Document:

Prepared by MERRILL CORPORATION

 

CREDIT AGREEMENT

 

Dated

as of August 29, 2001

 

among

 

LODGENET

ENTERTAINMENT CORPORATION,

as

Borrower,

 

THE

LENDERS LISTED HEREIN,

as

Lenders,

 

CANADIAN

IMPERIAL BANK OF COMMERCE,

as

Administrative Agent,

 

BEAR

STEARNS CORPORATE LENDING INC.,

as

Syndication Agent,

 

U.S.

BANK NATIONAL ASSOCIATION

and

FLEET

NATIONAL BANK,

as

Co-Documentation Agents

 

and

 

CIBC

WORLD MARKETS CORP.

and

BEAR,

STEARNS & CO. INC.,

as

Co-Lead Arrangers

 

 

TABLE OF CONTENTS

 

	

  Section 1.

  	

  DEFINITIONS

  
	

  1.1

  	

  Certain Defined Terms

  
	

  1.2

  	

  Accounting Terms; Utilization of GAAP for

  Purposes of Calculations Under Agreement

  
	

  1.3

  	

  Other Definitional Provisions and Rules of

  Construction

  
	

   

  	

   

  
	

  Section 2.

  	

  AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

  
	

  2.1

  	

  Commitments; Making of Loans; Optional

  Notes

  
	

  2.2

  	

  Interest on the Loans

  
	

  2.3

  	

  Fees

  
	

  2.4

  	

  Repayments, Prepayments and Reductions in

  Revolving Loan Commitments; General Provisions Regarding Payments; Application

  of Proceeds of Collateral and Payments Under Subsidiary Guaranty

  
	

  2.5

  	

  Use of Proceeds

  
	

  2.6

  	

  Special Provisions Governing LIBOR Loans

  
	

  2.7

  	

  Increased Costs; Taxes; Capital Adequacy

  
	

  2.8

  	

  Obligation of Lenders and Issuing Lenders

  to Mitigate

  
	

  2.9

  	

  Replacement of Lenders

  
	

  2.10

  	

  Extension of Term Loan and Revolving Loan

  Commitment Termination Dates

  
	

   

  	

   

  
	

  Section 3.

  	

  LETTERS OF CREDIT

  
	

  3.1

  	

  Issuance of Letters of Credit and Lenders’

  Purchase of Participations Therein

  
	

  3.2

  	

  Letter of Credit Fees

  
	

  3.3

  	

  Drawings and Reimbursement of Amounts Paid

  Under Letters of Credit

  
	

  3.4

  	

  Obligations Absolute

  
	

  3.5

  	

  Indemnification; Nature of Issuing Lenders’

  Duties

  
	

  3.6

  	

  Increased Costs and Taxes Relating to

  Letters of Credit

  
	

   

  	

   

  
	

  Section 4.

  	

  CONDITIONS TO LOANS AND LETTERS OF CREDIT

  
	

  4.1

  	

  Conditions to Term Loans and Initial

  Revolving Loans and Swing Line Loans

  
	

  4.2

  	

  Conditions to All Loans

  
	

  4.3

  	

  Conditions to Letters of Credit

  
	

   

  	

   

  
	

  Section 5.

  	

  BORROWER’S REPRESENTATIONS AND WARRANTIES

  
	

  5.1

  	

  Organization, Powers, Qualification, Good

  Standing, Business and Subsidiaries

  
	

  5.2

  	

  Authorization of Borrowing, etc

  
	

  5.3

  	

  Financial Condition

  
	

  5.4

  	

  No Material Adverse Change; No Restricted

  Junior Payments

  
	

  5.5

  	

  Title to Properties; Liens; Real Property;

  Intellectual Property

  
	

  5.6

  	

  Litigation; Adverse Facts

  
	

  5.7

  	

  Payment of Taxes

  
	

  5.8

  	

  Performance of Agreements; Materially

  Adverse Agreements

  
	

  5.9

  	

  Governmental Regulation

  
	

  5.10

  	

  Securities Activities

  
	

  5.11

  	

  Employee Benefit Plans

  
	

  5.12

  	

  Certain Fees

  
	

  5.13

  	

  Environmental Protection

  
	

  5.14

  	

  Employee Matters

  
	

  5.15

  	

  Solvency

  
	

  5.16

  	

  Matters Relating to Collateral

  
	

  5.17

  	

  Senior Note Documents

  
	

  5.18

  	

  Disclosure

  
	

  5.19

  	

  Mortgage Taxes, Etc.

  
	

   

  	

   

  
	

  Section

  6.

  	

  BORROWER’S

  AFFIRMATIVE COVENANTS

  
	

  6.1

  	

  Financial Statements and Other Reports

  
	

  6.2

  	

  Existence, etc.

  
	

  6.3

  	

  Payment of Taxes and Claims; Tax Returns

  
	

  6.4

  	

  Maintenance of Properties; Insurance;

  Application of Net Insurance/ Condemnation Proceeds

  
	

  6.5

  	

  Inspection Rights

  
	

  6.6

  	

  Compliance with Laws, etc.

  
	

  6.7

  	

  Environmental Matters

  
	

  6.8

  	

  Execution of Subsidiary Guaranty and Personal Property Collateral

  Documents After the Closing Date

  
	

  6.9

  	

  Matters Relating to Additional Real

  Property Collateral

  
	

  6.10

  	

  Interest Rate Protection.

  
	

  6.11

  	

  Deposit Accounts and Cash Management

  Systems

  
	

  6.12

  	

  Solvency

  
	

   

  	

   

  
	

  Section 7.

  	

  BORROWER’S NEGATIVE COVENANTS

  
	

  7.1

  	

  Indebtedness

  
	

  7.2

  	

  Liens and Related Matters

  
	

  7.3

  	

  Investments; Acquisitions

  
	

  7.4

  	

  Contingent Obligations

  
	

  7.5

  	

  Restricted Junior Payments

  
	

  7.6

  	

  Financial Covenants

  
	

  7.7

  	

  Restriction on Fundamental Changes; Asset

  Sales

  
	

  7.8

  	

  Consolidated Capital Expenditures

  
	

  7.9

  	

  Transactions with Affiliates

  
	

  7.10

  	

  Sales and Lease-Backs

  
	

  7.11

  	

  Disposal of Subsidiary Stock

  
	

  7.12

  	

  Sale or Discount of Receivables

  
	

  7.13

  	

  Conduct of Business

  
	

  7.14

  	

  Amendments of Documents Relating to Senior

  Note Documents and Subordinated Indebtedness

  
	

  7.15

  	

  Fiscal Year

  
	

   

  	

   

  
	

  Section

  8.

  	

  EVENTS

  OF DEFAULT

  
	

  8.1

  	

  Failure to Make Payments When Due

  
	

  8.2

  	

  Default in Other Agreements; Termination of

  Material Intellectual Property License

  
	

  8.3

  	

  Breach of Certain Covenants

  
	

  8.4

  	

  Breach of Warranty

  
	

  8.5

  	

  Other Defaults Under Loan Documents

  
	

  8.6

  	

  Involuntary Bankruptcy; Appointment of

  Receiver, etc.

  
	

  8.7

  	

  Voluntary Bankruptcy; Appointment of Receiver, etc

  
	

  8.8

  	

  Judgments and Attachments

  
	

  8.9

  	

  Dissolution

  
	

  8.10

  	

  Employee Benefit Plans

  
	

  8.11

  	

  Material Adverse Effect

  
	

  8.12

  	

  Change in Control

  
	

  8.13

  	

  Invalidity of Subsidiary Guaranty; Failure

  of Security; Repudiation of Obligations

  
	

  8.14

  	

  Subordinated Indebtedness

  
	

   

  	

   

  
	

  Section 9.

  	

  ADMINISTRATIVE AGENT

  
	

  9.1

  	

  Appointment

  
	

  9.2

  	

  Powers and Duties; General Immunity

  
	

  9.3

  	

  Representations and Warranties; No

  Responsibility For Appraisal of Creditworthiness

  
	

  9.4

  	

  Right to Indemnity

  
	

  9.5

  	

  Successor Administrative Agent and

  Successor Swing Line Lender

  
	

  9.6

  	

  Collateral Documents and Guaranties

  
	

  9.7

  	

  Administrative Agent May File Proofs of Claim

  
	

   

  	

   

  
	

  Section

  10.

  	

  MISCELLANEOUS

  
	

  10.1

  	

  Assignments and Participations in Loans and

  Letters of Credit

  
	

  10.2

  	

  Expenses

  
	

  10.3

  	

  Indemnity

  
	

  10.4

  	

  Set-Off; Security Interest in Deposit

  Accounts

  
	

  10.5

  	

  Ratable Sharing

  
	

  10.6

  	

  Amendments and Waivers

  
	

  10.7

  	

  Independence of Covenants

  
	

  10.8

  	

  Notices; Effectiveness of Signatures

  
	

  10.9

  	

  Survival of Representations, Warranties and

  Agreements

  
	

  10.10

  	

  Failure or Indulgence Not Waiver; Remedies

  Cumulative

  
	

  10.11

  	

  Marshalling; Payments Set Aside

  
	

  10.12

  	

  Severability

  
	

  10.13

  	

  Obligations Several; Independent Nature of

  Lenders’ Rights

  
	

  10.14

  	

  Headings

  
	

  10.15

  	

  Applicable Law

  
	

  10.16

  	

  Successors and Assigns

  
	

  10.17

  	

  Consent to Jurisdiction and Service of

  Process

  
	

  10.18

  	

  Waiver of Jury Trial

  
	

  10.19

  	

  Confidentiality

  
	

  10.20

  	

  Co-Lead Arranger, Bookrunner, Syndication

  Agent and Co-Documentation Agent

  
	

  10.21

  	

  Counterparts; Effectiveness

  
	

   

  	

   

  
	

  Signature pages

  	

   

  

 

LODGENET

ENTERTAINMENT CORPORATION

 

CREDIT

AGREEMENT

 

This CREDIT

AGREEMENT is dated as of August 29, 2001 and entered into by and

among LODGENET

ENTERTAINMENT CORPORATION, a Delaware corporation (“Borrower”),

THE

FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF OR PARTY FROM TIME TO TIME HERETO (each

individually referred to herein as a “Lender” and collectively as “Lenders”),

CANADIAN IMPERIAL BANK OF COMMERCE,

acting through one or more of its agencies, branches or affiliates (“CIBC”), as administrative agent for Lenders

(in such capacity, “Administrative Agent”), BEAR STEARNS CORPORATE LENDING INC., as

syndication agent (in such capacity, “Syndication

Agent”), U.S. BANK NATIONAL

ASSOCIATION and FLEET NATIONAL

BANK, as co-documentation agents (in such capacity, “Co-Documentation Agents”), CIBC WORLD MARKETS CORP. and BEAR, STEARNS & CO. INC., as co-lead

arrangers and bookrunners (in such capacity, “Co-Lead

Arrangers”) and CIBC, INC.,

as swing line lender (in such capacity, the “Swing

Line Lender”).

 

R

E C I T A L S

 

WHEREAS,

Lenders, at the request of Borrower, have agreed to extend certain credit

facilities to Borrower, in the aggregate original principal amount of

$225,000,000, the proceeds of which will be used (i) to refinance all of the

obligations of Borrower owing under the Existing Credit Agreement, and (ii) to

provide financing for working capital and other general corporate purposes of

Borrower and its Subsidiaries, including capital expenditures, acquisitions and

investments;

 

WHEREAS, Borrower desires to secure all of the

Obligations hereunder and under the other Loan Documents by granting to

Administrative Agent, on behalf of Lenders, a First Priority Lien on

substantially all of its real, personal and mixed property, including a pledge

of all of the Capital Stock of each of its Domestic Subsidiaries (with the

exception of AmNet, unless Borrower has not dissolved such Subsidiary by the

date that is 30 days after the Closing Date) and all of the non-voting and 65%

of the voting Capital Stock of its Foreign Subsidiaries; and

 

WHEREAS, all of the Domestic Subsidiaries of

Borrower (with the exception of certain inactive Domestic Subsidiaries of

Borrower without assets or income) have agreed to guarantee the Obligations

hereunder and under the other Loan Documents and to secure their guaranties by

granting to Administrative Agent, on behalf of Lenders, a First Priority Lien

on substantially all of their real, personal and mixed property, including a

pledge of all of the Capital Stock of each of their Domestic Subsidiaries (if

any) and all of the non-voting and 65% of the voting Capital Stock of their

respective Foreign Subsidiaries (if any):

 

NOW, THEREFORE, in consideration of the premises and the

agreements, provisions and covenants herein contained, Borrower, Lenders,

Administrative Agent, Syndication Agent, Co-Documentation Agents, Co-Lead

Arrangers and Swing Line Lender agree as follows:

 

Section 1.              DEFINITIONS

 

1.1          Certain Defined Terms.

 

The

following terms used in this Agreement shall have the following meanings:

 

“Additional Mortgaged Property” has the meaning assigned to that term in

subsection 6.9A.

 

“Additional Mortgages” has the meaning assigned to that term in

subsection 6.9A.

 

“Adjusted

LIBOR” means, for any Interest Rate Determination Date with respect

to an Interest Period for a LIBOR Loan, the rate per annum obtained by dividing

(x) the rate of interest equal to (a) the rate per annum determined on the

basis of the rate for deposits in Dollars for a period equal to such Interest

Period commencing on the first day of such Interest Period and appearing on

Telerate Screen 3750 at or about 11:00 A.M., London time, two Business Days

prior to the commencement of such Interest Period, or (b) if such a rate does

not appear on Telerate Screen 3750, the average of the rates per annum at which

Dollar deposits in immediately available funds are offered to CIBC in the

interbank LIBOR market as at or about 11:00 A.M. (New York City time) two

Business Days prior to the beginning of such Interest Period for delivery on the

first day of such Interest Period, and for a period approximately equal to such

Interest Period, by (y) a percentage equal to 100% minus the

stated maximum rate (expressed as a percentage) of all reserve requirements

(including any marginal, emergency, supplemental, special or other reserves)

applicable on such Interest Rate Determination Date to any member bank of the

Federal Reserve System in respect of “Eurocurrency liabilities” as defined in

Regulation D (or any successor category of liabilities under Regulation D).

 

“Administrative Agent” has the meaning assigned to that term in

the introduction to this Agreement and also means and includes any successor

Administrative Agent appointed pursuant to subsection 9.5A.

 

“Administrative

Agent’s Office” means (i) the office of Administrative Agent located

at CIBC, 425 Lexington Avenue, New York, NY 10017, or (ii) such other

office of Administrative Agent as may from time to time hereafter be designated

as such in a written notice delivered by Administrative Agent to Borrower and

each Lender.

 

“Affected Lender” has the meaning assigned to that term in

subsection 2.6C.

 

“Affected Loans” has the meaning assigned to that term in

subsection 2.6C.

 

“Affiliate”, as applied to any Person, means any

other Person directly or indirectly controlling, controlled by, or under common

control with, that Person.  For the

purposes of this definition, “control” (including, with correlative meanings,

the terms “controlling”, “controlled by” and “under common control with”), as

applied to any Person, means the possession, directly or indirectly, of the

power to direct or cause the direction of the management and policies of that

Person, whether through the ownership of voting securities or by contract or

otherwise.  For purposes of this

definition, a Person shall be deemed to be “controlled by” a Person if such

Person possesses, directly or indirectly, power to vote 15% or more of the

securities having ordinary voting power for the election of directors of such

Person.  Notwithstanding the foregoing,

neither Administrative Agent nor any Lender shall be deemed to be an Affiliate

of any of the Loan Parties.

 

“Agents” means, collectively, Administrative

Agent and Syndication Agent.

 

“Agreement” means this Credit Agreement dated as of

August 29, 2001.

 

“AmNet” means AmNet, Inc., a Delaware

corporation and a Subsidiary of Borrower.

 

“Applicable

Base Rate Margin” means, as at any date of determination, with

respect to any Type of Loan that is a Base Rate Loan, a percentage per annum

equal to the Applicable LIBOR Margin for such Type of Loan less 1.25%.

 

“Applicable

LIBOR Margin” means (a) with respect to Term Loans that are LIBOR

Loans, 4.00% per annum, and (b) with respect to Revolving Loans that are LIBOR

Loans, a percentage per annum as set forth below opposite the applicable

Consolidated Total Leverage Ratio:

 

	

  Consolidated Total Leverage Ratio

  	

   

  	

  Applicable

  LIBOR Margin

  	

   

  
	

  greater than or equal to 4.00:1.00

  	

   

  	

  3.00

  	

  %

  
	

  less than 4.00:1.00 but greater than or equal to

  3.50:1.00

  	

   

  	

  2.75

  	

  %

  
	

  less than 3.50:1.00 but greater than or equal to

  3.00:1.00

  	

   

  	

  2.50

  	

  %

  
	

  less

  than 3.00:1.00

  	

   

  	

  2.25

  	

  %

  

 

; provided

that until the date that is five Business Days after the date on which Borrower

delivers the first Margin Determination Certificate required to be delivered to

Administrative Agent pursuant to subsection 6.1(xiv), the Applicable LIBOR

Margin for Revolving Loans that are LIBOR Loans shall be 3.00%.

 

“Asset Sale” means the sale (in any single

transaction or related series of transactions) by Borrower or any of its

Subsidiaries to any Person other than Borrower or any Subsidiary Guarantor of

(i) any of the Capital Stock of any of Borrower’s Subsidiaries;

(ii) substantially all of the assets of any division or line of business

of Borrower or any of its Subsidiaries; or (iii) any other assets (whether

tangible or intangible) of Borrower or any of its Subsidiaries (other than (a)

Inventory sold in the ordinary course of business; (b) sales of assets from

Borrower or any Subsidiary Guarantor to Borrower or any Subsidiary Guarantor;

(c) sales of obsolete or surplus equipment removed from hotel guest rooms in

the ordinary course of business in connection with the renewal or replacement

of such equipment; provided such sales are for fair market value; and

(d) any such other assets to the extent that the aggregate value of such

assets sold in any single transaction or related series of transactions is

equal to $50,000 or less).

 

“Assignment Agreement” means an Assignment Agreement in

substantially the form of Exhibit I annexed hereto.

 

“Bankruptcy Code” means Title 11 of the United States

Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor

statute.

 

“Base Rate” means, at any time, the higher of

(i) the Reference Rate or (ii) the rate which is one-half of 1% in

excess of the Federal Funds Effective Rate.

 

“Base Rate Loans” means Loans bearing interest at rates

determined by reference to the Base Rate as provided in subsection 2.2A.

 

“Borrower” has the meaning assigned to that term in

the introduction to this Agreement.

 

“Business Day”

means (i) any day excluding Saturday, Sunday and any day which is a legal

holiday under the laws of the State of New York or is a day on which banking

institutions located in such state are authorized or required by law or other

governmental action to close, and (ii) with respect to all notices,

determinations, fundings and payments in connection with the Adjusted LIBOR or

any LIBOR Loan, any day that (a) is a Business Day described in clause (i)

above, and (b) is a day for trading by and between banks in Dollar deposits in

the London Interbank Market.

 

“Capital Lease”, as applied to any Person, means any

lease of any property (whether real, personal or mixed) by that Person as

lessee that, in conformity with GAAP, is accounted for as a capital lease on

the balance sheet of that Person; provided, however, that the

term “Capital Lease” shall not be

deemed to include video service leases and similar agreements utilized by

Borrower or its Subsidiaries in the ordinary course of business for the purpose

of obtaining the right to deliver cable television programming and/or other

interactive, multimedia entertainment and information services to specific

customer properties.

 

“Capital

Stock” means the

capital stock or other equity, membership or ownership interests of a Person.

“Cash” means money, currency or a credit balance in a

Deposit Account.

 

“Cash Equivalents” means, as at any date of determination,

(i) marketable securities (a) issued or directly and unconditionally guaranteed

as to interest and principal by the United States Government or (b) issued by

any agency of the United States the obligations of which are backed by the full

faith and credit of the United States, in each case maturing within one year

after such date; (ii) marketable direct obligations issued by any state of the

United States of America or any political subdivision of any such state or any

public instrumentality thereof, in each case maturing within one year after

such date and having, at the time of the acquisition thereof, the highest

rating obtainable from either S&P or Moody’s; (iii) commercial paper

maturing no more than one year from the date of creation thereof and having, at

the time of the acquisition thereof, a rating of at least A-1 from S&P or at

least P-1 from Moody’s; (iv) certificates of deposit or bankers’

acceptances maturing within one year after such date and issued or accepted by

any Lender or by any commercial bank organized under the laws of the United

States of America or any state thereof or the District of Columbia that (a) is

at least “adequately capitalized” (as defined in the regulations of its primary

Federal banking regulator) and (b) has Tier 1 capital (as defined in such

regulations) of not less than $100,000,000; and (v) shares of any money

market mutual fund that (a) has at least 95% of its assets invested

continuously in the types of investments referred to in clauses (i) and (ii)

above, (b) has net assets of not less than $500,000,000, and (c) has the

highest rating obtainable from either S&P or Moody’s.

 

“Change

in Control” means

either of the following:  (i) any Person

acting in concert with one or more other Persons shall have acquired beneficial

ownership, directly or indirectly, of Securities of Borrower (or other Securities

convertible into such Securities) representing 40% or more of the combined

voting power of all Securities of Borrower entitled to vote in the election of

members of the Governing Body of Borrower, other than Securities having such

power only by reason of the happening of a contingency; or (ii) individuals who

were members of the Governing Body of Borrower immediately prior to the event

shall cease for any reason to constitute a majority of the members of the

Governing Body of Borrower then in office. 

As used herein, “beneficial ownership” shall have the meaning provided

in Rule 13d-3 of the Securities and Exchange Commission promulgated under the

Exchange Act.

 

“Class” means,

as applied to Lenders, each of the following two classes of Lenders:  (i) Lenders having Revolving Loan Exposure,

and (ii) Lenders having Term Loan Exposure.

 

“Closing Date” means the date on which the initial

Loans are made.

 

“Closing Date Mortgaged Property” has the meaning assigned to that term in

subsection 4.1N.

 

“Closing Date Mortgage” has the meaning

assigned to that term in subsection 4.1N.

 

“Closing Date Mortgage Policy” has the meaning assigned to that term in

subsection 4.1N.

 

“Co-Documentation Agents” has the meaning assigned to that term in

the introduction to this Agreement.

 

 “Co-Lead Arrangers” has the meaning assigned to that term in

the introduction to this Agreement.

 

“Collateral” means, collectively, all of the real,

personal and mixed property (including Capital Stock ) in which Liens are

purported to be granted pursuant to the Collateral Documents as security for

the Obligations.

 

“Collateral Access Agreement” means any

landlord waiver, mortgagee waiver, bailee letter or any similar acknowledgement

or agreement of any landlord or mortgagee in respect of any Real Property Asset

where any Collateral is located or any warehouseman or processor in possession

of any Inventory of any Loan Party, which agreement shall (i) provide that such

lessor, bailee or other party shall not terminate such agreement as a result of

a default by such Loan Party thereunder without first giving Administrative

Agent notice of such default and at least 60 days (or, if such default cannot

reasonably be cured by Administrative Agent within such period, such longer

period as may reasonably be required) to cure such defaults, (ii) grant

Administrative Agent the right to sell, remove or otherwise dispose of any

Collateral located at such Real Property Asset during the term of such

agreement and for a reasonable period of time (but in no event less than 30

days) after the termination of such agreement, and (iii) contain such other

matters relating to such Real Property Asset as Administrative Agent may

reasonably request, all in form and substance reasonably acceptable to

Administrative Agent.

 

“Collateral Account” has the meaning assigned to that term in

the Security Agreement.

 

“Collateral Documents” means the Security Agreement, the

Mortgages, the Irrevocable Proxies and all other instruments or documents

delivered by any Loan Party pursuant to this Agreement or any of the other Loan

Documents in order to grant to Administrative Agent, on behalf of Lenders, a

Lien on any real, personal or mixed property of that Loan Party as security for

the Obligations.

 

“Commitments” means the commitments of Lenders to make

Loans as set forth in subsection 2.1A.

 

“Compliance Certificate” means a certificate substantially in the

form of Exhibit III annexed hereto delivered to Administrative

Agent and Lenders by Borrower pursuant to subsection 6.1(iii).

 

“Confidential Information Memorandum” means that certain Confidential

Information Memorandum dated July 2001 and any supplements thereto relating to

the credit facilities evidenced by this Agreement.

 

“Conforming Leasehold Interest” means any Recorded Leasehold Interest as

to which the lessor has agreed in writing for the benefit of Administrative

Agent (which writing has been delivered to Administrative Agent), whether under

the terms of the applicable lease, under the terms of a Landlord Consent and

Estoppel, or otherwise, to the matters described in the definition of “Landlord

Consent and Estoppel,” which interest, if a subleasehold or sub-subleasehold

interest, is not subject to any contrary restrictions contained in a superior

lease or sublease.

 

“Consolidated Capital Expenditures” means, for any period, the sum of the

aggregate of all expenditures (whether paid in Cash or other consideration or

accrued as a liability and including that portion of Capital Leases which is

capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)

by Borrower and its Subsidiaries during that period that, in conformity with

GAAP, are included in “additions to property, plant or equipment” or comparable

items reflected in the consolidated statement of cash flows of Borrower and its

Subsidiaries.  For purposes of this

definition, (a) the purchase price of equipment that is purchased

simultaneously with the trade-in of existing equipment or with insurance

proceeds shall be included in Consolidated Capital Expenditures only to the

extent of the gross amount of such purchase price less the credit granted by

the seller of such equipment for the equipment being traded in at such time or

the amount of such proceeds, as the case may be, and (b) the aggregate of all

expenditures by Borrower and its Subsidiaries during that period to acquire (by

purchase or otherwise) the business, property or fixed assets of any Person, or

the Capital Stock or other evidence of beneficial ownership of any Person that,

as a result of such acquisition, becomes a Subsidiary of Borrower shall be

included in Consolidated Capital Expenditures.

 

“Consolidated Cash Interest Expense” means, for any period, Consolidated

Interest Expense for such period excluding, however, any interest

expense not payable in Cash (including amortization of discount and

amortization of debt issuance costs).

 

“Consolidated EBITDA” means, for any period, the sum, without

duplication, of the amounts for such period of (i) Consolidated Net

Income, (ii) Consolidated Interest Expense, (iii) provisions for

taxes based on income, (iv) total depreciation expense, (v) total

amortization expense, and (vi) other non-recurring and non-cash items

reducing Consolidated Net Income, less interest income and any

non-recurring and non-cash items increasing Consolidated Net Income, all of the

foregoing as determined on a consolidated basis for Borrower and its

Subsidiaries in conformity with GAAP.

 

“Consolidated Excess Cash Flow” means, for any period, an amount (if

positive) equal to (i) Consolidated EBITDA (determined by adding back thereto

any amount deducted in the calculation of Consolidated Net Income that was

paid, incurred or accrued in violation of any of the provisions of this

Agreement) for such period minus (ii) the sum, without duplication,

of the amounts for such period of (a) voluntary and scheduled repayments of

Consolidated Total Debt (excluding repayments of Revolving Loans except to the

extent the Revolving Loan Commitments are permanently reduced in connection

with such repayments), (b) Consolidated Capital Expenditures (net of any

proceeds of any related financings with respect to such expenditures),

(c) Consolidated Cash Interest Expense, and (d) the provision for

current taxes based on income of Borrower and its Subsidiaries and payable in

Cash with respect to such period.

 

“Consolidated Interest Coverage

Ratio” means, for any period, the ratio of (a) Consolidated EBITDA for such

period to (b) Consolidated Cash Interest Expense minus the aggregate

amount of interest income in cash received by Borrower and its Subsidiaries

during such period.

 

“Consolidated Interest Expense” means, for any period, total interest

expense (including that portion attributable to Capital Leases in accordance

with GAAP and capitalized interest) of Borrower and its Subsidiaries on a

consolidated basis with respect to all outstanding Indebtedness of Borrower and

its Subsidiaries, including all commissions, discounts and other fees and

charges owed with respect to letters of credit and bankers’ acceptance

financing and net costs under Interest Rate Agreements, but excluding, however,

any amounts referred to in subsection 2.3 payable to Administrative Agent

and Lenders on or before the Closing Date.

 

“Consolidated Net Income” means, for any period, the net income

(or loss) of Borrower and its Subsidiaries on a consolidated basis for such

period taken as a single accounting period determined in conformity with GAAP; provided

that there shall be excluded (i) the income (or loss) of any Person (other

than a Subsidiary of Borrower) in which any other Person (other than Borrower

or any of its Subsidiaries) has a joint interest, except to the extent of the

amount of dividends or other distributions actually paid to Borrower or any of

its Subsidiaries by such Person during such period, (ii) the income (or

loss) of any Person accrued prior to the date it becomes a Subsidiary of

Borrower or is merged into or consolidated with Borrower or any of its

Subsidiaries or that Person’s assets are acquired by Borrower or any of its

Subsidiaries, (iii) the income of any Subsidiary of Borrower to the extent

that the declaration or payment of dividends or similar distributions by that

Subsidiary of that income is not at the time permitted by operation of the

terms of its charter or any agreement, instrument, judgment, decree, order,

statute, rule or governmental regulation applicable to that Subsidiary,

(iv) any after-tax gains or losses attributable to Asset Sales or returned

surplus assets of any Pension Plan, and (v) (to the extent not included in

clauses (i) through (iv) above) any net extraordinary gains or net

non-cash extraordinary losses.

 

“Consolidated

Senior Secured Debt” means, as at any date of determination,

Consolidated Total Debt less the aggregate principal amount of all

unsecured Indebtedness of Borrower and its Subsidiaries, determined on a

consolidated basis.

 

“Consolidated Senior Secured Leverage

Ratio” means, as at

the last day of any Fiscal Quarter, the ratio of (a) Consolidated Senior

Secured Debt as of the last day of such Fiscal Quarter, to

(b) Consolidated EBITDA for the four Fiscal Quarter period then ended; provided

that in calculating Consolidated EBITDA for such period, any Asset Sales or

other acquisitions or dispositions of assets during such period shall have been

deemed to have occurred on the first day of such period.

 

“Consolidated

Total Debt” means, as at any date of determination, the aggregate

principal amount of all Indebtedness of Borrower and its Subsidiaries, other

than the face amount of letters of credit where the conditions to drawing have

not been met, determined on a consolidated basis, less, until March 31,

2002, the amount of Cash and Cash Equivalents.

 

“Consolidated

Total Leverage Ratio” means, as at the last day of any Fiscal Quarter,

the ratio of (a) Consolidated Total Debt as of the last day of such Fiscal

Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter period

then ended; provided that in calculating Consolidated EBITDA for such

period, any Asset Sales or other acquisitions or dispositions of assets during

such period shall have been deemed to have occurred on the first day of such

period.

 

“Contingent Obligation”, as applied to any Person, means any

direct or indirect liability, contingent or otherwise, of that Person

(i) with respect to any Indebtedness, lease, dividend or other obligation

of another if the primary purpose or intent thereof by the Person incurring the

Contingent Obligation is to provide assurance to the obligee of such obligation

of another that such obligation of another will be paid or discharged, or that

any agreements relating thereto will be complied with, or that the holders of

such obligation will be protected (in whole or in part) against loss in respect

thereof, or (ii) under Hedge Agreements. 

Contingent Obligations shall include (a) the direct or indirect

guaranty, endorsement (otherwise than for collection or deposit in the ordinary

course of business), co-making, discounting with recourse or sale with recourse

by such Person of the obligation of another, (b) the obligation to make

take-or-pay or similar payments if required regardless of non-performance by

any other party or parties to an agreement, and (c) any liability of such

Person for the obligation of another through any agreement (contingent or

otherwise) (1) to purchase, repurchase or otherwise acquire such

obligation or any security therefor, or to provide funds for the payment or

discharge of such obligation (whether in the form of loans, advances, stock

purchases, capital contributions or otherwise) or (2) to maintain the

solvency or any balance sheet item, level of income or financial condition of

another if, in the case of any agreement described under subclauses (1) or (2)

of this sentence, the primary purpose or intent thereof is as described in the

preceding sentence.  The amount of any

Contingent Obligation shall be equal to the amount of the obligation so

guaranteed or otherwise supported or, if less, the amount to which such Contingent

Obligation is specifically limited.

 

“Contractual Obligation”, as applied to any Person, means any

provision of any Security issued by that Person or of any contract to which

that Person is a party or by which it or any of its properties is bound or to

which it or any of its properties is subject.

 

“Copyright Office” means the United States Copyright Office

or any successor or substitute office in which filings are necessary or, in the

opinion of the Administrative Agent, desirable, in order to create or perfect

Liens on any IP Collateral.

 

“Currency Agreement” means any foreign exchange contract,

currency swap agreement, futures contract, option contract, synthetic cap or

other similar agreement or arrangement to which Borrower or any of its

Subsidiaries is a party.

 

“Deposit Account” means a demand, time, savings, passbook

or similar account maintained with a Person engaged in the business of banking,

including a savings bank, savings and loan association, credit union or trust

company.

 

“Dollars” and the sign “$” mean the lawful money of

the United States of America.

 

“Domestic Subsidiary” means any Subsidiary of Borrower that is

incorporated or organized under the laws of the United States of America, any

state thereof or in the District of Columbia.

