  	
  20

  
	
  SECTION 5.04.  
  Securities Act

  	
  20

  
	
  SECTION 5.05.  
  Registration

  	
  20

  
	
   

  	
   

  
	
  ARTICLE VI Indemnity, Subrogation and Subordination

  	
  21

  
	
   

  	
   

  
	
  SECTION 6.01.  
  Indemnity and Subrogation

  	
  21

  
	
  SECTION 6.02.  
  Contribution and Subrogation

  	
  21

  
	
  SECTION 6.03.  
  Subordination

  	
  22

  

 

i

 

	
   

  	
   

  
	
  ARTICLE VII Miscellaneous

  	
  22

  
	
   

  	
   

  
	
  SECTION 7.01.  
  Notices

  	
  22

  
	
  SECTION 7.02.  
  Waivers; Amendment

  	
  22

  
	
  SECTION 7.03.  
  Agent’s Fees and Expenses; Indemnification

  	
  23

  
	
  SECTION 7.04.  
  Successors and Assigns

  	
  23

  
	
  SECTION 7.05.  
  Survival of Agreement

  	
  23

  
	
  SECTION 7.06.  
  Counterparts; Effectiveness; Several Agreement

  	
  24

  
	
  SECTION 7.07.  
  Severability

  	
  24

  
	
  SECTION 7.08.  
  Right of Setoff

  	
  24

  
	
  SECTION 7.09.  
  Governing Law; Jurisdiction; Consent to Service of Process

  	
  24

  
	
  SECTION 7.10.  
  WAIVER OF JURY TRIAL

  	
  25

  
	
  SECTION 7.11.  
  Headings

  	
  25

  
	
  SECTION 7.12.  
  Security Interest Absolute

  	
  25

  
	
  SECTION 7.13.  
  Termination or Release

  	
  26

  
	
  SECTION 7.14.  
  Additional Subsidiaries

  	
  26

  
	
  SECTION 7.15.  
  Agent Appointed Attorney-in-Fact

  	
  26

  

 

Schedules

 

	
  Schedule
  I

  	
  Subsidiary
  Loan Parties

  
	
  Schedule
  II

  	
  Pledged
  Equity Interests; Debt Securities

  
	
  Schedule III

  	
  Intellectual Property

  

 

Exhibits

 

	
  Exhibit I

  	
  Form of
  Supplement

  
	
  Exhibit II

  	
  Form of
  Perfection Certificate

  
	
  Exhibit III

  	
  Form of
  Copyright Security Agreement

  
	
  Exhibit IV

  	
  Form of
  Patent and Trademark Security Agreement

  

 

ii

 

GUARANTEE AND COLLATERAL
AGREEMENT dated as of December 31, 2009 (this “Agreement”), among
IDEARC INC., a Delaware Corporation (the “Borrower”), the subsidiaries
from time to time party hereto and JPMORGAN CHASE BANK, N.A., as the
Agent.

 

Reference
is made to the Loan Agreement dated as of December 31, 2009 (the “Loan
Agreement”), among the Borrower,
the Lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., as
the Administrative Agent.  Pursuant to
the Reorganization Plan (as defined in the Loan Agreement), the Lenders will be
deemed to have made Loans in an original aggregate principal amount of
$2,750,000,000 to the Borrower subject to the terms and conditions set forth in
the Loan Agreement.  The execution and
delivery of this Agreement is required by the terms of the Reorganization Plan
and is a condition precedent to the closing under the Loan Agreement.  Accordingly, the parties hereto agree as
follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Loan
Agreement. 
(a)  Each capitalized term used but not defined herein shall have
the meaning assigned to it in the Loan Agreement.  Each term defined in the New York UCC (as
defined herein) and not defined in this Agreement shall have the meaning
assigned to it in the New York UCC.  The
term “instrument” shall have the meaning specified in Article 9 of
the New York UCC.

 

(b)           The rules of
construction specified in Sections 1.03 and 1.04 of the Loan Agreement also
apply to this Agreement.

 

SECTION 1.02.  Other
Defined Terms.  As used in this
Agreement, the following terms have the meanings specified below:

 

“Account Debtor” means any Person who is or
who may become obligated to any Grantor under, with respect to or on account of
an Account.

 

“Agent”
means JPMorgan Chase Bank, N.A., in its capacity as collateral agent for the
Secured Parties.

 

“Agreement”
has the meaning given to such term in the introductory paragraph to this
Agreement.

 

“Article 9 Collateral” has the
meaning assigned to such term in Section 4.01.

 

“Borrower”
has the meaning assigned to such term in the introductory paragraph to this
Agreement.

 

“Cash
Management Agreement” means any agreement providing for treasury,
depositary, purchasing card or cash management services, including in
connection with any automated clearing house transfers of funds or any similar
transactions between the Borrower or any Guarantor and any Lender or Affiliate
thereof.

 

“Claiming
Party” has the meaning assigned to such term in Section 6.02.

 

“Collateral” means Article 9
Collateral and Pledged Collateral.

 

 

“Contributing
Party” has the meaning assigned to such term in Section 6.02.

 

“Copyright License” means, with
respect to any Grantor, any United States written license agreement of such
Grantor with any Person, now or hereafter in effect, granting any right to any
third party under any Copyright now or hereafter owned by any Grantor or that
such Grantor otherwise has the right to license, or granting any right to any
Grantor under any copyright now or hereafter owned by any third party, and all
rights of such Grantor under any such agreement, subject, in each case, to the
terms of such license agreements and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter covered by such licenses.

 

“Copyrights” means, with respect to any
Grantor, all of such Grantor’s right, title and interest in and to all of the
following now owned or hereafter acquired by such Grantor:  (a) all copyright rights in any work
subject to the copyright laws of the United States, whether as author,
assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office.

 

“Excluded
Property” has the meaning assigned to such term in Section 4.01(d).

 

“Federal Securities Laws” has the
meaning assigned to such term in Section 5.04.

 

“General Intangibles” has the meaning
assigned to such term in the New York UCC and shall include the Expanded Core
Verizon Agreements.

 

“Grantors” means the Borrower and the
Subsidiary Loan Parties.

 

“Guarantors” means the Subsidiary Loan
Parties.

 

“Intellectual Property” means, with
respect to any Grantor its Patents, Copyrights, Licenses, Trademarks, Patent
Licenses, Trademark Licenses and Copyright Licenses and all other intellectual
property rights of any kind.

 

“License” means any Patent License,
Trademark License or Copyright License or other license or sublicense agreement
to which any Grantor is a party, including those listed on Schedule III.

 

“Loan Agreement” has the meaning assigned
to such term in the preliminary statement of this Agreement.

 

“Loan Document Obligations” means (a) the
due and punctual payment by the Borrower of (i) the unpaid principal of
and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the Loans, when and as due,
whether at maturity, by acceleration, upon one or more dates when prepayment is
required under the Loan Agreement and (ii) all other monetary obligations
of the Borrower to any of the Secured Parties under the Loan Agreement and each
of the other Loan Documents, including obligations to pay fees, expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, contingent, fixed or otherwise (including interest incurred
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding), (b) the due and punctual payment of all other 

 

2

 

obligations of the Borrower under or pursuant to the Loan Agreement and
each of the other Loan Documents and (c) the due and punctual payment of
all the obligations of each other Loan Party under or pursuant to this
Agreement and each of the other Loan Documents.

 

“New York UCC” means the
Uniform Commercial Code as from time to time in effect in the State of New
York.

 

“Obligations” means (a) the
Loan Document Obligations and (b) the due and punctual payment of all
obligations of each Loan Party under (i) any Swap Agreement that is
entered into after the Closing Date with any counterparty that is a Lender or
an Affiliate of a Lender at the time such Swap Agreement is entered into and (ii) each
Cash Management Agreement that (A) is in effect on the Closing Date with a
Lender or an Affiliate of a Lender as of the Closing Date or (B) is
entered into after the Closing Date with a Lender or an Affiliate of a Lender
at the time such Cash Management Agreement is entered into.

 

“Patent License” means, with
respect to any Grantor, any written United States license agreement of such
Grantor with any Person, now or hereafter in effect, granting to any third
party any right to make, use or sell any invention covered by a patent, now or
hereafter owned by any Grantor or that any Grantor otherwise has the right to
license, or granting to any Grantor any right to make, use or sell any
invention covered by a patent, now or hereafter owned by any third party, and
all rights of any Grantor under any such agreements, subject, in each case, to
the terms of such license agreements and the right to prepare for sale, sell
and advertise for sale, all Inventory now or hereafter covered by such
licenses.

 

“Patents” means, with
respect to any Grantor, all of such Grantor’s right, title and interest to and
in all of the following now owned or hereafter acquired by such Grantor:  (a) all letters patent of the United
States, and all applications for letters patent of the United States, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office, including those listed on Schedule III and (b) all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof, and the inventions disclosed or claimed therein, including
the right to make, use and/or sell the inventions disclosed or claimed therein.

 

“Perfection Certificate” means a
certificate substantially in the form of Exhibit II, completed and
supplemented with the schedules and attachments contemplated thereby, and duly
executed by a Financial Officer and the chief legal officer of the Borrower.

 

“Pledged Collateral” has the
meaning assigned to such term in Section 3.01.

 

“Pledged Debt Securities” has the
meaning assigned to such term in Section 3.01.

 

“Pledged Equity Interests” has the
meaning assigned to such term in Section 3.01.

 

“Pledged Securities” means all
certificates, instruments or other documents representing or evidencing any
Pledged Collateral.

 

“Proceeds” has the
meaning specified in Section 9-102 of the New York UCC.

 

“Restrictive
Agreement” has the meaning assigned to such term in Section 4.01(d).

 

3

 

“Secured Parties” means (a) the
Lenders, (b) the Agent (and any Affiliate of the Agent), (c) the
Administrative Agent, (d) each counterparty to any Swap Agreement entered
into with a Loan Party the obligations under which constitute Obligations that
are then due and owing, (e) each counterparty to any Cash Management
Agreement  entered into with a Loan Party
the obligations under which constitute Obligations that are then due and owing,
(f) the beneficiaries of each indemnification obligation undertaken by any
Loan Party under any Loan Document and (g) the successors and permitted
assigns of each of the foregoing.

 

“Security Interest” has the
meaning assigned to such term in Section 4.01.

 

“Specified
Assets” means the following property and assets of each Grantor:

 

(a)           Collateral for
which the perfection of Liens thereon requires filing in or other actions under
the laws of jurisdictions outside of the United States (or any political
subdivision thereof);

 

(b)           goods included
in Collateral received by any Person for “sale or return” within the meaning of
Section 2-326 of the Uniform Commercial Code of the applicable
jurisdiction, to the extent of claims of creditors of such Person.

 

“Subsidiary Loan Parties” means (a) the
Subsidiaries identified on Schedule I and (b) each other Subsidiary
that becomes a party to this Agreement as a Grantor or Guarantor after the
Closing Date, but excluding any party that ceases to be a party to this
Agreement in accordance with Section 7.13.