 

“Eligible

Assignee” means (A) (i) a commercial bank organized under the

laws of the United States or any state thereof; (ii) a savings and loan

association or savings bank organized under the laws of the United States or

any state thereof; (iii) a commercial bank organized under the laws of any

other country or a political subdivision thereof (provided that

(x) such bank is acting through a branch or agency located in the United

States or (y) such bank is organized under the laws of a country that is a

member of the Organization for Economic Cooperation and Development or a

political subdivision of such country); and (iv) any other entity which is

an “accredited investor” (as defined in Regulation D under the Securities Act)

which extends credit or buys loans as one of its businesses including insurance

companies, mutual funds, lease financing companies and investment funds;

(B) a Lender, an Affiliate of a Lender; (C) any Fund that is managed by a

Person described in clauses (A) or (B) above or the same investment advisor or

an Affiliate of the same investment advisor of a Person described in clauses

(A) or (B) above (an “Approved Fund”);

or (D) any other Person (other than a natural Person) approved by (1)

Administrative Agent, (2) in the case of any assignment of a Revolving Loan,

Issuing Lender, and (3) unless (x) such Person is taking delivery of an

assignment in connection with physical settlement of a credit derivatives

transaction, or (y) an Event of Default or Potential Event of Default has

occurred and is continuing, Borrower (each such approval not to be unreasonably

withheld or delayed); provided that no Affiliate of Borrower shall be an

Eligible Assignee.

 

“Employee Benefit Plan” means any “employee benefit plan” as

defined in Section 3(3) of ERISA which is or, during the preceding six (6)

calendar years, was maintained or contributed to by Borrower, any of its

Subsidiaries or any of their respective ERISA Affiliates.

 

“Environmental Claim” means any investigation, notice, notice

of violation, claim, action, suit, proceeding, demand, abatement order or other

order or directive (conditional or otherwise), by any Government Authority or

any other Person, arising (i) pursuant to or in connection with any actual or

alleged violation of any Environmental Law, (ii) in connection with any Hazardous

Materials or any actual or alleged Hazardous Materials Activity, or (iii) in

connection with any actual or alleged damage, injury, threat or harm to health,

safety, natural resources or the environment.

 

“Environmental Laws” means any and all current or future

statutes, ordinances, orders, rules, regulations, guidance documents,

judgments, Governmental Authorizations, or any other requirements of any

Government Authority relating to (i) environmental matters, including

those relating to any Hazardous Materials Activity, (ii) the generation,

use, storage, transportation or disposal of Hazardous Materials, or

(iii) occupational safety and health, industrial hygiene, land use or the

protection of human, plant or animal health or welfare, in any manner applicable

to Borrower or any of its Subsidiaries or any Facility, including the

Comprehensive Environmental Response, Compensation, and Liability Act (42

U.S.C. § 9601 et seq.), the Hazardous Materials

Transportation Act (49 U.S.C. § 1801 et seq.), the Resource Conservation

and Recovery Act (42 U.S.C. § 6901 et seq.), the Federal

Water Pollution Control Act (33 U.S.C. § 1251 et seq.), the

Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic

Substances Control Act (15 U.S.C. § 2601 et seq.), the

Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.),

the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.),

the Oil Pollution Act (33 U.S.C. § 2701 et seq.) and the Emergency

Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.),

each as amended or supplemented, any analogous present or future state or local

statutes or laws, and any regulations promulgated pursuant to any of the

foregoing.

 

“ERISA” means the Employee Retirement Income

Security Act of 1974.

 

“ERISA Affiliate” means, as applied to any Person (i) any

corporation that is a member of a controlled group of corporations within the

meaning of Section 414(b) of the Internal Revenue Code of which that Person is

a member; (ii) any trade or business (whether or not incorporated) that is a

member of a group of trades or businesses under common control within the

meaning of Section 414(c) of the Internal Revenue Code of which that Person is

a member; and (iii) any member of an affiliated service group within the

meaning of Section 414(m) or (o) of the Internal Revenue Code of which that

Person is a member.  Any former ERISA

Affiliate of a Person or any of its Subsidiaries shall continue to be

considered an ERISA Affiliate of such Person or such Subsidiary within the

meaning of this definition with respect to the period such entity was an ERISA

Affiliate of such Person or such Subsidiary and with respect to liabilities

arising after such period for which such Person or such Subsidiary could be

liable under the Internal Revenue Code or ERISA.

 

“ERISA Event” means (i) a “reportable event” within

the meaning of Section 4043 of ERISA and the regulations issued thereunder with

respect to any Pension Plan (excluding those for which the provision for 30-day

notice to the PBGC has been waived by regulation); (ii) the failure to meet the

minimum funding standard of Section 412 of the Internal Revenue Code with

respect to any Pension Plan (whether or not waived in accordance with Section

412(d) of the Internal Revenue Code) or the failure to make by its due date a

required installment under Section 412(m) of the Internal Revenue Code with

respect to any Pension Plan or the failure to make any required contribution to

a Multiemployer Plan; (iii) the provision by the administrator of any Pension

Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate

such plan in a distress termination described in Section 4041(c) of ERISA; (iv)

the withdrawal by Borrower, any of its Subsidiaries or any of their respective

ERISA Affiliates from any Pension Plan with two or more contributing sponsors

or the termination of any such Pension Plan resulting in liability pursuant to

Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings

to terminate any Pension Plan, or the occurrence of any event or condition

which constitutes grounds under ERISA for the termination of, or the

appointment of a trustee to administer, any Pension Plan; (vi) the imposition

of liability on Borrower, any of its Subsidiaries or any of their respective

ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of

the application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower,

any of its Subsidiaries or any of their respective ERISA Affiliates in a

complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of

ERISA) from any Multiemployer Plan if there is any potential liability

therefor, or the receipt by Borrower, any of its Subsidiaries or any of their

respective ERISA Affiliates of notice from any Multiemployer Plan that it is in

reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that

it intends to terminate or has terminated under Section 4041A or 4042 of ERISA;

(viii) the occurrence of an act or omission which could give rise to the

imposition on Borrower, any of its Subsidiaries or any of their respective

ERISA Affiliates of material fines, penalties, taxes or related charges under

Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c),

(i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan;

(ix) the assertion of a material claim (other than routine claims for benefits)

against any Employee Benefit Plan other than a Multiemployer Plan or the assets

thereof, or against Borrower, any of its Subsidiaries or any of their

respective ERISA Affiliates in connection with any Employee Benefit Plan; (x)

receipt from the Internal Revenue Service of notice of the failure of any

Pension Plan (or any other Employee Benefit Plan intended to be qualified under

Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of

the Internal Revenue Code, or the failure of any trust forming part of any

Pension Plan to qualify for exemption from taxation under Section 501(a) of the

Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section

401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with

respect to any Pension Plan.

 

“Event of Default” means each of the events set forth in

Section 8.

 

“Exchange Act” means the Securities Exchange Act of

1934.

 

“Existing Credit Agreement” means that certain Second Amended and

Restated Credit Agreement dated as of February 25, 1999 among Borrower,

National Westminster Bank PLC, as Administrative Agent, Bankboston, N.A. and

Morgan Stanley Senior Funding, Inc., as Syndication Agents and the lenders

named therein, as amended prior to the Closing Date.

 

“Facilities” means all real property (including all

buildings, fixtures or other improvements located thereon) now, hereafter or

heretofore owned, leased, operated or used by Borrower or any of its

Subsidiaries or any of their respective predecessors or Affiliates.

 

“Federal Funds Effective Rate” means, for any period, a fluctuating

interest rate equal for each day during such period to the weighted average of

the rates on overnight Federal funds transactions with members of the Federal

Reserve System arranged by Federal funds brokers, as published for such day

(or, if such day is not a Business Day, for the next preceding Business Day) by

the Federal Reserve Bank of New York, or, if such rate is not so published for

any day which is a Business Day, the average of the quotations for such day on

such transactions received by Administrative Agent from three Federal funds brokers

of recognized standing selected by Administrative Agent.

 

“Financial Plan” has the meaning assigned to that term in

subsection 6.1(x).

 

“First Priority” means, with respect to any Lien

purported to be created in any Collateral pursuant to any Collateral Document,

that (i) such Lien is perfected and has priority over any other Lien on such

Collateral other than Liens permitted pursuant to subsection 7.2A(i),  7.2A(iii) and 7.2A(iv); and (ii) such Lien

is the only Lien (other than Liens permitted pursuant to subsection 7.2A) to

which such Collateral is subject.

 

“Fiscal Quarter” means a fiscal quarter of any Fiscal

Year.

 

“Fiscal Year” means the fiscal year of Borrower and

its Subsidiaries ending on December 31 of each calendar year.

 

“Flood Hazard Property” means a Closing Date Mortgaged Property

or an Additional Mortgaged Property located in an area designated by the

Federal Emergency Management Agency as having special flood or mud slide

hazards.

 

“Foreign Subsidiary” means any Subsidiary of Borrower that is

not a Domestic Subsidiary.

 

“Fund” means any Person (other than a

natural Person) that is (or will be) engaged in making, purchasing, holding or

otherwise investing in commercial loans and similar extensions of credit in the

ordinary course of its business.

 

“Funded Debt”, as applied to any Person,

means all Indebtedness of that Person (including any current portions thereof)

which by its terms or by the terms of any instrument or agreement relating

thereto matures more than one year from, or is directly renewable or extendable

at the option of that Person to a date more than one year from (including an

option of that Person under a revolving credit or similar agreement obligating

the lender or lenders to extend credit over a period of one year or more from),

the date of the creation thereof.

 

“Funding Date” means the date of the funding of a Loan.

 

“GAAP” means, subject to the limitations on the application

thereof set forth in subsection 1.2, generally accepted accounting principles

set forth in opinions and pronouncements of the Accounting Principles Board of

the American Institute of Certified Public Accountants and statements and

pronouncements of the Financial Accounting Standards Board or in such other

statements by such other entity as may be approved by a significant segment of

the accounting profession, in each case as the same are applicable to the

circumstances as of the date of determination.

 

“Governing Body” means the board of directors or other

body having the power to direct or cause the direction of the management and

policies of a Person that is a corporation, partnership, trust or limited

liability company.

 

“Government Authority” means any political subdivision or

department thereof, any other governmental or regulatory body, commission,

central bank, board, bureau, organ or instrumentality or any court, in each

case whether federal, state, local or foreign.

 

“Governmental Authorization” means any permit, license, registration,

authorization, plan, directive, consent, order or consent decree of or from, or

notice to, any Government Authority.

 

“Guest-Pay Rooms” means, at any time of determination, the

aggregate number of guest rooms of all lodging, hospital, cruise line and

related properties located in the United States or Canada (or in the case of

cruise lines, cruise lines that are operated by a shipping line flying the flag

of the United States or Canada), which have a firm, enforceable contract with

Borrower or any of its Subsidiaries for the provision of in-room television

entertainment and/or information services which are provided to the guests of

such property for a charge and against which Borrower or such Subsidiary has

not, in accordance with its ordinary business practice, chosen to exercise any

remedies for non-payment under such contract; provided, however,

the term “Guest-Pay Rooms” shall

exclude any guest rooms with respect to which Borrower or any of its

Subsidiaries has licensed their services and/or products to a third party

operator.

 

“Hazardous Materials” means (i) any chemical, material or

substance at any time defined as or included in the definition of “hazardous

substances”, “hazardous wastes”, “hazardous materials”, “extremely hazardous

waste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”,

“toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectious

waste”, “toxic substances”, or any other term or expression intended to define,

list or classify substances by reason of properties harmful to health, safety

or the indoor or outdoor environment (including harmful properties such as

ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive

toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any

applicable Environmental Laws); (ii) any oil, petroleum, petroleum

fraction or petroleum derived substance; (iii) any drilling fluids,

produced waters and other wastes associated with the exploration, development

or production of crude oil, natural gas or geothermal resources; (iv) any

flammable substances or explosives; (v) any radioactive materials;

(vi) any asbestos-containing materials; (vii) urea formaldehyde foam

insulation; (viii) electrical equipment which contains any oil or

dielectric fluid containing polychlorinated biphenyls; (ix) pesticides;

and (x) any other chemical, material or substance, exposure to which is

prohibited, limited or regulated by any Government Authority or which may or

could pose a hazard to the health and safety of the owners, occupants or any Persons

in the vicinity of any Facility or to the indoor or outdoor environment.

 

“Hazardous Materials Activity” means any past, current, proposed or

threatened activity, event or occurrence involving any Hazardous Materials,

including the use, manufacture, possession, storage, holding, presence,

existence, location, Release, threatened Release, discharge, placement,

generation, transportation, processing, construction, treatment, abatement,

removal, remediation, disposal, disposition or handling of any Hazardous Materials,

and any corrective action or response action with respect to any of the

foregoing.

 

“Hedge Agreement” means an Interest Rate Agreement or a

Currency Agreement designed to hedge against fluctuations in interest rates or

currency values, respectively.

 

“Increasing

Lenders” has the

meaning assigned to that term in subsection 2.1A(iv).

 

“Indebtedness” means, as applied to any Person (i) all

indebtedness for borrowed money, (ii) all obligations of such Person evidenced

by bonds, debentures, notes or similar instruments, or upon which interest

payments are customarily made without regard to any original issue discount

relating thereto, (iii) that portion of obligations with respect to

Capital Leases that is properly classified as a liability on a balance sheet in

conformity with GAAP, (iv) all obligations owed for all or any part of the

deferred purchase price of property or services (excluding any such obligations

incurred under ERISA), which purchase price is (a) due more than six

months from the date of incurrence of the obligation in respect thereof or (b)

evidenced by a note or similar written instrument, (v) all obligations in

respect of any preferred Capital Stock of such Person subject to mandatory

sinking fund payments, redemption or other acceleration, (vi) all indebtedness

secured by any Lien on any property or asset owned, acquired or held by that

Person regardless of whether the indebtedness secured thereby shall have been

assumed by that Person or is nonrecourse to the credit of that Person, (vii)

all obligations relating to the face amount of all letters of credit or

bankers’ acceptances that such Person is obligated to reimburse the related

letter of credit bank for, (viii) all obligations of such Person as lessee

under leases including any synthetic lease, tax retention operating lease,

off-balance sheet loan or similar off-balance sheet financing product, but

excluding Operating Leases, (ix) the Indebtedness of any partnership or

unincorporated joint venture in which such Person is a general partner or a

joint venturer and (x) all Contingent Obligations of such Person with respect

to Indebtedness of the type set forth in clauses (i) – (ix).  Obligations under Interest Rate Agreements

constitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2)

in all other cases, Investments, and in neither case constitute Indebtedness.

 

“Indemnitee” has the meaning assigned to that term in

subsection 10.3.

 

“Intellectual Property” means all patents, patent rights, patent

applications, licenses, inventions, trade secrets, trademarks, tradenames,

service marks, copyrights, technology, software, know-how and proprietary

techniques (including processes and substances) used in or necessary for the

conduct of the business of Borrower and its Subsidiaries as currently conducted

that are material to the condition (financial or otherwise), business or

operations of Borrower and its Subsidiaries, taken as a whole.

 

“Interest Payment Date” means (i) with respect to any Base

Rate Loan, the last Business Day of each March, June, September and December of

each year, commencing on the first such date to occur after the Closing Date,

and (ii) with respect to any LIBOR Loan, the last day of each Interest

Period applicable to such Loan; provided that in the case of each

Interest Period of six months, “Interest Payment Date” shall also include the

date that is three months after the commencement of such Interest Period.

 

“Interest Period” has the meaning assigned to that term in

subsection 2.2B.

 

“Interest Rate Agreement” means any interest rate swap agreement,

interest rate cap agreement, interest rate collar agreement or other similar

agreement or arrangement to which Borrower or any of its Subsidiaries is a

party.

 

“Interest Rate Determination Date” means,

with respect to any Interest Period, the second Business Day prior to the first

day of such Interest Period.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986,

as amended to the date hereof and from time to time hereafter, and any

successor statute.

 

“Inventory”

means, with respect to any Person as of any date of determination, all goods,

merchandise and other personal property which are then held by such Person for

sale or lease, including raw materials and work in process.

 

“Investment” means (i) any purchase or other

acquisition or commitment to purchase or acquire by Borrower or any of its

Subsidiaries of, or of a beneficial interest in, any Securities of any other

Person (including any Subsidiary of Borrower), (ii) any direct or indirect

redemption, retirement, purchase or other acquisition for value, by any

Subsidiary of Borrower from any Person other than Borrower or any of its

Subsidiaries, of any equity Securities of such Subsidiary, (iii) any

direct or indirect loan, advance (other than advances to employees for moving,

entertainment and travel expenses, drawing accounts and similar expenditures in

the ordinary course of business) or capital contribution by Borrower or any of

its Subsidiaries to any other Person (other than a Subsidiary Guarantor),

including all indebtedness and accounts receivable from that other Person that

are not current assets or did not arise from sales to that other Person in the

ordinary course of business, or (iv) Interest Rate Agreements or Currency

Agreements not constituting Hedge Agreements. The amount of any Investment

shall be the original cost or commitment of such Investment plus the

cost of all additions thereto, without any adjustments for increases or

decreases in value, or write-ups, write-downs or write-offs with respect to

such Investment (other than adjustments for the repayment of, or the refund of

capital with respect to, the original principal amount of any such Investment).

 

“IP Collateral” means, collectively, the Collateral

consisting of rights in or to Intellectual Property under the Security

Agreement.

 

“Irrevocable

Proxies” (i) the

Amended and Restated Irrevocable Proxy of even date herewith of Borrower

relating to ResNet Inc. shares; (ii) the Amended and Restated Irrevocable Proxy

of even date herewith of Borrower relating to LodgeNet Canada shares; and (iii)

the Amended and Restated Irrevocable Proxy of even date herewith of ResNet Inc.

relating to its ResNet LLC ownership interest.

 

“Issuing Lender” means, with respect to any Letter of

Credit, the Lender that agrees or is otherwise obligated to issue such Letter

of Credit, determined as provided in subsection 3.1B(iii).

 

“Joint Venture” means a joint venture, partnership or

other similar arrangement, whether in corporate, partnership or other legal

form; provided that in no event shall any corporate Subsidiary of any

Person be considered to be a Joint Venture to which such Person is a party.

 

“Landlord Consent and Estoppel” means, with respect to any Leasehold

Property, a letter, certificate or other instrument in writing from the lessor

under the related lease, satisfactory in form and substance to Administrative

Agent, pursuant to which such lessor agrees, for the benefit of Administrative

Agent, (i) that without any further consent of such lessor or any further

action on the part of the Loan Party holding such Leasehold Property, such

Leasehold Property may be encumbered pursuant to a Mortgage and may be assigned

to the purchaser at a foreclosure sale or in a transfer in lieu of such a sale

(and to a subsequent third party assignee if Administrative Agent, any Lender,

or an Affiliate of either so acquires such Leasehold Property), (ii) that such

lessor shall not terminate such lease as a result of a default by such Loan

Party thereunder without first giving Administrative Agent notice of such

default and at least 60 days (or, if such default cannot reasonably be cured by

Administrative Agent within such period, such longer period as may reasonably

be required) to cure such default, (iii) to the matters contained in a

Collateral Access Agreement, and (iv) to such other matters relating to such

Leasehold Property as Administrative Agent may reasonably request.

 

“LC Reimbursement Amount” has the meaning

assigned to this term in subsection 3.3B.

 

“Leasehold Property” means any leasehold interest of any Loan

Party (other than a Foreign Subsidiary) as lessee under any lease of real

property, other than any such leasehold interest designated from time to time

by Administrative Agent in its sole discretion as not being required to be

included in the Collateral.

 

“Lender” and “Lenders” means the Persons identified as

“Lenders” and listed on the signature pages of this Agreement, together with

their successors and permitted assigns pursuant to subsection 10.1, and the

term “Lenders” shall include Swing Line Lender unless the context otherwise

requires; provided that the term “Lenders”, when used in the context of

a particular Commitment, shall mean Lenders having that Commitment.

 

“Letter

of Credit” means

any standby letter of credit or similar instrument issued for the purpose of

supporting (i) Indebtedness of Borrower or any of its Subsidiaries in respect

of industrial revenue or development bonds or financings, (ii) workers’

compensation liabilities of Borrower or any of its Subsidiaries, (iii) the

obligations of third party insurers of Borrower or any of its Subsidiaries

arising by virtue of the laws of any jurisdiction requiring third party

insurers, (iv) obligations with respect to Capital Leases or Operating Leases

of Borrower or any of its Subsidiaries, and (v) performance, payment, deposit

or surety obligations of Borrower or any of its Subsidiaries, in any case if

required by law or governmental rule or regulation or for any purpose for which

Borrower is permitted to use its cash; provided that Letters of Credit

may not be issued for the purpose of supporting (a) trade payables or (b) any

Indebtedness constituting “antecedent debt” (as that term is used in Section

547 of the Bankruptcy Code).

 

“Letter of Credit Usage” means, as at any date of determination,

the sum of (i) the maximum aggregate amount which is or at any time

thereafter may become available for drawing under all Letters of Credit then

outstanding plus (ii) the aggregate amount of all drawings under Letters

of Credit honored by Issuing Lenders and not theretofore reimbursed out of the

proceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed

by Borrower.

 

“LIBOR Loans”

means Loans bearing interest at rates determined by reference to Adjusted LIBOR

as provided in subsection 2.2A.

 

“Lien” means any lien, mortgage, pledge, assignment,

security interest, charge or encumbrance of any kind (including any conditional

sale or other title retention agreement, any lease in the nature thereof, and

any agreement to give any security interest) and any option, trust or other

preferential arrangement having the practical effect of any of the foregoing.

 

“Loan” or “Loans” means one or more of the Term

Loans, Revolving Loans or Swing Line Loans or any combination thereof.

 

“Loan Documents” means this Agreement, the Notes, the

Letters of Credit (and any applications for, or reimbursement agreements or

other documents or certificates executed by Borrower in favor of an Issuing

Lender relating to, the Letters of Credit), the Subsidiary Guaranty and the

Collateral Documents.

 

“Loan Party” means each of Borrower and any of

Borrower’s Subsidiaries from time to time executing a Loan Document, and “Loan

Parties” means all such Persons, collectively.

 

“LodgeNet

Canada” LodgeNet

Entertainment (Canada) Corporation, a Canadian corporation and a wholly-owned

Subsidiary of Borrower.

 

“Margin

Determination Certificate”means an Officers’ Certificate of Borrower

delivered (a) with respect to each Fiscal Quarter (other than each fourth

Fiscal Quarter), together with the most recent financial statements required to

be delivered pursuant to subsection 6.1(i), and (b) with respect to each

fourth Fiscal Quarter, within 45 days of the last day of such fourth Fiscal

Quarter, setting forth in reasonable detail the Consolidated Total Leverage

Ratio that is applicable as of the last day of the fiscal period for which such

financial statements and Officers’ Certificate are being delivered.

 

“Margin Stock” has the meaning assigned to that term in

Regulation U of the Board of Governors of the Federal Reserve System as in

effect from time to time.

 

“Material Adverse Effect” means any act,

omission, situation, circumstance, event or undertaking which could reasonably

be expected to have, singly or in any combination with one or more other acts,

omissions, situations, circumstances, events or undertakings, a materially

adverse effect upon (a) the business, assets, properties, liabilities,

condition (financial or otherwise), results of operations or prospects of

Borrower and its Subsidiaries taken as a whole; (b) the value of the whole or

any material part of the Collateral, or the enforceability or priority of the

security interest in the Collateral; (c) the respective ability of Borrower or

any of the other Loan Parties to perform any payment obligation or any other

material obligation under this Agreement or any other Loan Document to which it

is a party; or (d) the legality, validity, binding effect or enforceability of

any Loan Document or the right to accelerate and foreclose on any material

portion of the Collateral or any other material right or remedy of

Administrative Agent or Lenders under or in connection with any Loan Document.

 

“Material Contract” means any contract, indenture, mortgage,

deed of trust, understanding, agreement, instrument or other arrangement,

whether written or oral, to which Borrower or any of its Subsidiaries is a

party (other than the Loan Documents), for which breach, nonperformance,

cancellation or failure to renew could reasonably be expected to have a

Material Adverse Effect.

 

“Material Leasehold Property” means a Leasehold Property reasonably

determined by Administrative Agent to be of material value as Collateral or of

material importance to the operations of Borrower or any of its Subsidiaries; provided,

however, that (i) any Leasehold Properties set forth on Schedule 1.1

as of the Closing Date and any other additional Leasehold Properties added to Schedule

1.1 from time to time with the approval of Administrative Agent and

Borrower shall not be deemed to be a “Material Leasehold Property” hereunder;

and (ii) unless the aggregate amount of all rents payable during any one Fiscal

Year with respect to a Leasehold Property, together with the aggregate amount

of all rents payable during such Fiscal Year with respect to any series of

adjacent, adjoining or connected Leasehold Properties, exceeds $750,000, such

Leasehold Property shall not be deemed to be a “Material Leasehold Property”

hereunder.

 

“Material Real Property” means any real property owned by any

Loan Party (other than any Foreign Subsidiary) with a fair market value, at an

time of determination, greater than or equal to $2,000,000 and any additional

real property acquired or owned by any Loan Party (other than any Foreign

Subsidiary) as designated in writing by Borrower to Administrative Agent in

order to comply with the terms of subsection 6.9.

 

“Minimum

Amount” means,

with respect to each of the following actions, the minimum amount and any

multiples in excess thereof set forth opposite such action: 

 

	

  Type of Action

  	

   

  	

  Minimum

  Amount

  	

   

  	

  Multiples

  in excess thereof

  	

   

  
	

  Conversion into

  Base Rate Loans

  	

   

  	

  $

  	

  500,000

  	

   

  	

  $

  	

  500,000

  	

   

  
	

  Conversion into

  LIBOR Loans

  	

   

  	

  $

  	

  2,000,000

  	

   

  	

  $

  	

  100,000

  	

   

  

 

“Moody’s”

means Moody’s Investors Service, Inc.

 

“Mortgage” means (i) a security instrument (whether

designated as a deed of trust or a mortgage or by any similar title) executed

and delivered by any Loan Party, substantially in the form of Exhibit IV-A

or Exhibit IV-B annexed hereto or in such other form as may be approved

by Administrative Agent in its sole discretion, in each case with such changes

thereto as may be recommended by Administrative Agent’s local counsel based on

local laws or customary local mortgage or deed of trust practices; or (ii) at

Administrative Agent’s option, in the case of an Additional Mortgaged Property,

an amendment to an existing Mortgage, in form satisfactory to Administrative

Agent, adding such Additional Mortgaged Property to the Real Property Assets

encumbered by such existing Mortgage.  “Mortgages”

means all such instruments, including the Closing Date Mortgage and any

Additional Mortgages, collectively.

 

“Multiemployer Plan” means any Employee Benefit Plan that is

a “multiemployer plan” as defined in Section 3(37) of ERISA.

 

“Net Asset Sale Proceeds” means, with respect to any Asset Sale, Cash

payments (including any Cash received by way of deferred payment pursuant to,

or by monetization of, a note receivable or otherwise, but only as and when so

received) received from such Asset Sale, net of any bona fide direct costs

incurred in connection with such Asset Sale, including (i) income taxes

reasonably estimated to be actually payable within two years of the date of

such Asset Sale as a result of any gain recognized in connection with such

Asset Sale and (ii) payment of the outstanding principal amount of,

premium or penalty, if any, and interest on any Indebtedness (other than the

Loans) that is secured by a Lien on the stock or assets in question and that is

required to be repaid under the terms thereof as a result of such Asset Sale;

provided, however, that Net Asset Sale Proceeds shall not include any cash

payments received from any Asset Sale by a Foreign Subsidiary unless such proceeds

may be repatriated (by reason of a repayment of an intercompany note or

otherwise) to the United States without (in the reasonable judgment of

Borrower) resulting in a material tax liability to Borrower.

 

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds

received by Borrower or any of its Subsidiaries (i) under any business

interruption or casualty insurance policy in respect of a covered loss

thereunder or (ii) as a result of the taking of any assets of Borrower or any

of its Subsidiaries by any Person pursuant to the power of eminent domain,

condemnation or otherwise, or pursuant to a sale of any such assets to a

purchaser with such power under threat of such a taking, in each case net of

any actual and reasonable documented costs incurred by Borrower or any of its

Subsidiaries in connection with the adjustment or settlement of any claims of

Borrower or such Subsidiary in respect thereof.

 

“Net Pension Proceeds” has the meaning

assigned to that term in subsection 2.4B(iv)(d).

 

“Net Proceeds Amount” has the meaning

assigned to that term in subsection 2.4B(iii)(g).

 

“Net Securities Proceeds” means the Cash proceeds (net of

underwriting discounts and commissions and other reasonable costs and expenses

associated therewith, including reasonable legal fees and expenses) from the

(i) issuance of Capital Stock of or incurrence of Indebtedness by Borrower or

any of its Subsidiaries and (ii) capital contributions made by a holder of

Capital Stock of Borrower.

 

“New

Lender” has the

meaning assigned to that term in subsection 2.1A(iv).

 

“Non-US Lender” has the meaning assigned to that term in

subsection 2.7B(iii)(a).

 

“Notes” means one or more of the Term Notes,

Revolving Notes or Swing Line Note or any combination thereof.

 

“Notice of

Borrowing” means a notice substantially in the form of Exhibit V

annexed hereto delivered by Borrower to Administrative Agent pursuant to

subsection 2.1B with respect to a proposed borrowing.

 

“Notice of

Conversion/Continuation” means a notice substantially in the form of

Exhibit VI annexed hereto delivered by Borrower to Administrative

Agent pursuant to subsection 2.2D with respect to a proposed conversion or

continuation of the applicable basis for determining the interest rate with

respect to the Loans specified therein.

 

“Notice

of Extension”

means a notice in substantially the form of Exhibit VII  annexed hereto delivered by Borrower to

Administrative Agent pursuant to subsections 2.10A and/or 2.10B with respect to

Borrower’s election to extend the Term Loan Maturity Date and/or the Revolving

Loan Commitment Termination Date, as applicable.

 

 “Notice of Issuance of Letter of Credit”

means a notice substantially in the form of Exhibit VIII annexed

hereto delivered by Borrower to Administrative Agent pursuant to subsection

3.1B(i) with respect to the proposed issuance of a Letter of Credit.

 

“Obligations” means all obligations of every nature of

each Loan Party from time to time owed to Administrative Agent, Lenders or any

of them under the Loan Documents, whether for principal, interest,

reimbursement of amounts drawn under Letters of Credit, fees, expenses,

indemnification or otherwise, whether contingent, direct or otherwise,

including post-petition interest on such amounts accruing subsequent to, and

interest that would have accrued but for, the commencement of a proceeding

under the Bankruptcy Code (whether or not such interest is allowed as a claim

in such proceeding).

 

“Officer” means the president, chief executive

officer, a vice president, chief financial officer, treasurer, general partner

(if an individual), managing member (if an individual) or other individual

appointed by the Governing Body or the Organizational Documents of a

corporation, partnership, trust or limited liability company to serve in a

similar capacity as the foregoing.

 

“Officers’

Certificate,” as

applied to any Person that is a corporation, partnership, trust or limited

liability company, means a certificate executed on behalf of such Person by one

or more Officers of such Person or one or more Officers of a general partner or

a managing member if such general partner or managing member is a corporation,

partnership, trust or limited liability company; provided that every

Officers’ Certificate with respect to the compliance with a condition precedent

to the making of any Loans hereunder shall include (i) a statement that

the Officer or Officers making or giving such Officers’ Certificate have read

such condition and any definitions or other provisions contained in this

Agreement relating thereto, (ii) a statement that, in the opinion of the

signers, they have made or have caused to be made such examination or

investigation as is reasonably necessary to enable them to express an informed

opinion as to whether or not such condition has been complied with, and

(iii) a statement as to whether, in the opinion of the signers, such

condition has been complied with.

 

“Operating Lease”, as applied to any Person, means any

lease (including leases that may be terminated by the lessee at any time) of

any property (whether real, personal or mixed) that is not a Capital Lease

other than any such lease under which that Person is the lessor; provided,

however, that the term “Operating

Lease” shall not be deemed to include video service leases and

similar agreements utilized by Borrower or its Subsidiaries in the ordinary

course of business for the purpose of obtaining the right to deliver cable

television programming and/or other interactive, multimedia entertainment and

information services to specific customer properties.

 

“Organizational Documents” means the documents (including Bylaws,

if applicable) pursuant to which a Person that is a corporation, partnership,

trust or limited liability company is organized.

 

“Participant” means a

purchaser of a participation in the rights and obligations under this Agreement

pursuant to subsection 10.1C.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any

successor thereto.

 

“Pension Plan” means any Employee Benefit Plan, other

than a Multiemployer Plan, which is subject to Section 412 of the Internal

Revenue Code or Section 302 of ERISA.