 

“Trademark License” means, with
respect to any Grantor, any written U.S. license agreement of such Grantor with
any Person, now or hereafter in effect, granting to any third party any right
to use any Trademark now or hereafter owned by any Grantor or that any Grantor
otherwise has the right to license, or granting to any Grantor any right to use
any trademark now or hereafter owned by any third party, and all rights of an
Grantor under any such agreement, subject, in each case, to the terms of such
license agreements and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.

 

“Trademarks” means, with
respect to any Grantor, all of such Grantor’s right, title and interest to and
in all of the following now owned or hereafter acquired by any Grantor:  (a) all trademarks, service marks, trade
names, corporate names, company names, business names, trade dress, logos,
other source or business identifiers, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications filed
in connection therewith, in the United States Patent and Trademark Office, and
all renewals thereof, including those listed on Schedule III and (b) all
goodwill associated therewith or symbolized thereby.

 

ARTICLE II

 

Guarantee

 

SECTION 2.01.  Guarantee.  Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, the due and punctual payment and performance of the
Obligations.  Each Guarantor further
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee hereunder notwithstanding any such extension or renewal of any
Obligation.  Each Guarantor waives
presentment to, demand of 

 

4

 

payment from and protest to the Borrower or any other Loan Party of any
of the Obligations, and also waives notice of acceptance of its guarantee and
notice of protest for nonpayment.

 

SECTION 2.02.  Guarantee
of Payment.  Each Guarantor further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
and not merely of collection, and waives any right to require that any resort
be had by the Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any deposit account or credit
on the books of the Agent or any other Secured Party in favor of the Borrower,
any other Loan Party or any other Person. 
Each Guarantor agrees that its guarantee is continuing in nature and applies
to all Obligations, whether currently existing or hereafter incurred.

 

SECTION 2.03.  No
Limitations.  (a)  Except for
termination of a Guarantor’s obligations hereunder as expressly provided in Section 7.13,
the obligations of each Guarantor hereunder shall not, to the fullest extent
permitted by applicable law, be subject to any reduction, limitation,
impairment or termination for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever, by
reason of the invalidity, illegality or unenforceability of the Obligations, or
otherwise (other than a defense of performance).  Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not, to the
fullest extent permitted by law, be discharged, impaired or otherwise affected
by (i) the failure of the Agent or any other Secured Party to assert any
claim or demand or to exercise or enforce any right or remedy under the
provisions of any Loan Document or otherwise (other than a defense of
performance); (ii) any extension or renewal of any of the Obligations; (iii) any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, any Loan Document or any other agreement, including
with respect to any other Guarantor under this Agreement; (iv) the failure
to perfect any security interest (to the extent provided herein) in, or the
release of, any security held by the Agent or any other Secured Party for the
Obligations or any of them; (v) any default, failure or delay, willful or
otherwise, in the performance of the Obligations; or (vi) any other act,
omission or delay to do any other act that may or might in any manner or to any
extent vary the risk of any Guarantor or otherwise operate as a discharge of
any Guarantor as a matter of law or equity (other than the payment in full in
cash of all the Obligations) or which would impair or eliminate the right of
any Guarantor to subrogation.  Each
Guarantor expressly authorizes the Agent and the other Secured Parties to take
and hold security for the payment and performance of the Obligations, to
exchange, waive or release any or all such security (with or without
consideration), to enforce or apply such security and direct the order and
manner of any sale thereof in their sole discretion or to release or substitute
any one or more other guarantors or obligors upon or in respect of the
Obligations, all without affecting the obligations of any Guarantor
hereunder.  Each Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the
financing arrangements contemplated by the Loan Documents.

 

(b)           To the fullest extent
permitted by applicable law, each Guarantor waives any defense based on or
arising out of any defense of the Borrower or any other Loan Party or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower or any other Loan
Party, other than the payment in full in cash or immediately available funds of
all the Obligations (other than contingent or unliquidated obligations or
liabilities) or a defense of performance. 
The Agent and the other Secured Parties may, at their election,
foreclose on any security held by one or more of them by one or more judicial
or nonjudicial sales, accept an assignment of any such security in lieu of
foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrower or any other Loan Party or exercise any other
right or remedy available to them against 

 

5

 

the Borrower or any other
Loan Party, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent all the Obligations (other than
contingent or unliquidated obligations or liabilities) have been reduced
thereby.  To the fullest extent permitted
by applicable law, each Guarantor waives any defense arising out of any such
election even though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation or other
right or remedy of such Guarantor against the Borrower or any other Loan Party,
as the case may be, or any security.

 

SECTION 2.04.  Reinstatement.  Each Guarantor agrees that its guarantee
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of any Obligation is rescinded or
must otherwise be restored by the Agent or any other Secured Party upon the
bankruptcy or reorganization of the Borrower, any other Loan Party or
otherwise.

 

SECTION 2.05.  Agreement
To Pay.  In furtherance of the
foregoing and not in limitation of any other right that the Agent or any other
Secured Party may have at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, without duplication,
to the Agent for distribution to the applicable Secured Parties in cash the
amount of such unpaid Obligation.  Upon
payment by any Guarantor of any sums to the Agent as provided above, all rights
of such Guarantor against the Borrower or any other Loan Party arising as a
result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subject to Article VI.

 

SECTION 2.06.  Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s and each other Loan Party’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Agent or the other Secured Parties will have any duty to advise such
Guarantor of information known to it or any of them regarding such
circumstances or risks.

 

SECTION 2.07.  Taxes.
Each Guarantor agrees that the provisions of Section 2.12 of the Loan
Agreement shall apply equally to the monetary obligations of such Guarantor
(other than its guarantee of the Obligations of the Borrower) under this
Agreement.

 

SECTION 2.08.  Maximum
Liability.  Anything herein or in any
other Loan Document to the contrary notwithstanding, the maximum liability of
each Guarantor hereunder and under the other Loan Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under applicable
federal and state laws relating to the insolvency of debtors (after giving effect
to the right of contribution established in Section 6.02).

 

ARTICLE III

 

Pledge of Securities

 

SECTION 3.01.  Pledge.  As security for the payment or performance,
as the case may be, in full of the Obligations, each Grantor hereby assigns and
pledges to the Agent, its successors and permitted assigns, for the ratable
benefit of the Secured Parties, and hereby grants to the Agent, its successors
and permitted assigns, for the ratable benefit of the Secured Parties, a 

 

6

 

security interest in, all of
such Grantor’s right, title and interest in, to and under (a) any Equity
Interests of any Subsidiary owned by it, including listed on Schedule II,
and any other Equity Interests of any Subsidiary obtained in the future by such
Grantor required to be pledged by such Grantor pursuant to Section 5.11 of
the Loan Agreement (the “Pledged Equity Interests”); provided
that the Pledged Equity Interests shall not include (i) more than 65% of
the issued and outstanding Equity Interests in any Foreign Subsidiary, (ii) to
the extent applicable law requires that a Subsidiary of such Grantor issue
directors’ qualifying shares, such shares or nominee or other similar shares, (iii) any
Equity Interests of a Subsidiary to the extent that, as of the Closing Date,
and for so long as, such a pledge of such Equity Interests would violate a
contractual obligation binding on such Equity Interests or (iv) any Equity
Interests of a Subsidiary of a Loan Party acquired after the Closing Date if,
and to the extent that, and for so long as, (A) a pledge of such Equity
Interests would violate applicable law or any contractual obligation binding
upon such Subsidiary and (B) such law or obligation existed at the time of
the acquisition thereof and was not created or made binding upon such
Subsidiary in contemplation of or in connection with the acquisition of such
Subsidiary; (b)(i) any debt securities or Indebtedness (including
intercompany Indebtedness) issued by the Borrower and any Subsidiary held by
it, including those listed opposite the name of such Grantor on Schedule II,
(ii) any debt securities or Indebtedness in the future issued to or held
by such Grantor, which are issued by the Borrower or any Subsidiary and (iii) any
promissory notes and any other instruments evidencing such debt securities (the
“Pledged Debt Securities”); (c) subject to Section 3.06, all
payments of principal or interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed
belonging to the Grantor in respect of, in exchange for or upon the conversion
of, and all other Proceeds belonging to the Grantor received in respect of, the
securities referred to in clauses (a) and (b) above (other than
Excluded Property); (d) subject to Section 3.06, all rights and
privileges of such Grantor with respect to the securities and other property
referred to in clauses (a), (b) and (c) above; and (e) all
Proceeds of any of the foregoing (the items referred to in clauses (a) through
(e) above being collectively referred to as the “Pledged Collateral”).

 

TO
HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Agent, its successors and permitted assigns, for the ratable benefit
of the Secured Parties, forever; subject, however, to the terms, covenants and
conditions hereinafter set forth.

 

SECTION 3.02.  Delivery of
the Pledged Collateral.  (a) 
Each Grantor agrees promptly to deliver or cause to be delivered to the
Collateral Agent, any and all Pledged Securities; provided that the
Grantor shall have no obligation to deliver any Pledged Debt Securities in an
outstanding principal amount of $500,000 or less; provided, further,
that the aggregate principal amount represented by Pledged Debt Securities that
are not delivered to the Agent shall not exceed $1,000,000 in the aggregate at
any time outstanding;

 

(b)           Upon delivery to the Agent, (i) any
Pledged Securities shall be accompanied by stock or note powers duly executed
in blank or other instruments of transfer reasonably satisfactory to the Agent
and the Grantor and by such other instruments and documents as the Agent may
reasonably request and (ii) all other property composing part of the
Pledged Collateral to the extent necessary or reasonably advisable to perfect
the security interests therein or allow realization of the Pledged Collateral
shall be accompanied by proper instruments of assignment duly executed by the
applicable Grantor and such other instruments or documents as the Agent may
reasonably request.  Each delivery of
Pledged Securities shall be accompanied by a schedule describing the
securities, which schedule shall be attached hereto as Schedule II  

 

7

 

and made a part hereof; provided
that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. 
Each schedule so delivered shall supplement any prior schedules so
delivered.

 

SECTION 3.03.  Representations,
Warranties and Covenants.  Each
Grantor, jointly with the other Grantors and severally, represent, warrant and
covenant to and with the Agent for the benefit of the Secured Parties that:

 

(a)           Schedule II correctly sets
forth the percentage of the issued and outstanding shares of each class of the
Equity Interests of the issuer thereof represented by the Pledged Equity
Interests and includes all Equity Interests, debt securities and promissory
notes required to be pledged hereunder;

 

(b)           the Pledged
Equity Interests and, to the knowledge of the Borrower, Pledged Debt Securities
have been duly and validly authorized and issued by the issuers thereof and (i) in
the case of Pledged Equity Interests, are fully paid and nonassessable and (ii) in
the case of Pledged Debt Securities, to the knowledge of the Borrower, are
legal, valid and binding obligations of the issuers thereof;

 

(c)           each Grantor (i) is
and, subject to any transfers made in compliance with the Loan Agreement, will
continue to be the direct owner, beneficially and of record, of the Pledged
Securities indicated on Schedule II as owned by such Grantor, (ii) holds
the same free and clear of all Liens, other than Liens permitted pursuant to Section 6.02
of the Loan Agreement, (iii) will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security
interest in or other Lien on, the Pledged Collateral, other than Liens
permitted pursuant to Section 6.02 of the Loan Agreement and (iv) subject
to the rights of each Grantor under the Loan Documents to dispose of Pledged
Collateral, such Grantor will use commercially reasonable efforts to defend its
title or interest thereto or therein against any and all Liens (other than
Liens created permitted pursuant to Section 6.02 of the Loan Agreement),
however arising, of all Persons whomsoever;

 

(d)           except for
restrictions and limitations imposed by the Loan Documents or securities laws
generally or otherwise permitted to exist pursuant to the terms of the Loan
Agreement, the Pledged Collateral is and will continue to be freely
transferable and assignable, and none of the Pledged Collateral is or will be
subject to any option, right of first refusal, shareholders agreement, charter
or by-law provisions or contractual restriction of any nature that might
prohibit, impair, delay or otherwise affect the pledge of such Pledged
Collateral hereunder, the sale or disposition thereof pursuant hereto or the
exercise by the Agent of rights and remedies hereunder;

 

(e)           each Grantor has
the power and authority to pledge the Pledged Collateral pledged by it
hereunder in the manner hereby done or contemplated;

 

(f)            no consent or
approval of any Governmental Authority, any securities exchange or any other
Person was or is necessary to the validity of the pledge effected hereby (other
than such as have been obtained or the failure of which to have been obtained
would not impair the rights and remedies of the Secured Parties hereunder in
any material respect);

 

8

 

(g)           by virtue of
the execution and delivery by each Grantor of this Agreement, when any Pledged
Securities are delivered to the Agent in accordance with this Agreement, the
Agent will obtain a legal, valid and perfected lien upon, and security interest
in, such Pledged Securities as security for the payment and performance of the
Obligations; and

 

(h)           the pledge
effected hereby is effective to vest in the Agent, for the ratable benefit of
the Secured Parties, the rights of the Agent in the Pledged Collateral as set
forth herein.

 

SECTION 3.04.  Certification
of Limited Liability Company and Limited Partnership Interests.  Each interest in any limited liability
company or limited partnership that is a Domestic Subsidiary controlled by any
Grantor and pledged hereunder shall be represented by a certificate, shall be a
“security” within the meaning of Article 8 of the Uniform Commerical Code
in effect in the relevant jurisdiction and shall be governed by Article 8
of such Uniform Commerical Code.

 

SECTION 3.05.  Registration
in Nominee Name; Denominations.  The
Agent, on behalf of the Secured Parties, shall have the right to hold the
Pledged Securities in the name of the applicable Grantor, endorsed or assigned
in blank or in favor of the Agent or, if an Event of Default shall have
occurred and be continuing, in its own name as pledgee or the name of its
nominee (as pledgee or as sub-agent). 
Each Grantor will promptly give to the Agent copies of any notices or
other communications received by it with respect to Pledged Securities
registered in the name of such Grantor. 
If an Event of Default shall have occurred and be continuing, the Agent
shall have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Agreement.

 

SECTION 3.06.  Voting
Rights; Dividends and Interest.  (a) 
Unless and until an Event of Default shall have occurred and be continuing and
the Agent shall have notified the Grantors that their rights under this Section 3.06
are being suspended:

 

(i)            Each Grantor
shall be entitled to exercise any and all voting and/or other consensual rights
and powers inuring to an owner of Pledged Securities or any part thereof for
any purpose not in violation of the terms of this Agreement, the Loan Agreement
and the other Loan Documents.

 

(ii)           The Agent shall
execute and deliver to each Grantor, or cause to be executed and delivered to
such Grantor, all such proxies, powers of attorney and other instruments as
such Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and/or consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above.

 

(iii)          Each Grantor
shall be entitled to receive and retain any and all dividends, interest,
principal and other distributions paid on or distributed in respect of the
Pledged Securities to the extent and only to the extent that such dividends,
interest, principal and other distributions are permitted by, and otherwise
paid or distributed in accordance with, the terms and conditions of the Loan
Agreement, the other Loan Documents and applicable laws; provided that
any non-cash dividends, interest, principal or other distributions that would
constitute Pledged Equity Interests or Pledged Debt Securities, whether
resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Securities or
received in exchange for 

 

9

 

Pledged Securities or any part thereof, or in redemption thereof, or as
a result of any merger, consolidation, acquisition or other exchange of assets
to which such issuer may be a party or otherwise, shall be and become part of
the Pledged Collateral, and, if received by any Grantor, shall be held in trust
for the benefit of the Agent and shall be forthwith delivered to the Agent in
the same form as so received (endorsed in a manner reasonably satisfactory to
the Agent).

 

(b)           Upon the occurrence and
during the continuance of an Event of Default, after the Agent shall have
notified the Grantors of the suspension of their rights under paragraph (a)(iii) of
this Section 3.06, then all rights of any Grantor to dividends, interest,
principal or other distributions that such Grantor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 3.06 shall cease,
and all such rights shall thereupon become vested in the Agent for so long as
such Event of Default is continuing, which shall have the sole and exclusive
right and authority to receive and retain such dividends, interest, principal
or other distributions.  All dividends,
interest, principal or other distributions received by any Grantor contrary to
the provisions of this Section 3.06 shall be held in trust for the benefit
of the Agent, shall be segregated from other property or funds of such Grantor
and shall be forthwith delivered to the Agent upon demand in the same form as
so received (endorsed in a manner reasonably satisfactory to the Agent).  Any and all money and other property paid
over to or received by the Agent pursuant to the provisions of this paragraph (b) shall
be retained by the Agent in an account to be established by the Agent upon
receipt of such money or other property and shall be applied in accordance with
the provisions of Section 5.02. 
After all Events of Default have been cured and the Borrower has
delivered to the Agent a certificate to that effect or waived in writing, the
Agent shall within five Business Days repay to each Grantor (without interest)
all dividends, interest, principal or other distributions that such Grantor
would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) of
this Section 3.06 and that remain in such account.

 

(c)           Upon the occurrence and
during the continuance of an Event of Default, after the Agent shall have
notified the Grantors of the suspension of their rights under paragraph (a)(i) of
this Section 3.06, then all rights of any Grantor to exercise the voting
and consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of
the Agent under paragraph (a)(ii) of this Section 3.06, shall
cease, and all such rights shall thereupon become vested in the Agent, which
shall have the sole and exclusive right and authority to exercise such voting
and consensual rights and powers; provided that, unless otherwise
directed by the Required Lenders, the Agent shall have the right from time to
time following and during the continuance of an Event of Default to permit the
Grantors to exercise such rights.

 

(d)           Any notice given by the
Agent to the Grantors suspending their rights under paragraph (a) of this Section 3.06
(i) may be given by telephone if promptly confirmed in writing, (ii) may
be given to one or more of the Grantors at the same or different times and (iii) may
suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) in
part without suspending all such rights (as specified by the Agent in its sole
and absolute discretion) and without waiving or otherwise affecting the Agent’s
rights to give additional notices from time to time suspending other rights so
long as an Event of Default has occurred and is continuing.

 

(e)           After all Events of Default
have been cured or waived, each Grantor shall have the right to exercise the
voting and/or consensual rights and powers that such Grantor would otherwise be
entitled to exercise pursuant to the terms of paragraph (a)(i) above.

 

10

 

ARTICLE IV

 

Security Interests in
Personal Property

 

SECTION 4.01.  Security
Interest.  (a)  As security for
the payment or performance, as the case may be, in full of the Obligations,
each Grantor hereby grants to the Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, a security interest (the “Security
Interest”) in, all right, title and interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the  “Article 9
Collateral”):

 

(i)            all Deposit
Accounts;

 

(ii)           all Accounts;

 

(iii)          all Chattel
Paper;

 

(iv)          all
Instruments;

 

(v)           all Investment
Property;

 

(vi)          all Documents;

 

(vii)         all General
Intangibles;

 

(viii)        all Inventory;

 

(ix)           all Equipment;

 

(x)            all Fixtures;

 

(xi)           all
Intellectual Property;

 

(xii)          each Commercial
Tort Claim as described in Exhibit II;

 

(xiii)         all books and
records pertaining to the Article 9 Collateral; and

 

(xiv)        to the extent not otherwise
included, all Proceeds and products of any and all of the foregoing and all
collateral security and guarantees given by any Person with respect to any of
the foregoing.

 

(b)           Each Grantor
hereby irrevocably authorizes the Agent at any time and from time to time to
file in any relevant jurisdiction any initial financing statements (including
fixture filings) with respect to the Article 9 Collateral or any part
thereof and amendments thereto that (i) indicate the Collateral as all
assets of such Grantor or words of similar effect as being of an equal or
lesser scope or with greater detail, and (ii) contain the information
required by Article 9 of the Uniform Commercial Code of each applicable
jurisdiction for the filing of any financing statement or amendment, including (A) whether
such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor and (B) in the
case of a financing statement filed as a fixture filing, a sufficient
description of the real property 

 

11

 

to which such Article 9
Collateral relates.  Each Grantor agrees
to provide such information to the Agent promptly upon request.

 

Each Grantor also ratifies its authorization
for the Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto if filed prior to the date hereof.

 

The Agent is further authorized to file with
the United States Patent and Trademark Office or the United States Copyright
Office (to the extent provided herein) (or any successor office) such documents
as may be necessary or advisable for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, in the Trademarks, Copyrights or Patents owned by such Grantor, naming
such Grantor or the Grantors as debtors and the Agent as secured party.

 

(c)           The Security Interest is
granted as security only and shall not subject the Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Article 9 Collateral, nor
shall such Security Interest be construed to be an assignment as of the date
hereof of any of such Grantor’s rights in the Article 9 Collateral or as
anything else other than a grant of security for the payment or
performance, as the case may be, in full of the Obligations.

 

(d)           Notwithstanding anything
herein to the contrary, in no event shall the Security Interest attach to, and
“Article 9 Collateral” shall not include, (i) any contract,
agreement, General Intangible, Instrument, Chattel Paper, or License (each a “Restrictive
Agreement”) to which any Grantor is a party or any of its rights or
interests thereunder to the extent and for so long as the grant of the Security
Interest shall constitute or result in (A) the unenforceability,
abandonment or invalidation of any right of such Grantor therein or (B) in
a breach or termination pursuant to the terms of, or a default under, any such
Restrictive Agreement (other than to the extent that any such term would be
rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
New York UCC or any other applicable law of similar effect); provided, however,
that the Security Interest shall attach immediately at such time as the
condition causing such unenforceability, abandonment or invalidation shall be
remedied and, to the extent severable, shall attach immediately to any portion
of such contract or agreement that does not result in any of the consequences
specified in (A) or (B) including any proceeds of such contract or
agreement, (ii) any asset or property not referenced in any other clauses
in this Section 4.01(d) that is owned by the Grantor as of the date
hereof or that is purchased or otherwise acquired (including through a
Permitted Acquisition) in accordance with the terms of the Loan Agreement and subject
to a contractual or other restriction if the terms of such restriction would
prohibit the grant of a Lien in such assets or property under this Agreement
(other than to the extent that any such term would be rendered ineffective
pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any
other applicable law of similar effect), (iii) any Equipment that is
subject to a Lien permitted by Section 6.02(e) of the Loan Agreement,
(iv) any vehicle covered by a certificate of title or ownership, (v) assets
sold to a Person that is not a Grantor in compliance with the Loan Agreement, (vi) any
Letter-of-Credit Rights to the extent any Grantor is required by applicable law
to apply the proceeds of a drawing of such letter of credit for a specified
purpose, (vii) assets owned by a Guarantor after the release of the
guarantee of such Guarantor pursuant to Section 7.13 of this Agreement, (viii) any
property excluded from the definition of Pledged Collateral by virtue of the
proviso to Section 3.01 hereof and (ix) any “intent-to-use”
application for trademark or service mark registration filed pursuant to Section 1(b) of
the Lanham Act, 15 U.S.C. § 1051, to the extent the inclusion in the Collateral
would violate such section, unless and until an Amendment to Allege Use or a
Statement of Use under 

 

12

 

Sections 1(c) and 1(d) of
said Act has been filed (the property described in clauses (i) through
(ix), the “Excluded Property”).