 

“Permitted Encumbrances” means the following types of Liens

(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of

the Internal Revenue Code or by ERISA, any such Lien relating to or imposed in

connection with any Environmental Claim, and any such Lien expressly prohibited

by any applicable terms of any of the Collateral Documents):

 

(i)            Liens for taxes,

assessments or governmental charges or claims the payment of which is not, at

the time, required by subsection 6.3A;

 

(ii)           statutory Liens of

landlords, statutory Liens and rights of set-off of banks, statutory Liens of

carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and

other Liens imposed by law, in each case incurred in the ordinary course of

business and in an aggregate amount not to exceed $750,000 (a) for amounts not

yet overdue or (b) for amounts that are overdue and that (in the case of any

such amounts overdue for a period in excess of 5 days) are being contested in

good faith by appropriate proceedings, so long as (1) such reserves or other

appropriate provisions, if any, as shall be required by GAAP shall have been

made for any such contested amounts, and (2) in the case of a Lien with respect

to any portion of the Collateral, such contest proceedings conclusively operate

to stay the sale of any portion of the Collateral on account of such Lien;

 

(iii)          Liens incurred or

deposits made in the ordinary course of business and in an aggregate amount not

to exceed $750,000 in connection with workers’ compensation, unemployment

insurance and other types of social security, or to secure the performance of

tenders, statutory obligations, surety and appeal bonds, bids, leases, government

contracts, trade contracts, performance and return-of-money bonds and other

similar obligations (exclusive of obligations for the payment of borrowed

money), so long as no foreclosure, sale or similar proceedings have been

commenced with respect to any portion of the Collateral on account thereof;

 

(iv)          any attachment or

judgment Lien not constituting an Event of Default under subsection 8.8;

 

(v)           leases or subleases

granted to third parties in accordance with any applicable terms of the

Collateral Documents and not interfering in any material respect with the

ordinary conduct of the business of Borrower or any of its Subsidiaries or

resulting in a material diminution in the value of any Collateral as security

for the Obligations;

 

(vi)          easements, rights-of-way,

restrictions, encroachments, and other minor defects or irregularities in

title, in each case which do not and will not interfere in any material respect

with the ordinary conduct of the business of Borrower or any of its

Subsidiaries or result in a material diminution in the value of any Collateral

as security for the Obligations;

 

(vii)         any

(a) interest or title of a lessor or sublessor under any lease not

prohibited by this Agreement, 

(b) restriction or encumbrance that the interest or title of such

lessor or sublessor may be subject to, or (c) subordination of the

interest of the lessee or sublessee under such lease to any restriction or

encumbrance referred to in the preceding clause (b), so long as the holder of

such restriction or encumbrance agrees to recognize the rights of such lessee

or sublessee under such lease;

 

(viii)        Liens arising from

filing UCC financing statements relating solely to leases not prohibited by

this Agreement; and

 

(ix)           licenses of

Intellectual Property granted by Borrower or any of its Subsidiaries in the

ordinary course of business and not interfering in any material respect with

the ordinary conduct of the business of Borrower or such Subsidiary.

 

“Person” means and includes natural persons,

corporations, limited partnerships, general partnerships, limited liability

companies, limited liability partnerships, joint stock companies, Joint

Ventures, associations, companies, trusts, banks, trust companies, land trusts,

business trusts or other organizations, whether or not legal entities, and

governments (whether federal, state or local, domestic or foreign, and

including political subdivisions thereof) and agencies or other administrative

or regulatory bodies thereof.

 

“Pledged Collateral” means, collectively, the “Pledged

Collateral” as defined in the Security Agreement.

 

“Potential Event of Default” means a condition or event that, after

notice or lapse of time or both, would constitute an Event of Default.

 

“Proceedings” means any action, suit, proceeding

(whether administrative, judicial or otherwise), governmental investigation or

arbitration.

 

“Pro Rata Share” means (i) with respect to all payments,

computations and other matters relating to the Term Loan Commitment or the Term

Loan of any Lender, the percentage obtained by dividing (x) the

Term Loan Exposure of that Lender by (y) the aggregate Term Loan

Exposure of all Lenders; (ii) with respect to all payments, computations

and other matters relating to the Revolving Loan Commitment or the Revolving

Loans of any Lender or any Letters of Credit issued or participations therein

purchased by any Lender or any assignments of any Swing Line Loans purchased by

any Lender, the percentage obtained by dividing (x) the Revolving

Loan Exposure of that Lender by (y) the aggregate Revolving Loan

Exposure of all Lenders; and (iii) for all other purposes with respect to

each Lender, the percentage obtained by dividing (x) the sum of the

Term Loan Exposure and the Revolving Loan Exposure of that Lender by

(y) the sum of the aggregate Term Loan Exposure and Revolving Loan

Exposure of all Lenders, in any such case as the applicable percentage may be

adjusted by assignments permitted pursuant to subsection 10.1.

 

“PTO” means the United States Patent and Trademark Office

or any successor or substitute office in which filings are necessary or, in the

opinion of Administrative Agent, desirable in order to create or perfect Liens

on any IP Collateral.

 

“Real Property Asset” means, at any time of determination, any

interest then owned by any Loan Party (other than any Foreign Subsidiary) in

any real property.

 

“Recorded Leasehold Interest” means a Leasehold Property with respect

to which a Record Document (as hereinafter defined) has been recorded in all

places necessary or desirable, in Administrative Agent’s reasonable judgment,

to give constructive notice of such Leasehold Property to third-party

purchasers and encumbrancers of the affected real property.  For purposes of this definition, the term “Record

Document” means, with respect to any Leasehold Property, (a) the

lease evidencing such Leasehold Property or a memorandum thereof, executed and

acknowledged by the owner of the affected real property, as lessor, or (b) if

such Leasehold Property was acquired or subleased from the holder of a Recorded

Leasehold Interest, the applicable assignment or sublease document, executed

and acknowledged by such holder, in each case in form sufficient to give such

constructive notice upon recordation and otherwise in form reasonably

satisfactory to Administrative Agent.

 

“Reference

Rate” means the rate that CIBC announces from time to time as its

prime lending rate, as in effect from time to time. The Reference Rate is a

reference rate and does not necessarily represent the lowest or best rate

actually charged to any customer.  CIBC

or any other Lender may make commercial loans or other loans at rates of

interest at, above or below the Reference Rate.

 

“Refunded Swing Line Loans” has the meaning assigned to that term in

subsection 2.1A(iii).

 

“Register” has the meaning assigned to that term in

subsection 2.1D.

 

“Regulation D” means Regulation D of the Board of

Governors of the Federal Reserve System, as in effect from time to time.

 

“Reimbursement Date” has the meaning assigned to that term in

subsection 3.3B.

 

“Release” means any release, spill, emission,

leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,

dispersal, dumping, leaching or migration of Hazardous Materials into the

indoor or outdoor environment (including the abandonment or disposal of any

barrels, containers or other closed receptacles containing any Hazardous

Materials), including the movement of any Hazardous Materials through the air,

soil, surface water or groundwater.

 

“Requisite Class Lenders” means, at any time of determination (i)

for the Class of Lenders having Revolving Loan Exposure, Lenders having or

holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders,

and (ii) for the Class of Lenders having Term Loan Exposure, Lenders having or

holding more than 50% of the aggregate Term Loan Exposure of all Lenders.

 

“Requisite Lenders” means Requisite Class Lenders for the

Class of Lenders having Revolving Loan Exposure and Requisite Class Lenders for

the Class of Lenders having Term Loan Exposure.

 

“ResNet

Inc.” ResNet

Communications, Inc., a Delaware corporation and a Subsidiary of Borrower.

 

“ResNet

LLC” means ResNet

Communications, LLC, a Delaware limited liability company and a Subsidiary of

Borrower.

 

“Restricted Junior Payment” means (i) any dividend or other

distribution, direct or indirect, on account of any shares of any class of

Capital Stock of Borrower or any of its Subsidiaries now or hereafter

outstanding, except a dividend payable solely in shares of that class of stock to

the holders of that class or from any Subsidiary of Borrower to Borrower or any

Subsidiary Guarantor; (ii) any redemption, retirement, sinking fund or

similar payment, purchase or other acquisition for value, direct or indirect,

of any shares of any class of Capital Stock of Borrower or any of its

Subsidiaries now or hereafter outstanding, except Capital Stock owned by

Borrower or a Subsidiary Guarantor; (iii) any payment made to retire, or

to obtain the surrender of, any outstanding warrants, options or other rights

to acquire shares of any class of Capital Stock of Borrower or any of its

Subsidiaries now or hereafter outstanding, except Capital Stock owned by

Borrower or a Subsidiary Guarantor; (iv) any payment or prepayment of

principal of, premium, if any, or interest on, or redemption, purchase,

retirement, defeasance (including in-substance or legal defeasance), sinking

fund or similar payment with respect to, any Subordinated Indebtedness; and (v)

any payment or prepayment of principal of, premium, if any, or interest on, or

redemption, purchase, retirement, defeasance (including in-substance or legal

defeasance), sinking fund or similar payment with respect to the Senior Notes

(and any senior unsecured Indebtedness incurred to refinance the Senior Notes acceptable

to the Administrative Agent).

 

“Revolving

Lender” means a

Lender that has a Revolving Loan Commitment and/or that has an outstanding

Revolving Loan.

 

“Revolving Loan Commitment” means the commitment of a Lender to make

Revolving Loans to Borrower pursuant to subsection 2.1A(ii), and “Revolving

Loan Commitments” means such commitments of all Lenders in the

aggregate.  The Revolving Loan

Commitments shall be recorded by Administrative Agent in the Register.

 

“Revolving Loan Commitment

Termination Date”

means initially June 30, 2006 unless the initial Revolving Loan Commitment

Termination Date has been extended in accordance with subsection 2.10B, in

which case it means August 29, 2007.

 

“Revolving Loan Exposure” means, with respect to any Lender, as of any

date of determination (i) prior to the termination of the Revolving Loan

Commitments, that Lender’s Revolving Loan Commitment, and (ii) after the

termination of the Revolving Loan Commitments, the sum of (a) the

aggregate outstanding principal amount of the Revolving Loans of that Lender plus

(b) if Lender is an Issuing Lender, the aggregate Letter of Credit Usage

in respect of all Letters of Credit issued by that Lender (in each case net of

any participations purchased by other Lenders in such Letters of Credit or in

any unreimbursed drawings thereunder) plus (c) the aggregate amount

of all participations purchased by that Lender in any outstanding Letters of

Credit or any unreimbursed drawings under any Letters of Credit plus

(d) in the case of Swing Line Lender, the aggregate outstanding principal

amount of all Swing Line Loans (net of any assignments thereof purchased by

other Lenders) plus (e) the aggregate amount of all assignments

purchased by that Lender in any outstanding Swing Line Loans.

 

“Revolving Loans” means the Loans made by Lenders to

Borrower pursuant to subsection 2.1A(ii).

 

“Revolving Notes” means (i) the promissory notes of

Borrower issued pursuant to subsection 2.1E on the Closing Date and

(ii) any promissory notes issued by Borrower pursuant to subsection

10.1B(i) in connection with assignments of the Revolving Loan Commitments and

Revolving Loans of any Lenders and any replacements thereof, in each case

substantially in the form of Exhibit IX annexed hereto.

 

“S&P” means Standard & Poor’s

Ratings Group.

 

“Securities” means any stock, shares, partnership

interests, voting trust certificates, certificates of interest or participation

in any profit-sharing agreement or arrangement, options, warrants, bonds,

debentures, notes, or other evidences of indebtedness, secured or unsecured,

convertible, subordinated or otherwise, or in general any instruments commonly

known as “securities” or any certificates of interest, shares or participations

in temporary or interim certificates for the purchase or acquisition of, or any

right to subscribe to, purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of

1933.

 

“Security Agreement” means the Security Agreement executed

and delivered by each of the Loan Parties on the Closing Date, substantially in

the form of Exhibit X annexed hereto.

 

“Senior

1995 Notes” those

certain 11.5% Senior Notes due July 15, 2005 of Borrower with an aggregate face

value of $30,000,000.

 

“Senior

1995 Note Agreement”

that certain Securities Purchase Agreement dated as of August 9, 1995 by and

among Borrower and the holders of the Senior 1995 Notes.

 

“Senior

1996 Notes” those

certain 10 1/4% Senior Notes due December 15, 2006 of Borrower with an

aggregate face value of $150,000,000.

 

“Senior

1996 Note Indenture”

that certain Indenture dated as of December 19, 1996 between Borrower and

Marine Midland Bank, as Trustee, relating to the Senior 1996 Notes.

 

“Senior

Note Documents”

collectively, the Senior 1995 Notes, the Senior 1995 Note Agreement, the Senior

1996 Notes, the Senior 1996 Note Indenture and each other agreement, instrument

or other document executed in connection therewith.

 

“Senior

Notes” means the

Senior 1995 Notes and the Senior 1996 Notes.

 

“Solvent”

means, with respect to any Person, that as of the date of determination both

(A) (i) the then fair saleable value of the property of such Person is

(y) greater than the total amount of liabilities (including contingent

liabilities) of such Person and (z) not less than the amount that will be

required to pay the probable liabilities on such Person’s then existing debts

as they become absolute and matured considering all financing alternatives and

potential asset sales reasonably available to such Person; (ii) such

Person’s capital is not unreasonably small in relation to its business or any

contemplated or undertaken transaction; and (iii) such Person does not

intend to incur, or believe (nor should it reasonably believe) that it will

incur, debts beyond its ability to pay such debts as they become due; and (B)

such Person is “solvent” within the meaning given that term and similar terms

under applicable laws relating to fraudulent transfers and conveyances.  For purposes of this definition, the amount

of any contingent liability at any time shall be computed as the amount that,

in light of all of the facts and circumstances existing at such time,

represents the amount that can reasonably be expected to become an actual or

matured liability.

 

“Subject Lender” has the meaning assigned to that term in

subsection 2.9.

 

 “Subordinated Indebtedness” means (i) any Indebtedness of Borrower incurred from

time to time pursuant to subsection 7.1(vi) and subordinated in right of

payment to the Obligations on terms and conditions satisfactory to Administrative

Agent.

 

“Subsidiary”

means, with respect to any Person, any corporation, partnership, limited

liability company, association, joint venture or other business entity of which

more than 50% of the total voting power of shares of stock or other ownership

interests entitled (without regard to the occurrence of any contingency) to

vote in the election of the Person or Persons (whether directors, managers,

trustees or other Persons performing similar functions) having the power to

direct or cause the direction of the management and policies thereof is at the

time owned or controlled, directly or indirectly, by that Person or one or more

of the other Subsidiaries of that Person or a combination thereof.  Notwithstanding anything herein to the

contrary, AmNet, ResNet Inc. and ResNet LLC shall each be deemed to be a

Subsidiary of Borrower so long as (i) in the case of AmNet, Borrower owns 50%

of AmNet’s outstanding capital stock and retains the right to elect a majority

of AmNet’s board of directors; (ii) in the case of ResNet Inc., Borrower owns

50% of ResNet Inc.’s outstanding capital stock and retains the right to elect a

majority of ResNet Inc.’s board of directors; and (iii) in the case of ResNet

LLC, Borrower directly or indirectly owns 50% of all members’ interests and is

the managing member.

 

“Subsidiary Guarantor” means any Domestic Subsidiary of

Borrower that executes and delivers a counterpart of the Subsidiary Guaranty on

the Closing Date or from time to time thereafter pursuant to subsection 6.8.

 

“Subsidiary Guaranty” means the Subsidiary Guaranty to be

executed and delivered by each of the existing Domestic Subsidiaries of

Borrower (other than AmNet, ResNet Inc. and ResNet LLC) on the Closing Date and

to be executed and delivered by additional Domestic Subsidiaries of Borrower

and/or AmNet, ResNet Inc. and/or ResNet LLC from time to time thereafter in

accordance with subsection 6.8, substantially in the form of Exhibit XI

annexed hereto.

 

“Supplemental Collateral Agent” has the meaning assigned to that term in

subsection 9.1B.

 

“Survey” means a current as-built survey for the

property prepared by a surveyor licensed or registered in the state where such

property is located, which survey must contain a certification from the

surveyor in the form of Exhibit XVIII attached hereto and be sufficient

to delete any standard printed survey exception contained in the applicable

title policy and otherwise in form and substance satisfactory to Administrative

Agent.

 

“Swing

Line Lender” has

the meaning assigned to that term in the introduction to this Agreement and

also means any successor Swing Line Lender appointed pursuant to subsection

9.5B.

 

“Swing

Line Lender’s Office” means (i) the office of Swing Line Lender located at CIBC, Inc., 425

Lexington Avenue, New York, NY 10017 or (ii) such other office of Swing

Line Lender as may from time to time hereafter be designated as such in a

written notice delivered by Swing Line Lender to Borrower and each Lender.

 

“Swing Line Loan Commitment” means the commitment of Swing Line

Lender to make Swing Line Loans to Borrower pursuant to subsection 2.1A(iii).

 

“Swing Line Loans” means the Loans made by Swing Line

Lender to Borrower pursuant to subsection 2.1A(iii).

 

“Swing Line Note” means (i) the promissory note of

Borrower issued pursuant to subsection 2.1E on the Closing Date (or any

replacements thereof) and (ii) any promissory note issued by Borrower to

any successor Swing Line Lender pursuant to the last sentence of subsection

9.5B, and any replacements thereof, in each case substantially in the form of Exhibit

XII annexed hereto.

 

“Syndication Agent” has the meaning assigned to that term in

the introduction to this Agreement.

 

“Tax”

or “Taxes”

means any present or future tax, levy, impost, duty, charge, fee, deduction or

withholding of any nature and whatever called, by whomsoever, on whomsoever and

wherever imposed, levied, collected, withheld or assessed, including interest,

penalties, additions to tax and any similar liabilities with respect thereto;

except that, in the case of a Lender, there shall be excluded taxes that are

imposed on the overall net income or net profits (including franchise taxes

imposed in lieu thereof) (i) by the United States, or (ii) by any other

Government Authority under the laws of which the Lender is organized or has its

principal office or maintains its applicable lending office.

 

“Term Loan Commitment” means the commitment of a Lender to make

a Term Loan to Borrower pursuant to subsection 2.1A(i), and “Term Loan

Commitments” means such commitments of all Lenders in the aggregate.

 

“Term Loan Exposure”, with respect to any Lender, means, as of

any date of determination (i) prior to the funding of the Term Loans, that

Lender’s Term Loan Commitment and (ii) after the funding of the Term

Loans, the outstanding principal amount of the Term Loan of that Lender.

 

“Term

Loan Maturity Date”

means, initially June 30, 2006 unless the initial Term Loan Maturity Date

has been extended in accordance with subsection 2.10A, in which case it means

August 29, 2008.

 

“Term Loans” means the Loans made by Lenders to

Borrower pursuant to subsection 2.1A(i).

 

“Term Notes” means (i) the promissory notes of

Borrower issued pursuant to subsection 2.1E to evidence the Term Loans of any

Lenders, (ii) any promissory notes issued by Borrower pursuant to subsection

10.1B(i) in connection with assignments of the Term Loan Commitments or Term

Loans of any Lenders and any replacements thereof, in each case substantially

in the form of Exhibit XIII annexed hereto.

 

“Title Company” means, Chicago Title Insurance Company

and/or one or more other title insurance companies reasonably satisfactory to

Administrative Agent.

 

“Total Utilization of Revolving Loan

Commitments”

means, as at any date of determination, the sum of (i) the aggregate principal

amount of all outstanding Revolving Loans plus (ii) the aggregate

principal amount of all outstanding Swing Line Loans plus (iii) the

Letter of Credit Usage.

 

“Transaction Costs” means the fees, costs and expenses

payable by Borrower on or before the Closing Date in connection with the

transactions contemplated by the Loan Documents.

 

“Type” means, with respect to any Loan, a Term Loan, a

Revolving Loan or a Swing Line Loan (each of which is a “Type” of Loan).

 

“UCC” means the Uniform Commercial Code (or any similar or

equivalent legislation) as in effect in any applicable jurisdiction.

 

1.2          Accounting Terms; Utilization of

GAAP for Purposes of Calculations Under Agreement

 

Except as

otherwise expressly provided in this Agreement, all accounting terms not

otherwise defined herein shall have the meanings assigned to them in conformity

with GAAP.  Financial statements and

other information required to be delivered by Borrower to Lenders pursuant to

clauses (ii), (iii) and (xii) of subsection 6.1 shall be prepared in accordance

with GAAP as in effect in the United States of America at the time of such

preparation (and delivered together with the reconciliation statements provided

for in subsection 6.1(iii)). 

Calculations in connection with the definitions, covenants and other

provisions of this Agreement shall utilize GAAP as in effect in the United

States of America on the date of determination, applied in a manner consistent

with that used in preparing the financial statements referred to in subsection

5.3.  Borrower shall deliver to the

Administrative Agent at the same time as the delivery of any annual or

quarterly financial statements given in accordance with the provisions of

Section 6.1, (i) a description in reasonable detail of any material change

in the application of accounting principles employed in the preparation of such

financial statements from those applied in the most recently preceding

quarterly or annual financial statements as to which no objection shall have

been made in accordance with the provisions above and (ii) a reasonable

estimate of the effect on the financial statements on account of such changes

in application.

 

1.3          Other Definitional Provisions and

Rules of Construction.

 

A.            Any of the terms defined herein may, unless the

context otherwise requires, be used in the singular or the plural, depending on

the reference.

 

B.            References to “Sections” and “subsections” shall be to

Sections and subsections, respectively, of this Agreement unless otherwise

specifically provided.

 

C.            The use in any of the Loan Documents of the word

“include” or “including”, when following any general statement, term or matter,

shall not be construed to limit such statement, term or matter to the specific

items or matters set forth immediately following such word or to similar items

or matters, whether or not nonlimiting language (such as “without limitation”

or “but not limited to” or words of similar import) is used with reference

thereto, but rather shall be deemed to refer to all other items or matters that

fall within the broadest possible scope of such general statement, term or

matter.

 

D.            Each of the parties hereto acknowledges that (i) it

has been represented by counsel in the negotiation and documentation of the

terms of this Agreement, (ii) it has had full and fair opportunity to review

and revise the terms of this Agreement, (iii) this Agreement has been drafted

jointly by all of the parties hereto, and (iv) neither Administrative Agent nor

any Lender has any fiduciary relationship with or duty to Borrower arising out

of or in connection with this Agreement or any of the other Loan Documents, and

the relationship between Administrative Agent and Lenders, on one hand, and

Borrower, on the other hand, in connection herewith or therewith is solely that

of debtor and creditor.  Accordingly,

each of the parties hereto acknowledges and agrees that the terms of this

Agreement shall not be construed against or in favor of another party.

 

E.             Any reference in this Agreement or any other Loan

Document to any agreement means such agreement as it may be amended, restated,

supplemented or otherwise modified from time to time; (ii) any reference in

this Agreement or any other Loan Document to any law, statute, regulation, rule

or other legislative action shall mean such law, statute, regulation, rule or

other legislative action as amended, supplemented or otherwise modified from

time to time, and shall include any rule or regulation promulgated thereunder;

and (iii) any reference in this Agreement or any Loan Document to a Person

shall include the successor or assignee of such Person.

 

Section 2.              AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

 

2.1          Commitments; Making of Loans;

Optional Notes.

 

A.    Commitments.  Subject to the terms and conditions of this

Agreement and in reliance upon the representations and warranties of Borrower

herein set forth, each Lender hereby severally agrees to make the Loans as

described in subsections 2.1A(i) and 2.1A(ii) and Swing Line Lender hereby

agrees to make the Swing Line Loans as described in subsection 2.1A(iii).

 

(i)            Term Loans.  Each Lender that has a Term Loan Commitment

severally agrees to lend to Borrower on the Closing Date an amount not

exceeding its Pro Rata Share of the aggregate amount of the Term Loan

Commitments to be used for the purposes identified in subsection 2.5A.  Borrower shall deliver to Administrative

Agent a Notice of Borrowing no later than 12:00 Noon (New York City time) at

least one Business Day prior to the Closing Date, requesting a borrowing of the

Term Loans.  The Notice of Borrowing

shall specify (i) the proposed Funding Date (which shall be a Business

Day), (ii) the amount of the borrowing, and (iii) that all such Loans shall be

Base Rate Loans.  The aggregate amount

of the Term Loan Commitments is $150,000,000; provided that the Term

Loan Commitments of Lenders shall be adjusted to give effect to any assignments

of the Term Loan Commitments pursuant to subsection 10.1B.  Each Lender’s Term Loan Commitment shall

expire immediately and without further action on August 31, 2001 if the Term

Loans have not been made on or before that date.  Borrower may make only one borrowing under the Term Loan

Commitments.  Amounts borrowed under

this subsection 2.1A(i) and subsequently repaid or prepaid may not be reborrowed.

 

(ii)           Revolving Loans.  Each Revolving Lender severally agrees,

subject to the limitations set forth below with respect to the maximum amount

of Revolving Loans permitted to be outstanding from time to time, to lend to

Borrower from time to time during the period from the Closing Date to but

excluding the Revolving Loan Commitment Termination Date an aggregate amount

not exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan

Commitments to be used for the purposes identified in subsection 2.5B.  The aggregate original amount of the

Revolving Loan Commitments is $75,000,000; provided that the Revolving

Loan Commitments of Revolving Lenders shall be adjusted to give effect to any

assignments of the Revolving Loan Commitments pursuant to subsection 10.1B and

shall be reduced from time to time by the amount of any reductions thereto made

pursuant to subsection 2.4B.  Each

Revolving Lender’s Revolving Loan Commitment shall expire immediately and

without further action on the Revolving Loan Commitment Termination Date and

all Revolving Loans and all other amounts owed hereunder with respect to the

Revolving Loans and the Revolving Loan Commitments shall be paid in full no

later than that date; provided that each Revolving Lender’s Revolving

Loan Commitment shall expire immediately and without further action on August

31, 2001 if the Term Loans have not been made on or before that date.  Amounts borrowed under this subsection

2.1A(ii) may be repaid and reborrowed to but excluding the Revolving Loan

Commitment Termination Date.

 

Anything contained

in this Agreement to the contrary notwithstanding, the Revolving Loans and the

Revolving Loan Commitments shall be subject to the limitation that in no event

shall the Total Utilization of Revolving Loan Commitments at any time exceed

the Revolving Loan Commitments then in effect.

 

(iii)          Swing Line Loans.

 

(a)           General Provisions.  Swing Line Lender hereby agrees, subject to

the limitations set forth below with respect to the maximum amount of Swing

Line Loans permitted to be outstanding from time to time, to make a portion of

the Revolving Loan Commitments available to Borrower from time to time during

the period from the Closing Date to but excluding the Revolving Loan Commitment

Termination Date by making Swing Line Loans to Borrower in an aggregate amount

not exceeding the amount of the Swing Line Loan Commitment to be used for the

purposes identified in subsection 2.5B, notwithstanding the fact that such

Swing Line Loans, when aggregated with Swing Line Lender’s outstanding

Revolving Loans and Swing Line Lender’s Pro Rata Share of the Letter of Credit

Usage then in effect, may exceed Swing Line Lender’s Revolving Loan

Commitment.  The original amount of the

Swing Line Loan Commitment is $5,000,000; provided that any reduction of

the Revolving Loan Commitments made pursuant to subsection 2.4B that reduces

the aggregate Revolving Loan Commitments to an amount less than the then

current amount of the Swing Line Loan Commitment shall result in an automatic

corresponding reduction of the Swing Line Loan Commitment to the amount of the

Revolving Loan Commitments, as so reduced, without any further action on the

part of Borrower, Administrative Agent or Swing Line Lender.  The Swing Line Loan Commitment shall expire

on the Revolving Loan Commitment Termination Date and all Swing Line Loans and

all other amounts owed hereunder with respect to the Swing Line Loans shall be

paid in full no later than that date; provided that the Swing Line Loan

Commitment shall expire immediately and without further action on

August 31, 2001 if the Term Loans have not been made on or before that

date.  Borrower shall repay each Swing

Line Loan on or before the date that is five Business Days after the date such

Loan was made. Amounts borrowed under this subsection 2.1A(iii) may be repaid

and reborrowed to but excluding the Revolving Loan Commitment Termination Date.

 

Anything contained

in this Agreement to the contrary notwithstanding, the Swing Line Loans and the

Swing Line Loan Commitment shall be subject to the limitation that in no event

shall the Total Utilization of Revolving Loan Commitments at any time exceed

the Revolving Loan Commitments then in effect.

 

(b)           Swing Line Loan Prepayment with

Proceeds of Revolving Loans.  With

respect to any Swing Line Loans that have not been voluntarily prepaid by

Borrower pursuant to subsection 2.4B(i), Swing Line Lender may, at any time in

its sole and absolute discretion, deliver to Administrative Agent (with a copy

to Borrower), no later than 10:00 A.M. (New York City time) at least one

Business Day in advance of the proposed Funding Date, a notice (which shall be

deemed to be a Notice of Borrowing given by Borrower) requesting Revolving

Lenders to make Revolving Loans that are Base Rate Loans on such Funding Date

in an amount equal to the amount of such Swing Line Loans (the “Refunded

Swing Line Loans”) outstanding on the date such notice is given

which Swing Line Lender requests Revolving Lenders to prepay.  Borrower hereby authorizes the giving of any

such notice and the making of any such Revolving Loans.  Anything contained in this Agreement to the

contrary notwithstanding, (1) the proceeds of such Revolving Loans made by

Revolving Lenders other than Swing Line Lender shall be immediately delivered

by Administrative Agent to Swing Line Lender at Swing Line Lender’s Office (and

not to Borrower) and applied to repay a corresponding portion of the Refunded

Swing Line Loans and (2) on the day such Revolving Loans are made, Swing

Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed

to be paid with the proceeds of a Revolving Loan made by Swing Line Lender, and

such portion of the Swing Line Loans deemed to be so paid shall no longer be

outstanding as Swing Line Loans and shall no longer be due under the Swing Line

Note of Swing Line Lender but shall instead constitute part of Swing Line

Lender’s outstanding Revolving Loans and shall be due under the Revolving Note

of Swing Line Lender.  Borrower agrees

to immediately pay Swing Line Lender the amount of the Refunded Swing Line

Loans to the extent the proceeds of such Revolving Loans made by Revolving

Lenders, including the Revolving Loan deemed to be made by Swing Line Lender,

are not sufficient to repay in full the Refunded Swing Line Loans.  If any portion of any such amount paid (or

deemed to be paid) to Swing Line Lender should be recovered by or on behalf of

Borrower from Swing Line Lender in any bankruptcy proceeding, in any assignment

for the benefit of creditors or otherwise, the loss of the amount so recovered

shall be ratably shared among all Lenders in the manner contemplated by

subsection 10.5.

 

(c)           Swing Line Loan Assignments.  If for any reason (1) Revolving Loans are

not made upon the request of Swing Line Lender as provided in the immediately

preceding paragraph in an amount sufficient to repay any amounts owed to Swing

Line Lender in respect of any outstanding Swing Line Loans or (2) the Revolving

Loan Commitments are terminated at a time when any Swing Line Loans are

outstanding, each Revolving Lender shall be deemed to, and hereby agrees to,

have purchased an assignment of such outstanding Swing Line Loans in an amount

equal to its Pro Rata Share (calculated, in the case of the foregoing clause (2),

immediately prior to such termination of the Revolving Loan Commitments) of the

unpaid amount of such Swing Line Loans together with accrued interest

thereon.  Upon one Business Day’s notice

from Swing Line Lender, each Revolving Lender shall deliver to Swing Line

Lender an amount equal to its respective assignment in same day funds at the

Swing Line Lender’s Office.  In order to

further evidence such assignment (and without prejudice to the effectiveness of

the assignment provisions set forth above), each Revolving Lender agrees to

enter into an Assignment Agreement at the request of Swing Line Lender in form

and substance reasonably satisfactory to the Swing Line Lender and such

Revolving Lender.  If any Revolving Lender

fails to make available to Swing Line Lender the amount of such Revolving

Lender’s assignment as provided in this paragraph, Swing Line Lender shall be

entitled to recover such amount on demand from such Revolving Lender together

with interest thereon at the rate customarily used by Swing Line Lender for the

correction of errors among banks for three Business Days and thereafter at the

Base Rate.  If Swing Line Lender

receives a payment of any amount in which other Revolving Lenders have

purchased assignments as provided in this paragraph, Swing Line Lender shall

promptly distribute to each such other Revolving Lender its Pro Rata Share of

such payment.

 

(d)           Lenders’

Obligations.  Anything contained

herein to the contrary notwithstanding, each Revolving Lender’s obligation to

make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans

pursuant to subsection 2.1A(iii)(b) and each Revolving Lender’s obligation to

purchase an assignment of any unpaid Swing Line Loans pursuant to the

immediately preceding paragraph shall be absolute and unconditional and shall

not be affected by any circumstance, including (1) any set-off,

counterclaim, recoupment, defense or other right which such Revolving Lender

may have against Swing Line Lender, Borrower or any other Person for any reason

whatsoever; (2) the occurrence or continuation of an Event of Default or a

Potential Event of Default; (3) any adverse change in the business,

operations, properties, assets, condition (financial or otherwise) or prospects

of Borrower or any of its Subsidiaries or the occurrence of any Material

Adverse Effect; (4) any breach of this Agreement or any other Loan

Document by any party thereto; or (5) any other circumstance, happening or

event whatsoever, whether or not similar to any of the foregoing; provided

that such obligations of each Revolving Lender are subject to the condition

that (x) Swing Line Lender believed in good faith that all conditions

under Section 4 to the making of the applicable Refunded Swing Line Loans or

other unpaid Swing Line Loans, as the case may be, were satisfied at the time

such Refunded Swing Line Loans or unpaid Swing Line Loans were made or

(y) the satisfaction of any such condition not satisfied had been waived

in accordance with subsection 10.6 prior to or at the time such Refunded Swing

Line Loans or other unpaid Swing Line Loans were made.