 

SECTION 4.02.  Representations
and Warranties.  Each Grantor,
jointly with the other Grantors and severally, represents and warrants to the
Agent and the Secured Parties that:

 

(a)           Each Grantor has good and
valid rights in and title to the Article 9 Collateral with respect to which
it has purported to grant the Security Interest and has full power and
authority to grant to the Agent the Security Interest in such Article 9
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms of this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained
or the failure of which to have been obtained would not impair the Security
Interest or rights and remedies of the Secured Parties in any material respect.

 

(b)           The Perfection Certificate
has been duly prepared, completed and executed and the information set forth
therein, including the exact legal name of each Grantor, is correct and
complete, in all material respects, as of the Closing Date.  Except with respect to Liens (if any) on
Specified Assets, upon the completion of (i) the filing of the Uniform
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations containing a
description of the Article 9 Collateral prepared by the Agent based upon
the information provided to the Agent in the Perfection Certificate for filing
in each governmental, municipal or other office specified in Section 2
of the Perfection Certificate (or specified by notice from the Borrower to the
Agent after the Closing Date in the case of filings, recordings or
registrations required by Section 5.03, 5.11 or 5.12 of the Loan
Agreement), (ii) the filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in Article 9 Collateral consisting of United
States Patents, United States registered Trademarks and applications therefor
and United States registered Copyrights and (iii) any filings after the
Closing Date as may be necessary under any Requirement of Law, (iv) the
payment of all applicable fees, (v) the delivery to and continuing
possession by the Agent of all Pledged Securities, all Instruments, all Chattel
Paper and all Documents a security interest in which is perfected by
possession, and (vi) the obtaining and maintenance of “control” (as
described in the Uniform Commercial Code as in effect in the applicable
jurisdiction) by the Agent of all Deposit Accounts, all Electronic Chattel
Paper, Letter-of-Credit Rights, all Uncertificated Securities and all
Securities Accounts, in each case a security interest in which is perfected by
such “control,” the security interests granted in Section 4.01 will
constitute legal, valid and perfected (to the extent provided herein) security
interests in such Grantor’s Article 9 Collateral (except for Excluded
Property) in favor of the Agent, for the benefit of the Secured Parties, as
collateral security for such Grantor’s Obligations, enforceable in accordance
with the terms hereof against all creditors of such Guarantor and any Persons
purporting to purchase any such Article 9 Collateral from such Guarantor,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied covenant
of good faith and fair dealing, is and will be prior to all other Liens on such
Article 9 Collateral except for Liens permitted pursuant to Section 6.02
of the Loan Agreement.

 

(c)           The Article 9
Collateral is owned by the Grantors free and clear of any Lien, except for
Liens expressly permitted pursuant to Section 6.02 of the Loan Agreement
or arising by operation of law.  None of
the Grantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other 

 

13

 

applicable laws covering any
Article 9 Collateral, (ii) any assignment in which any Grantor
assigns any Collateral or any security agreement or similar instrument covering
any Article 9 Collateral with the United States Patent and Trademark
Office or the United States Copyright Office or (iii) any assignment in
which any Grantor assigns any Article 9 Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with any
foreign governmental, municipal or other office, which financing statement or
analogous document, assignment, security agreement or similar instrument is
still in effect, except, in each case, for Liens permitted pursuant to Section 6.02
of the Loan Agreement.

 

SECTION 4.03.  Covenants.  (a)  Each Grantor shall, at its own
expense, take any and all commercially reasonable actions to defend the
Security Interest and the priority thereof against any Lien not permitted by Section 6.02
of the Loan Agreement.

 

(b)           At its option, the Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Article 9
Collateral and not permitted pursuant to Section 6.02 of the Loan
Agreement, and may pay for the maintenance and preservation of the Article 9
Collateral to the extent any Grantor fails to do so as required by the Loan
Agreement or this Agreement, and each Grantor jointly and severally agrees to
reimburse the Agent promptly following receipt of a reasonably detailed invoice
for any payment made or any reasonable expense incurred by the Agent pursuant
to the foregoing authorization; provided that nothing in this paragraph
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Agent or any Secured Party to cure or perform,
any covenants or other promises of any Grantor with respect to taxes,
assessments, charges, fees, Liens, security interests or other encumbrances and
maintenance as set forth herein or in the other Loan Documents.

 

(c)           Each Grantor hereby
authorizes the Agent, with prompt notice thereof to the Grantors, to supplement
this Agreement by supplementing Schedule III or adding additional
schedules hereto to specifically identify any asset or item that may constitute
Copyrights, material exclusive Copyright Licenses, Patents, material exclusive
Patent Licenses, Trademarks or material exclusive Trademark Licenses acquired
by the Grantor after the date hereof; provided that any Grantor shall
have the right, exercisable within 30 days after it has been notified by
the Agent of the specific identification of such Collateral, to advise the
Agent in writing of any inaccuracy of the representations and warranties made
by such Grantor hereunder with respect to such Collateral.  Each Grantor agrees that it will use
commercially reasonable efforts to take such action as it determines shall be
necessary in order that all representations and warranties hereunder shall be
true and correct with respect to such Collateral (to the extent provided
herein) within 45 days after the date it has been notified by the Agent
(or on such later date as the Agent shall agree in its sole reasonable
discretion) of the specific identification of such Collateral.

 

(d)           The Agent and such Person
the Agent may reasonably designate shall have the right, upon not fewer than
five Business Days’ prior notice, at the Grantors’ cost and expense, to inspect
the Article 9 Collateral, all records related thereto and the premises
upon which any of the Article 9 Collateral is located and to verify under
reasonable procedures, in accordance with Section 5.09 of the Loan
Agreement, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Article 9 Collateral, including,
in the case of Accounts or Article 9 Collateral in the possession of any
third person, by contacting Account Debtors or the third person possessing such
Article 9 Collateral for the purpose of making such a verification, at all
such reasonable times and as often as reasonably requested, provided
that at times when no Event of Default is continuing, (i) the Agent shall
not be entitled to contact Account Debtor or third parties in possession of any
Article 9 Collateral or (ii) the 

 

14

 

Borrower shall not be
required to pay for more than two visits per year in the aggregate by the Agent
pursuant to this clause (d) or the Administrative Agent pursuant to Section 5.09
to the Loan Agreement.  The Agent shall
have the right to share any information it gains from such inspection or
verification with any Secured Party, subject to the provisions of Section 9.12
of the Loan Agreement.

 

(e)           At its option, the Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Article 9
Collateral and not permitted pursuant to Section 6.02 of the Loan
Agreement, and may pay for the maintenance and preservation of the Article 9
Collateral to the extent any Grantor fails to do so as required by the Loan
Agreement or this Agreement, and each Grantor jointly and severally agrees to
reimburse the Agent on demand for any payment made or any reasonable expense
incurred by the Agent pursuant to the foregoing authorization; provided
that nothing in this paragraph shall be interpreted as excusing any Grantor
from the performance of, or imposing any obligation on the Agent or any Secured
Party to cure or perform, any covenants or other promises of any Grantor with
respect to taxes, assessments, charges, fees, Liens, security interests or
other encumbrances and maintenance as set forth herein.

 

(f)            Each Grantor shall remain
liable to observe and perform all the conditions and obligations to be observed
and performed by it under each contract, agreement or instrument relating to
the Article 9 Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Agent and the other Secured Parties from and against any and all
liability for such performance.

 

(g)           None of the Grantors shall
make or permit to be made an assignment, pledge or hypothecation of the Article 9
Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Loan Agreement.  None of the Grantors shall make or permit to
be made any transfer of the Article 9 Collateral and each Grantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except as permitted by the Loan Agreement.

 

(h)           None of the Grantors will,
without the Agent’s prior written consent (which consent shall not be
unreasonably withheld), grant any extension of the time of payment of any
Accounts included in the Article 9 Collateral, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, compromises, settlements,
releases, credits or discounts granted or made in the ordinary course of
business or as otherwise permitted under the Loan Agreement.

 

(i)            Each Grantor irrevocably
makes, constitutes and appoints the Agent (and all officers, employees or
agents designated by the Agent) as such Grantor’s true and lawful agent (and
attorney-in-fact) for the purpose of making, settling and adjusting claims in
respect of Article 9 Collateral under policies of insurance, endorsing the
name of such Grantor on any check, draft, instrument or other item of payment
for the proceeds of such policies of insurance and for making all
determinations and decisions with respect thereto; provided that the Agent
agrees not to exercise any rights as agent except following the occurrence and
during the continuance of an Event of Default. 
If any Grantor at any time or times shall fail to obtain or maintain any
of the policies of insurance required by the Loan Agreement or to pay any
premium in whole or part relating thereto, the Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Event of
Default, in its sole discretion, obtain and maintain such policies of insurance
and pay such premium and take any other actions with respect 

 

15

 

thereto as the Agent deems
advisable or necessary.  All sums
disbursed by the Agent in connection with this paragraph, including reasonable
attorneys’ fees, court costs, expenses and other charges relating thereto,
shall be payable, upon demand, by the Grantors to the Agent and shall be
additional Obligations secured hereby.

 

(j)            (i)            On the date hereof, except
to the extent listed in Section 4.01 above, no Grantor has rights in any
Commercial Tort Claim with potential value in excess of $1,000,000.

 

(ii)           Upon the filing
of a financing statement covering and properly describing any Commercial Tort
Claim referred to in clause (iii) hereof against such Grantor in the
jurisdiction specified in Exhibit II hereto, the security interest granted
in such Commercial Tort Claim will constitute a valid perfected security
interest in favor of the Agent, for the ratable benefit of the Secured Parties,
as collateral security for such Grantor’s Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase such Collateral from Grantor, which security
interest shall be prior to all other Liens on such Collateral except for
unrecorded liens permitted by the Loan Agreement which have priority over the
Liens on such Collateral by operation of law.

 

(iii)          If such Grantor
shall obtain an interest in any Commercial Tort Claim with a potential value in
excess of $1,000,000, such Grantor shall within 30 days of obtaining such
interest sign and deliver documentation reasonably acceptable to the Agent
granting a security interest under the terms and provisions of this Agreement
in and to such Commercial Tort Claim.

 

SECTION 4.04.  Covenants
Regarding Patent, Trademark and Copyright Collateral.  (a)  Each Grantor agrees that it will
not do any act or omit to do any act (and will exercise commercially reasonable
efforts to prevent its licensees from doing any act or omitting to do any act) (i) whereby
any Intellectual Property that is material to the normal conduct of such
Grantor’s business may become invalidated or prematurely dedicated to the
public and (ii) that violates any third party’s rights in respect of any
Intellectual Property in any material respect and agrees that it shall take
commercially reasonable steps with respect to any material products covered by
any Patent material to the normal conduct of such Grantor’s business to mark
such products with the relevant patent number to the extent it determines
necessary and sufficient to establish and preserve its rights under applicable
patent laws.

 

(b)           Each Grantor will, and will
use its commercially reasonable efforts to cause its licensees or its
sublicensees to, for each Trademark material to the normal conduct of such
Grantor’s business, (i) maintain such Trademark in full force, free from
any adjudication of abandonment or invalidity for non-use, (ii) maintain
the quality of products and services offered under such Trademark consistent
with the quality of such products and services as of the date hereof, (iii) display
such Trademark with notice of federal registration to the extent it determines
necessary and sufficient to establish and preserve its rights under applicable
law and (iv) not knowingly use or knowingly permit its licensees’ use of
such Trademark in violation of any third-party rights.

 

(c)           Each Grantor will, and will
use its commercially reasonable efforts to cause its licensees or its
sublicensees to, for each work covered by a Copyright material to the normal
conduct of such Grantor’s business that it publishes, displays and distributes,
use copyright notice as necessary to establish and preserve its rights under
applicable copyright laws.

 

16

 

(d)           Each Grantor shall notify
the Agent promptly if it knows that any Intellectual Property material to the
normal conduct of such Grantor’s business is likely to become abandoned, lost
or dedicated to the public other than by expiration, or of any materially
adverse determination or development, excluding office actions and similar
determinations in the United States Patent and Trademark Office, United States
Copyright Office or any court, regarding such Grantor’s ownership of any such
material Patent, Trademark or Copyright or its right to register or to maintain
the same.

 

(e)           Each Grantor shall (i) inform
the Agent within 45 days after the end of each calendar quarter of (A) each
Patent or exclusive Patent license acquired, filed or issued in its own name
with the United States Patent and Trademark Office, (B) each Trademark
registration of or application or exclusive Trademark license acquired, filed
or issued in its own name with the United States Patent and Trademark Office
and (C) any acquisition of an exclusive license to a registered Copyright,
Copyright registration and/or application to register any Copyright at the
United States Copyright Office or any filing to record at the United States
Copyright Office any execution of a “transfer” (as defined in Section 101
of the U.S. Copyright Act of 1976) of any registered Copyright and (ii) upon
the reasonable request of the Agent, promptly execute and deliver any and all
agreements, instruments, documents and papers as the Agent may reasonably
request to evidence and perfect the Agent’s security interest in such Patent,
Trademark or Copyright.

 

(f)            Each Grantor shall exercise
its reasonable business judgment consistent with the practice in any proceeding
before the United States Patent and Trademark Office or the United States
Copyright Office with respect to maintaining and pursuing each material
application relating to any Patent, Trademark and/or Copyright (and obtaining
the relevant grant or registration) material to the normal conduct of such
Grantor’s business and to maintain (i) each issued Patent and (ii) the
registrations of each Trademark and each Copyright in each case that is
material to the normal conduct of such Grantor’s business, including, when
applicable and necessary in such Grantor’s reasonable business judgment, timely
filings of applications for renewal, affidavits of use, affidavits of
incontestability and payment of maintenance fees, and, if any Grantor believes
necessary in its reasonable business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.

 

(g)           In the event that any
Grantor knows that any Article 9 Collateral consisting of a Intellectual
Property material to the normal conduct of its business has been or is about to
be materially infringed, misappropriated or diluted by a third party, such
Grantor shall promptly notify the Agent and shall, if such Grantor deems it
necessary in its reasonable business judgment, promptly contact such third
party, and if necessary or advisable in its reasonable business judgment, sue
and recover damages, and take such other actions as it determines are
reasonably appropriate under the circumstances.

 

(h)           Upon the occurrence and
during the continuance of an Event of Default, each Grantor shall use
commercially reasonable efforts to obtain all requisite consents or approvals
from the licensor under each Copyright License, Patent License or Trademark
License or other Intellectual Property License to effect the assignment of all
such Grantor’s right, title and interest thereunder to (in the Agent’s sole
discretion) the designee of the Agent or the Agent.

 

17

 

ARTICLE V

 

Remedies

 

SECTION 5.01.  Remedies
Upon Default.  Upon the occurrence
and during the continuance of an Event of Default, each Grantor agrees to
deliver each item of Collateral to the Agent on demand, and it is agreed that
the Agent shall have the right to take any of or all the following actions at
the same or different times subject to the mandatory requirements of applicable
law:  (a) with respect to any Article 9
Collateral consisting of Intellectual Property, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such Article 9
Collateral by the applicable Grantors to the Agent, or to license or
sublicense, whether on an exclusive or nonexclusive basis, any such Article 9
Collateral throughout the world on such terms and conditions and in such manner
as the Agent shall determine (other than if and to the extent any such
assignment or license would violate any then-existing rights or licensing
arrangements to the extent that waivers cannot be obtained) and (b) with
or without legal process and with or without prior notice or demand for
performance, to take possession of the Article 9 Collateral and without
liability for trespass to enter any premises where the Article 9
Collateral may be located for the purpose of taking possession of or removing
the Article 9 Collateral and, generally, to exercise any and all rights
afforded to a secured party under the Uniform Commercial Code or other
applicable law.  Without limiting the
generality of the foregoing, each Grantor agrees that the Agent shall have the
right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral at a public or private
sale or at any broker’s board or on any securities exchange, for cash, upon
credit or for future delivery as the Agent shall deem appropriate.  The Agent shall be authorized at any such
sale of securities (if it deems it necessary or advisable to do so) to restrict
the prospective bidders or purchasers to Persons who represent and agree that
they are purchasing such securities for their own account for investment and
not with a view to the distribution or sale thereof, and upon consummation of
any such sale of Collateral pursuant to this Section 5.01, the Agent shall
have the right to assign, transfer and deliver to the purchaser or purchasers
thereof the Collateral so sold.  Each
such purchaser at any such sale of Collateral shall hold the property sold
absolutely, free from any claim or right on the part of any Grantor, and each
Grantor hereby waives and releases (to the extent permitted by law) all rights
of redemption, stay, valuation and appraisal that such Grantor now has or may
at any time in the future have under any rule of law or statute now
existing or hereafter enacted.

 

The Agent shall give the applicable Grantors
10 days written notice (which each Grantor agrees is reasonable notice
within the meaning of Section 9-611 of the New York UCC or its
equivalent in other jurisdictions) of the Agent’s intention to make any sale of
Collateral.  Such notice, in the case of
a public sale, shall state the time and place for such sale and, in the case of
a sale at a broker’s board or on a securities exchange, shall state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or portion thereof, will first be offered for sale at such board or
exchange.  Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Agent may fix and state in the notice (if any) of such sale.  Subject to preexisting rights and licenses,
at any such sale, the Collateral or portion thereof, to be sold may be sold in
one lot as an entirety or in separate parcels, as the Agent may (in its commercially
reasonable discretion) determine.  The
Agent shall not be obligated to make any sale of any Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of such
Collateral shall have been given.  The
Agent may, without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at
the time and place to which the same was so adjourned.  In case any 

 

18

 

sale of all or any part of
the Collateral is made on credit or for future delivery, the Collateral so sold
may be retained by the Agent until the sale price is paid by the purchaser or
purchasers thereof, but the Agent shall not incur any liability in the event
that any such purchaser or purchasers shall fail to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may be
sold again in accordance with the provisions of this Section 5.01.  At any public (or, to the extent permitted by
law, private) sale made pursuant to this Section 5.01, any Secured Party
may bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released to the extent permitted by law),
the Collateral or any part thereof offered for sale and may make payment on
account thereof by using any claim then due and payable to such Secured Party
from any Grantor as a credit against the purchase price, and such Secured Party
may, upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor.  For purposes hereof, a written agreement to
purchase the Collateral or any portion thereof shall be treated as a sale
thereof; the Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Agent shall
have entered into such an agreement all Events of Default shall have been
remedied and the Obligations paid in full. 
As an alternative to exercising the power of sale herein conferred upon
it, the Agent may proceed by a suit or suits at law or in equity to foreclose
under this Agreement and to sell the Collateral or any portion thereof pursuant
to a judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.  Any sale pursuant to the provisions of this Section 5.01
shall be deemed, to the extent permitted by applicable law, to conform to the
commercially reasonable standards as provided in Section 9-610(b) of
the New York UCC or its equivalent in other jurisdictions.

 

SECTION 5.02.  Application
of Proceeds.  The Agent shall
promptly apply the proceeds, moneys or balances of any collection or sale of
Collateral, as well as any Collateral consisting of cash, as follows:

 

FIRST, to the payment of all reasonable costs and expenses incurred by
the Agent in connection with such collection or sale or otherwise in connection
with this Agreement, any other Loan Document or any of the Obligations,
including all court costs and the fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Agent hereunder or under any
other Loan Document on behalf of any Grantor and any other costs or expenses incurred
in connection with the exercise of any right or remedy hereunder or under any
other Loan Document;

 

SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the respective amounts of the Obligations owed to them on the date of any such
distribution); and

 

THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

The Agent shall have absolute discretion as to
the time of application of any such proceeds, moneys or balances in accordance
with this Agreement.  Upon any sale of
Collateral by the Agent (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the consideration by
the Agent or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Collateral so sold and such purchaser or 

 

19

 

purchasers shall not be obligated to see to
the application of any part of the purchase money paid over to the Agent or
such officer or be answerable in any way for the misapplication thereof.

 

SECTION 5.03.  Grant of
License to Use Intellectual Property. 
Solely for the purpose of and to the extent of enabling the Agent to
exercise rights and remedies under this Agreement at such time and only for so
long as the Agent shall be lawfully entitled to exercise such rights and
remedies, each Grantor hereby grants to (in the Agent’s sole discretion) a
designee of the Agent or the Agent, for the ratable benefit of the Secured
Parties, a nonexclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, license or sublicense any of the Article 9
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, wherever the same may be located, and including, without
limitation, in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer software and
programs used for the compilation or printout thereof.  The use of such license by the Agent may be
exercised, at the option of the Agent, upon the occurrence and during the continuation
of an Event of Default; provided that any license, sublicense or other
transaction entered into by the Agent in accordance herewith shall be binding
upon the Grantors notwithstanding any subsequent cure of an Event of Default.