 

(iv)          Increase of the Revolving Loan

Commitments.  With the consent of

Administrative Agent, Borrower may, one time on or after the Closing Date,

increase, at Borrower’s discretion after consultation with Administrative Agent

the then effective aggregate principal amount of the Revolving Loan

Commitments; provided that (1) the aggregate principal amount of the

increase in the Revolving Loan Commitments pursuant to this subsection 2.1A(iv)

shall not exceed $25,000,000; (2) Borrower shall execute and deliver such

documents and instruments and take such other actions as may be reasonably

requested by Administrative Agent in connection with such increase and at the

time of any such proposed increase, no Potential Event of Default or Event of

Default shall have occurred and be continuing or would occur after giving

effect to such increase.  Any request

under this subsection 2.1A(iv) shall be submitted by Borrower to Administrative

Agent.  Borrower may also specify any

fees offered to those Lenders (the “Increasing

Lenders”) that agree to increase the principal amount of their

Revolving Loan Commitment, which fees may be variable based upon the amount by

which any such Lender is willing to increase the principal amount of its

Revolving Loan Commitment.  No Lender

shall have any obligation, express or implied, to offer to increase the

aggregate principal amount of its Revolving Loan Commitment.  Only the consent of each Increasing Lender

shall be required for an increase in the aggregate principal amount of the

Revolving Loan Commitments pursuant to this 2.1A(iv).  No Lender that declines to increase the principal amount of its

Revolving Loan Commitment may be replaced with respect to its existing Revolving

Loan Commitment as a result thereof without such Lender’s consent.

 

Each Increasing Lender shall as soon as practicable

specify the amount of the proposed increase that it is willing to assume.  Borrower may offer and accept some or all of

the offered amounts or designate new lenders who qualify as Eligible Assignees

and that are reasonably acceptable to Administrative Agent as additional

Lenders hereunder in accordance with this subsection 2.1A(iv) (each such new

lender being a “New Lender”),

which New Lender may assume all or a portion of the increase in the aggregate

principal amount of the Revolving Loan Commitments.  Borrower and Administrative Agent shall have discretion jointly

to adjust the allocation of the increased aggregate principal amount of the

Revolving Loan Commitments among Increasing Lenders and New Lenders.

 

Each New Lender designated by Borrower and reasonably

acceptable to Administrative Agent shall become an additional party hereto as a

New Lender concurrently with the effectiveness of the proposed increase in the

aggregate principal amount of the new Revolving Loan Commitments.

 

Subject to the foregoing, any increase required by

Borrower shall be effective upon delivery to Administrative Agent of each of

the following documents:  (i) an

originally executed copy of an instrument of joinder signed by a duly

authorized officer of each New Lender, substantially in the form attached

hereto as Exhibit XIV-A; (ii) a notice to the Increasing Lenders and New

Lenders, substantially in the form attached hereto as Exhibit XIV-B,

signed by a duly authorized officer of Borrower; (iii) an Officers’ Certificate

of Borrower, substantially in the form attached hereto as Exhibit XIV-C;

and (iv) any other certificates or documents that Administrative Agent shall

reasonably request, in form and substance satisfactory to Administrative Agent

and shall be in the principal amount equal to (i) the principal amount that

Increasing Lenders are willing to assume as increases to the principal amount

of their Revolving Loan Commitment; plus (ii) the principal amount

offered by New Lenders with respect to the Revolving Loan Commitments, in

either case as adjusted by Borrower and Administrative Agent pursuant to this

subsection 2.1A(iv).  Upon effectiveness

of any such increase, the Commitments and Pro Rata Share of each Lender will be

adjusted to give effect to the increase in the Revolving Loan Commitments.  To the extent that the adjustment of Pro

Rata Shares results in losses or expenses to any Lender as a result of the

prepayment of any LIBOR Loan on a date other than the scheduled last day of the

applicable Interest Period, Borrower shall be responsible for such losses or

expenses pursuant to subsection 2.6D.

 

B.            Borrowing

Mechanics.  Revolving Loans made on any Funding Date

(other than Revolving Loans made pursuant to a request by Swing Line Lender

pursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded Swing

Line Loans or Revolving Loans made pursuant to subsection 3.3B for the purpose

of reimbursing any Issuing Lender for the amount of a drawing under a Letter of

Credit issued by it) shall be in an aggregate minimum amount of $1,000,000 and

integral multiples of $100,000 in excess of that amount; provided that

Revolving Loans made on any Funding Date as LIBOR Loans with a particular

Interest Period shall be in an aggregate minimum amount of $2,000,000 and

integral multiples of $100,000 in excess of that amount.  Any Swing Line Loan made on any Funding Date

shall be in a minimum amount of $250,000 and integral multiples of $100,000 in

excess of that amount.  Whenever

Borrower desires that Lenders make Revolving Loans it shall deliver to

Administrative Agent a Notice of Borrowing no later than 10:00 A.M. (New York

City time) at least three Business Days in advance of the proposed Funding Date

(in the case of a LIBOR Loan) or at least one Business Day in advance of the

proposed Funding Date (in the case of a Base Rate Loan).  Whenever Borrower desires that Swing Line

Lender make a Swing Line Loan, it shall deliver to Swing Line Lender at Swing

Line Lender’s Office (with a copy to Administrative Agent at Administrative

Agent’s Office) a Notice of Borrowing no later than 12:00 Noon (New York City

time) on the proposed Funding Date.  The

Notice of Borrowing shall specify (i) the proposed Funding Date (which

shall be a Business Day), (ii) the amount and Type of Loans requested,

(iii) in the case of Swing Line Loans and any Loans made on the Closing Date,

that such Loans shall be Base Rate Loans, (iv) in the case of Revolving

Loans not made on the Closing Date, whether such Loans shall be Base Rate Loans

or LIBOR Loans, (v) in the case of any Loans requested to be made as LIBOR

Loans, the initial Interest Period requested therefor and (vi) information about

the account of Borrower to be credited. 

Revolving Loans may be continued as or converted into Base Rate Loans

and LIBOR Loans in the manner provided in subsection 2.2D.  In lieu of delivering the above-described

Notice of Borrowing for any Loan other than a Swing Line Loan, Borrower may

give Administrative Agent telephonic notice by the required time of any

proposed borrowing under this subsection 2.1B; provided that such notice

shall be promptly confirmed in writing by delivery of a Notice of Borrowing to

Administrative Agent at Administrative Agent’s Office no later than 2:00 P.M.

(New York City time) on the date such notice was given.  In lieu of delivering the above-described

Notice of Borrowing for any Swing Line Loan, Borrower may give Swing Line Lender

telephonic notice by the required time of any proposed borrowing under this

subsection 2.1B; provided that such notice shall be promptly confirmed in

writing by delivery of a Notice of Borrowing to Swing Line Lender at Swing Line

Lender’s Office (with a copy to Administrative Agent at Administrative Agent’s

Office) no later than 2:00 P.M. (New York City time) on the date such notice

was given.

 

None of

Administrative Agent, Swing Line Lender or any Lender shall incur any liability

to Borrower in acting upon any telephonic notice referred to above that

Administrative Agent or Swing Line Lender believes in good faith to have been

given by a duly authorized Officer or other person authorized to borrow on

behalf of Borrower or for otherwise acting in good faith under this subsection

2.1B, and upon funding of Revolving Loans by Lenders or Swing Line Loans by

Swing Line Lender, in accordance with this Agreement pursuant to any such

telephonic notice Borrower shall have effected Revolving Loans or Swing Line Loans

hereunder.

 

Borrower shall

notify Administrative Agent prior to the funding of any Loans if any of the

matters to which Borrower is required to certify in the applicable Notice of

Borrowing is no longer true and correct as of the applicable Funding Date, and

the acceptance by Borrower of the proceeds of any Loans shall constitute a

re-certification by Borrower, as of the applicable Funding Date, as to the

matters to which Borrower is required to certify in the applicable Notice of

Borrowing.

 

Except as

otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowing

for a LIBOR Loan (or telephonic notice in lieu thereof) shall be irrevocable

once Administrative Agent receives such notice, and Borrower shall be bound to

make a borrowing in accordance therewith.

 

Notwithstanding

anything to the contrary contained herein, there shall be no Borrowings

comprised of LIBOR Loans and no conversions of Base Rate Loans into LIBOR Loans

until the date that is 7 days after the Closing Date.

 

C.            Disbursement

of Funds. 

All Term Loans and Revolving Loans under this Agreement shall be made by

Lenders simultaneously and proportionately to their respective Pro Rata Shares,

it being understood that neither Administrative Agent nor any Lender shall be

responsible for any default by any other Lender in that other Lender’s

obligation to make a Loan requested hereunder nor shall the Commitment of any

Lender to make the particular Type of Loan requested be increased or decreased

as a result of a default by any other Lender in that other Lender’s obligation

to make a Loan requested hereunder. 

Promptly after receipt by Administrative Agent of a Notice of Borrowing

(except with respect to Swing Line Loans) pursuant to subsection 2.1A or 2.1B

(or telephonic notice in lieu thereof), Administrative Agent shall notify each

Lender for that Type of Loan of the proposed borrowing.  Each such Lender shall make the amount of

its Loan available to Administrative Agent at the Administrative Agent’s Office

not later than 12:00 Noon (New York City time) on the applicable Funding

Date.  Except as provided in subsection

2.1A(iii) or subsection 3.3B with respect to Revolving Loans used to repay

Refunded Swing Line Loans or to reimburse any Issuing Lender for the amount of

a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of

the conditions precedent specified in subsections 4.1 (in the case of Loans

made on the Closing Date) and 4.2 (in the case of all Loans), Administrative

Agent shall make the proceeds of such Loans available to Borrower on the

applicable Funding Date by causing an amount of same day funds in Dollars equal

to the proceeds of all such Loans received by Administrative Agent from Lenders

to be wire transferred to an account of Borrower as specified in the applicable

Notice of Borrowing.  Swing Line Lender shall make

the amount of its Swing Line Loan available to Borrower by wire transfer to an

account of Borrower as specified in the applicable Notice of Borrowing not

later than 3:00 P.M. (New York City time) on the applicable Funding Date, in

each case in same day funds in Dollars.

 

Unless

Administrative Agent shall have been notified by any Lender prior to a Funding

Date for any Loans that such Lender does not intend to make available to

Administrative Agent the amount of such Lender’s Loan requested on such Funding

Date, Administrative Agent may assume that such Lender has made such amount

available to Administrative Agent on such Funding Date and Administrative Agent

may, in its sole discretion, but shall not be obligated to, make available to

Borrower a corresponding amount on such Funding Date.  If such corresponding amount is not in fact made available to

Administrative Agent by such Lender, Administrative Agent shall be entitled to

recover such corresponding amount on demand from such Lender together with

interest thereon, for each day from such Funding Date until the date such

amount is paid to Administrative Agent, at the customary rate set by

Administrative Agent for the correction of errors among banks for three

Business Days and thereafter at the Base Rate. 

If such Lender does not pay such corresponding amount forthwith upon

Administrative Agent’s demand therefor, Administrative Agent shall promptly

notify Borrower and Borrower shall immediately pay such corresponding amount to

Administrative Agent together with interest thereon, for each day from such

Funding Date until the date such amount is paid to Administrative Agent, at the

rate payable under this Agreement for Base Rate Loans.  Nothing in this subsection 2.1C shall be

deemed to relieve any Lender from its obligation to fulfill its Commitments

hereunder or to prejudice any rights that Borrower may have against any Lender

as a result of any default by such Lender hereunder.

 

D.            The Register.

 

(i)            Administrative

Agent shall maintain, at its address referred to in subsection 10.8, a register

for the recordation of the names and addresses of Lenders and the Commitments

and Loans of each Lender from time to time (the “Register”).  The Register shall be available for

inspection by Borrower at any reasonable time and from time to time upon

reasonable prior notice.

 

(ii)           Administrative Agent shall record in

the Register the Term Loan Commitment and Revolving Loan Commitment and the

Term Loans and Revolving Loans from time to time of each Lender, and each

repayment or prepayment in respect of the principal amount of the Term Loan or

Revolving Loans of each Lender.  Any

such recordation shall be conclusive and binding on Borrower and each Lender, absent

manifest error; provided that failure to make any such recordation, or

any error in such recordation, shall not affect any Lender’s Commitments or

Borrower’s Obligations in respect of any applicable Loans.

 

(iii)          Each Lender may record on its internal

records (including the Notes held by such Lender) the amount of the Term Loans

and each Revolving Loan made by it and each payment in respect thereof.  Any such recordation shall be conclusive and

binding on Borrower, absent manifest error; provided that failure to

make any such recordation, or any error in such recordation, shall not affect

any Lender’s Commitments or Borrower’s Obligations in respect of any applicable

Loans; and provided further that in the event of any

inconsistency between the Register and any Lender’s records, the recordations

in the Register shall govern (absent manifest error).

 

(iv)          Borrower, Administrative Agent and

Lenders shall deem and treat the Persons listed as Lenders in the Register as

the holders and owners of the corresponding Commitments and Loans listed

therein for all purposes hereof, and no assignment or transfer of any such

Commitment or Loan shall be effective, in each case unless and until an

Assignment Agreement effecting the assignment or transfer thereof shall have

been accepted by Administrative Agent and recorded in the Register as provided

in subsection 10.1B(ii).  Prior to such

recordation, all amounts owed with respect to the applicable Commitment or Loan

shall be owed to the Lender listed in the Register as the owner thereof, and

any request, authority or consent of any Person who, at the time of making such

request or giving such authority or consent, is listed in the Register as a

Lender shall be conclusive and binding on any subsequent holder, assignee or

transferee of the corresponding Commitments or Loans.

 

(v)           Borrower hereby designates CIBC to

serve as Borrower’s agent solely for purposes of maintaining the Register as

provided in this subsection 2.1D, and Borrower hereby agrees that, to the

extent CIBC serves in such capacity, CIBC and its officers, directors,

employees, agents and Affiliates shall constitute Indemnitees for all purposes

under subsection 10.3.

 

E.             Notes.  Borrower shall execute and deliver on the

Closing Date (i) to each Lender (or to Administrative Agent for that

Lender if requested by such Lender) (a) a Term Loan Note substantially in

the form of Exhibit XIII annexed hereto to evidence that Lender’s

Term Loan, in the principal amount of that Lender’s Term Loan and with other

appropriate insertions, and (b) a Revolving Note substantially in the form

of Exhibit IX annexed hereto to evidence that Lender’s Revolving

Loans, in the principal amount of that Lender’s Revolving Loan Commitment and

with other appropriate insertions, and (ii) to Swing Line Lender (or to

Administrative Agent for Swing Line Lender) a Swing Line Note substantially in

the form of Exhibit XII annexed hereto to evidence Swing Line Lender’s

Swing Line Loans, in the principal amount of the Swing Line Loan Commitment and

with other appropriate insertions.

 

Administrative

Agent may deem and treat the payee of any Note as the owner thereof for all

purposes hereof unless and until an Assignment Agreement effecting the

assignment or transfer thereof shall have been accepted by Administrative Agent

as provided in subsection 10.1B(ii). 

Any request, authorization or consent of any person or entity who, at

the time of making such request or giving such authority or consent, is the

holder of any Note shall be conclusive and binding on any subsequent holder,

assignee or transferee of that Note or of any Note or Notes issued in exchange

therefor.

 

2.2          Interest

on the Loans.

 

A.            Rate

of Interest. 

Subject to the provisions of subsections 2.6 and 2.7, each Term Loan and

each Revolving Loan shall bear interest on the unpaid principal amount thereof

from the date made through maturity (whether by acceleration or otherwise) at a

rate determined by reference to the Base Rate or Adjusted LIBOR.  Subject to the provisions of subsection 2.7,

each Swing Line Loan shall bear interest on the unpaid principal amount thereof

from the date made through maturity (whether by acceleration or otherwise) at a

rate determined by reference to the Base Rate. 

The applicable basis for determining the rate of interest with respect

to any Term Loan or any Revolving Loan shall be selected by Borrower initially

at the time a Notice of Borrowing is given with respect to such Loan pursuant

to subsection 2.1B and the basis for determining the interest rate with respect

to any Term Loan or any Revolving Loan may be changed from time to time

pursuant to subsection 2.2D.  If on any

day a Term Loan or Revolving Loan is outstanding with respect to which notice

has not been delivered to Administrative Agent in accordance with the terms of

this Agreement specifying the applicable basis for determining the rate of

interest, then for that day that Loan shall bear interest determined by

reference to the Base Rate.

 

Subject to the

provisions of subsections 2.2E and 2.7, the Term Loans and the Revolving Loans

shall bear interest through maturity as follows:

 

(i)            if a Base Rate Loan, then at the sum

of the Base Rate plus the Applicable Base Rate Margin for such Type of

Loans; or

 

(ii)           if a LIBOR Loan, then at the sum of

Adjusted LIBOR plus the Applicable LIBOR Margin for such Type of Loans.

 

Subject to the

provisions of subsections 2.2E and 2.7, the Swing Line Loans shall bear

interest through maturity at the sum of the Base Rate plus the

Applicable Base Rate Margin.

 

Upon delivery of

the Margin Determination Certificate by Borrower to Administrative Agent

pursuant to subsection 6.1(xiv), the Applicable Base Rate Margin and Applicable

LIBOR Margin shall automatically be adjusted in accordance with such Margin

Determination Certificate, such adjustment to become effective on the third

Business Day after the date on which Borrower delivers such Margin

Determination Certificate; provided that (1) at any time a Margin

Determination Certificate is not delivered at the time required pursuant to

subsection 6.1(xiv), from the time such Margin Determination Certificate was

required to be delivered until delivery of such Margin Determination

Certificate, the Applicable Base Rate Margin shall be 1.75% for the Revolving

Loans and 2.75% for the Term Loans, and the Applicable LIBOR Margin shall be

3.00% for the Revolving Loans and 4.00% for the Term Loans, and (2) if a Margin

Determination Certificate erroneously indicates an applicable margin more

favorable to Borrower than should be afforded by the actual calculation of the

Consolidated Total Leverage Ratio, Borrower shall promptly pay additional

interest and letter of credit fees to correct for such error.

 

B.            Interest

Periods. 

In connection with each LIBOR Loan, Borrower may, pursuant to the applicable

Notice of Borrowing or Notice of Conversion/Continuation, as the case may be,

select an interest period (each an “Interest Period”) to be applicable to such

Loan, which Interest Period shall be, at Borrower’s option, either a one, two,

three or six month period (or a period of such other length of less than six

months as may be requested by Borrower and as may be acceptable to

Administrative Agent); provided that:

 

(i)            the

initial Interest Period for any LIBOR Loan shall commence on the Funding Date in

respect of such Loan, in the case of a Loan initially made as a LIBOR Loan, or

on the date specified in the applicable Notice of Conversion/Continuation, in

the case of a Loan converted to a LIBOR Loan;

 

(ii)           in

the case of immediately successive Interest Periods applicable to a LIBOR Loan

continued as such pursuant to a Notice of Conversion/Continuation, each

successive Interest Period shall commence on the day on which the next

preceding Interest Period expires;

 

(iii)          if an Interest Period would otherwise

expire on a day that is not a Business Day, such Interest Period shall expire

on the next succeeding Business Day; provided that, if any Interest

Period would otherwise expire on a day that is not a Business Day but is a day

of the month after which no further Business Day occurs in such month, such

Interest Period shall expire on the next preceding Business Day;

 

(iv)          any

Interest Period that begins on the last Business Day of a calendar month (or on

a day for which there is no numerically corresponding day in the calendar month

at the end of such Interest Period) shall, subject to clause (v) of this

subsection 2.2B, end on the last Business Day of a calendar month;

 

(v)           no

Interest Period with respect to any portion of the Term Loans shall extend beyond

the Term Loan Maturity Date, and no Interest Period with respect to any portion

of the Revolving Loans shall extend beyond the Revolving Loan Commitment

Termination Date;

 

(vi)          no

Interest Period with respect to any Type of Term Loans shall extend beyond a

date on which Borrower is required to make a scheduled payment of principal of

such Type of Term Loans, unless the sum of (a) the aggregate principal amount

of such Type of Term Loans that are Base Rate Loans plus (b) the

aggregate principal amount of such Type of Term Loans that are LIBOR Loans with

Interest Periods expiring on or before such date equals or exceeds the

principal amount required to be paid on such Type of Term Loans on such date;

 

(vii)         no

Interest Period with respect to any portion of the Revolving Loans shall extend

beyond the date on which a permanent reduction of the Revolving Loan

Commitments is scheduled to occur unless the sum of (a) the aggregate principal

amount of Revolving Loans that are Base Rate Loans plus (b) the

aggregate principal amount of Revolving Loans that are LIBOR Loans with

Interest Periods expiring on or before such date plus (c) the excess of

the Revolving Loan Commitments then in effect over the aggregate principal

amount of Revolving Loans then outstanding equals or exceeds the permanent

reduction of the Revolving Loan Commitments that is scheduled to occur on such

date;

 

(viii)        there

shall be no more than 10 Interest Periods outstanding at any time; and

 

(ix)           if

Borrower fails to specify an Interest Period for any LIBOR Loan in the

applicable Notice of Borrowing or Notice of Conversion/Continuation, Borrower

shall be deemed to have selected an Interest Period of one month.

 

C.            Interest

Payments. 

Subject to the provisions of subsection 2.2E, interest on each Loan

shall be payable in arrears on and to each Interest Payment Date applicable to

that Loan, upon any prepayment of that Loan (to the extent accrued on the

amount being prepaid) and at maturity (including final maturity) provided

that if any Swing Line Loans or any Revolving Loans that are Base Rate Loans

are prepaid pursuant to subsection 2.4B(i), interest accrued on such Loans

through the date of such prepayment shall be payable on the next succeeding

Interest Payment Date applicable to Base Rate Loans (or, if earlier, at final

maturity).

 

D.            Conversion or Continuation.

 

(i)            Subject

to the provisions of subsection 2.6, Borrower shall have the option (i) to

convert at any time all or any part of its outstanding Term Loans or Revolving

Loans from Loans bearing interest at a rate determined by reference to one

basis to Loans bearing interest at a rate determined by reference to an

alternative basis, in each case in the applicable Minimum Amount therefor, or

(ii) upon the expiration of any Interest Period applicable to a LIBOR

Loan, to continue all or any portion of such Loan equal to $2,000,000 and

integral multiples of $100,000 in excess of that amount as a LIBOR Loan; provided,

however, that a LIBOR Loan may only be converted into a Base Rate Loan

on the expiration date of an Interest Period applicable thereto.

 

(ii)           Borrower shall deliver a Notice of

Conversion/Continuation to Administrative Agent no later than 10:00 AM (New

York City time) at least three Business Days in advance of the proposed

conversion date (in the case of a conversion to a Base Rate Loan) and at least

three Business Days in advance of the proposed conversion/continuation date (in

the case of a conversion to, or a continuation of, a LIBOR Loan).  With respect to any LIBOR Loan, if Borrower

fails to deliver a Notice of Conversion/Continuation as described above or if

any proposed conversion/continuation under this subsection 2.2D is not

permitted hereunder, Borrower shall be deemed to have elected to convert such

LIBOR Loan to a Base Rate Loan on the last day of the then-expiring Interest

Period.

 

(iii)          A Notice of Conversion/Continuation

shall specify (a) the proposed conversion/continuation date (which shall

be a Business Day), (b) the amount and Type of the Loan to be

converted/continued, (c) the nature of the proposed

conversion/continuation, (d) in the case of a conversion to, or a

continuation of, a LIBOR Loan, the requested Interest Period, and (e) in

the case of a conversion to, or a continuation of, a LIBOR Loan, that no

Potential Event of Default or Event of Default has occurred and is

continuing.  In lieu of delivering the

above-described Notice of Conversion/Continuation, Borrower may give

Administrative Agent telephonic notice by the required time of any proposed

conversion/continuation under this subsection 2.2D, provided that

Administrative Agent shall receive a Notice of Conversion/Continuation to

confirm such telephonic notice no later than 2:00 P.M. (New York City time) on

the day on which such telephonic notice is given.  Upon receipt of written or telephonic notice of any proposed

conversion/continuation under this subsection 2.2D, Administrative Agent shall

promptly transmit such notice by telefacsimile or electronic mail (or by

telephone promptly confirmed by telefacsimile or electronic mail) to each

Lender.

 

(iv)          Neither Administrative Agent nor any

Lender shall incur any liability to Borrower in acting upon any telephonic

notice referred to above that Administrative Agent believes in good faith to

have been given by a duly authorized Officer or other person authorized to act

on behalf of Borrower or for otherwise acting in good faith under this

subsection 2.2D, and upon conversion or continuation of the applicable basis

for determining the interest rate with respect to any Loans in accordance with

this Agreement pursuant to any such telephonic notice Borrower shall have

effected a conversion or continuation, as the case may be, hereunder.

 

(v)           Except as otherwise provided in

subsections 2.6B, 2.6C and 2.6G, a notice of a proposed conversion to, or

continuation of, a LIBOR Loan (whether by delivery of a Notice of

Conversion/Continuation or telephonic notice) shall be irrevocable once

Administrative Agent receives such notice, and Borrower shall be bound to

effect a conversion or continuation in accordance therewith.

 

E.             Default

Rate. 

Upon the occurrence and during the continuation of any Event of Default,

the outstanding principal amount of all Loans and, to the extent permitted by

applicable law, any interest payments thereon not paid when due and any fees

and other amounts then due and payable hereunder, shall thereafter bear

interest (including post-petition interest in any proceeding under the

Bankruptcy Code or other applicable bankruptcy laws) payable upon demand at a rate

that is 2.00% per annum in excess of the highest interest rate otherwise

payable under this Agreement with respect to the applicable Loans (or, in the

case of any such fees and other amounts, at a rate which is 2.00% per annum in

excess of the highest interest rate otherwise payable under this Agreement for

Revolving Loans that are Base Rate Loans); provided that, in the case of

LIBOR Loans, upon the expiration of the Interest Period in effect at the time

any such increase in interest rate is effective such LIBOR Loans shall

thereupon become Base Rate Loans and shall thereafter bear interest (including

post-petition interest in any proceeding under the Bankruptcy Code or other

applicable bankruptcy laws) payable upon demand at a rate which is 2.00% per annum

in excess of the interest rate otherwise payable under this Agreement for Base

Rate Loans.  Payment or acceptance of

the increased rates of interest provided for in this subsection 2.2E is

not a permitted alternative to timely payment and shall not constitute a waiver

of any Event of Default or otherwise prejudice or limit any rights or remedies

of Administrative Agent or any Lender.

 

F.             Computation of Interest. 

Interest on the Loans and other Obligations shall be computed

(i) in the case of Base Rate Loans, on the basis of a 365-day year, and

(ii) in the case of LIBOR Loans and other Obligations (other than Base

Rate Loans), on the basis of a 360-day year, in each case for the actual number

of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date

of the making of such Loan or the first day of an Interest Period applicable to

such Loan or, with respect to a Base Rate Loan being converted from a LIBOR

Loan, the date of conversion of such LIBOR Loan to such Base Rate Loan, as the

case may be, shall be included, and the date of payment of such Loan or the

expiration date of an Interest Period applicable to such Loan or, with respect

to a Base Rate Loan being converted to a LIBOR Loan, the date of conversion of

such Base Rate Loan to such LIBOR Loan, as the case may be, shall be excluded; provided

that if a Loan is repaid on the same day on which it is made, one day’s

interest shall be paid on that Loan.

 

2.3          Fees.

 

A.         Revolving

Loan Commitment Fees.  Borrower agrees to pay to

Administrative Agent, for distribution to each Lender in proportion to that

Lender’s Pro Rata Share of the Revolving Loan Commitments, commitment fees for

the period from and including the Closing Date to and excluding the Revolving

Loan Commitment Termination Date equal to the average of the daily excess of

the Revolving Loan Commitments over the sum of (i) the aggregate principal

amount of outstanding Revolving Loans (but not any outstanding Swing Line

Loans) plus (ii) the Letter of Credit Usage multiplied by

(a) 0.75% per annum for each day the Total Utilization of Revolving Loan

Commitments is less than or equal to 50% of the aggregate Revolving Loan

Commitments, or (b) 0.50% per annum for each day the Total Utilization of

Revolving Loan Commitments is greater than 50% of the aggregate Revolving Loan

Commitments, such commitment fees to be calculated on the basis of a 360-day

year and the actual number of days elapsed and to be payable quarterly in

arrears on the last Business Day of each March, June, September and December of

each Fiscal Year, commencing on the first such date to occur after the Closing

Date, and on the Revolving Loan Commitment Termination Date.

 

B.            Other Fees. 

Borrower agrees to pay to Lead Arranger and Administrative Agent such

fees in the amounts and at the times separately agreed upon between Borrower,

Lead Arranger and Administrative Agent.

 

2.4          Repayments,

Prepayments and Reductions in Revolving Loan Commitments; General Provisions

Regarding Payments; Application of Proceeds of Collateral and Payments Under

Subsidiary Guaranty.

 

A.    Scheduled

Payments of Term Loans.

 

(i)            Scheduled

Payments of Term Loans.  Borrower

shall make principal payments on the Term Loan in quarterly installments equal

to 0.25% of the original principal amount thereof on each September 30,

December, 31, March 31 and June 30, commencing on December 31, 2001 and through

and including the quarterly payment date immediately preceding the Term Loan

Maturity Date.  On the Term Loan

Maturity Date, Borrower shall make a final principal payment in the amount of

the entire remaining principal balance of the original principal amount of the

Term Loan; provided that the scheduled installments of principal of the

Term Loans set forth above shall be reduced in connection with any voluntary or

mandatory prepayments of the Term Loans in accordance with

subsection 2.4B(iv); and provided, further that the Term

Loans and all other amounts owed hereunder with respect to the Term Loans shall

be paid in full no later than the Term Loan Maturity Date, and the final

installment payable by Borrower in respect of the Term Loans on such date shall

be in an amount, if such amount is different from that specified above,

sufficient to repay all amounts owing by Borrower under this Agreement with

respect to the Term Loans.

 

B.            Prepayments and Unscheduled

Reductions in Revolving Loan Commitments.

 

(i)            Voluntary Prepayments.

Borrower may, upon not less than one Business Day’s irrevocable prior written

notice, in the case of Base Rate Loans, and three Business Days’ irrevocable

prior written notice, in the case of LIBOR Loans, in each case given to

Administrative Agent by 12:00 Noon (New York City time) on the date required

(which written notice Administrative Agent will promptly transmit by

telefacsimile or electronic mail to each Lender for the Loans to be prepaid),

at any time and from time to time prepay any Swing Line Loan on any Business

Day in whole or in part in an aggregate minimum amount of $250,000 and integral

multiples of $100,000 in excess of that amount, and any Loans or Revolving

Loans on any Business Day in whole or in part in an aggregate minimum amount of

$1,000,000 and integral multiples of $100,000 in excess of that amount; provided,

however, that any LIBOR Loan may be prepaid on a day other than the

expiration of the Interest Period applicable thereto, only if Borrower pays the

amounts due pursuant to subsection 2.6D caused by such prepayment.  Notice of prepayment having been given as

aforesaid, the principal amount of the Loans specified in such notice shall

become due and payable on the prepayment date specified therein.  Any such voluntary prepayment shall be

applied as specified in subsection 2.4B(iv).

 

(ii)           Voluntary Reductions of Revolving

Loan Commitments.  Borrower may,

upon not less than five Business Days’ irrevocable prior written notice to

Administrative Agent (which written notice Administrative Agent will promptly

transmit to each Lender), at any time and from time to time terminate in whole

or permanently reduce in part, without premium or penalty, the Revolving Loan

Commitments in an amount up to the amount by which the Revolving Loan

Commitments exceed the Total Utilization of Revolving Loan Commitments at the

time of such proposed termination or reduction; provided that any such

partial reduction of the Revolving Loan Commitments shall be in an aggregate

minimum amount of $1,000,000 and integral multiples of $100,000 in excess of

that amount.  Borrower’s notice to

Administrative Agent shall designate the date (which shall be a Business Day)

of such termination or reduction and the amount of any partial reduction, and

such termination or reduction of the Revolving Loan Commitments shall be

effective on the date specified in Borrower’s notice and shall reduce the

Revolving Loan Commitment of each Revolving Lender proportionately to its Pro

Rata Share.

 

(iii)          Mandatory Prepayments and Mandatory

Reductions of Revolving Loan Commitments. 

The Loans shall be prepaid and/or the Revolving Loan Commitments shall

be permanently reduced in the amounts and under the circumstances set forth

below, all such prepayments and/or reductions to be applied as set forth below

or as more specifically provided in subsection 2.4B(iv):

 

(a)           Prepayments and Reductions From

Net Asset Sale Proceeds.  No later

than the date of receipt by Borrower or any of its Subsidiaries of any Net

Asset Sale Proceeds in respect of any Asset Sale, Borrower shall either

(1) prepay the Loans and/or the Revolving Loan Commitments shall be

permanently reduced in an aggregate amount equal to such Net Asset Sale

Proceeds; or (2) so long as no Potential Event of Default under subsections

8.1, 8.6 or 8.7 and no Event of Default shall have occurred and be continuing,

and to the extent that aggregate Net Asset Sale Proceeds for the then current

Fiscal Year do not exceed $1,000,000 for such Fiscal Year, deliver to

Administrative Agent an Officers’ Certificate setting forth (x) that portion of

such Net Asset Sale Proceeds that Borrower or such Subsidiary intends to reinvest

in equipment or other productive assets of the general type used in the

business of Borrower and its Subsidiaries within 180 days of such date of

receipt; and (y) the proposed use of such portion of the Net Asset Sale

Proceeds and such other information with respect to such reinvestment as

Administrative Agent may reasonably request, and Borrower shall, or shall cause

one or more of its Subsidiaries to, promptly and diligently apply such portion

to such reinvestment purposes; provided, however, that any

portion of the Net Asset Sale Proceeds not intended for reinvestment shall be

applied to prepay outstanding Loans and/or reduce the Revolving Loan

Commitments to the full extent thereof. 

In addition, Borrower shall, no later than 180 days after receipt of

such Net Asset Sale Proceeds that have not theretofore been applied to the

Obligations or that have not been so reinvested as provided above, make an

additional prepayment of the Loans (and/or the Revolving Loan Commitments shall

be permanently reduced) in the full amount of all such Net Asset Sale Proceeds.

 

(b)           Prepayments and Reductions from

Net Insurance/Condemnation Proceeds. 

No later than the first Business Day following the date of receipt by

Administrative Agent or by Borrower or any of its Subsidiaries of any Net

Insurance/Condemnation Proceeds that are required to be applied to prepay the

Loans and/or reduce the Revolving Loan Commitments pursuant to the provisions

of subsection 6.4C and, if such Net Insurance/Condemnation Proceeds are not applied

to restoration or reconstruction, then immediately following the 180th

day (or immediately following the last day of such longer period as is

necessary to complete such restoration or reconstruction so long as Borrower

diligently initiates and continues to prosecute such restoration or

reconstruction within such 180-day period) occurring after the receipt by

Borrower or any of its Subsidiaries of such Net Insurance/Condemnation

Proceeds, Borrower shall prepay the Loans and/or the Revolving Loan Commitments

shall be permanently reduced in an aggregate amount equal to the amount of such

Net Insurance/Condemnation Proceeds.

 

(c)           Prepayments

and Reductions Due to Issuance of Equity Securities.  On the date of receipt of the Net Securities

Proceeds from the issuance of any Capital Stock of Borrower of its Subsidiaries

or from any capital contribution to Borrower or any of its Subsidiaries by any

holder of Capital Stock thereof (other than Borrower or one of its

Subsidiaries) after the Closing Date, Borrower shall prepay the Loans and/or

the Revolving Loan Commitments shall be permanently reduced in an aggregate

amount equal to such Net Securities Proceeds;

provided, however, if on such date of receipt Borrower has

achieved and is maintaining a Consolidated Total Leverage Ratio of less than

3.00:1.00, and so long as no Potential Event of Default or Event of Default has

occurred and is continuing, Borrower shall be entitled to retain up to fifty

percent (50%) of such Net Securities Proceeds and shall not be required to

prepay the Loans and/or reduce the Revolving Loan Commitments with such

retained proceeds.

 

(d)           Reversion

of Surplus Assets of Pension Plans. 

On the date of return to Borrower or any of its Subsidiaries or any

surplus assets of any Pension Plan of Borrower or any of its Subsidiaries,

Borrower shall prepay the Loans and/or the Revolving Loan Commitments shall be

permanently reduced in an aggregate amount (such amount being the “Net Pension Proceeds” equal to 100% of such

returned surplus assets, net of transaction costs and expenses incurred in

obtaining such return, including incremental taxes payable as a result thereof.

 

(e)           Prepayments

and Reductions Due to Issuance of Indebtedness.  On the date of receipt of the Net Securities Proceeds from the

issuance of any Indebtedness of Borrower or any of its Subsidiaries after the

Closing Date, other than Indebtedness permitted pursuant to

subsection 7.1, Borrower shall prepay the Loans and/or the Revolving Loan

Commitments shall be permanently reduced in an aggregate amount equal to such

Net Securities Proceeds.

 

(f)            Prepayments and Reductions from

Consolidated Excess Cash Flow.  If

there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing

with Fiscal Year 2002), Borrower shall, no later than 90 days after the end of

such Fiscal Year, prepay the Loans and the Revolving Loan Commitments shall be

permanently reduced in an aggregate amount equal to 50% of such Consolidated

Excess Cash Flow if at the end of such Fiscal Year the Consolidated Total

Leverage Ratio is greater than or equal to 4:00 to 1:00.

 

(g)           Calculations of Net Proceeds

Amounts; Additional Prepayments and Reductions Based on Subsequent Calculations.  Concurrently with any prepayment of the

Loans and/or reduction of the Revolving Loan Commitments pursuant to

subsections 2.4B(iii)(a)-(f), Borrower shall deliver to Administrative Agent an

Officers’ Certificate demonstrating the calculation of the amount (the “Net Proceeds Amount”) of the applicable Net

Asset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Pension Proceeds,

Net Securities Proceeds, or Consolidated Excess Cash Flow, as the case may be,

that gave rise to such prepayment and/or reduction.  If Borrower subsequently determines that the actual Net Proceeds

Amount was greater than the amount set forth in such Officers’ Certificate

(including if any actual taxes to be paid as a result of an Asset Sale is less

than the estimated taxes to be paid as a result of such Asset Sale), Borrower

shall promptly make an additional prepayment of the Loans (and/or, if

applicable, the Revolving Loan Commitments shall be permanently reduced) in an

amount equal to the amount of such excess, and Borrower shall concurrently

therewith deliver to Administrative Agent an Officers’ Certificate

demonstrating the derivation of the additional Net Proceeds Amount resulting in

such excess.

 

(h)           Prepayments

Due to Reductions or Restrictions of Revolving Loan Commitments.  Borrower shall from time to time first

prepay the Swing Line Loans, second prepay the Revolving Loans and third

cash collateralize any outstanding Letters of Credit to the extent necessary so

that the Total Utilization of Revolving Loan Commitments shall not at any time

exceed the Revolving Loan Commitments then in effect.

 

(iv)          Application of Prepayments.

 

(a)           Application

of Voluntary Prepayments by Type of Loans and Order of Maturity.  Subject to the provisions of subsection

2.4D, any voluntary prepayments pursuant to subsection 2.4B(i) shall be applied

as specified by Borrower in the applicable notice of prepayment; provided

that if Borrower fails to specify the Loans to which any such prepayment shall

be applied, such prepayment shall be applied first to repay outstanding

Term Loans to the full extent thereof, second to repay outstanding Swing

Line Loans to the full extent thereof, and third to repay outstanding

Revolving Loans and cash collateralize outstanding Letters of Credit to the

full extent thereof and permanently reduce the Revolving Loan Commitments.  Any voluntary prepayments of the Term Loans

pursuant to subsection 2.4B(i) shall be applied to reduce the scheduled

installments of principal of the Term Loans set forth in subsection 2.4A(i) in

inverse chronological order of maturity.

 

(b)           Application of Mandatory Prepayments

by Type of Loans.  Subject to the

provisions of subsection 2.4D, any amount required to be applied as a mandatory

prepayment of the Term Loans and/or a reduction of the Revolving Loan

Commitments pursuant to subsections 2.4B(iii)(a)-(g) shall be first

applied to prepay the Term Loans to the full extent thereof, second, to

the extent of any remaining portion of such amount, applied to prepay the Swing

Line Loans to the full extent thereof and to permanently reduce the Revolving

Loan Commitments by the amount of such prepayment, third, to the extent

of any remaining portion of such amount, applied to prepay the Revolving Loans

to the full extent thereof and to cash collateralize any outstanding Letters of

Credit and to further permanently reduce the Revolving Loan Commitments by the

amount of such prepayment, and fourth, to the extent of any remaining

portion of such amount, retained by Borrower; provided, however,

the Revolving Loan Commitment shall be permanently reduced by the full extent

of the amount so retained.  If an Event

of Default has occurred and is continuing, any amount required to be applied as

a mandatory prepayment shall be applied as set forth in subsection 2.4D. 

Any mandatory prepayments of the Term Loans pursuant to subsection

2.4B(iii) shall be applied to reduce the scheduled installments of principal of

the Term Loans set forth in subsection 2.4A(i) in inverse chronological order

of maturity.

 

(c)           Application of Prepayments to Base

Rate Loans and LIBOR Loans. 

Considering Term Loans and Revolving Loans being prepaid separately, any

prepayment thereof shall be applied first to Base Rate Loans to the full extent

thereof before application to LIBOR Loans, in each case in a manner which

minimizes the amount of any payments required to be made by Borrower pursuant

to subsection 2.6D;

 

(d)           Prepayments

of Term Loans Within Two Years of the Closing Date.  Any prepayments of the Term Loans pursuant

to subsection 2.4B(i) shall be subject

to a premium equal to (i) with respect to prepayments made on or before the

first anniversary of the Closing Date, 2.00% of the principal amount of Term

Loans prepaid; and (ii) with respect to prepayments made after the first

anniversary of the Closing Date and on or before the second anniversary of the

Closing Date, 1.00% of the principal amount of Term Loans prepaid.

 

C.            General Provisions Regarding

Payments.

 

(i)            Manner and Time of Payment.  All payments by Borrower of principal,

interest, fees and other Obligations hereunder and under the Notes shall be

made in Dollars in same day funds, without defense, setoff or counterclaim,

free of any restriction or condition, and delivered to Administrative Agent not

later than 2:00 P.M. (New York City time) on the date due at the Administrative

Agent’s Office for the account of Lenders; funds received by Administrative

Agent after that time on such due date shall be deemed to have been paid by

Borrower on the next succeeding Business Day. 

Borrower hereby authorizes Administrative Agent to charge its accounts

with Administrative Agent in order to cause timely payment to be made to

Administrative Agent of all principal, interest, fees and expenses due

hereunder (subject to sufficient funds being available in its accounts for that

purpose).

 

(ii)           Application of Payments.  Prior to any payments being applied to

principal or interest under this Agreement or under the Notes, such payments

shall first be applied to any outstanding and payable fees, costs, expenses,

indemnities or other amounts (aside from principal or interest due under the

Loan Documents), as determined in the reasonable opinion of Administrative

Agent.

 

(iii)          Application

of Payments to Principal and Interest. 

Except as provided in subsection 2.2C, all payments in respect of the

principal amount of any Loan shall include payment of accrued interest on the

principal amount being repaid or prepaid, and all such payments (and, in any

event, any payments in respect of any Loan on a date when interest is due and

payable with respect to such Loan) shall be applied to the payment of interest

before application to principal.

 

(iv)          Apportionment of Payments.  Aggregate principal and interest payments in

respect of Term Loans and Revolving Loans shall be apportioned among all

outstanding Loans to which such payments relate, in each case proportionately

to Lenders’ respective Pro Rata Shares. 

Administrative Agent shall promptly distribute to each Lender, at its

primary address set forth below its name on the appropriate signature page

hereof or at such other address as such Lender may request, its Pro Rata Share

of all such payments received by Administrative Agent and the commitment fees

of such Lender, if any, when received by Administrative Agent pursuant to

subsection 2.3.  Notwithstanding

the foregoing provisions of this subsection 2.4C(iv), if, pursuant to the

provisions of subsection 2.6C, any Notice of Conversion/Continuation is

withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate

Loans in lieu of its Pro Rata Share of any LIBOR Loans, Administrative Agent

shall give effect thereto in apportioning payments received thereafter.

 

(v)           Payments

on Business Days.  Subject to

subsection 2.2B(iii), whenever any payment to be made hereunder shall be stated

to be due on a day that is not a Business Day, such payment shall be made on

the next succeeding Business Day and such extension of time shall be included

in the computation of the payment of interest hereunder or of the commitment

fees hereunder, as the case may be.

 

(vi)          Notation

of Payment.  Each Lender agrees that

before disposing of any Note held by it, or any part thereof (other than by

granting participations therein), that Lender will use reasonable efforts to

make a notation thereon of all Loans evidenced by that Note and all principal

payments previously made thereon and of the date to which interest thereon has

been paid; provided that the failure to make (or any error in the making

of) a notation of any Loan made under such Note shall not limit or otherwise

affect the obligations of Borrower hereunder or under such Note with respect to

any Loan or any payments of principal or interest on such Note or result in any

liability for such Lender; provided, however, further,

that in the event of any inconsistency the Register shall govern (absent manifest

error).

 

D.            Application of Proceeds of

Collateral and Payments after Event of Default.

 

(i)            Upon

the occurrence and during the continuation of an Event of Default, (a) all

payments received on account of the Obligations, whether from Company, from any

Guarantor or otherwise, shall be applied by Administrative Agent against the

Obligations and (b) all proceeds received by Administrative Agent in respect of

any sale of, collection from, or other realization upon all or any part of the

Collateral under any Collateral Document may, in the discretion of

Administrative Agent, be held by Administrative Agent as Collateral for, and/or

(then or at any time thereafter) applied in full or in part by Administrative

Agent against, the applicable Secured Obligations (as defined in such

Collateral Document), in each case in the following order of priority:

 

(a)           To

the payment of all costs and expenses of such sale, collection or other

realization, including reasonable compensation to Administrative Agent and its

agents and counsel, and all other expenses, liabilities and advances made or

incurred by Administrative Agent in connection therewith, and all amounts for

which Administrative Agent is entitled to compensation (including the fees

described in subsection 2.3), reimbursement and indemnification under any Loan

such Document and all advances made by Administrative Agent thereunder for the

account of the applicable Loan Party, and to the payment of all costs and

expenses paid or incurred by Administrative Agent in connection with the Loan

Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and the other

terms of this Agreement and the Loan Documents;

 

(b)           thereafter,

to the extent of any excess such proceeds, to the payment of all other Secured

Obligations (as defined in such Collateral Document) for the ratable benefit of

the holders thereof (subject to the provisions of subsection 2.4C(ii)); and

 

(c)           thereafter,

to the extent of any excess such proceeds, to the payment to or upon the order

of such Loan Party or to whosoever may be lawfully entitled to receive the same

or as a court of competent jurisdiction may direct.

 

(ii)           Application

of Payments Under Subsidiary Guaranty. 

All payments received by Administrative Agent under the Subsidiary

Guaranty shall be applied promptly from time to time by Administrative Agent in

the following order of priority:

 

(a)           To

the payment of the costs and expenses of any collection or other realization

under the Subsidiary Guaranty, including reasonable compensation to Administrative

Agent and its counsel, and all expenses, liabilities and advances made or

incurred by Administrative Agent in connection therewith, all in accordance

with the terms of this Agreement and the Subsidiary Guaranty;

 

(b)           thereafter,

to the extent of any excess such payments, to the payment of all other

Guarantied Obligations (as defined in the Subsidiary Guaranty for the ratable

benefit of the holders thereof); and

 

(c)           thereafter,

to the extent of any excess such payments, to the payment to the applicable

Subsidiary Guarantor or to whosoever may be lawfully entitled to receive the

same or as a court of competent jurisdiction may direct.

 

2.5          Use of Proceeds.

 

A.            Term

Loans. 

The proceeds of the Term Loans shall be applied by Borrower to refinance

the obligations of Borrower under Existing Credit Agreement and to pay

Transaction Costs.

 

B.            Revolving

Loans; Swing Line Loans. 

The proceeds of the Revolving Loans and any Swing Line Loans shall be

applied by Borrower for working capital and other general corporate purposes,

which may include the making of intercompany loans to any of Borrower’s

wholly-owned Domestic Subsidiaries that are Subsidiary Guarantors, in

accordance with subsection 7.1(iii), for their own general corporate purposes,

including working capital, capital expenditures, acquisitions and investments.

 

C.            Margin

Regulations. 

No portion of the proceeds of any borrowing under this Agreement shall

be used by Borrower or any of its Subsidiaries in any manner that might cause

the borrowing or the application of such proceeds to violate Regulation T,

Regulation U or Regulation X of the Board of Governors of the Federal

Reserve System or any other regulation of such Board or to violate the Exchange

Act, in each case as in effect on the date or dates of such borrowing and such

use of proceeds.

 

2.6          Special Provisions Governing LIBOR

Loans.

 

Notwithstanding

any other provision of this Agreement to the contrary, the following provisions

shall govern with respect to LIBOR Loans as to the matters covered:

 

A.            Determination of Applicable Interest

Rate.  As soon as practicable after 12:00 Noon (New

York City time) on each Interest Rate Determination Date, Administrative Agent

shall determine (which determination shall, absent manifest error, be final, conclusive

and binding upon all parties) the interest rate that shall apply to the LIBOR

Loans for which an interest rate is then being determined for the applicable

Interest Period and shall promptly give notice thereof (in writing or by

telephone confirmed in writing) to Borrower and each Lender.

 

B.            Inability

to Determine Applicable Interest Rate.  If Administrative Agent shall have

determined (which determination shall be final and conclusive and binding upon

all parties hereto), on any Interest Rate Determination Date with respect to

any LIBOR Loans, that by reason of circumstances affecting the interbank

Eurodollar market adequate and fair means do not exist for ascertaining the

interest rate applicable to such Loans on the basis provided for in the definition

of Adjusted LIBOR, Administrative Agent shall on such date give notice (by

telefacsimile or by telephone confirmed in writing) to Borrower and each Lender

of such determination, whereupon (i) no Loans may be made as, or converted

to, LIBOR Loans until such time as Administrative Agent notifies Borrower and

Lenders that the circumstances giving rise to such notice no longer exist and

(ii) any Notice of Borrowing or Notice of Conversion/Continuation given by

Borrower with respect to the Loans in respect of which such determination was

made shall be deemed to be rescinded by Borrower.

 

C.            Illegality

or Impracticability of LIBOR Loans.  If any date any Lender shall have determined

(which determination shall be final, conclusive and binding upon all parties

hereto but shall be made only after consultation with Borrower and

Administrative Agent) that the making, maintaining or continuation of its LIBOR

Loans (i) has become unlawful as a result of compliance by such Lender in

good faith with any law, treaty, governmental rule, regulation, guideline or

order (or would conflict with any such treaty, governmental rule, regulation,

guideline or order not having the force of law even though the failure to

comply therewith would not be unlawful) or (ii) has become impracticable,

or would cause such Lender material hardship, as a result of contingencies

occurring after the date of this Agreement which materially and adversely

affect the interbank Eurodollar market or the position of such Lender in that

market, then, and in any such event, such Lender shall be an “Affected

Lender” and it shall on that day give notice (by telefacsimile or by

telephone confirmed in writing) to Borrower and Administrative Agent of such

determination (which notice Administrative Agent shall promptly transmit to

each other Lender).  Thereafter

(a) the obligation of Affected Lender to make Loans as, or to convert

Loans to, LIBOR Loans shall be suspended until such notice shall be withdrawn

by Affected Lender, (b) to the extent such determination by Affected

Lender relates to a LIBOR Loan then being requested by Borrower pursuant to a

Notice of Borrowing or a Notice of Conversion/Continuation, Affected Lender

shall make such Loan as (or convert such Loan to, as the case may be) a Base

Rate Loan, (c) the Affected Lender’s obligation to maintain its

outstanding LIBOR Loans (the “Affected Loans”) shall be terminated at

the earlier to occur of the expiration of the Interest Period then in effect

with respect to the Affected Loans or when required by law, and (d) the

Affected Loans shall automatically convert into Base Rate Loans on the date of

such termination.  Notwithstanding the

foregoing, to the extent a determination by an Affected Lender as described

above relates to a LIBOR Loan then being requested by Borrower pursuant to a

Notice of Borrowing or a Notice of Conversion/Continuation, Borrower shall have

the option, subject to the provisions of subsection 2.6D, to rescind such

Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by

giving notice (by telefacsimile or by telephone confirmed in writing) to

Administrative Agent of such rescission on the date on which the Affected

Lender gives notice of its determination as described above (which notice of

rescission Administrative Agent shall promptly transmit to each other

Lender).  Except as provided in the

immediately preceding sentence, nothing in this subsection 2.7C shall affect

the obligation of any Lender other than an Affected Lender to make or maintain

Loans as, or to convert Loans to, LIBOR Loans in accordance with the terms of

this Agreement.

 

D.            Compensation

For Breakage or Non-Commencement of Interest Periods.  Borrower shall compensate each Lender, upon

written request by that Lender (which request shall set forth the basis for

requesting such amounts) pursuant to subsection 2.8, for all reasonable losses,

expenses and liabilities (including any interest paid by that Lender to lenders

of funds borrowed by it to make or carry its LIBOR Loans and any loss, expense or

liability sustained by that Lender in connection with the liquidation or

re-employment of such funds) which that Lender may sustain: (i) if for any

reason (other than a default by that Lender) a borrowing of any LIBOR Loan does

not occur on a date specified therefor in a Notice of Borrowing or a telephonic

request therefor, or a conversion to or continuation of any LIBOR Loan does not

occur on a date specified therefor in a Notice of Conversion/Continuation or a

telephonic request therefor, (ii) if any prepayment (including any

prepayment described in subsection 2.4B(i) or conversion occasioned by the

circumstances described in subsection 2.6C) or other principal payment or any

conversion of any of its LIBOR Loans occurs on a date prior to the last day of

an Interest Period applicable to that Loan, (iii) if any prepayment of any

of its LIBOR Loans is not made on any date specified in a notice of prepayment

given by Borrower, or (iv) as a consequence of any other default by

Borrower in the repayment of its LIBOR Loans when required by the terms of this

Agreement.

 

E.             Booking of LIBOR Loans. 

Any Lender may make, carry or transfer LIBOR Loans at, to, or for the

account of any of its branch offices or the office of an Affiliate of that

Lender.

 

F.             Assumptions Concerning Funding of

LIBOR Loans.

Calculation of all amounts payable to a Lender under this subsection 2.6 and

under subsection 2.7A shall be made as though that Lender had actually funded

each of its relevant LIBOR Loans through the purchase of a Eurodollar deposit

bearing interest at the rate obtained pursuant to clause (i) of the definition

of Adjusted LIBOR in an amount equal to the amount of such LIBOR Loan and

having a maturity comparable to the relevant Interest Period, whether or not

its LIBOR Loans had been funded in such manner and through the transfer of such

Eurodollar deposit from an offshore office of that Lender to a domestic office

of that Lender in the United States of America; provided, however,

that each Lender may fund each of its LIBOR Loans in any manner it sees fit and

the foregoing assumptions shall be utilized only for the purposes of

calculating amounts payable under this subsection 2.6 and under subsection

2.7A.

 

G.            LIBOR

Loans After Default. 

After the occurrence of and during the continuation of a Potential Event

of Default or an Event of Default, (i) Borrower may not elect to have a

Loan be made or maintained as, or converted to, a LIBOR Loan after the

expiration of any Interest Period then in effect for that Loan and (ii) subject

to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of

Conversion/Continuation given by Borrower with respect to a requested borrowing

or conversion/continuation that has not yet occurred shall be deemed to be

rescinded by Borrower.

 

2.7          Increased Costs; Taxes; Capital

Adequacy.

 

A.            Compensation

for Increased Costs and Taxes.  Subject to the provisions of subsection 2.7B

(which shall be controlling with respect to the matters covered thereby), if

any Lender shall determine (which determination shall, absent manifest error,

be final and conclusive and binding upon all parties hereto) that any law,

treaty or governmental rule, regulation or order, or any change therein or in

the interpretation, administration or application thereof (including the

introduction of any new law, treaty or governmental rule, regulation or order),

or any determination of a court or Governmental Authority, in each case that

becomes effective after the date hereof, or compliance by such Lender with any

guideline, request or directive issued or made after the date hereof by any

central bank or other governmental or quasi-Governmental Authority (whether or

not having the force of law):

 

(i)            subjects

such Lender (or its applicable lending office) to any additional Tax with

respect to this Agreement or any of its obligations hereunder (including with

respect to issuing or maintaining any Letters of Credit or purchasing or

maintaining any participations therein or maintaining any Commitment hereunder)

or any payments to such Lender (or its applicable lending office) of principal,

interest, fees or any other amount payable hereunder;

 

(ii)           imposes,

modifies or holds applicable any reserve (including any marginal, emergency,

supplemental, special or other reserve), special deposit, compulsory loan, FDIC

insurance or similar requirement against assets held by, or deposits or other

liabilities in or for the account of, or advances or loans by, or other credit

extended by, or any other acquisition of funds by, any office of such Lender

(other than any such reserve or other requirements with respect to LIBOR Loans

that are reflected in the definition of Adjusted LIBOR); or

 

(iii)          imposes

any other condition (other than with respect to a Tax matter) on or affecting

such Lender (or its applicable lending office) or its obligations hereunder or

the interbank Eurodollar market;

 

and

the result of any of the foregoing is to increase the cost to such Lender of

agreeing to make, making or maintaining its Loans or Commitments or agreeing to

issue, issuing or maintaining any Letter of Credit or agreeing to purchase,

purchasing or maintaining any participation therein or to reduce any amount

received or receivable by such Lender (or its applicable lending office) with

respect thereto; then, in any such case, Borrower shall promptly pay to such

Lender, upon receipt of the statement referred to in the next sentence, such

additional amount or amounts (in the form of an increased rate of, or a

different method of calculating, interest or otherwise as such Lender in its

sole discretion shall determine) as may be necessary to compensate such Lender

for any such increased cost or reduction in amounts received or receivable

hereunder.

 

B.            Withholding of Taxes.

 

(i)            Payments

to Be Free and Clear.  All sums

payable by Borrower under this Agreement and the other Loan Documents shall be

paid free and clear of, and without any deduction or withholding on account of,

any Tax imposed, levied, collected, withheld or assessed by or within the

United States of America or any political subdivision in or of the United

States of America or any other jurisdiction from or to which a payment is made

by or on behalf of Borrower or by any federation or organization of which the

United States of America or any such jurisdiction is a member at the time of

payment.

 

(ii)           Grossing-up

of Payments.  If Borrower or any

other Person is required by law to make any deduction or withholding on account

of any such Tax from any sum paid or payable by Borrower to Administrative

Agent or any Lender under any of the Loan Documents:

 

(a)           Borrower

shall notify Administrative Agent of any such requirement or any change in any

such requirement as soon as Borrower becomes aware of it;

 

(b)           Borrower

shall pay any such Tax when such Tax is due, such payment to be made (if the

liability to pay is imposed on Borrower) for its own account or (if that

liability is imposed on Administrative Agent or such Lender, as the case may

be) on behalf of and in the name of Administrative Agent or such Lender;

 

(c)           the

sum payable by Borrower in respect of which the relevant deduction, withholding

or payment is required shall be increased to the extent necessary to ensure

that, after the making of that deduction, withholding or payment,

Administrative Agent or such Lender, as the case may be, receives on the due

date a net sum equal to what it would have received had no such deduction,

withholding or payment been required or made; and

 

(d)           within

30 days after paying any sum from which it is required by law to make any

deduction or withholding, and within 30 days after the due date of payment of

any Tax which it is required by clause (b) above to pay, Borrower shall deliver

to Administrative Agent and/or other affected parties evidence satisfactory to

the other affected parties of such deduction, withholding or payment and of the

remittance thereof to the relevant taxing or other authority;

 

provided that no such additional amount shall be

required to be paid to any Lender under clause (c) above (i) to the extent such

additional amount relates to a portion of any sums paid or payable to such

Lender under any of the Loan Documents with respect to which such Lender does

not act for its own account, or (ii) except to the extent that any change after

the date such Lender became a Lender in any such requirement for a deduction,

withholding or payment as is mentioned therein shall result in an increase in

the rate of such deduction, withholding or payment from that in effect at the

date on which such Lender became a Lender, in respect of payments to such

Lender.

 

(iii)          Evidence of Exemption from U.S.

Withholding Tax.

 

(a)           Each Lender that is organized under

the laws of any jurisdiction other than the United States or any state or other

political subdivision thereof (for purposes of this subsection 2.7B(iii), a “Non-US

Lender”) shall deliver to Administrative Agent and to Borrower, on

or prior to the Closing Date (in the case of each Lender listed on the

signature pages hereof) or on or prior to the date of the Assignment Agreement

pursuant to which it becomes a Lender (in the case of each other Lender), and

at such other times as may be necessary in the determination of Borrower or

Administrative Agent (each in the reasonable exercise of its discretion), two

original copies of Internal Revenue Service Form W-8BEN or W-8ECI (or any

successor forms) properly completed and duly executed by such Non-US Lender,

or, in the case of a Non-US Lender claiming exemption from United States

federal withholding tax under Section 871(h) or 881(c) of the Internal Revenue

Code with respect to payments of “portfolio interest”, a form W-8BEN, and, in

the case of a Non-US Lender that has certified in writing to Administrative

Agent that it is not a “bank” (as defined in Section 881(c)(3)(A) of the

Internal Revenue Code), a certificate of such Non-US Lender certifying that

such Non-US Lender is not (i) a “bank” for purposes of Section 881(c) of

the Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning

of Section 871(h)(3)(B) of the Internal Revenue Code) of Borrower, or

(iii) a controlled foreign corporation related to Borrower (within the

meaning of Section 864(d)(4) of the Internal Revenue Code) in each case

together with any other certificate or statement of exemption required under

the Internal Revenue Code or the regulations issued thereunder to establish

that such Non-US Lender is not subject to United States withholding tax with

respect to any payments to such Non-US Lender of interest payable under any of

the Loan Documents.

 

(b)           Each

Non-US Lender, to the extent it does not act or ceases to act for its own

account with respect to any portion of any sums paid or payable to such Lender

under any of the Loan Documents (for example, in the case of a typical

participation by such Lender), shall deliver to Administrative Agent and to

Borrower, on or prior to the Closing Date (in the case of each Lender listed on

the signatures pages hereof), on or prior to the date of the Assignment

Agreement pursuant to which it becomes a Lender (in the case of each other

Lender), or on such later date when such Non-US Lender ceases to act for its

own account with respect to any portion of any such sums paid or payable, and

at such other times as may be necessary in the determination of Borrower or

Administrative Agent (each in the reasonable exercise of its discretion), (1)

two original copies of the forms or statements required to be provided by such

Non-US Lender under subsection 2.7B(iii)(a), properly completed and duly

executed by such Non-US Lender, to establish the portion of any such sums paid

or payable with respect to which such Non-US Lender acts for its own account

that is not subject to United States withholding tax, and (2) two original

copies of Internal Revenue Service Form W-8IMY (or any successor forms)

properly completed and duly executed by such Non-US Lender, together with any

information, if any, such Non-US Lender chooses to transmit with such form, and

any other certificate or statement of exemption required under the Internal

Revenue Code or the regulations issued thereunder, to establish that such

Non-US Lender is not acting for its own account with respect to a portion of

any such sums payable to such Non-US Lender.

 

(c)           Each

Non-US Lender hereby agrees, from time to time after the initial delivery by

such Non-US Lender of such forms, whenever a lapse in time or change in

circumstances renders such forms, certificates or other evidence so delivered

obsolete or inaccurate in any material respect or if, by virtue of a change in

law or regulations, such forms are no longer valid evidence of a person’s

exemption from withholding tax which is reasonably satisfactory to Borrower,

that such Non-US Lender shall promptly (1) deliver to Administrative Agent

and to Borrower two original copies of renewals, amendments or additional or

successor forms, properly completed and duly executed by such Non-US Lender,

together with any other certificate or statement of exemption required in order

to confirm or establish that such Non-US Lender is not subject to United States

withholding tax with respect to payments to such Non-US Lender under the Loan

Documents and, if applicable, that such Non-US Lender does not act for its own

account with respect to any portion of any such payments, or (2) notify

Administrative Agent and Borrower of its inability to deliver any such forms,

certificates or other evidence.

 

(d)           Borrower

shall not be required to pay any additional amount to any Non-US Lender under

clause (c) of subsection 2.7B(ii) if such Non-US Lender shall have failed to

satisfy the requirements of clause (a), (b) or (c)(1) of this subsection

2.7B(iii); provided that if such Non-US Lender shall have satisfied the

requirements of subsection 2.7B(iii)(a) on the date such Non-US Lender became a

Lender, nothing in this subsection 2.7B(iii)(d) shall relieve Borrower of its

obligation to pay any amounts pursuant to subsection 2.7B(ii)(c) if, as a

result of any change in any applicable law, treaty or governmental rule,

regulation or order, or any change in the interpretation, administration or

application thereof, such Non-US Lender is no longer properly entitled to

deliver forms, certificates or other evidence at a subsequent date establishing

the fact that such Non-US Lender is not subject to withholding as described in

subsection 2.7B(iii)(a).

 

C.            Capital

Adequacy Adjustment. 