 

SECTION 5.04.  Securities
Act.  In view of the position of the
Grantors in relation to the Pledged Collateral, or because of other current or
future circumstances, a question may arise under the Securities Act of 1933, as
now or hereafter in effect, or any similar statute hereafter enacted analogous
in purpose or effect (such Act and any such similar statute as from time to
time in effect being called the “Federal Securities Laws”) with respect
to any disposition of the Pledged Collateral permitted hereunder.  Each Grantor understands that compliance with
the Federal Securities Laws might very strictly limit the course of conduct of
the Agent if the Agent were to attempt to dispose of all or any part of the
Pledged Collateral, and might also limit the extent to which or the manner in
which any subsequent transferee of any Pledged Collateral could dispose of the
same.  Similarly, there may be other
legal restrictions or limitations affecting the Agent in any attempt to dispose
of all or part of the Pledged Collateral under applicable Blue Sky or other
state securities laws or similar laws analogous in purpose or effect.  Each Grantor recognizes that in light of such
restrictions and limitations the Agent may, 
with respect to any sale of the Pledged Collateral, limit the purchasers
to those who will agree, among other things, to acquire such Pledged Collateral
for their own account, for investment, and not with a view to the distribution
or resale thereof.  Each Grantor
acknowledges and agrees that in light of such restrictions and limitations, the
Agent, in its sole and absolute discretion (a) may proceed to make such a
sale whether or not a registration statement for the purpose of registering
such Pledged Collateral or part thereof shall have been filed under the Federal
Securities Laws and (b) may approach and negotiate with a limited number
of potential purchasers to effect such sale. 
Each Grantor acknowledges and agrees that any such sale might result in
prices and other terms less favorable to the seller than if such sale were a
public sale without such restrictions. 
In the event of any such sale, the Agent shall incur no responsibility
or liability for selling all or any part of the Pledged Collateral at a price
that the Agent, in its sole and absolute discretion, may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might have been realized if the sale were deferred
until after registration as aforesaid or if more than a limited number of
potential purchasers was approached.  The
provisions of this Section 5.04 will apply notwithstanding the existence
of a public or private market upon which the quotations or sales prices may
exceed substantially the price at which the Agent sells.

 

SECTION 5.05.  Registration.  Each Grantor agrees that, upon the occurrence
and during the continuance of an Event of Default, if for any reason the Agent
desires to sell any of the Pledged Collateral at a public sale, it will, at any
time and from time to time, upon the 

 

20

 

written request of the
Agent, use its commercially reasonable efforts to take or to cause the issuer
of such Pledged Collateral to take such action and prepare, distribute and/or
file such documents, as are required in the reasonable opinion of counsel for
the Agent to permit the public sale of such Pledged Collateral.  Each Grantor further agrees to indemnify,
defend and hold harmless the Agent, each other Secured Party, any underwriter
and each of the foregoing’s officers, directors, employees, affiliates, agents,
advisors and controlling persons from and against all loss, liability,
expenses, costs of counsel (including, without limitation, reasonable fees and
expenses to the Agent of legal counsel), and claims (including the costs of
investigation) that they may incur insofar as such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a material
fact contained in any prospectus (or any amendment or supplement thereto) or in
any notification or offering circular, or arises out of or is based upon any
alleged omission to state a material fact required to be stated therein or
necessary to make the statements in any thereof not misleading, except insofar
as the same may have been caused by any untrue statement or omission based upon
information furnished in writing to such Grantor or the issuer of such Pledged
Collateral by the Agent or any other Secured Party expressly for use
therein.  Each Grantor further agrees, upon
such written request referred to above, to use its commercially reasonable
efforts to qualify, file or register, or cause the issuer of such Pledged
Collateral to qualify, file or register, any of the Pledged Collateral under
the Blue Sky or other securities laws of such states as may be reasonably
requested by the Agent and keep effective, or cause to be kept effective, all
such qualifications, filings or registrations. 
Each Grantor will bear all costs and expenses of carrying out its
obligations under this Section 5.05. 
Each Grantor acknowledges that there is no adequate remedy at law for
failure by it to comply with the provisions of this Section 5.05 and that
such failure would not be adequately compensable in damages, and therefore
agrees that its agreements contained in this Section 5.05 may be
specifically enforced to the extent permitted by applicable law.

 

ARTICLE VI

 

Indemnity, Subrogation and
Subordination

 

SECTION 6.01.  Indemnity
and Subrogation.  In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 6.03), the Borrower agrees that (a) in
the event a payment shall be made by any Guarantor under this Agreement in
respect of any Obligation, the Borrower shall indemnify such Guarantor for the
full amount of such payment and such Guarantor shall be subrogated to the
rights of the Person to whom such payment shall have been made to the extent of
such payment and (b) in the event any assets of any Grantor shall be sold
pursuant to this Agreement or any other Security Document to satisfy in whole
or in part an Obligation owed to any Secured Party, the Borrower shall
indemnify such Grantor in an amount equal to the greater of the book value or
the fair market value of the assets so sold.

 

SECTION 6.02.  Contribution
and Subrogation.  Each Guarantor and
each Grantor (a “Contributing Party”) agrees (subject to Section 6.03)
that, in the event a payment shall be made by any other Guarantor hereunder in
respect of any Obligation or assets of any other Grantor shall be sold pursuant
to any Security Document to satisfy any Obligation owed to any Secured Party
and such other Guarantor or Grantor (the “Claiming Party”) shall not
have been fully indemnified by the Borrower as provided in Section 6.01,
the Contributing Party shall indemnify the Claiming Party in an amount equal to
the amount of such payment or the greater of the book value or the fair market
value of such assets, as the case may be, in each case multiplied by a fraction
of which the numerator shall be the net worth of the Contributing Party on the
date hereof and the denominator shall be the aggregate net worth of all the
Guarantors and Grantors on 

 

21

 

the date hereof (or, in the
case of any Guarantor or Grantor becoming a party hereto pursuant to Section 7.14,
the date of the supplement hereto executed and delivered by such Guarantor or
Grantor).  Any Contributing Party making
any payment to a Claiming Party pursuant to this Section 6.02 shall be
subrogated to the rights of such Claiming Party under Section 6.01 above
to the extent of such payment.

 

SECTION 6.03.  Subordination.  (a)  Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors and Grantors under
Sections 6.01 and 6.02 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully subordinated to
the indefeasible payment in full in cash of the Obligations.  No failure on the part of the Borrower or any
Guarantor or Grantor to make the payments required by Sections 6.01 and
6.02 (or any other payments required under applicable law or otherwise) shall
in any respect limit the obligations and liabilities of any other Guarantor or
Grantor with respect to its obligations hereunder, and each Guarantor and each
Grantor shall remain liable for the full amount of the obligations of such
Guarantor or Grantor hereunder.

 

(b)           If any amount shall erroneously be
paid to the Guarantor on account of any such Indebtedness of the Borrower or
any other Loan Party, such amount shall be held in trust for the benefit of the
Secured Parties and shall forthwith be paid to the Agent to be credited against
the payment of Obligations, whether matured or unmatured, in accordance with
the terms of the Loan Agreement or any other Loan Document.

 

ARTICLE VII

 

Miscellaneous

 

SECTION 7.01.  Notices.  All communications and notices hereunder (a) to
any party other than the Subsidiary Loan Parties, shall (except as otherwise
expressly permitted herein) be in writing and given as provided in Section 9.01
of the Loan Agreement or (b) to any Subsidiary Loan Party, shall (except
as otherwise expressly permitted herein) be in writing and given to it in care
of the Borrower as provided in Section 9.01 of the Loan Agreement.

 

SECTION 7.02.  Waivers;
Amendment.  (a)  No failure or
delay by the Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement
or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section 7.02, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  No notice or demand on any Loan Party in any
case shall entitle any Loan Party to any other or further notice or demand in
similar or other circumstances.

 

(b)           Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Agent and the Loan Party
or Loan Parties with respect to which such waiver, amendment or modification is
to apply, subject to any consent required in accordance with Section 9.02
of the Loan Agreement.

 

22

 

SECTION 7.03.  Agent’s Fees
and Expenses; Indemnification.  (a) 
Each Guarantor and each Grantor shall pay all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including the reasonable fees,
charges and disbursements of a single documentation counsel for the Agent,
which the Agent or its Affiliates incur in connection with the custody or
supervision of the Collateral, as permitted by this Agreement. In addition, the
parties hereto agree that the Agent shall be entitled to the reimbursement of
its expenses hereunder as provided by Section 9.03 of the Loan Agreement.

 

(b)           Without limitation of its
indemnification obligations under the other Loan Documents, each Guarantor and
each Grantor agrees to indemnify, on a joint and several basis, the Agent and
the other Indemnitees (as defined in Section 9.03 of the Loan Agreement)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of counsel for any Indemnitee, incurred by or
asserted against any Indemnitee (excluding Taxes) arising out of, in connection
with, or as a result of, the execution, delivery or performance of this
Agreement and all reasonable fees, charges and disbursements of counsel arising
out of, in connection with, or as a result of any actual or prospective claim,
litigation, investigation or proceeding relating to the foregoing or to the
Collateral, regardless of whether based on contract, tort or any other theory,
whether brought by any Loan Party, any Subsidiary or any other Person and
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 (i) are found by a court
of competent jurisdiction by final, non-appealable judgment to have resulted
from the bad faith, gross negligence or willful misconduct of, or breach of its
obligations under this Agreement or any other Loan Document by, such Indemnitee
or any of its Related Parties or (ii) not resulting from the breach of a
representation or warranty, the noncompliance with an obligation, or a wrongful
or negligent act or omission, by the Grantor and brought by any Indemnitee
against one or more other Indemnitees.

 

(c)           Any such amounts payable as provided
hereunder shall be additional Obligations secured hereby and by the other
Security Documents.  The provisions of
this Section 7.03 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Loan Document, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made by or on
behalf of the Agent or any other Secured Party. 
All amounts due under this Section 7.03 shall be payable on written
demand therefor.

 

SECTION 7.04.  Successors
and Assigns.  Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of any Guarantor, Grantor or
the Agent that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns.

 

SECTION 7.05.  Survival of
Agreement.  All covenants,
agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by or on behalf of any Lender and
notwithstanding that the Agent or any Lender may have had notice or knowledge
of any Default or incorrect representation or warranty at the time any credit
is extended under the Loan 

 

23

 

Agreement, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable under any Loan
Document is outstanding and unpaid.

 

SECTION 7.06.  Counterparts;
Effectiveness; Several Agreement. 
This Agreement may be executed in counterparts, each of which shall
constitute an original but all of which when taken together shall constitute a
single contract.  Delivery of an executed
signature page to this Agreement by facsimile transmission or other
electronic imaging means shall be as effective as delivery of a manually signed
counterpart of this Agreement.  This
Agreement shall become effective as to any Loan Party when a counterpart hereof
executed on behalf of such Loan Party shall have been delivered to the Agent
and a counterpart hereof shall have been executed on behalf of the Agent, and
thereafter shall be binding upon such Loan Party and the Agent and their
respective permitted successors and assigns, and shall inure to the benefit of
such Loan Party, the Agent and the other Secured Parties and their respective
successors and assigns, except that no Loan Party shall have the right to
assign or transfer its rights or obligations hereunder or any interest herein
or in the Collateral (and any such assignment or transfer shall be void) except
as expressly contemplated by this Agreement or the Loan Agreement.  This Agreement shall be construed as a
separate agreement with respect to each Loan Party and may be amended,
modified, supplemented, waived or released with respect to any Loan Party
without the approval of any other Loan Party and without affecting the obligations
of any other Loan Party hereunder.