If any Lender shall have determined that the adoption, effectiveness,

phase-in or applicability after the date hereof of any law, rule or regulation

(or any provision thereof) regarding capital adequacy, or any change therein or

in the interpretation or administration thereof by any Governmental Authority,

central bank or comparable agency charged with the interpretation or

administration thereof, or compliance by any Lender (or its applicable lending

office) with any guideline, request or directive regarding capital adequacy

(whether or not having the force of law) of any such Governmental Authority,

central bank or comparable agency, has or would have the effect of reducing the

rate of return on the capital of such Lender or any corporation controlling

such Lender as a consequence of, or with reference to, such Lender’s Loans or

Commitments or Letters of Credit or participations therein or other obligations

hereunder with respect to the Loans or the Letters of Credit to a level below

that which such Lender or such controlling corporation could have achieved but

for such adoption, effectiveness, phase-in, applicability, change or compliance

(taking into consideration the policies of such Lender or such controlling

corporation with regard to capital adequacy), then from time to time, within

five Business Days after receipt by Borrower from such Lender of the statement

referred to in the next sentence, Borrower shall pay to such Lender such

additional amount or amounts as will compensate such Lender or such controlling

corporation on an after-tax basis for such reduction. Such Lender shall deliver

to Borrower (with a copy to Administrative Agent) a written statement, setting

forth in reasonable detail the basis of the calculation of such additional

amounts, which statement shall be conclusive and binding upon all parties

hereto absent manifest error.

 

2.8          Obligation of Lenders and Issuing

Lenders to Mitigate.

 

Each Lender and

Issuing Lender agrees that, as promptly as practicable after the officer of

such Lender or Issuing Lender responsible for administering the Loans or

Letters of Credit of such Lender or Issuing Lender, as the case may be, becomes

aware of the occurrence of an event or the existence of a condition that would

cause such Lender to become an Affected Lender or that would entitle such

Lender or Issuing Lender to receive payments under subsection 2.7 or subsection

3.6, it will, to the extent not inconsistent with the internal policies of such

Lender or Issuing Lender and any applicable legal or regulatory restrictions,

use reasonable efforts (i) to make, issue, fund or maintain the

Commitments of such Lender or the affected Loans or Letters of Credit of such

Lender or Issuing Lender through another lending or letter of credit office of

such Lender or Issuing Lender, or (ii) take such other measures as such

Lender or Issuing Lender may deem reasonable, if as a result thereof the

circumstances which would cause such Lender to be an Affected Lender would

cease to exist or the additional amounts which would otherwise be required to

be paid to such Lender or Issuing Lender pursuant to subsection  2.7 or subsection 3.6 would be materially

reduced and if, as determined by such Lender or Issuing Lender in its sole

discretion, the making, issuing, funding or maintaining of such Commitments or

Loans or Letters of Credit through such other lending or letter of credit

office or in accordance with such other measures, as the case may be, would not

otherwise be disadvantageous to such Lender or Issuing Lender or materially

adversely affect such Commitments or Loans or Letters of Credit or the

interests of such Lender or Issuing Lender; provided that such Lender or

Issuing Lender will not be obligated to utilize such other lending or letter of

credit office pursuant to this subsection 2.8 unless Borrower agrees to pay all

incremental expenses incurred by such Lender or Issuing Lender as a result of

utilizing such other lending or letter of credit office as described in clause

(i) above.  A certificate as to the

amount of any such expenses payable by Borrower pursuant to this subsection 2.8

(setting forth in reasonable detail the basis for requesting such amount)

submitted by such Lender or Issuing Lender to Borrower (with a copy to

Administrative Agent) shall be conclusive absent manifest error.

 

2.9          Replacement of Lenders.

 

If Borrower receives a statement of amounts due

pursuant to subsection 2.7 from a Lender, or a Lender becomes an Affected Lender

(any such Lender, a “Subject Lender”),

so long as (i) no Potential Event of Default or Event of Default shall have

occurred and be continuing and Borrower has obtained a commitment from another

Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans

and assume the Subject Lender’s Commitments and all other obligations of the

Subject Lender hereunder; (ii) such Lender is not an Issuing Lender with

respect to any Letters of Credit outstanding (unless all such Letters of Credit

are terminated or arrangements acceptable to such Issuing Lender (such as a

“back-to-back” letter of credit) are made); and (iii) if applicable, the

Subject Lender is unwilling to withdraw the notice delivered to Company

pursuant to subsection 2.7, Borrower may require the Subject Lender to assign

all of its Loans and Commitments to such other Lender, Lenders, Eligible

Assignee or Eligible Assignees pursuant to the provisions of subsection 10.1B; provided

that, prior to or concurrently with such replacement, (1) the Subject Lender

shall have received payment in full of all principal, interest, fees and other

amounts (including all amounts under subsections 2.6D and/or 2.7 (if

applicable)) due and payable to it through such date of replacement and a

release from its obligations under the Loan Documents; (2) the processing fee

required to be paid by subsection 10.1B(i) shall have been paid to

Administrative Agent; and (3) all of the requirements for such assignment

contained in subsection 10.1B, including, without limitation, the consent of

Administrative Agent (if required) and the receipt by Administrative Agent of

an executed Assignment Agreement and other supporting documents, have been

fulfilled.

 

2.10        Extension of Term Loan and Revolving

Loan Commitment Termination Dates.

 

A.            Term Loan Maturity Date.  Borrower may, in its sole discretion and

without the payment of any additional costs, expenses or fees to Lenders,

extend the Term Loan Maturity Date, subject to satisfaction of the following

conditions and provided that no Event of Default or Potential Event of

Default then exists:

 

(i)            On or prior to March 31, 2006,

Borrower may elect to extend the Term Loan Maturity Date to August 29,

2008 by providing Notice of Extension to the Administrative Agent; provided,

that Borrower may not elect to exercise the extension option provided for in

this subsection 2.9A(i) unless Borrower has refinanced all of the then

outstanding Senior 1996 Notes on terms and conditions acceptable to the Co-Lead

Arrangers; and

 

(ii)           Such notice of extension shall be

accompanied by an Officers’ Certificate certifying that the refinancing

contemplated by subparagraph (i) above has occurred.

 

B.            Revolving Loan Commitment Termination

Date.  Borrower

may, in its sole discretion and without the payment of any additional costs,

expenses or fees to Lenders with respect to the exercise of such option to

extend, extend the Revolving Loan Commitment Termination Date, subject to

satisfaction of the following conditions and provided that no Event of

Default or Potential Event of Default then exists:

 

(i)            On or prior to March 31, 2006,

Borrower may elect to extend the Revolving Loan Commitment Termination Date to

August 29, 2007 by providing a Notice of Extension to the Administrative

Agent; provided, that Borrower may not elect to exercise the extension

option provided for in this subsection 2.9B(i) unless Borrower has refinanced

all of the then outstanding Senior 1996 Notes on terms and conditions

acceptable to the Co-Lead Arrangers; and

 

(ii)           Such notice of extension shall be

accompanied by an Officers’ Certificate certifying that the refinancing

contemplated by subparagraph (i) above has occurred.

 

Section

3.              LETTERS OF CREDIT

 

3.1          Issuance of Letters of Credit and

Lenders’ Purchase of Participations Therein.

 

A.    Letters

of Credit. 

In addition to Borrower requesting that Lenders make Revolving Loans

pursuant to subsection 2.1A(ii) and that Swing Line Lender make Swing Line

Loans pursuant to subsection 2.1A(iii), Borrower may request, in accordance

with the provisions of this subsection 3.1, from time to time during the period

from the Closing Date to but excluding the 30th day prior to the

Revolving Loan Commitment Termination Date, that one or more Lenders issue

Letters of Credit for the account of Borrower for the purposes specified in the

definition of Letters of Credit. 

Subject to the terms and conditions of this Agreement and in reliance

upon the representations and warranties of Borrower herein set forth, any one

or more Lenders may, but (except as provided in subsection 3.1B(iii)) shall not

be obligated to, issue such Letters of Credit in accordance with the provisions

of this subsection 3.1; provided that Borrower shall not request that

any Lender issue (and no Lender shall issue):

 

(i)            any

Letter of Credit if, after giving effect to such issuance, the Total

Utilization of Revolving Loan Commitments would exceed the Revolving Loan

Commitments then in effect;

 

(ii)           any

Letter of Credit if, after giving effect to such issuance, the Letter of Credit

Usage would exceed $10,000,000;

 

(iii)          any

Letter of Credit having an expiration date later than the earlier of (a) 30

days prior to the Revolving Loan Commitment Termination Date; and (b) the

date which is one year from the date of issuance of such Letter of Credit; provided

that the immediately preceding clause (b) shall not prevent any Issuing Lender

(but subject to clause (a) above) from agreeing that a Letter of Credit will

automatically be extended for one or more successive periods not to exceed one

year each unless such Issuing Lender elects not to extend for any such

additional period; and provided, further that such Issuing Lender

shall elect not to extend such Letter of Credit if it has knowledge that an

Event of Default or Potential Event of Default has occurred and is continuing

(and has not been waived in accordance with subsection 10.6) at the time such

Issuing Lender must elect whether or not to allow such extension; and provided,

further that the preceding clause (b) shall not prevent any Issuing

Lender (but subject to clause (a) above) from issuing a Letter of Credit in

favor of Nintendo of America Inc. (or its designee) which Letter of Credit may

have an expiration date of up to 18 months from the date of issuance of such

Letter of Credit.

 

(iv)          any

Letter of Credit denominated in a currency other than Dollars; or

 

(v)           any

Letter of Credit that is otherwise unacceptable to the applicable Issuing

Lender in its reasonable discretion acting in good faith (including if issuing

such Letter of Credit would violate such Issuing Lender’s policies or general

criteria for issuing the type of Letter of Credit).

 

B.            Mechanics of Issuance.

 

(i)            Notice of Issuance.  Whenever Borrower desires the issuance of a

Letter of Credit, it shall deliver to Administrative Agent a Notice of Issuance

of Letter of Credit substantially in the form of Exhibit VII annexed

hereto no later than 12:00 Noon (New York City time) at least five Business

Days, or in each case such shorter period as may be agreed to by the Issuing

Lender in any particular instance, in advance of the proposed date of

issuance.  The Notice of Issuance of

Letter of Credit shall specify (a) the proposed date of issuance (which

shall be a Business Day), (b) the face amount of the Letter of Credit,

(c) the expiration date of the Letter of Credit, (d) the name and

address of the beneficiary, and (e) either the verbatim text of the

proposed Letter of Credit or the proposed terms and conditions thereof,

including a precise description of any documents to be presented by the

beneficiary which, if presented by the beneficiary prior to the expiration date

of the Letter of Credit, would require the Issuing Lender to make payment under

the Letter of Credit; provided that the Issuing Lender, in its

reasonable discretion, may require changes in the text of the proposed Letter

of Credit or any such documents; and provided, further that no

Letter of Credit shall require payment against a conforming draft to be made

thereunder on the same Business Day (under the laws of the jurisdiction in

which the office of the Issuing Lender to which such draft is required to be

presented is located) that such draft is presented if such presentation is made

after 12:00 Noon (in the time zone of such office of the Issuing Lender) on

such Business Day.

 

(ii)           Update of Certifications.  Borrower shall notify the applicable Issuing

Lender (and Administrative Agent, if Administrative Agent is not such Issuing

Lender) prior to the issuance of any Letter of Credit if any of the matters to

which Borrower is required to certify in the applicable Notice of Issuance of

Letter of Credit is no longer true and correct as of the proposed date of

issuance of such Letter of Credit, and upon the issuance of any Letter of

Credit Borrower shall be deemed to have re-certified, as of the date of such

issuance, as to the matters to which Borrower is required to certify in the

applicable Notice of Issuance of Letter of Credit.

 

(iii)          Determination

of Issuing Lender.  Upon receipt by

Administrative Agent of a Notice of Issuance of Letter of Credit pursuant to

subsection 3.1B(i) requesting the issuance of a Letter of Credit, if

Administrative Agent elects to issue such Letter of Credit, Administrative

Agent shall promptly so notify Borrower, and Administrative Agent shall be the

Issuing Lender with respect thereto.  If

Administrative Agent, in its sole discretion, elects not to issue such Letter

of Credit, Administrative Agent shall promptly so notify Borrower, whereupon

Borrower may request any other Lender to issue such Letter of Credit by

delivering to such Lender a copy of the applicable Notice of Issuance of Letter

of Credit.  Any Lender so requested to

issue such Letter of Credit shall promptly notify Borrower and Administrative

Agent whether or not, in its sole discretion, it has elected to issue such

Letter of Credit, and any such Lender that elects to issue such Letter of

Credit shall be the Issuing Lender with respect thereto.  If all other Lenders have declined to issue

such Letter of Credit, notwithstanding the prior election of Administrative

Agent not to issue such Letter of Credit, Administrative Agent shall, subject

to the other provisions of this Agreement (including subsections 3.1A, 3.1B and

Section 4), issue such Letter of Credit and shall be the Issuing Lender with

respect thereto, notwithstanding the fact that the Letter of Credit Usage with

respect to such Letter of Credit and with respect to all other Letters of

Credit issued by Administrative Agent, when aggregated with Administrative

Agent’s outstanding Revolving Loans and Swing Line Loans, may exceed

Administrative Agent’s Revolving Loan Commitment then in effect.

 

(iv)          Issuance

of Letter of Credit.  Upon

satisfaction or waiver (in accordance with subsection 10.6) of the conditions

set forth in subsection 4.3, the Issuing Lender shall issue the requested

Letter of Credit in accordance with the Issuing Lender’s standard operating

procedures.

 

(v)           Notification

to Lenders.  Upon the issuance of or

amendment to any Letter of Credit the applicable Issuing Lender shall promptly

notify Administrative Agent of such issuance or amendment in writing and such

notice shall be accompanied by a copy of such Letter of Credit or

amendment.  Promptly after receipt of

notice of any issuance of a Letter of Credit (or, if Administrative Agent is

the Issuing Lender, together with such notice), Administrative Agent shall

notify each Lender of the amount of such Lender’s respective participation in

such Letter of Credit, determined in accordance with subsection 3.1C.

 

C.            Lenders’

Purchase of Participations in Letters of Credit.  Immediately upon the issuance of each Letter

of Credit, each Revolving Lender shall be deemed to, and hereby agrees to, have

irrevocably purchased from the Issuing Lender a participation in such Letter of

Credit and any drawings honored thereunder in an amount equal to such Revolving

Lender’s Pro Rata Share of the maximum amount which is or at any time may

become available to be drawn thereunder.

 

3.2          Letter

of Credit Fees.

 

Borrower

agrees to pay the following amounts with respect to Letters of Credit issued

hereunder:

 

(i)            with

respect to each Letter of Credit, (a) a fronting fee, payable directly to

the applicable Issuing Lender for its own account, equal to 0.25% per annum of

the daily amount available to be drawn under such Letter of Credit, and

(b) a letter of credit fee, payable to Administrative Agent for the

account of Revolving Lenders, equal to the Applicable LIBOR Margin for

Revolving Loans multiplied by the daily amount available to be drawn under such

Letter of Credit, each such fronting fee or letter of credit fee to be payable

in arrears on the last Business Day of each March, June, September and December

of each Fiscal Year commencing on the first such date to occur after the

Closing Date, and computed on the basis of a 360-day year for the actual number

of days elapsed; and

 

(ii)           with

respect to the issuance, amendment or transfer of each Letter of Credit and

each payment of a drawing made thereunder (without duplication of the fees

payable under clause (i) above), documentary and processing charges payable

directly to the applicable Issuing Lender for its own account in accordance

with such Issuing Lender’s standard schedule for such charges in effect at the

time of such issuance, amendment, transfer or payment, as the case may be.

 

For purposes of calculating any fees payable under

clauses (i) and (ii) of this subsection 3.2, the daily amount available to be

drawn under any Letter of Credit shall be determined as of the close of

business on any date of determination. 

Promptly upon receipt by Administrative Agent of any amount described in

clause (i) or (ii) of this subsection 3.2, Administrative Agent shall

distribute to each Revolving Lender its Pro Rata Share of such amount.

 

3.3          Drawings and Reimbursement of

Amounts Paid Under Letters of Credit.

 

A.            Responsibility of Issuing Lender

With Respect to Drawings.  In determining whether to

honor any drawing under any Letter of Credit by the beneficiary thereof, the

Issuing Lender shall be responsible only to examine the documents delivered

under such Letter of Credit with reasonable care so as to ascertain whether

they appear on their face to be in accordance with the terms and conditions of

such Letter of Credit.

 

B.            Reimbursement

by Borrower of Amounts Paid Under Letters of Credit.  If an Issuing Lender has determined to honor

a drawing under a Letter of Credit issued by it, such Issuing Lender shall

immediately notify Borrower and Administrative Agent, and Borrower shall

reimburse such Issuing Lender on or before the Business Day immediately

following the date on which such drawing is honored (the “Reimbursement Date”) in an

amount in Dollars and in same day funds equal to the amount of such honored

drawing (plus interest thereon (as provided in subsection 3.3D(i) for the

period from the date of drawing to the date on which such Revolving Loans are

made (the “LC Reimbursement Amount”));

provided that, anything contained in this Agreement to the contrary

notwithstanding, (i) unless Borrower shall have notified Administrative Agent

and such Issuing Lender prior to 12:00 Noon (New York City time) on the date

such drawing is honored that Borrower intends to reimburse such Issuing Lender

for the LC Reimbursement Amount with funds other than the proceeds of Revolving

Loans, Borrower shall be deemed to have given a timely Notice of Borrowing to

Administrative Agent requesting Lenders to make Revolving Loans that are Base

Rate Loans on the Reimbursement Date in an amount in Dollars equal to the LC Reimbursement

Amount (and Administrative Agent shall promptly give notice thereof to each

Lender) and (ii) subject to satisfaction or waiver of the conditions specified

in subsection 4.2B, Lenders shall, on or before the Business Day immediately

following the Reimbursement Date, make Revolving Loans that are Base Rate Loans

in the LC Reimbursement Amount), the proceeds of which shall be applied

directly by Administrative Agent to reimburse such Issuing Lender in an amount

equal to the LC Reimbursement Amount; and provided, further that

if for any reason proceeds of Revolving Loans are not received by such Issuing

Lender on or before the Business Day immediately following the Reimbursement

Date in an amount equal to the LC Reimbursement Amount), Borrower shall reimburse

such Issuing Lender, on demand, in an amount in same day funds equal to the

excess of (x) the LC Reimbursement Amount) over (y) the aggregate amount of

such Revolving Loans, if any, which are so received.  Nothing in this subsection 3.3B shall be deemed to relieve any

Lender from its obligation to make Revolving Loans on the terms and conditions

set forth in this Agreement, and Borrower shall retain any and all rights it

may have against any Lender resulting from the failure of such Lender to make such

Revolving Loans under this subsection 3.3B.  The Issuing

Lender may honor or dishonor any drawing in accordance with the terms of the

Letter of Credit without regard to any instruction of Borrower.

 

C.            Payment by Lenders of Unreimbursed

Amounts Paid Under Letters of Credit.

 

(i)            Payment

by Lenders.  If Borrower shall fail

for any reason to reimburse any Issuing Lender as provided in subsection 3.3B

in an amount equal to the amount of any drawing honored by such Issuing Lender

under a Letter of Credit issued by it, such Issuing Lender shall promptly

notify each Revolving Lender of the unreimbursed amount of such honored drawing

and of such Revolving Lender’s respective participation therein based on such

Revolving Lender’s Pro Rata Share of the Revolving Loan Commitment.  Each Revolving Lender with a Revolving Loan

Commitment shall make available to such Issuing Lender an amount equal to its

respective participation, in Dollars and in same day funds, at the office of

such Issuing Lender specified in such notice, not later than 12:00 Noon (New

York City time) on the first Business Day (under the laws of the jurisdiction

in which such office of such Issuing Lender is located) after the date notified

by such Issuing Lender.  If any

Revolving Lender fails to make available to such Issuing Lender on such

Business Day the amount of such Revolving Lender’s participation in such Letter

of Credit as provided in this subsection 3.3C, such Issuing Lender shall be

entitled to recover such amount on demand from such Lender together with

interest thereon at the rate customarily used by such Issuing Lender for the

correction of errors among banks for three Business Days and thereafter at the

Base Rate.  Nothing in this subsection

3.3C shall be deemed to prejudice the right of any Lender to recover from any

Issuing Lender any amounts made available by such Lender to such Issuing Lender

pursuant to this subsection 3.3C if it is determined by the final judgment of a

court of competent jurisdiction that the payment with respect to a Letter of

Credit by such Issuing Lender in respect of which payment was made by such

Lender constituted gross negligence or willful misconduct on the part of such

Issuing Lender.

 

(ii)           Distribution

to Lenders of Reimbursements Received From Borrower.  If any Issuing Lender shall have been

reimbursed by Revolving Lenders pursuant to subsection 3.3C(i) for all or any

portion of any drawing honored by such Issuing Lender under a Letter of Credit

issued by it, such Issuing Lender shall promptly distribute to each other

Revolving Lender that has paid all amounts payable by it under subsection

3.3C(i) with respect to such honored drawing such other Revolving Lender’s Pro

Rata Share of all payments subsequently received by such Issuing Lender from

Borrower in reimbursement of such honored drawing when such payments are

received.  Any such distribution shall

be made to a Revolving Lender at its primary address set forth below its name

on the appropriate signature page hereof or at such other address as such Revolving

Lender may request.

 

D.            Interest

on Amounts Paid Under Letters of Credit.

 

(i)            Payment of Interest by Borrower.  Borrower agrees to pay to each Issuing

Lender, with respect to drawings honored under any Letters of Credit issued by

it, interest on the amount paid by such Issuing Lender in respect of each such

honored drawing from the date a drawing is honored to but excluding the date

such amount is reimbursed by Borrower (including any such reimbursement out of

the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to

(a) for the period from the date such drawing is honored to but excluding the

Reimbursement Date, the rate then in effect under this Agreement with respect

to Revolving Loans that are Base Rate Loans and (b) thereafter, a rate

which is 2.00% per annum in excess of the rate of interest otherwise payable

under this Agreement with respect to Revolving Loans that are Base Rate

Loans.  Interest payable pursuant to

this subsection 3.3D(i) shall be computed on the basis of a 365-day or 366-day

year, as the case may be, for the actual number of days elapsed in the period

during which it accrues and shall be payable on demand or, if no demand is

made, on the date on which the related drawing under a Letter of Credit is

reimbursed in full.

 

(ii)           Distribution

of Interest Payments by Issuing Lender. 

Promptly upon receipt by any Issuing Lender of any payment of interest

pursuant to subsection 3.3D(i) with respect to a drawing honored under a Letter

of Credit issued by it, (a) such Issuing Lender shall distribute to each

other Revolving Lender, out of the interest received by such Issuing Lender in

respect of the period from the date such drawing is honored to but excluding

the date on which such Issuing Lender is reimbursed for the amount of such

honored drawing (including any such reimbursement out of the proceeds of

Revolving Loans pursuant to subsection 3.3B), the amount that such Revolving

Lender would have been entitled to receive in respect of the letter of credit

fee that would have been payable in respect of such Letter of Credit for such

period pursuant to subsection 3.2 if no drawing had been honored under such

Letter of Credit, and (b) if such Issuing Lender shall have been

reimbursed by Revolving Lenders pursuant to subsection 3.3C(i) for all or any

portion of such honored drawing, such Issuing Lender shall distribute to each

other Revolving Lender that has paid all amounts payable by it under subsection

3.3C(i) with respect to such honored drawing such other Revolving Lender’s Pro

Rata Share of the Revolving Loan Commitment any interest received by such

Issuing Lender in respect of that portion of such honored drawing so reimbursed

by Revolving Lenders for the period from the date on which such Issuing Lender

was so reimbursed by Revolving Lenders to but excluding the date on which such

portion of such honored drawing is reimbursed by Borrower.  Any such distribution shall be made to a

Revolving Lender at its primary address set forth below its name on the

appropriate signature page hereof or at such other address as such Revolving

Lender may request.

 

3.4          Obligations Absolute.

 

The obligation of

Borrower to reimburse each Issuing Lender for drawings honored under the

Letters of Credit issued by it and to repay any Revolving Loans made by

Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving

Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and

shall be paid strictly in accordance with the terms of this Agreement under all

circumstances including any of the following circumstances:

 

(i)            any

lack of validity or enforceability of any Letter of Credit;

 

(ii)           the

existence of any claim, set-off, defense or other right which Borrower or any

Lender may have at any time against a beneficiary or any transferee of any

Letter of Credit (or any Persons for whom any such transferee may be acting),

any Issuing Lender or other Lender or any other Person or, in the case of a

Lender, against Borrower, whether in connection with this Agreement, the

transactions contemplated herein or any unrelated transaction (including any

underlying transaction between Borrower or one of its Subsidiaries and the

beneficiary for which any Letter of Credit was procured);

 

(iii)          any

draft or other document presented under any Letter of Credit proving to be

forged, fraudulent, invalid or insufficient in any respect or any statement

therein being untrue or inaccurate in any respect;

 

(iv)          payment

by the applicable Issuing Lender under any Letter of Credit against presentation

of a draft or other document which does not substantially comply with the terms

of such Letter of Credit;

 

(v)           any

adverse change in the business, operations, properties, assets, condition

(financial or otherwise) or prospects of Borrower or any of its Subsidiaries;

 

(vi)          any

breach of this Agreement or any other Loan Document by any party thereto;

 

(vii)         any

other circumstance or happening whatsoever, whether or not similar to any of

the foregoing; or

 

(viii)        the

fact that an Event of Default or a Potential Event of Default shall have

occurred and be continuing;

 

provided, in each case, that payment by the

applicable Issuing Lender under the applicable Letter of Credit shall not have

constituted gross negligence or willful misconduct of such Issuing Lender under

the circumstances in question (as determined by a final judgment of a court of

competent jurisdiction).

 

3.5          Indemnification; Nature of Issuing

Lenders’ Duties.

 

A.            Indemnification.  In addition to amounts payable as provided

in subsection 3.6, Borrower hereby agrees to protect, indemnify, pay and save

harmless each Issuing Lender and each other Lender from and against any and all

claims, demands, liabilities, damages, losses, costs, charges and expenses

(including reasonable fees, expenses and disbursements of outside counsel and

allocated costs of internal counsel) which such Issuing Lender and each other

Lender may incur or be subject to as a consequence, direct or indirect, of

(i) the issuance of any Letter of Credit by such Issuing Lender, other

than as a result of (a) the gross negligence or willful misconduct of such

Issuing Lender as determined by a final judgment of a court of competent

jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor

by such Issuing Lender of a proper demand for payment made under any Letter of

Credit issued by it or (ii) the failure of such Issuing Lender to honor a

drawing under any such Letter of Credit as a result of any act or omission,

whether rightful or wrongful, of any present or future de jure or de facto

Government Authority (all such acts or omissions herein called “Governmental Acts”).

 

B.            Nature

of Issuing Lenders’ Duties.  As between Borrower and any Issuing Lender,

Borrower assumes all risks of the acts and omissions of, or misuse of the

Letters of Credit issued by such Issuing Lender by, the respective

beneficiaries of such Letters of Credit. 

In furtherance and not in limitation of the foregoing, such Issuing

Lender shall not be responsible for: 

(i) the form, validity, sufficiency, accuracy, genuineness or legal

effect of any document submitted by any party in connection with the

application for and issuance of any such Letter of Credit, even if it should in

fact prove to be in any or all respects invalid, insufficient, inaccurate,

fraudulent or forged; (ii) the validity or sufficiency of any instrument

transferring or assigning or purporting to transfer or assign any such Letter

of Credit or the rights or benefits thereunder or proceeds thereof, in whole or

in part, which may prove to be invalid or ineffective for any reason;

(iii) failure of the beneficiary of any such Letter of Credit to comply

fully with any conditions required in order to draw upon such Letter of Credit;

(iv) errors, omissions, interruptions or delays in transmission or

delivery of any messages, by mail, cable, telegraph, telex or otherwise,

whether or not they be in cipher; (v) errors in interpretation of

technical terms; (vi) any loss or delay in the transmission or otherwise of any

document required in order to make a drawing under any such Letter of Credit or

of the proceeds thereof; (vii) the misapplication by the beneficiary of any

such Letter of Credit of the proceeds of any drawing under such Letter of

Credit; or (viii) any consequences arising from causes beyond the control of

such Issuing Lender, including any Governmental Acts, and none of the above

shall affect or impair, or prevent the vesting of, any of such Issuing Lender’s

or any other Lender’s rights or powers hereunder.

 

In furtherance and

extension and not in limitation of the specific provisions set forth in the

first paragraph of this subsection 3.5B, any action taken or omitted by any

Issuing Lender under or in connection with the Letters of Credit issued by it

or any documents and certificates delivered thereunder, if taken or omitted in

good faith, shall not put such Issuing Lender or any other Lender under any

resulting liability to Borrower.

 

Notwithstanding

anything to the contrary contained in this subsection 3.5, Borrower shall retain

any and all rights it may have against any Issuing Lender for any liability

arising solely out of the gross negligence or willful misconduct of such

Issuing Lender, as determined by a final judgment of a court of competent

jurisdiction.

 

3.6          Increased Costs and Taxes Relating to Letters of Credit.

 

Subject to the

provisions of subsection 2.7B (which shall be controlling with respect to the

matters covered thereby), if any Issuing Lender or Lender shall determine

(which determination shall, absent manifest error, be final and conclusive and

binding upon all parties hereto) that any law, treaty or governmental rule,

regulation or order, or any change therein or in the interpretation,

administration or application thereof (including the introduction of any new

law, treaty or governmental rule, regulation or order), or any determination of

a court or governmental authority, in each case that becomes effective after

the date hereof, or compliance by any Issuing Lender or Lender with any

guideline, request or directive issued or made after the date hereof by any

central bank or other governmental or quasi-governmental authority (whether or

not having the force of law):

 

(i)            subjects

such Issuing Lender or Lender (or its applicable lending or letter of credit office)

to any additional Tax (other than any Tax on the overall net income of such

Issuing Lender or Lender) with respect to the issuing or maintaining of any

Letters of Credit or the purchasing or maintaining of any participations

therein or any other obligations under this Section 3, whether directly or by

such being imposed on or suffered by any particular Issuing Lender;

 

(ii)           imposes,

modifies or holds applicable any reserve (including any marginal, emergency,

supplemental, special or other reserve), special deposit, compulsory loan, FDIC

insurance or similar requirement in respect of any Letters of Credit issued by

any Issuing Lender or participations therein purchased by any Lender; or

 

(iii)          imposes

any other condition (other than with respect to a Tax matter) on or affecting

such Issuing Lender or Lender (or its applicable lending or letter of credit

office) regarding this Section 3 or any Letter of Credit or any participation

therein;

 

and the result of

any of the foregoing is to increase the cost to such Issuing Lender or Lender

of agreeing to issue, issuing or maintaining any Letter of Credit or agreeing

to purchase, purchasing or maintaining any participation therein or to reduce

any amount received or receivable by such Issuing Lender or Lender (or its

applicable lending or letter of credit office) with respect thereto; then, in

any case, Borrower shall promptly pay to such Issuing Lender or Lender, upon

receipt of the statement referred to in the next sentence, such additional

amount or amounts as may be necessary to compensate such Issuing Lender or

Lender for any such increased cost or reduction in amounts received or

receivable hereunder.  Such Issuing

Lender or Lender shall deliver to Borrower a written statement, setting forth

in reasonable detail the basis for calculating the additional amounts owed to

such Issuing Lender or Lender under this subsection 3.6, which statement shall

be conclusive and binding upon all parties hereto absent manifest error.

 

Section

4.              CONDITIONS TO LOANS AND

LETTERS OF CREDIT

 

The obligations of

Lenders to make Loans and the issuance of Letters of Credit hereunder are

subject to the satisfaction of the following conditions.

 

4.1          Conditions to Term Loans and Initial

Revolving Loans and Swing Line Loans.

 

The obligations of

Lenders to make the Term Loans and any Revolving Loans and Swing Line Loans to

be made on the Closing Date are, in addition to the conditions precedent

specified in subsection 4.2, subject to prior or concurrent satisfaction of the

following conditions:

 

A.            Loan Party Documents. 

On or before the Closing Date, Borrower shall, and shall cause each

other Loan Party to, deliver to Lenders (or to Administrative Agent with

sufficient originally executed copies, where appropriate, for each Lender) the

following with respect to Borrower or such Loan Party, as the case may be,

each, unless otherwise noted, dated the Closing Date:

 

(i)            Copies

of the Organizational Documents of such Person, certified by the Secretary of

State of its jurisdiction of organization or, if such document is of a type

that may not be so certified, certified by the secretary or similar officer of

the applicable Loan Party, together with a good standing certificate from the

Secretary of State of its jurisdiction of organization and each other state in

which such Person is qualified to do business (or, in the case of Borrower,

each of the following states:  Delaware,

South Dakota, New York, Florida, California, Illinois, Nevada, Hawaii, Texas,

Georgia, New Jersey, Arizona, Washington, Colorado and Louisiana) and, to the

extent generally available, a certificate or other evidence of good standing as

to payment of any applicable franchise or similar taxes from the appropriate

taxing authority of each of such jurisdictions, each dated a recent date prior

to the Closing Date;

 

(ii)           Resolutions

of the Governing Body of such Person approving and authorizing the execution,

delivery and performance of the Loan Documents to which it is a party,

certified as of the Closing Date by the secretary or similar Officer of such

Person as being in full force and effect without modification or amendment;

 

(iii)          Signature

and incumbency certificates of the Officers of such Person executing the Loan

Documents to which it is a party;

 

(iv)          Executed

originals of the Loan Documents to which such Person is a party; and

 

(v)           Such

other documents as Administrative Agent may reasonably request.

 

B.            No Material Adverse Effect.  Since

December 31, 2000, no Material Adverse Effect (in the reasonable opinion of

Administrative Agent) shall have occurred.

 

C.            Fees.  Borrower

shall have paid to Administrative Agent, for distribution (as appropriate) to

Administrative Agent and Lenders, the fees payable on the Closing Date referred

to in subsection 2.3.

 

D.            Corporate and Capital Structure, and Ownership.

 

(i)            Corporate

Structure.  The corporate

organizational structure of Borrower and its Subsidiaries shall be as set forth

on Schedule 4.1D annexed hereto.

 

(ii)           Capital

Structure and Ownership.  The

capital structure and ownership of Borrower and its Subsidiaries shall be as

set forth on Schedule 4.1D annexed hereto.

 

E.             Representations

and Warranties; Performance of Agreements.  Borrower shall have delivered to

Administrative Agent an Officers’ Certificate, in form and substance

satisfactory to Administrative Agent, to the effect that the representations

and warranties in Section 5 are true, correct and complete in all material

respects on and as of the Closing Date to the same extent as though made on and

as of that date (or, to the extent such representations and warranties

specifically relate to an earlier date, that such representations and

warranties were true, correct and complete in all material respects on and as

of such earlier date) and that Borrower shall have performed in all material

respects all agreements and satisfied all conditions that this Agreement

provides shall be performed or satisfied by it on or before the Closing Date

except as otherwise disclosed to and agreed to in writing by Administrative

Agent; provided that where a representation and warranty, covenant or

condition is qualified as to materiality, such materiality qualifier shall be

disregarded for purposes of this condition.

 

F.             Financial Statements. 

On or before the Closing Date, Lenders shall have received from Borrower

audited and unaudited financial statements of Borrower and its Subsidiaries as

set forth in Schedule 4.1F.

 

G.            Opinions of Counsel to Loan Parties. 

Lenders shall have received originally executed copies of (i) one or

more favorable written opinions of Pillsbury Winthrop LLP, counsel for Loan

Parties, dated as of the Closing Date, in the form set forth in Exhibit XV-A

annexed hereto; and (ii) one or more favorable written opinions of Daniel P.

Johnson, Esq., general counsel of Borrower, dated as of the Closing Date, in

the form set forth in Exhibit XV-B annexed hereto.

 

H.            Opinions of Administrative Agent’s

Counsel.  Lenders shall have received originally

executed copies of one or more favorable written opinions of O’Melveny &

Myers LLP, counsel to Administrative Agent, dated as of the Closing Date,

substantially in the form of Exhibit XVI annexed hereto.

 

I.              Solvency Assurances. 

On the Closing Date, Administrative Agent and Lenders shall have

received an Officers’ Certificate of Borrower dated the Closing Date,

substantially in the form of Exhibit XVII annexed hereto and with

appropriate attachments, in each case demonstrating that, after giving effect

to the consummation of the transactions contemplated by the Loan Documents,

Borrower and the Subsidiary Guarantors, taken as a whole, will be Solvent.

 

J.             Evidence of Insurance. 

Administrative Agent shall have received a certificate from Borrower’s

insurance broker or other evidence satisfactory to it that all insurance

required to be maintained pursuant to subsection 6.4 is in full force and

effect and that Administrative Agent on behalf of Lenders has been named as

additional insured and/or loss payee thereunder to the extent required under

subsection 6.4.

 

K.            Necessary

Governmental Authorizations and Consents; Expiration of Waiting Periods, Etc.  Borrower shall have obtained

all Governmental Authorizations and all consents of other Persons, in each

case that are necessary or advisable in connection with the transactions

contemplated by the Loan Documents and the continued operation of the business

conducted by Borrower and its Subsidiaries in substantially the same manner as

conducted prior to the Closing Date. 

Each such Governmental Authorization or consent shall be in full force

and effect, except in a case where the failure to obtain or maintain a

Governmental Authorization or consent, either individually or in the aggregate,

could not reasonably be expected to result in a Material Adverse Effect.  All applicable waiting periods shall have

expired without any action being taken or threatened by any competent authority

that would restrain, prevent or otherwise impose adverse conditions on the

transactions contemplated by the Loan Documents or the financing thereof.  No action, request for stay, petition for

review or rehearing, reconsideration, or appeal with respect to any of the

foregoing shall be pending, and the time for any applicable Government

Authority to take action to set aside its consent on its own motion shall have

expired.

 

L.            Environmental

Reports. 

Administrative Agent shall have received reports and other information,

in form, scope and substance satisfactory to Administrative Agent, regarding

environmental matters relating to Borrower and its Subsidiaries and the Closing

Date Mortgaged Property, which reports shall include a draft of a Phase I

environmental assessment for the Closing Date Mortgaged Property which (i)

conforms to the ASTM Standard Practice for Environmental Site Assessments:

Phase I Environmental Site Assessment Process, E 1527; (ii) was conducted no

more than six months prior to the Closing Date by one or more environmental

consulting firms reasonably satisfactory to Administrative Agent; (iii)

includes an assessment of asbestos-containing materials at such Closing Date

Mortgaged Property; and (iv) includes an estimate of the reasonable worst-case

cost of investigating and remediating any Hazardous Materials Activity

identified in such Phase I environmental assessments as giving rise to an

actual or potential violation of any Environmental Law or as presenting a

material risk of giving rise to a material Environmental Claim.

 

M.           Security

Interests in Personal and Mixed Property.  To the extent not otherwise satisfied

pursuant to subsection 4.1N, Administrative Agent shall have received evidence

satisfactory to it that Borrower and Subsidiary Guarantors shall have taken or

caused to be taken all such actions, executed and delivered or caused to be

executed and delivered all such agreements, documents and instruments, and made

or caused to be made all such filings and recordings (other than the filing or

recording of items described in clauses (iii), (iv), (v) and (vi) below) that

may be necessary or, in the reasonable opinion of Administrative Agent, desirable

in order to create in favor of Administrative Agent, for the benefit of

Lenders, a valid and (upon such filing and recording) perfected First Priority

Lien except for existing Liens in the entire personal and mixed property

Collateral, subject, in the case of Deposit Accounts, to the principal balance

threshold set forth in subsection 4.1M(vii). 

Such actions shall include the following:

 

(i)            Schedules

to Collateral Documents.  Delivery

to Administrative Agent of accurate and complete schedules to all of the

applicable Collateral Documents.

 

(ii)           Stock

Certificates and Instruments. 

Delivery to Administrative Agent of (a) certificates (which certificates

shall be accompanied by irrevocable undated stock powers, duly endorsed in

blank and otherwise satisfactory in form and substance to Administrative Agent)

representing all Capital Stock pledged pursuant to the Security Agreement (it

being acknowledged and agreed that Borrower shall not be required to deliver

stock certificates with respect to AmNet except as may be required after the

Closing Date in accordance with subsection 

6.8); and (b) all promissory notes or other instruments (duly endorsed,

where appropriate, in a manner satisfactory to Administrative Agent) evidencing

any Collateral.

 

(iii)          Lien Searches and UCC Termination

Statements.  Delivery to

Administrative Agent of (a) the results of a recent search, by a Person

satisfactory to Administrative Agent, of all effective UCC financing statements

and fixture filings and all judgment and tax lien filings which may have been

made with respect to any personal or mixed property of any Loan Party, together

with copies of all such filings disclosed by such search, and (b) UCC

termination statements duly executed by all applicable Persons for filing in all

applicable jurisdictions as may be necessary to terminate any effective UCC

financing statements or fixture filings disclosed in such search (other than

any such financing statements or fixture filings in respect of Liens permitted

to remain outstanding pursuant to the terms of this Agreement).

 

(iv)          UCC Financing Statements and

Fixture Filings.  Delivery to

Administrative Agent of UCC financing statements and, where appropriate,

fixture filings, duly executed by each applicable Loan Party with respect to all

personal and mixed property Collateral of such Loan Party, for filing in all

jurisdictions as may be necessary or, in the opinion of Administrative Agent,

desirable to perfect the security interests created in such Collateral

pursuant to the Collateral Documents.

 

(v)           PTO Cover Sheets, Etc.  Delivery to Administrative Agent of all

cover sheets or other documents or instruments required to be filed with the

PTO in order to create or perfect Liens in respect of any registered IP

Collateral.

 

(vi)          Copyright Mortgages.  Delivery to Administrative Agent of

Copyright Mortgages or other documents or instruments required to be filed with

the Copyright Office in order to create or perfect Liens in respect of any

registered IP Collateral.

 

(vii)         Deposit Account Bank Control

Agreements.  Delivery to

Administrative Agent of control agreements as required under subsection 6.11

with each of the financial institutions with which Borrower or any of its

Subsidiaries maintains a Deposit Account with a principal balance in excess of

$2,500,000 sufficient to perfect the security interests created in such

Collateral pursuant to the Collateral Documents.

 

N.            Closing

Date Mortgage; Closing Date Mortgage Policy; Etc.  Administrative Agent shall have received

from Borrower and each applicable Subsidiary Guarantor:

 

(i)            Closing

Date Mortgage.  A fully executed and

notarized Mortgage (“Closing Date Mortgage”), in proper form for

recording in the appropriate place in the applicable jurisdiction, encumbering

the Real Property Asset listed in Schedule 4.1N annexed hereto (the

“Closing

Date Mortgaged Property”);

 

(ii)           Title

Insurance.  (a) Form 1970 ALTA

mortgagee title insurance policies or unconditional commitments therefor (the “Closing Date

Mortgage Policy”) issued by the Title Company with respect to the

Closing Date Mortgaged Property, in amounts not less than the respective

amounts designated therein with respect to the Closing Date Mortgaged Property,

insuring fee simple title to, or a valid leasehold interest in, the Closing Date

Mortgaged Property vested in such Loan Party and assuring Administrative Agent

that the Closing Date Mortgage creates valid and enforceable First Priority

mortgage Lien on the Closing Date Mortgaged Property encumbered thereby, which

Closing Date Mortgage Policy (1) shall include the following endorsements to

the extent available in the state where the Closing Date Mortgaged Property is

located: comprehensive, mechanics’ lien, variable rate, street address,

separate tax lot, survey, contiguity, zoning (ALTA 3.1), street access, usury,

subdivision map act, revolving credit, tie-in, creditors’ rights, doing

business, first loss and last dollar and any other matters reasonably requested

by Administrative Agent and (2) shall provide for affirmative insurance and

such reinsurance as Administrative Agent may reasonably request, all of the

foregoing in form and substance reasonably satisfactory to Administrative

Agent; and (b) evidence satisfactory to Administrative Agent that such Loan

Party has (i) delivered to the Title Company all certificates and affidavits

required by the Title Company in connection with the issuance of the Closing

Date Mortgage Policy and (ii) paid to the Title Company or to the appropriate

governmental authorities all expenses and premiums of the Title Company in

connection with the issuance of the Closing Date Mortgage Policy and all

recording and stamp taxes (including mortgage recording and intangible taxes)

payable in connection with recording the Closing Date Mortgage in the

appropriate real estate records;

 

(iii)          Title Report.  With respect to the Closing Date Mortgaged

Property, a title report issued by the Title Company with respect thereto,

dated not more than 30 days prior to the Closing Date and satisfactory in form

and substance to Administrative Agent;

 

(iv)          Copies

of Documents Relating to Title Exceptions. 

Copies of all recorded documents listed as exceptions to title or

otherwise referred to in the Closing Date Mortgage Policy or in the title

reports delivered pursuant to subsection 4.1N(iii);

 

(v)           Matters

Relating to Flood Hazard Properties. 

(a) Evidence, which may be in the form of a letter from an insurance

broker or a municipal engineer, as to whether (1) the Closing Date

Mortgaged Property is a Flood Hazard Property and (2) the community in

which any such Flood Hazard Property is located is participating in the

National Flood Insurance Program, (b) if there is a Flood Hazard Property, such

Loan Party’s written acknowledgement of receipt of written notification from Administrative

Agent (1) as to the existence of such Flood Hazard Property and

(2) as to whether the community in which such Flood Hazard Property is

located is participating in the National Flood Insurance Program, and (c) if

such Flood Hazard Property is located in a community that participates in the

National Flood Insurance Program, evidence that Borrower has obtained flood

insurance in respect of such Flood Hazard Property to the extent required under

the applicable regulations of the Board of Governors of the Federal Reserve

System; and

 

(vi)          Environmental

Indemnity.  An environmental

indemnity agreement, satisfactory in form and substance to Administrative Agent

and its counsel, with respect to the indemnification of Administrative Agent

and Lenders for any liabilities that may be imposed on or incurred by any of

them as a result of any Hazardous Materials Activity.

 

O.            Matters

Relating to Existing Indebtedness of Borrower and its Subsidiaries. 

On the Closing Date, Borrower and its Subsidiaries shall have (i) repaid

in full all Indebtedness outstanding under the Existing Credit Agreement (the

aggregate principal amount of which Indebtedness shall not exceed

$130,000,000); (ii) terminated any commitments to lend or make other

extensions of credit thereunder; (iii) delivered to Administrative Agent

all documents or instruments necessary to release all Liens securing

Indebtedness or other obligations of Borrower and its Subsidiaries thereunder;

and (iv) made arrangements satisfactory to Administrative Agent with respect to

the cancellation of any letters of credit outstanding thereunder or the

issuance of Letters of Credit to support the obligations of Borrower and its

Subsidiaries with respect thereto.

 

P.            Completion of Proceedings. 

All corporate and other proceedings taken or to be taken in connection

with the transactions contemplated hereby and all documents incidental thereto

not previously found acceptable by Administrative Agent, acting on behalf of

Lenders, and its counsel shall be satisfactory in form and substance to

Administrative Agent and such counsel, and Administrative Agent and such

counsel shall have received all such counterpart originals or certified copies

of such documents as Administrative Agent may reasonably request.

 

Q.            Maximum Consolidated Senior Secured Leverage Ratio; Maximum Consolidated

Total Leverage Ratio and Minimum Guest Pay-Rooms. 

On the Closing Date, Administrative Agent shall have received an

Officers’ Certificate executed by the chief financial officer of Borrower,

dated the Closing Date, with appropriate attachments, demonstrating that, after

giving effect to the consummation transactions contemplated by this Agreement,

(i) the Consolidated Senior Secured Leverage Ratio does not exceed 2.25:1.00;

(ii) the Consolidated Total Leverage Ratio does not exceed 4.75:1.00; and (iii)

the number of Guest Pay-Rooms is not less than 700,000.

 

4.2          Conditions

to All Loans.

 

The obligations of

Lenders to make Loans on each Funding Date are subject to the following further

conditions precedent:

 

A.            Administrative Agent shall have received before that

Funding Date, in accordance with the provisions of subsection 2.1B, an

originally executed Notice of Borrowing, in each case signed by a duly

authorized Officer of Borrower.

 

B.            As

of that Funding Date:

 

(i)            The

representations and warranties contained herein and in the other Loan Documents

shall be true, correct and complete in all material respects on and as of that

Funding Date to the same extent as though made on and as of that date, except

to the extent such representations and warranties specifically relate to an

earlier date, in which case such representations and warranties shall have been

true, correct and complete in all material respects on and as of such earlier

date; provided, that where a representation and warranty is already

qualified as to materiality, such materiality qualifier shall be disregarded

for purposes of this condition.

 

(ii)           No

event shall have occurred and be continuing or would result from the

consummation of the borrowing contemplated by such Notice of Borrowing that

would constitute an Event of Default or a Potential Event of Default.

 

(iii)          Each

Loan Party shall have performed in all material respects all agreements and

satisfied all conditions which this Agreement provides shall be performed or

satisfied by it on or before that Funding Date.

 

(iv)          No

order, judgment or decree of any arbitrator or Government Authority shall

purport to enjoin or restrain any Lender from making the Loans to be made by it

on that Funding Date.

 

(v)           The

making of the Loans requested on such Funding Date shall not violate any law

including Regulation T, Regulation U or Regulation X of the

Board of Governors of the Federal Reserve System.

 

(vi)          No

injunction or other restraining order shall have been issued and no hearing to

cause an injunction or other restraining order to be issued shall be pending or

noticed with respect to any action, suit or proceeding seeking to enjoin or

otherwise prevent the consummation of, or to recover any damages or obtain

relief as a result of, the transactions contemplated by this Agreement or the

making of Loans hereunder.

 

4.3          Conditions

to Letters of Credit.

 

The issuance of

any Letter of Credit hereunder (whether or not the applicable Issuing Lender is

obligated to issue such Letter of Credit) and the renewal of any Letter of

Credit hereunder are each subject to the following conditions precedent:

 

A.            On or before the date of issuance of the initial

Letter of Credit pursuant to this Agreement, the initial Loans shall have been

made.

 

B.            On or before the date of issuance of such Letter of

Credit, Administrative Agent shall have received, in accordance with the

provisions of subsection 3.1, a Notice of Issuance (or a facsimile copy

thereof) in each case signed by a duly authorized Officer of Borrower, together

with all other information specified in subsection 3.1 and such other documents

or information as the applicable Issuing Lender may reasonably require in

connection with the issuance of such Letter of Credit.

 

C.            On the date of issuance of such Letter of Credit, all

conditions precedent described in subsection 4.2B shall be satisfied to the

same extent as if the issuance of such Letter of Credit were the making of a

Loan and the date of issuance of such Letter of Credit were a Funding Date.

 

Section 5.              BORROWER’S

REPRESENTATIONS AND WARRANTIES

 

In order to induce

Lenders to enter into this Agreement and to make the Loans, to induce Issuing

Lenders to issue Letters of Credit and to induce other Lenders to purchase

participations therein, Borrower represents and warrants to each Lender, on the

date of this Agreement, on each Funding Date and on the date of issuance of

each Letter of Credit and the renewal of any Letter of Credit hereunder, that

the following statements are true, correct and complete:

 

5.1          Organization,

Powers, Qualification, Good Standing, Business and Subsidiaries.

 

A.            Organization and Powers. 

Each Loan Party is a corporation, partnership, trust or limited

liability company duly organized, validly existing and in good standing under

the laws of its jurisdiction of organization as specified in Schedule 5.1

annexed hereto.  Each Loan Party has all

requisite corporate power and authority to own and operate its properties, to

carry on its business as now conducted and as proposed to be conducted, to

enter into the Loan Documents to which it is a party and to carry out the

transactions contemplated thereby.

 

B.            Qualification and Good Standing. 

Each Loan Party is qualified to do business and in good standing in

every jurisdiction where its assets are located and wherever necessary to carry

out its business and operations, except in jurisdictions where the failure to

be so qualified or in good standing has not had and could not reasonably be

expected to result in a Material Adverse Effect.

 

C.            Conduct of Business. 

Borrower and its Subsidiaries are engaged only in the businesses

permitted to be engaged in pursuant to subsection 7.13.

 

D.            Subsidiaries. 

All of the Subsidiaries of Borrower and their jurisdictions of

organization are identified in Schedule 5.1 annexed hereto, as said

Schedule 5.1 may be supplemented from time to time pursuant to the

provisions of subsection 6.1(xiii).  The

Capital Stock of Borrower and each of the Subsidiaries of Borrower identified

in Schedule 5.1 annexed hereto (as so supplemented) are duly

authorized, validly issued, fully paid and nonassessable and none of such

Capital Stock constitutes Margin Stock. 

Each of the Subsidiaries of Borrower identified in Schedule 5.1

annexed hereto (as so supplemented) is a corporation, partnership, trust or

limited liability company duly organized, validly existing and in good standing

under the laws of its respective jurisdiction of organization set forth

therein, has all requisite power and authority to own and operate its

properties and to carry on its business as now conducted and as proposed to be

conducted, to enter into the Loan Documents to which it is a party and to carry

out the transactions contemplated thereby, and is qualified to do business and

in good standing in every jurisdiction where its assets are located and

wherever necessary to carry out its business and operations, in each case

except where failure to be so qualified or in good standing or a lack of such

power and authority has not had and could not reasonably be expected to result

in a Material Adverse Effect.  Schedule 5.1

annexed hereto (as so supplemented) correctly sets forth, as of the Closing

Date, the ownership interest of Borrower and each of its Subsidiaries in each

of the Subsidiaries of Borrower identified therein.  None of AmNet, ResNet Inc. or ResNet LLC are actively conducting

business.  Neither AmNet nor ResNet LLC

owns any assets or has any income and Borrower intends to dissolve AmNet

promptly following the Closing Date. 

ResNet Inc. does not have any income and its sole assets consist of (i)

95% of the membership interests in ResNet LLC; and (ii) certain promissory

notes issued by Global Interactive Communications Corporation and Global

Interactive Technologies Corporation as set forth on Schedule 7.3, each

of which has been pledged by ResNet Inc. to Borrower.

 

5.2          Authorization of Borrowing, etc.

 

A.            Authorization of Borrowing. 

The execution, delivery and performance of the Loan Documents have been

duly authorized by all necessary action on the part of each Loan Party that is

a party thereto.

 

B.            No Conflict. 

The execution, delivery and performance by Loan Parties of the Loan

Documents to which they are parties and the consummation of the transactions

contemplated by the Loan Documents do not and will not (i) violate any

provision of any law or any governmental rule or regulation applicable to

Borrower or any of its Subsidiaries, the Organizational Documents of Borrower

or any of its Subsidiaries or any order, judgment or decree of any court or

other Government Authority binding on Borrower or any of its Subsidiaries,

(ii) conflict with, result in a breach of or constitute (with due notice

or lapse of time or both) a default under any Contractual Obligation of

Borrower or any of its Subsidiaries, (iii) result in or require the

creation or imposition of any Lien upon any of the properties or assets of

Borrower or any of its Subsidiaries (other than any Liens created under any of

the Loan Documents in favor of Administrative Agent on behalf of Lenders),

(iv) require any approval of stockholders or any approval or consent of

any Person under any Contractual Obligation of Borrower or any of its

Subsidiaries, except for such approvals or consents which will be obtained on

or before the Closing Date and disclosed in writing to Lenders or (v) conflict

with, result in a breach of or constitute (with due notice or lapse of time or

both) a default under any other contractual obligation of Borrower or any of

its Subsidiaries.  Any borrowing under

this Agreement will not result in any violation of any debt incurrence test or

other applicable covenant under the Senior Note Documents.

 

C.            Governmental Consents. 

The execution, delivery and performance by Loan Parties of the Loan

Documents to which they are parties and the consummation of the transactions

contemplated by the Loan Documents do not and will not require registration

with, consent or approval of, or notice to, or other action to, with or by, any

Governmental Authority.

 

D.            Binding Obligation. 

Each of the Loan Documents has been duly executed and delivered by each

Loan Party that is a party thereto and is the legally valid and binding

obligation of such Loan Party, enforceable against such Loan Party in

accordance with its respective terms, except as may be limited by bankruptcy,

insolvency, reorganization, moratorium or similar laws relating to or limiting

creditors’ rights generally or by equitable principles (regardless of whether

enforcement is sought in a proceeding in equity or at law).

 

5.3          Financial

Condition.

 

The financial

statements delivered to Lenders pursuant to subsection 4.1F were prepared in

conformity with GAAP and fairly present, the financial position (on a

consolidated basis) of the entities described in such financial statements as

at the respective dates thereof and the results of operations and cash flows

(on a consolidated basis) of the entities described therein for each of the

periods then ended, subject, in the case of any such unaudited financial

statements, to changes resulting from audit and normal year-end

adjustments.  No Loan Party has (and

will not have following the funding of the initial Loans) any obligation,

liability or commitment, direct or contingent, that, as of the Closing Date, is

not reflected in the foregoing financial statements or the notes thereto and,

as of any Funding Date subsequent to the Closing Date, is not reflected in the

most recent financial statements delivered to Lenders pursuant to subsection

6.1 or the notes thereto and that, in any such case, is material in relation to

the business, operations, properties, assets, condition (financial or

otherwise) or prospects of Borrower or any of its Subsidiaries.

 

5.4          No Material Adverse Change; No Restricted

Junior Payments.

 

Since

December 31, 2000, no event or change has occurred that has resulted in or

evidences, either in any case or in the aggregate, a Material Adverse Effect.

 

5.5          Title to

Properties; Liens; Real Property; Intellectual Property.

 

A.            Title to Properties; Liens. 

Borrower and its Subsidiaries have (i) good, sufficient and legal title

to (in the case of fee interests in real property), (ii) valid leasehold

interests in (in the case of leasehold interests in real or personal property),

or (iii) good title to (in the case of all other personal property), all of

their respective properties and assets reflected in the financial statements

referred to in subsection 5.3 or in the most recent financial statements

delivered pursuant to subsection 6.1, in each case except for assets disposed

of since the date of such financial statements in the ordinary course of

business or as otherwise permitted under subsection 7.7.  Except as permitted by this Agreement, all

such properties and assets are free and clear of Liens.

 

B.            Real Property. 

As of the Closing Date, (i) Schedule 5.5B(i) annexed hereto

contains a true, accurate and complete list of all fee interests in any Real

Property Assets; and (ii) Schedule 5.5B(ii) annexed hereto contains a

true, accurate and complete list of all leases, subleases or assignments of

leases (together with all amendments, modifications, supplements, renewals or

extensions of any thereof) affecting each Real Property Asset with respect to

which the aggregate amount of all rents payable during any one Fiscal Year

exceeds $25,000, regardless of whether a Loan Party is the landlord or tenant

(whether directly or as an assignee or successor in interest) under such lease,

sublease or assignment.  Each agreement

listed in Schedule 5.5B(ii) is in full force and effect and Borrower

does not have knowledge of any default that has occurred and is continuing

thereunder, and each such agreement constitutes the legally valid and binding

obligation of each applicable Loan Party, enforceable against such Loan Party

in accordance with its terms, except as enforcement may be limited by

bankruptcy, insolvency, reorganization, moratorium or similar laws relating to

or limiting creditors’ rights generally or by equitable principles relating to

enforceability.

 

C.            Intellectual Property.  As of the

Closing Date, Borrower and its Subsidiaries own or have the right to use, all

Intellectual Property used in the conduct of their business, except where the

failure to own or have such right to use, individually or in the aggregate

could not reasonably be expected to result in a Material Adverse Effect.  No claim has been asserted and is pending by

any Person challenging or questioning the use of any such Intellectual Property

or the validity or effectiveness of any such Intellectual Property, nor does

Borrower know of any valid basis for any such claim except for such claims that

individually or in the aggregate could not reasonably be expected to result in

a Material Adverse Effect.  The use of

such Intellectual Property by Borrower and its Subsidiaries does not infringe

on the rights of any Person, except for such claims and infringements that,

individually or in the aggregate, could not reasonably be expected to result in

a Material Adverse Effect.  All federal

and state and all foreign registrations of and applications for Intellectual

Property that are owned or licensed by Borrower or any of its Subsidiaries on

the Closing Date are described on Schedule 5.5C annexed hereto.

 

5.6          Litigation;

Adverse Facts.

 

There are no

Proceedings (whether or not purportedly on behalf of Borrower or any of its

Subsidiaries) at law or in equity, or before or by any court or other

Government Authority (including any Environmental Claims) that are pending or,

to the knowledge of Borrower, threatened against or affecting Borrower or any

of its Subsidiaries or any property of Borrower or any of its Subsidiaries and

that individually or in the aggregate, could reasonably be expected to result

in a Material Adverse Effect.

 

5.7          Payment of Taxes.

 

Except to the

extent permitted by subsection 6.3, all tax returns and reports of Borrower and

its Subsidiaries required to be filed by any of them have been timely filed,

and all taxes shown on such tax returns to be due and payable and all assessments,

fees and other governmental charges upon Borrower and its Subsidiaries and upon

their respective properties, assets, income, businesses and franchises that are

due and payable have been paid when due and payable.  Borrower knows of no material proposed tax assessment against

Borrower or any of its Subsidiaries that is not being actively contested by

Borrower or such Subsidiary in good faith and by appropriate proceedings; provided

that such reserves or other appropriate provisions, if any, as shall be

required in conformity with GAAP shall have been made or provided

therefor.  Borrower knows of no material

proposed tax assessment against Borrower or any of its Subsidiaries that is not

being actively contested by Borrower or such Subsidiary in good faith and by

appropriate proceedings.

 

5.8          Performance of Agreements; Materially Adverse

Agreements.

 

A.            Neither Borrower nor any of its Subsidiaries is in

default in the performance, observance or fulfillment of any of the

obligations, covenants or conditions contained in any of its Contractual

Obligations, and no condition exists that, with the giving of notice or the

lapse of time or both, would constitute such a default, except where the

consequences, direct or indirect, of such default or defaults, if any,

individually or in the aggregate, could not reasonably be expected to have a

Material Adverse Effect.

 

B.            Neither Borrower nor any of its Subsidiaries is a

party to or is otherwise subject to any agreements or instruments or any

charter or other internal restrictions or any provision of any applicable law,

rule or regulation which, individually or in the aggregate, could reasonably be

expected to result in a Material Adverse Effect.

5.9          Governmental Regulation.

 

Neither

Borrower  nor any of its Subsidiaries is

subject to regulation under the Public Utility Holding Company Act of 1935, the

Federal Power Act, the Interstate Commerce Act or the Investment Company Act of

1940 or under any other federal or state statute or regulation which may limit

its ability to incur Indebtedness or which may otherwise render all or any

portion of the Obligations unenforceable.

 

5.10        Securities Activities.

 

A.            Neither Borrower nor any of its Subsidiaries is

engaged principally, or as one of its important activities, in the business of

extending credit for the purpose of purchasing or carrying any Margin Stock.

 

B.            Following application of the proceeds of each Loan,

not more than 25% of the value of the assets (either of Borrower only or of

Borrower and its Subsidiaries on a consolidated basis) subject to the

provisions of subsection 7.2 or 7.7 or subject to any restriction contained in

any agreement or instrument, between Borrower and any Lender or any Affiliate

of any Lender, relating to Indebtedness and within the scope of subsection 8.2,

will be Margin Stock.

 

5.11        Employee Benefit Plans.

 

A.            Borrower, each of its Subsidiaries and each of their

respective ERISA Affiliates are in compliance in all material respects with all

applicable provisions and requirements of ERISA and the regulations and

published interpretations thereunder with respect to each Employee Benefit

Plan, and have performed in all material respects all of their obligations

under each Employee Benefit Plan.  Each

Employee Benefit Plan that is intended to qualify under Section 401(a) of the

Internal Revenue Code is so qualified.

 

B.            No ERISA Event has occurred or is reasonably expected

to occur, except for events that individually or in the aggregate could not

reasonably be expected to result in a Material Adverse Effect.

 

C.            Except to the extent required under Section 4980B of

the Internal Revenue Code or as reported in Borrower’s financial statements, no

Employee Benefit Plan provides health or welfare benefits (through the purchase

of insurance or otherwise) for any retired or former employee of Borrower, any

of its Subsidiaries or any of their respective ERISA Affiliates.

 

D.            As of the most recent valuation date for any Pension

Plan, the accumulated benefit obligation, individually or in the aggregate for

all Pension Plans (excluding for purposes of such computation any Pension Plans

with respect to which assets exceed the accumulated benefit obligation), does

not exceed the fair market value of the assets of such Pension Plans by more

than $2,500,000.

 

E.             As of the most recent valuation date for each

Multiemployer Plan for which the actuarial report is available, the potential

liability of Borrower, its Subsidiaries and their respective ERISA Affiliates

for a complete withdrawal from such Multiemployer Plan (within the meaning of

Section 4203 of ERISA), when aggregated with such potential liability for a

complete withdrawal from all Multiemployer Plans, based on information

available pursuant to Section 4221(e) of ERISA, does not exceed $2,500,000.

 

5.12        Certain Fees.

 

No broker’s or

finder’s fee or commission will be payable (other than any fees or commissions

payable pursuant to any commitment or fee letter between Co-Lead Arrangers and

Borrower with respect to the transactions contemplated by the Loan Documents)

with respect to this Agreement or any of the transactions contemplated by the

Loan Documents, and Borrower hereby indemnifies Lenders against, and agrees

that it will hold Lenders harmless from, any claim, demand or liability for any

such broker’s or finder’s fees alleged to have been incurred in connection

herewith or therewith and any expenses (including reasonable fees, expenses and

disbursements of counsel) arising in connection with any such claim, demand or

liability.

 

5.13        Environmental

Protection.

 

(i)            Neither

Borrower nor any of its Subsidiaries nor any of their respective Facilities or

operations are subject to any outstanding written order, consent decree or

settlement agreement with any Person relating to (a) any Environmental

Law, (b) any Environmental Claim, or (c) any Hazardous Materials Activity.

 

(ii)           Neither

Borrower nor any of its Subsidiaries has received any letter or request

for information under Section 104 of the Comprehensive Environmental

Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any

comparable state law.