 

SECTION 7.07.  Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 7.08.  Right of
Setoff.  If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to setoff and
apply any and all deposits (general or special, time or demand, provisional or
final) (other than deposits held in a custodial, trust or fiduciary capacity)
at any time held and other obligations at any time owing by such Lender to or
for the credit or the account of any Subsidiary Loan Party against any of and
all the obligations of such Subsidiary Loan Party now or hereafter existing
under this Agreement owed to such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured.  The rights
of each Lender under this Section 7.08 are in addition to other rights and
remedies (including other rights of set-off) which such Lender may have.

 

SECTION 7.09.  Governing
Law; Jurisdiction; Consent to Service of Process.  (a)  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.

 

(b)           Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District 

 

24

 

of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the
extent permitted by law, in such Federal court. 
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement or any
other Loan Document shall affect any right that any party hereto may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against any other party, or its properties in the courts of any
jurisdiction.

 

(c)           Each party hereto hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section 7.09.  Each
of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.

 

(d)           Each party hereto irrevocably
consents to service of process in the manner provided for notices in Section 7.01.  Nothing in this Agreement or any other Loan
Document will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

SECTION 7.10.  WAIVER OF
JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10.

 

SECTION 7.11.  Headings.  Article and Section headings and
the Table of Contents used herein are for convenience of reference only, are
not part of this Agreement and are not to affect the construction of, or to be
taken into consideration in interpreting, this Agreement.

 

SECTION 7.12.  Security
Interest Absolute.  All rights of the
Agent hereunder, the Security Interest, the grant of a security interest in the
Pledged Collateral and all obligations of each Grantor and Guarantor hereunder
shall, to the fullest extent permitted by applicable law, be absolute and
unconditional irrespective of (a) any lack of validity or enforceability
of the Loan Agreement, any other Loan Document, any agreement with respect to
any of the Obligations or any other agreement or instrument relating to any of
the foregoing, (b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations, or any other amendment
or waiver of or any consent to any departure from the Loan Agreement, any other

 

25

 

Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor or Guarantor
in respect of the Obligations or this Agreement.

 

SECTION 7.13.  Termination
or Release.  This Agreement, the
guarantees made herein, the Security Interest and all other security interests
granted hereby shall terminate, and the Loan Parties shall automatically be
released from their obligations hereunder, in accordance with Section 9.14
of the Loan Agreement.

 

SECTION 7.14.  Additional
Subsidiaries.  Pursuant to Section 5.11
of the Loan Agreement, each Subsidiary (other than an Excluded Subsidiary) that
was not in existence or not a Subsidiary on the date of the Loan Agreement is
required to enter into this Agreement as a Guarantor and a Grantor upon
becoming a Subsidiary.  Upon execution
and delivery by the Agent and a Subsidiary of an instrument in the form of Exhibit I
hereto, such Subsidiary shall become a Guarantor and a Grantor hereunder with
the same force and effect as if originally named as a Guarantor and a Grantor
herein.  The execution and delivery of
any such instrument shall not require the consent of any other Loan Party
hereunder.  The rights and obligations of
each Loan Party hereunder shall remain in full force and effect notwithstanding
the addition of any new Guarantor and Grantor as a party to this Agreement.

 

SECTION 7.15.  Agent
Appointed Attorney-in-Fact.  Each
Grantor hereby appoints the Agent the attorney-in-fact of such Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument that the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest; provided that the Agent agrees not to exercise any rights
pursuant to this appointment except following the occurrence and during the continuance
of an Event of Default.  Without limiting
the generality of the foregoing, the Agent shall have the right, upon the
occurrence and during the continuance of an Event of Default, with full power
of substitution either in the Agent’s name or in the name of such Grantor (a) to
receive, endorse, assign and/or deliver any and all notes, acceptances, checks,
drafts, money orders or other evidences of payment relating to the Collateral
or any part thereof; (b) to demand, collect, receive payment of, give receipt
for and give discharges and releases of all or any of the Collateral; (c) 
to ask for, demand, sue for, collect, receive and give acquittance for any and
all moneys due or to become due under and by virtue of any Collateral, (d) to
sign the name of any Grantor on any invoice or bill of lading relating to any
of the Collateral; (e) to send verifications of Accounts Receivable to any
Account Debtor; (f) to commence and prosecute any and all suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (g) to settle, compromise, compound,
adjust or defend any actions, suits or proceedings relating to all or any of
the Collateral; (h) to notify, or to require any Grantor to notify,
Account Debtors to make payment directly to the Agent; and (i) subject to
pre-existing rights and licenses, to use, sell, assign, transfer, pledge, make
any agreement with respect to or otherwise deal with all or any of the
Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Agent were
the absolute owner of the Collateral for all purposes; provided that
nothing herein contained shall be construed as requiring or obligating the
Agent to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Agent, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby.  The Agent and
the other Secured Parties 

 

26

 

shall be accountable only
for amounts actually received as a result of the exercise of the powers granted
to them herein, and neither they nor their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

27

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Guarantee and Collateral Agreement as of the day and year
first above written.

 

 

	
   

  	
  IDEARC
  INC., 

  as
  the Borrower,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., 

  as
  the Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Subsidiary Loan Party signature page

to the Guarantee and Collateral Agreement

 

	
  Name
  of Subsidiary Loan Party

  	
   

  
	
   

  	
   

  
	
   

  	
  IDEARC
  INFORMATION SERVICES LLC,

  
	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA LLC,

  
	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA SERVICES - WEST INC.,

  
	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA SALES - WEST INC.,

  
	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA SERVICES - EAST INC.,

  
	
   

  	
   

  
	
   

  	
  LICENSE
  APPLICATION CORPORATION,

  
	
   

  	
   

  
	
   

  	
  SECOND
  LICENSE APPLICATION CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA SALES—EAST LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
  Idearc
  Media Sales—West Inc., 

  its sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  IDEARC
  MEDIA SALES—EAST CO.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by
  

  	
  Idearc
  Media Sales—West Inc., 

  its Managing Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule I to

the Guarantee and

Collateral Agreement

 

SUBSIDIARY LOAN PARTIES

 

Idearc Information Services LLC

 

Idearc Media LLC

 

License Application Corporation

 

Second License Application Corporation

 

Idearc Media Sales — West Inc.

 

Idearc Media Services — West Inc.

 

Idearc Media Services — East Inc.

 

Idearc Media Sales — East Co.

 

Idearc Media Sales — East LLC

 

 

Schedule II to

the Guarantee and

Collateral Agreement

 

EQUITY
INTERESTS

 

	
  Issuer

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Number and

  Class of

  Equity Interest

  	
   

  	
  Percentage of 

  Equity Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Information Services LLC

  	
   

  	
  Idearc
  Inc.

  	
   

  	
  Unnumbered

  	
   

  	
  155,000 limited liability company interests

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media LLC

  	
   

  	
  Idearc
  Information Services LLC

  	
   

  	
  1

  	
   

  	
  3,000 common shares

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  License
  Application Corporation

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  2

  	
   

  	
  1 share

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Second
  License Application Corporation

  	
   

  	
  License
  Application Corporation

  	
   

  	
  2

  	
   

  	
  1 share

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Sales — West Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  5

  	
   

  	
  2,000 shares

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Services — West Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  6

  	
   

  	
  1,000 shares

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Services — East Inc.

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  3

  	
   

  	
  1 share

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Sales — East LLC

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  Unnumbered

  	
   

  	
  100 common units

  	
   

  	
  100%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Inceptor Limited

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  4

  	
   

  	
  65

  	
   

  	
  65%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Idearc
  Media LLC (formerly known as Idearc Media Corp.)

  	
   

  	
  2(1)

  	
   

  	
  35

  	
   

  	
  35%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idearc
  Media Sales — East Co.

  	
   

  	
  Idearc
  Media Sales — West Inc.

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  10.5% partnership interest

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Idearc
  Media Sales — East LLC

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  89.5% partnership interest

  

 

(1) Not
pledged.

 

 

DEBT
SECURITIES

 

None.

 

 

Schedule III to

the Guarantee and

Collateral Agreement

 

INTELLECTUAL
PROPERTY

 

[See Attached]

 

 

Exhibit I to the

Guarantee and

Collateral Agreement

 

SUPPLEMENT NO. [·] dated as of [·], to the Guarantee and Collateral Agreement dated
as of December 31, 2009 (the “Collateral Agreement”), among IDEARC
INC., a Delaware Corporation (the “Borrower”), each Subsidiary from time
to time party thereto (each such subsidiary individually a “Subsidiary
Guarantor” and collectively, the “Subsidiary Guarantors”; the Subsidiary
Guarantors and the Borrower are referred to collectively herein as the “Grantors”)
and JPMORGAN CHASE BANK, N.A., as the Agent.

 

A.            Reference
is made to the Loan Agreement dated as of December 31, 2009 (the “Loan
Agreement”), among the Borrower, the lenders from time to time parties
thereto and the Agent.

 

B.            Each
capitalized term used but not defined herein shall have the meaning assigned to
it in the Loan Agreement and the Collateral Agreement.

 

C.            The
Grantors have entered into the Collateral Agreement as required by the terms of
the Reorganization Plan and as a condition precedent to the closing under the
Loan Agreement.  Section 7.14 of the
Collateral Agreement provides that additional Subsidiaries of the Borrower may
become Subsidiary Loan Parties under the Collateral Agreement by execution and
delivery of an instrument in the form of this Supplement.  The undersigned Subsidiary (the “New
Subsidiary”) is executing this Supplement in accordance with the
requirements of the Loan Agreement and the Collateral Agreement to become a
Subsidiary Loan Party under the Collateral Agreement as consideration for Loans
deemed made on the Closing Date.

 

Accordingly, the Agent and the New Subsidiary
agree as follows:

 

SECTION 1.  In accordance with Section 7.14 of the
Collateral Agreement, the New Subsidiary by its signature below becomes a
Subsidiary Loan Party (and accordingly, becomes a Guarantor and a Grantor)
under the Collateral Agreement with the same force and effect as if originally
named therein as a Subsidiary Loan Party and the New Subsidiary hereby (a) agrees
to all the terms and provisions of the Collateral Agreement applicable to it as
a Subsidiary Loan Party, Guarantor and Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Guarantor
and a Grantor thereunder are true and correct on and as of the date
hereof.  In furtherance of the foregoing,
the New Subsidiary, as security for the payment and performance in full of the
Obligations (as defined in the Collateral Agreement), does hereby create and
grant to the Agent, its successors and assigns, for the benefit of the Secured
Parties, their successors and assigns, a security interest in and lien on all
of the New Subsidiary’s right, title and interest in and to the Collateral (as
defined in the Collateral Agreement) of the New Subsidiary, to the extent
provided in the Collateral Agreement. 
Each reference to a “Guarantor” or “Grantor” in the Collateral Agreement
shall be deemed to include the New Subsidiary. 
The Collateral Agreement is hereby incorporated herein by reference.

 

SECTION 2.  The New Subsidiary represents and warrants to
the Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

 

SECTION 3.  This Supplement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of

 

 

which when taken together
shall constitute a single contract. This Supplement shall become effective when
the Agent shall have received a counterpart of this Supplement that bears the
signature of the New Subsidiary and the Agent has executed a counterpart
hereof.  Delivery of an executed
signature page to this Supplement by facsimile transmission or other
electronic imaging means shall be as effective as delivery of a manually signed
counterpart of this Supplement.

 

SECTION 4.  The New Subsidiary hereby represents and
warrants that (a) set forth on Schedule I attached hereto is a true
and correct schedule of the location of any and all Collateral of the New
Subsidiary, (b) set forth on Schedule II hereto is a true and
correct schedule of all the Pledged Securities of the New Subsidiary, (c) set
forth on Schedule III hereto is a true and correct schedule of all
Intellectual Property of the New Subsidiary which is included in the definition
of Article 9 Collateral and (d) set forth under its signature hereto,
is the true and correct legal name of the New Subsidiary, its jurisdiction of
formation and the location of its chief executive office.

 

SECTION 5.  Except as expressly supplemented hereby, the
Collateral Agreement shall remain in full force and effect.

 

SECTION 6.  THIS SUPPLEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICTS OF LAWS TO THE
EXTENT THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

SECTION 7.  In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Collateral Agreement shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

 

SECTION 8.  All communications and notices hereunder
shall be in writing and given as provided in Section 7.01 of the Collateral
Agreement.

 

SECTION 9.  The New Subsidiary agrees to reimburse the
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Agent.

 

2

 

IN WITNESS WHEREOF, the New Subsidiary and
the Agent have duly executed this Supplement to the Guarantee and Collateral
Agreement as of the day and year first above written.

 

	
   

  	
  [NAME
  OF NEW SUBSIDIARY],

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Legal
  Name:

  
	
   

  	
   

  	
  Jurisdiction
  of Formation:

  
	
   

  	
   

  	
  Location
  of Chief Executive office:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as the Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

3

 

Schedule I

to the Supplement No        to the

Guarantee and

Collateral Agreement

 

LOCATION
OF COLLATERAL

 

	
  Description

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

Schedule II

to the Supplement No      to the

Guarantee and

Collateral Agreement

 

PLEDGED
SECURITIES

 

Equity
Interests

 

	
  Issuer

  	
   

  	
  Number of

  Certificate

  	
   

  	
  Registered

  Owner

  	
   

  	
  Number and

  Class of

  Equity Interests

  	
   

  	
  Percentage

  of Equity Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Debt
Securities

 

	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule III

to the Supplement No      to the

Guarantee and

Collateral Agreement

 

INTELLECTUAL
PROPERTY

 

 

Exhibit II to the

Guarantee and

Collateral Agreement

 

FORM OF
PERFECTION CERTIFICATE

 

[See Attached]

 

 

Exhibit III to the

Guarantee and

Collateral Agreement

 

FORM OF
COPYRIGHT SECURITY AGREEMENT

 

[See Attached]

 

 

Exhibit IV to the

Guarantee and

Collateral Agreement

 

FORM OF
PATENT AND TRADEMARK SECURITY AGREEMENT

 

[See Attached]

 

 

EXHIBIT D

 

Form of Perfection
Certificate

 

[see attached]

 

 

PERFECTION CERTIFICATE

 

December 31, 2009

 

Reference is made to the Loan Agreement dated as of December 31,
2009 (the “Loan Agreement”), among Idearc Inc. (the “Borrower”),
the lenders from time to time parties thereto (the “Lenders”), JPMorgan
Chase Bank, N.A., as Administrative Agent (in such capacity, the “Administrative
Agent”) and Collateral Agent for the Lenders. Capitalized terms used but
not defined herein have the meanings assigned in the Loan Agreement or the
Guarantee and Collateral Agreement referred to therein, as applicable.

 

The undersigned, a Financial
Officer and the Vice President-General Counsel, respectively, of the Borrower,
hereby certify, on behalf of the Borrower and not in their individual capacity,
to the Administrative Agent and each other Secured Party as follows as of the
date hereof:

 

1.                                       Names.  Set forth on Schedule 1 attached hereto is,

 

(a)                                  The exact legal
name of each Grantor, as such name appears in its respective certificate of
formation;

 

(b)                                 A list of all
other names (including trade names or similar appellations) used by each
Grantor or any of its divisions or other business units in connection with the
conduct of its business or the ownership of its properties at any time during
the past five years;

 

(c)                                  The Organizational
Identification Number, if any, issued by the jurisdiction of formation of each
Grantor that is a registered organization;

 

2.                                       Current
Locations.  Set forth
below in Schedule 2 hereto,

 

(a)                                  The chief
executive office of each Grantor is located at the address set forth opposite
its name:

 

	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(b)                                 Opposite the
name of each Grantor are all locations where such Grantor maintains any books
or records relating to any Accounts Receivable (with each location at which
chattel paper, if any, is kept being indicated by an (“*”):

 

	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(c)                                  The
jurisdiction of formation of each Grantor that is a registered organization is
set forth opposite its name:

 

 

	
  Grantor:

  	
   

  	
  Jurisdiction:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

(d)                                 Opposite the
name of each Grantor are the names and addresses of all Persons other than such
Grantor that have possession of any of the Collateral of such Grantor:

 

	
  Grantor

  	
   

  	
  Mailing Address

  	
   

  	
  County

  	
   

  	
  State

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3.                                       Unusual
Transactions.  Other than
as set forth on Schedule 3 attached hereto, all Accounts have been originated
by the Grantors and all Inventory has been acquired by the Grantors in the
ordinary course of business.

 

4.                                       UCC Filings.  Financing statements in substantially the
form of Schedule 4 hereto have been prepared for filing in the proper Uniform
Commercial Code filing office in the jurisdiction in which each Grantor is
located as set forth with respect to such Grantor in Section 2 hereof.

 

5.                                       Schedule of
Filings.  Attached hereto as Schedule 5
is a schedule setting forth, with respect to the filings described in Section 4
above, each filing and the filing office in which such filing is to be made.

 

6.                                       Stock Ownership
and other Equity Interests.  Attached hereto as Schedule 6 is a true and
correct list of all the issued and outstanding stock, partnership interests,
limited liability company membership interests or other equity interest of the
Borrower and each Subsidiary and the record and beneficial owners of such
stock, partnership interests, membership interests or other equity
interests.  Also set forth on Schedule 6
is each equity investment of the Borrower or any Subsidiary that represents 50%
or more of the equity of the entity in which such investment was made.

 

7.                                       Debt
Instruments.  Attached
hereto as Schedule 7 is a true and correct list of all promissory notes and
other evidence of indebtedness held by the Borrower and each Subsidiary that
are required to be pledged under the Guarantee and Collateral Agreement,
including all intercompany notes between the Borrower and each Subsidiary of
the Borrower and each Subsidiary of the Borrower and each other such
Subsidiary.

 

8.                                       Mortgage
Filings.  Attached hereto as Schedule 8
is a schedule setting forth, with respect to each Mortgaged Property, (a) the
exact name of the Person that owns such property as such name appears in its
certificate of incorporation or other organizational document, (b) if
different from the name identified pursuant to clause (a), the exact name of
the current record owner of such property reflected in the records of the
filing office for such property identified pursuant to the following clause and
(c) the filing office in which a Mortgage with respect to such property
must be filed or recorded in order for the Administrative Agent to obtain a
perfected security interest therein.

 

2

 

9.                                       Intellectual
Property.  Attached
hereto as Schedule 9(A) in proper form for filing with the United States
Patent and Trademark Office is a schedule setting forth all of each Grantor’s
issued United States Patents and patent applications, including the name of the
registered owner, title and the registration or application number of each such
Patent and patent application owned by any Grantor.

 

Attached hereto as Schedule 9(B) in
proper form for filing with the United States Patent and Trademark Office is a
schedule setting forth all of each Grantor’s registered United States
Trademarks and trademark applications, including the name of the registered
owner and the registration or application number of each such Trademark and
trademark application owned by any Grantor.

 

Attached hereto as Schedule 9(C) in
proper form for filing with the United States Copyright Office is a schedule
setting forth all of each Grantor’s registered United States Copyrights
(including the name of the registered owner, title and the registration number)
and copyright applications (including the name of the owner and title) of each
such Copyright or copyright application owned by any Grantor.

 

10.                                 Commercial Tort
Claims.  Attached hereto as Schedule 10
is a true and correct list of commercial tort claims in excess of $1,000,000
held by any Grantor, including a brief description thereof.

 

11.                                 Deposit
Accounts.  Attached
hereto as Schedule 11 is a true and correct list of deposit accounts maintained
by each Grantor, including the name and address of the depositary institution,
the type of account and the account number.

 

12.                                 Securities
Accounts.  Attached
hereto as Schedule 12 is a true and correct list of securities accounts
maintained by each Grantor, including the name and address of the intermediary
institution, the type of account and the account number.

 

3

 

IN WITNESS WHEREOF, the undersigned have duly
executed this certificate on this date first written above.

 

	
   

  	
  IDEARC
  INC., as Borrower,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

Perfection
Certificate Signature Page

 

 

EXHIBIT E

 

U.S. Tax Compliance
Certificate

 

FORM OF
U.S. TAX COMPLIANCE CERTIFICATE

 

1.               The undersigned is the
[beneficial owner of an interest in (name of intermediary) which is the](1) sole
record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing
such Loan(s)) registered in its name;

 

2.               The income from the Loan(s) held by the
undersigned is not effectively connected with the conduct of a trade or
business within the United States;

 

3.               The undersigned is not a bank (as such term
is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended (the “Code”)), is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other filing or submission made to
any governmental authority, any application made to a rating agency or any
qualification for any exemption from any tax, securities law or other legal
requirements;

 

4.               The undersigned is not a 10-percent
shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of
the Code; and

 

5.               The undersigned is not a controlled foreign
corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of
the Code.

 

We have furnished you with a certificate of
[the non-U.S person status of our members/partners] or [our non-U.S. person
status](2) on Internal Revenue Service Form W-8BEN.  By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall so inform the Borrower (for the benefit of the
Borrower and the Administrative Agent) in writing within 30 days of such change
and (2) the  undersigned shall furnish the Borrower (for
the benefit of the Borrower and the Administrative Agent), a properly completed
and currently effective certificate.

 

(1)                                  Insert if you
are a beneficial owner in an intermediary or a pass-through entity filling out
this certificate.

 

(2)                                  Insert language
in first set of brackets if you are an intermediary or pass-through entity
filling out this certificate.

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