 

(iii)          There

are and, to Borrower’s knowledge, have been no conditions, occurrences, or

Hazardous Materials Activities which could reasonably be expected to form the

basis of an Environmental Claim against Borrower or any of its Subsidiaries

which individually or in the aggregate has had or could reasonably be expected

to have a Material Adverse Effect.

 

(iv)          Neither

Borrower nor any of its Subsidiaries nor, to Borrower’s knowledge, any

predecessor of Borrower or any of its Subsidiaries has filed any notice under

any Environmental Law indicating past or present treatment of Hazardous

Materials at any Facility, and none of Borrower’s or any of its Subsidiaries’

operations involves the generation, transportation, treatment, storage or

disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any

state equivalent.

 

(v)           Compliance

with all current or reasonably foreseeable future requirements pursuant to or

under Environmental Laws would not, individually or in the aggregate, be

reasonably expected to result in a Material Adverse Effect.

 

(vi)          To

Borrower’s and each of its Subsidiary’s knowledge, all Real Property Assets and

all operations of Borrower and its Subsidiaries are in compliance, and have in

the last five years been in compliance, with Environmental Laws, except where

such failure to comply could not reasonably be expected to have a Material

Adverse Effect.

 

(vii)         No

judicial proceeding or action by any Governmental Authority is pending, or to

the knowledge of Borrower and each of its Subsidiaries, threatened, under any

Environmental Law to which Borrower or any of its Subsidiaries is or will be

named as a party.

 

Notwithstanding

anything in this subsection 5.13 to the contrary, no event or condition has

occurred or is occurring with respect to Borrower or any of its Subsidiaries

relating to any Environmental Law, any Release of Hazardous Materials, or any

Hazardous Materials Activity, including any matter disclosed on Schedule

5.13 annexed hereto, which individually or in the aggregate has had or

could reasonably be expected to have a Material Adverse Effect.

 

5.14        Employee Matters.

 

There are no

collective bargaining agreements covering the employees of Borrower and its

Subsidiaries except as set forth on Schedule 5.14.  There is no strike or work stoppage in

existence or, to Borrower’s knowledge, threatened involving Borrower or any of

its Subsidiaries that could reasonably be expected to result in a Material

Adverse Effect, and there are no strikes or walkouts in progress, pending or to

Borrower’s knowledge contemplated relating to any labor contracts to which

Borrower or any of its Subsidiaries is a party, relating to any labor contracts

being negotiated, in each case, that could reasonably be expected to result in

a Material Adverse Effect.

 

5.15        Solvency.

 

Each Loan Party is

and, upon the incurrence of any Obligations by such Loan Party on any date on

which this representation is made, will be, Solvent.

 

5.16        Matters Relating to Collateral.

 

A.            Creation,

Perfection and Priority of Liens.  The execution and delivery of the Collateral

Documents by Loan Parties, together with (i) the actions taken on or prior to

the date hereof pursuant to subsections 4.1M, 4.1N, 6.8 and 6.9 and (ii) the

delivery to Administrative Agent of any Pledged Collateral not delivered to

Administrative Agent at the time of execution and delivery of the applicable

Collateral Document (all of which Pledged Collateral has been so delivered) are

effective to create in favor of Administrative Agent for the benefit of

Lenders, as security for the respective Secured Obligations (as defined in the

applicable Collateral Document in respect of any Collateral), a valid First

Priority Lien (except for Liens permitted by subsection 7.2A) on all of the

Collateral, and all filings and other actions necessary or desirable to perfect

and maintain the perfection and First Priority status of such Liens (except for

Liens permitted by subsection 7.2A) have been duly made or taken and remain in

full force and effect, other than the filing of any UCC financing statements

delivered to Administrative Agent for filing (but not yet filed) and the

periodic filing of UCC continuation statements in respect of UCC financing

statements filed by or on behalf of Administrative Agent.

 

B.            Material Contracts.  Except for

the Material Contracts listed on Schedule 5.16, none of the Material

Contracts contain restrictions or prohibitions on assignment.   Administrative Agent, for the benefit of

the Lenders, may take a Lien on all accounts and payment intangibles with

respect to all Material Contracts (including those listed on Schedule 5.16,

notwithstanding any such restrictions or prohibitions on assignment).  Borrower has previously provided to

Administrative Agent copies of all Material Contracts in the same form as such

contracts have been submitted by Borrower for filing with the Securities and

Exchange Commission.

 

C.            Governmental Authorizations. 

No authorization, approval or other action by, and no notice to or

filing with, any Government Authority is required for either (i) the

pledge or grant by any Loan Party of the Liens purported to be created in favor

of Administrative Agent pursuant to any of the Collateral Documents or

(ii) the exercise by Administrative Agent of any rights or remedies in

respect of any Collateral (whether specifically granted or created pursuant to

any of the Collateral Documents or created or provided for by applicable law),

except for filings or recordings contemplated by subsection 5.16A and except as

may be required, in connection with the disposition of any Pledged Collateral,

by laws generally affecting the offering and sale of securities.

 

D.            Absence of Third-Party Filings. 

Except such as may have been filed in favor of Administrative Agent as

contemplated by subsection 5.16A and to evidence permitted lease obligations

and other Liens permitted pursuant to subsection 7.2, (i) no effective UCC

financing statement, fixture filing or other instrument similar in effect

covering all or any part of the Collateral is on file in any filing or

recording office and (ii) no effective filing covering all or any part of the

IP Collateral is on file in the PTO or Copyright Office.

 

E.             Margin Regulations. 

The pledge of the Pledged Collateral pursuant to the Collateral

Documents does not violate Regulation T, U or X of the Board of Governors of

the Federal Reserve System.

 

F.             Information Regarding Collateral. 

All information supplied to Administrative Agent by or on behalf of any

Loan Party with respect to any of the Collateral (in each case taken as a whole

with respect to any particular Collateral) is accurate and complete in all

material respects.  Except as listed on Schedule

5.16F hereto, neither Borrower nor any of the Subsidiaries has, within the

six-year period immediately preceding the date of this Agreement, changed its

name, the location of its Chief executive office or principal place of

business, changed its jurisdiction of incorporation or formation, been the

surviving entity of a merger or consolidation, or acquired all or substantially

all of the assets of any Person.

5.17        Senior Note Documents.

 

Borrower has delivered to Lenders complete and correct

copies of each Senior Note Document and of all exhibits and schedules thereto.  As of the Closing Date, the Senior Note

Documents have not been altered, amended or otherwise modified or supplemented

or any condition thereof waived without the prior written consent of the

Administrative Agent.

 

5.18        Disclosure.

 

No representation

or warranty of Borrower or any of its Subsidiaries contained in the

Confidential Information Memorandum or in any Loan Document or in any other

document, certificate or written statement furnished to Lenders by or on behalf

of Borrower or any of its Subsidiaries for use in connection with the

transactions contemplated by this Agreement contains any untrue statement of a

material fact or omits to state a material fact (known to Borrower, in the case

of any document not furnished by it) necessary in order to make the statements

contained herein or therein not misleading as of the date such statement was

made.  Any projections and pro forma

financial information contained in such materials are based upon good faith

estimates and assumptions believed by Borrower to be reasonable at the time

made, it being recognized by Lenders that such projections as to future events

are not to be viewed as facts and that actual results during the period or

periods covered by any such projections may differ from the projected results.  There are no facts known to Borrower (other

than matters of a general economic nature) that, individually or in the

aggregate, could reasonably be expected to result in a Material Adverse Effect

and that have not been disclosed herein or in such other documents,

certificates and statements furnished to Lenders for use in connection with the

transactions contemplated hereby.

 

5.19        Mortgage Taxes, Etc.

 

All mortgage, note, transfer, documentary, stamp, intangible and other

similar taxes and impositions which may be required to be paid in connection

with the Loans, the Mortgages and the other Loan Documents have been (or

concurrently with the closing of the Loans and recording of the Mortgages, will

be) paid in full by Borrower.

 

Section 6.              BORROWER’S AFFIRMATIVE COVENANTS

 

Borrower covenants

and agrees that until (i) all of the Commitments hereunder have been

terminated; (ii) payment in full of all of the Loans; (iii) payment in full of

all other Obligations then due and payable; and (iv) the cancellation or

expiration of all Letters of Credit, unless Requisite Lenders shall otherwise

give prior written consent, Borrower shall perform, and shall cause each of its

Subsidiaries to perform, all covenants in this Section 6.

 

6.1          Financial

Statements and Other Reports.

 

Borrower will

maintain, and cause each of its Subsidiaries to maintain, a system of

accounting established and administered in accordance with sound business

practices to permit preparation of financial statements in conformity with

GAAP.  Borrower will deliver to

Administrative Agent and Lenders:

 

(i)            Quarterly Financials:  as soon as available and in any event within

45 days after the end of the first three Fiscal Quarters of each Fiscal Year,

(a) the consolidated and consolidating balance sheets of Borrower and its

Subsidiaries as at the end of such Fiscal Quarter and the related consolidated

and consolidating statements of income, stockholders’ equity and cash flows of

Borrower and its Subsidiaries for such Fiscal Quarter and for the period from

the beginning of the then current Fiscal Year to the end of such Fiscal

Quarter, setting forth in each case in comparative form the corresponding

figures for the corresponding periods of the previous Fiscal Year and the

corresponding figures from the Financial Plan for the current Fiscal Year, all

in reasonable detail and certified by the chief financial officer of Borrower

that they fairly present, in all material respects, the financial condition of

Borrower and its Subsidiaries as at the dates indicated and the results of

their operations and their cash flows for the periods indicated, subject to

changes resulting from audit and normal year-end adjustments; and (b) a narrative report describing

the operations of Borrower and its Subsidiaries in the form prepared for

presentation to senior management for such Fiscal Quarter and for the period

from the beginning of the then current Fiscal Year to the end of such Fiscal

Year (it being understood that the narrative report as contained in Borrower’s

regular and periodic reports on Form 10-Q shall be sufficient for purposes of

this clause (b));

 

(ii)           Year-End

Financials:  as soon as available

and in any event within 90 days after the end of each Fiscal Year, (a) the

consolidated and consolidating balance sheets of Borrower and its Subsidiaries

as at the end of such Fiscal Year and the related consolidated and

consolidating statements of income, stockholders’ equity and cash flows of

Borrower and its Subsidiaries for such Fiscal Year, setting forth in each case

in comparative form the corresponding figures for the previous Fiscal Year and

the corresponding figures from the Financial Plan for the Fiscal Year covered

by such financial statements, all in reasonable detail and certified by the

chief financial officer of Borrower that they fairly present, in all material

respects, the financial condition of Borrower and its Subsidiaries as at the

dates indicated and the results of their operations and their cash flows for

the periods indicated; (b) a narrative report describing the operations of

Borrower and its Subsidiaries in the form prepared for presentation to senior

management for such Fiscal Year (it being understood that the narrative report

as contained in Borrower’s regular and periodic reports on Form 10-K shall be

sufficient for purposes of this clause (b)); and (c) in the case of such

consolidated financial statements, a report thereon of a nationally recognized

“big 5” accounting firm or other independent certified public accountants of

recognized national standing selected by Borrower and satisfactory to

Administrative Agent, which report shall be unqualified, shall express no

doubts about the ability of Borrower and its Subsidiaries to continue as a

going concern, and shall state that such consolidated financial statements

fairly present, in all material respects, the consolidated financial position

of Borrower and its Subsidiaries as at the dates indicated and the results of

their operations and their cash flows for the periods indicated in conformity

with GAAP applied on a basis consistent with prior years (except as otherwise

disclosed in such financial statements) and that the examination by such

accountants in connection with such consolidated financial statements has been

made in accordance with generally accepted auditing standards;

 

(iii)          Officer and Compliance Certificates:  together with each delivery of financial

statements of Borrower and its Subsidiaries pursuant to subdivisions (i) and

(ii) above, (a) an Officers’ Certificate of Borrower stating that the signers

have reviewed the terms of this Agreement and have made, or caused to be made

under their supervision, a review in reasonable detail of the transactions and

condition of Borrower and its Subsidiaries during the accounting period covered

by such financial statements and that such review has not disclosed the

existence during or at the end of such accounting period, and that the signers

do not have knowledge of the existence as at the date of such Officers’

Certificate, of any condition or event that constitutes an Event of Default or

Potential Event of Default, or, if any such condition or event existed or

exists, specifying the nature and period of existence thereof and what action

Borrower has taken, is taking and proposes to take with respect thereto; and

(b) a Compliance Certificate demonstrating in reasonable detail compliance

during and at the end of the applicable accounting periods with the

restrictions contained in Section 7, in each case to the extent compliance with

such restrictions is required to be tested at the end of the applicable

accounting period;

 

(iv)          Reconciliation Statements:  if, as a result of any change in accounting

principles and policies from those used in the preparation of the audited

financial statements referred to in subsection 5.3, the consolidated financial

statements of Borrower and its Subsidiaries delivered pursuant to subdivisions

(i), (ii) or (x) of this subsection 6.1 will differ in any material respect

from the consolidated financial statements that would have been delivered

pursuant to such subdivisions had no such change in accounting principles and

policies been made, then (a) together with the first delivery of financial

statements pursuant to subdivision (i), (ii) or (x) of this subsection 6.1 following

such change, consolidated financial statements of Borrower and its Subsidiaries

for (y) the current Fiscal Year to the effective date of such change and

(z) the two full Fiscal Years immediately preceding the Fiscal Year in

which such change is made, in each case prepared on a pro forma basis as if

such change had been in effect during such periods, and (b) together with

each delivery of financial statements pursuant to subdivision (i), (ii) or (x)

of this subsection 6.1 following such change, if required pursuant to

subsection 1.2, a written statement of the chief accounting officer or chief

financial officer of Borrower setting forth the differences (including any

differences that would affect any calculations relating to the financial

covenants set forth in subsection 7.6) which would have resulted if such

financial statements had been prepared without giving effect to such change;

 

(v)           Accountants’ Certification:  together with each delivery of consolidated

financial statements of Borrower and its Subsidiaries pursuant to subdivision

(ii) above, a written statement by the independent certified public accountants

giving the report thereon (a) stating that their audit examination has included

a review of the terms of this Agreement and the other Loan Documents as they

relate to accounting matters, (b) stating whether, in connection with their

audit examination, any condition or event that constitutes an Event of Default

or Potential Event of Default has come to their attention and, if such a

condition or event has come to their attention, specifying the nature and

period of existence thereof; provided that such accountants shall not be

liable by reason of any failure to obtain knowledge of any such Event of

Default or Potential Event of Default that would not be disclosed in the course

of their audit examination, and (c) stating that based on their audit

examination nothing has come to their attention that causes them to believe

either or both that the information contained in the certificates delivered therewith

pursuant to subdivision (iii) above is not correct or that the matters set

forth in the Compliance Certificates delivered therewith pursuant to clause (b)

of subdivision (iii) above for the applicable Fiscal Year are not stated in

accordance with the terms of this Agreement;

 

(vi)          SEC

Filings and Press Releases: 

promptly upon their becoming available, copies of (a) all financial

statements, reports, notices and proxy statements sent or made available

generally by Borrower to its security holders or by any Subsidiary of Borrower

to its security holders other than Borrower or another Subsidiary of Borrower,

(b) all regular and periodic reports and all registration statements

(other than on Form S-8 or a similar form) and prospectuses, if any, filed by

Borrower or any of its Subsidiaries with any securities exchange or with the

Securities and Exchange Commission or any governmental or private regulatory

authority, and (c) all press releases and other statements made available

generally by Borrower or any of its Subsidiaries to the public concerning

material developments in the business of Borrower or any of its Subsidiaries;

 

(vii)         Litigation or Other Proceedings:  (a) promptly upon any officer of Borrower

obtaining knowledge of the institution of, or non-frivolous threat of, any

Proceeding against or affecting Borrower or any of its Subsidiaries or any

property of Borrower or any of its Subsidiaries not previously disclosed in

writing by Borrower to Lenders or upon the reasonable request of Administrative

Agent, any material development in any Proceeding that, in any case:

 

(x)            if

adversely determined, has a reasonable possibility of giving rise to a Material

Adverse Effect; or

 

(y)           seeks

to enjoin or otherwise prevent the consummation of, or to recover any damages

or obtain relief as a result of, the transactions contemplated hereby;

 

written notice thereof

together with such other information as may be reasonably available to Borrower

to enable Lenders and their counsel to evaluate such matters; and (b) within

twenty days after the end of each Fiscal Quarter, a schedule of all Proceedings

involving an alleged liability of, or claims against or affecting, Borrower or

any of its Subsidiaries equal to or greater than $2,500,000, and promptly after

request by Administrative Agent such other information as may be reasonably

requested by Administrative Agent to enable Administrative Agent and its

counsel to evaluate any of such Proceedings;

 

(viii)        ERISA

Events:  promptly upon becoming

aware of the occurrence of or forthcoming occurrence of any ERISA Event, a

written notice specifying the nature thereof, what action Borrower, any of its

Subsidiaries or any of their respective ERISA Affiliates has taken, is taking

or proposes to take with respect thereto and, when known, any action taken or

threatened by the Internal Revenue Service, the Department of Labor or the PBGC

with respect thereto;

 

(ix)           ERISA

Notices:  with reasonable

promptness, copies of (a) each Schedule B (Actuarial Information) to the annual

report (Form 5500 Series) filed by Borrower, any of its Subsidiaries or any of

their respective ERISA Affiliates with the Internal Revenue Service with

respect to each Pension Plan; (b) all notices received by Borrower, any of its

Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer

Plan sponsor concerning an ERISA Event; and (b) copies of such other documents

or governmental reports or filings relating to any Employee Benefit Plan as

Administrative Agent shall reasonably request;

 

(x)            Financial Plans:  as soon as practicable and in any event no

later than 60 days after the last day of each Fiscal Year, a consolidated plan

and financial forecast for such Fiscal Year (the “Financial Plan” for such

Fiscal Year), including (a) forecasted consolidated balance sheets and

forecasted consolidated statements of income and cash flows of Borrower and its

Subsidiaries for each Fiscal Year, together with pro forma

Compliance Certificates for each Fiscal Quarter of each Fiscal Year and an

explanation of the assumptions on which such forecasts are based; and

(b) forecasted consolidated statements of income and cash flows of

Borrower and its Subsidiaries for each Fiscal Quarter of each Fiscal Year,

together with an explanation of the assumptions on which such forecasts are

based;

 

(xi)           Insurance:  (a) as soon as practicable and in any event

by the last day of each Fiscal Year, a report in form and substance

satisfactory to Administrative Agent outlining all material insurance coverage

required hereunder to be maintained as of the date of such report by Borrower

and its Subsidiaries and all material insurance coverage planned to be

maintained by Borrower and its Subsidiaries in the immediately succeeding

Fiscal Year as required hereunder and (b) as soon as practicable after any

material change in insurance coverage maintained by Borrower and its

Subsidiaries notice thereof to Administrative Agent specifying the changes and

reasons therefor;

 

(xii)          Governing

Body:  with reasonable promptness,

written notice of any change in the Governing Body of Borrower;

 

(xiii)         New Subsidiaries:  promptly upon any Person becoming a

Subsidiary of Borrower, a written notice setting forth with respect to such

Person (a) the date on which such Person became a Subsidiary of Borrower and

(b) all of the data required to be set forth in Schedule 5.1 annexed

hereto with respect to all Subsidiaries of Borrower (it being understood that

such written notice shall be deemed to supplement Schedule 5.1 annexed

hereto for all purposes of this Agreement);

 

(xiv)        Margin Determination Certificate:

commencing with the Fiscal Quarter ended September 30, 2001, together with

each delivery of financial statements for each Fiscal Quarter (other than each

fourth Fiscal Quarter) pursuant to subdivision (ii) above, and within 45 days

of the last day of each fourth Fiscal Quarter, a Margin Determination

Certificate demonstrating in reasonable detail the calculation of the

Consolidated Total Leverage Ratio for the four consecutive Fiscal Quarters

ending on the day of the accounting period covered by such financial

statements;

 

(xv)         Deposit

Accounts: promptly upon the opening of any Deposit Account with a principal

balance in excess of $2,500,000 by Borrower or any of its Subsidiaries, a

written notice setting forth all of the data required to be set forth in Schedule

6.11 annexed hereto with respect to such Deposit Account;

 

(xvi)        Events

of Default, etc.:  promptly upon

Borrower obtaining knowledge (a) of any condition or event that constitutes an

Event of Default or Potential Event of Default, or becoming aware that any

Lender has given any notice (other than to Administrative Agent) or taken any

other action with respect to a claimed Event of Default or Potential Event of

Default; (b) that any Person has given any notice to Borrower or any of

its Subsidiaries or taken any other action with respect to a claimed default or

event or condition of the type referred to in subsection 8.2; (c) of any

resignation or dismissal of Borrower’s independent accountant; (d) of any

Change of Control or other event requiring a prepayment of principal on any

Subordinated Indebtedness; (e) of any individual or series of related Asset

Sales with respect to which either (1) Borrower is obligated to prepay the

Loans and/or reduce the Revolving Loan Commitments pursuant to subsection

2.4B(iii)(a); or (2) the Net Asset Sale Proceeds of which exceed $250,000; (f)

of any issuances of Capital Stock or receipt of Net Insurance/Condemnation

Proceeds aggregating in excess of $500,000; or (g) of the occurrence of any

event or change that has caused or evidences, either in any case or in the

aggregate, a Material Adverse Effect, an Officers’ Certificate specifying the

nature and period of existence of such condition, event or change, or specifying

the notice given or action taken by any such Person and the nature of such

claimed Event of Default, Potential Event of Default, default, event or

condition, and what action Borrower has taken, is taking and proposes to take

with respect thereto;

 

(xvii)       Corporate

Matters:  with reasonable

promptness, written notice of any amendment of the articles or certificate of

incorporation or by-laws or other constituent documents of Borrower or any of

its Subsidiaries;

 

(xviii)      Revisions or Updates to Schedules:  should any of the information or disclosures

provided on any of the Schedules originally attached to any of the Loan

Documents become outdated or incorrect in any material respect, as part of the

next Compliance Certificate required pursuant to subsection 6.1(iii) or at such

other time as Borrower shall elect (or in the case of an update to Schedule

5.5B(i), upon the acquisition by Borrower or any Subsidiary of any

additional Real Property Assets), such revisions or updates to such Schedules

as may be necessary or appropriate to update or correct such Schedules, provided

that no such revisions or updates to any Schedules shall be deemed to have

amended, modified or superseded such Schedules immediately prior to the

submission of such revised or updated Schedules, or to have cured any breach of

warranty or representation resulting from the inaccuracy or incompleteness of

any such Schedules, unless and until the Requisite Lenders in their sole and

absolute discretion, shall have accepted in writing such revisions or updates

to such Schedules; and

 

(xix)         Other

Information:  with reasonable

promptness, such other information and data with respect to Borrower or any of

its Subsidiaries as from time to time may be reasonably requested by any Lender

(such requests to be coordinated through Administrative Agent), including,

without limitation, as soon as available, but in any event not later than

forty-five (45) days after the end of the first three Fiscal Quarters of

Borrower and not later than ninety (90) days after the end of the last Fiscal

Quarter of Borrower, a report, certified by the president, chief financial

officer or chief operating officer of Borrower as having been prepared

personally by him or under his personal supervision and to be substantially true

and complete, of the number of Guest-Pay Rooms served by Borrower and its

Subsidiaries (on a state-by-state basis) as of the last day of such fiscal

quarter, together with such other information with respect to billings,

operating costs, Consolidated EBITDA or other matters as Administrative Agent

or the Required Lenders may reasonably request from time to time.

 

6.2          Existence, etc.

 

Except as

permitted under subsection 7.7, Borrower will, and will cause each of its

Subsidiaries to, at all times preserve and keep in full force and effect its

existence and all rights and franchises material to its business; provided,

however that neither Borrower nor any of its Subsidiaries shall be

required to preserve any such right or franchise if the Governing Body of Borrower

or such Subsidiary shall determine that the preservation thereof is no longer

desirable in the conduct of the business of Borrower or such Subsidiary, as the

case may be, and that the loss thereof could not reasonably be expected to

result in a Material Adverse Effect.

 

6.3          Payment of Taxes and Claims; Tax Returns

 

A.            Payment of Taxes and Claims.  Borrower will, and will cause each of its

Subsidiaries to, pay all taxes, assessments and other governmental charges

imposed upon it or any of its properties or assets or in respect of any of its

income, businesses or franchises before any penalty accrues thereon, and all

claims (including claims for labor, services, materials and supplies) for sums

that have become due and payable and that by law have or may become a Lien upon

any of its properties or assets, prior to the time when any penalty or fine

shall be incurred with respect thereto; provided that no such charge or

claim need be paid if it is being contested in good faith by appropriate

proceedings promptly instituted and diligently conducted, so long as (i) such

reserve or other appropriate provision, if any, as shall be required in

conformity with GAAP shall have been made therefor and (ii) in the case of a

charge or claim which has or may become a Lien against any of the Collateral,

such proceedings conclusively operate to stay the sale of any portion of the

Collateral to satisfy such charge or claim.

 

B.            Tax Returns.  Borrower will not, nor will it

permit any of its Subsidiaries to, file or consent to the filing of any

consolidated income tax return with any Person (other than Borrower or any of

its Subsidiaries).

 

6.4          Maintenance of Properties;

Insurance; Application of Net Insurance/ Condemnation Proceeds

 

A.            Maintenance of Properties. 

Borrower will, and will cause each of its Subsidiaries to, maintain or

cause to be maintained in good repair, working order and condition, ordinary

wear and tear excepted, all material properties used or useful in the business

of Borrower and its Subsidiaries (including all Intellectual Property) and from

time to time will make or cause to be made all appropriate repairs, renewals

and replacements thereof.

 

B.            Insurance. 

Borrower will maintain or cause to be maintained, with financially sound

and reputable insurers, such public liability insurance, third party property

damage insurance, business interruption insurance and casualty insurance with

respect to liabilities, losses or damage in respect of the assets, properties

and businesses of Borrower and its Subsidiaries as may customarily be carried

or maintained under similar circumstances by corporations of established

reputation engaged in similar businesses, in each case in such amounts (giving

effect to self-insurance, to the extent companies of similar size and in

similar businesses self-insure), with such deductibles, covering such risks and

otherwise on such terms and conditions as shall be customary for corporations

similarly situated in the industry. 

Without limiting the generality of the foregoing, Borrower will maintain

or cause to be maintained (i) flood insurance with respect to each Flood

Hazard Property that is located in a community that participates in the

National Flood Insurance Program, in each case in compliance with any

applicable regulations of the Board of Governors of the Federal Reserve System,

and (ii) replacement value casualty insurance on the Collateral under such

policies of insurance, with such insurance companies, in such amounts, with

such deductibles, covering such risks, and having other terms and conditions as

are at all times satisfactory to Administrative Agent in its commercially

reasonable judgment. Each such policy of insurance shall (a) name

Administrative Agent for the benefit of Lenders as an additional insured

thereunder as its interests may appear and (b) in the case of each business

interruption and casualty insurance policy, contain a loss payable clause or

endorsement, satisfactory in form and substance to Administrative Agent, that

names Administrative Agent for the benefit of Lenders as the loss payee

thereunder for any covered loss in excess of $500,000 and provides for at least

30 days prior written notice to Administrative Agent of any modification or

cancellation of such policy.

 

C.            Application of Net Insurance/Condemnation

Proceeds.

 

(i)            Business

Interruption Insurance.  Upon

receipt by Borrower or any of its Subsidiaries of any business interruption

insurance proceeds constituting Net Insurance/Condemnation Proceeds,

(a) so long as no Potential Event of Default under subsections 8.1,8.6 or

8.7 and no Event of Default shall have occurred and be continuing, Borrower or

such Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds

for working capital purposes, and (b) if a Potential Event of Default under

subsections 8.1,8.6 or 8.7 or Event of Default shall have occurred and be

continuing, Borrower shall apply an amount equal to such Net

Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan

Commitments shall be reduced) as provided in subsection 2.4B;

 

(ii)           Net

Insurance/Condemnation Proceeds Received by Borrower.  Upon receipt by Borrower or any of its

Subsidiaries of any Net Insurance/Condemnation Proceeds other than from

business interruption insurance, (a) so long as no Potential Event of Default

under subsections 8.1,8.6 or 8.7 and no Event of Default shall have occurred

and be continuing, Borrower shall, or shall cause one or more of its

Subsidiaries to, within 180 days (or such longer period as is necessary to

complete the repair, restoration or replacement described below so long as

Borrower diligently initiates and continues to prosecute such repair,

restoration or replacement within such 180-day period) apply such Net

Insurance/Condemnation Proceeds to pay or reimburse the costs of repairing,

restoring or replacing the assets in respect of which such Net

Insurance/Condemnation Proceeds were received or, to the extent not so applied,

to prepay the Loans (and/or the Revolving Loan Commitments shall be reduced) as

provided in subsection 2.4B, and (b) if a Potential Event of Default under

subsections 8.1,8.6 or 8.7 or Event of Default shall have occurred and be

continuing, Borrower shall apply an amount equal to such Net

Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan

Commitments shall be reduced) as provided in subsection 2.4B.

 

(iii)          Net

Insurance/Condemnation Proceeds Received by Administrative Agent.  Upon receipt by Administrative Agent of any

Net Insurance/Condemnation Proceeds as loss payee, (a) if and to the extent

Borrower would have been required to apply such Net Insurance/Condemnation

Proceeds (if it had received them directly) to prepay the Loans and/or reduce

the Revolving Loan Commitments, Administrative Agent shall, and Borrower hereby

authorizes Administrative Agent to, apply such Net Insurance/Condemnation

Proceeds to prepay the Loans (and/or the Revolving Loan Commitments shall be

reduced) as provided in subsection 2.4B, and (b) to the extent the foregoing

clause (a) does not apply, Administrative Agent shall deliver such Net

Insurance/Condemnation Proceeds to Borrower, and Borrower shall, or shall cause

one or more of its Subsidiaries to, promptly apply such Net

Insurance/Condemnation Proceeds to the costs of repairing, restoring, or

replacing the assets in respect of which such Net Insurance/Condemnation

Proceeds were received; provided, however, that if at any time

Administrative Agent reasonably determines (A) that Borrower or such Subsidiary

is not proceeding diligently with such repair, restoration or replacement or

(B) that such repair, restoration or replacement cannot be completed with the

Net Insurance/Condemnation Proceeds then held by Administrative Agent for such

purpose, together with funds otherwise available to Borrower for such purpose,

or that such repair, restoration or replacement cannot begin within 180 days

after the receipt by Administrative Agent of such Net Insurance/Condemnation

Proceeds, Administrative Agent shall, and Borrower hereby authorizes

Administrative Agent to, apply such Net Insurance/ Condemnation Proceeds to

prepay the Loans (and/or the Revolving Loan Commitments shall be reduced) as

provided in subsection 2.4B.

6.5          Inspection Rights.

 

Borrower shall, and shall cause each of its

Subsidiaries to, permit any authorized representatives designated by

Administrative Agent to visit and inspect any of the properties of Borrower or

of any of its Subsidiaries, to inspect, copy and take extracts from its and

their financial and accounting records, and to discuss its and their affairs,

finances and accounts with its and their officers and independent public

accountants (provided that Borrower may, if it so chooses, be present at or

participate in any such discussion), all upon reasonable notice and at such reasonable

times during normal business hours and as often as may reasonably be requested.

 

6.6          Compliance

with Laws, etc.

 

Borrower shall comply, and shall cause each of its

Subsidiaries and all other Persons on or occupying any Facilities to comply,

with the requirements of all applicable laws, rules, regulations and orders of

any Government Authority (including all Environmental Laws), noncompliance with

which could reasonably be expected to result in, individually or in the

aggregate, a Material Adverse Effect.

 

6.7          Environmental Matters.

 

A.            Environmental

Disclosure.  Borrower will deliver to Administrative

Agent and Lenders:

 

(i)            Environmental

Audits and Reports.  As soon as

practicable following receipt thereof, copies of all environmental audits,

investigations, analyses and reports of any kind or character, whether prepared

by personnel of Borrower or any of its Subsidiaries or by independent

consultants, governmental authorities or any other Persons, with respect to any

Environmental Claims that could reasonably be expected to result in a Material

Adverse Effect;

 

(ii)           Notice

of Certain Releases, Remedial Actions, Etc.  Promptly upon the occurrence thereof, written notice describing

in reasonable detail (a) any Release required to be reported to any federal,

state or local governmental or regulatory agency under any applicable

Environmental Laws, (b) any remedial action taken by Borrower or any other

Person in response to (1) any Hazardous Materials Activities the existence

of which could reasonably be expected to result in one or more Environmental

Claims having, individually or in the aggregate, a Material Adverse Effect, or

(2) any Environmental Claims that, individually or in the aggregate, could

reasonably be expected to result in a Material Adverse Effect, and (c)

Borrower’s discovery of any occurrence or condition on any real property

adjoining or in the vicinity of any Facility that could cause such Facility or

any part thereof to be subject to any material restrictions on the ownership,

occupancy, transferability or use thereof under any Environmental Laws.

 

(iii)          Written

Communications Regarding Environmental Claims, Releases, Etc.  As soon as practicable following the sending

or receipt thereof by Borrower or any of its Subsidiaries, a copy of any and

all written communications with respect to (a) any Environmental Claims that,

individually or in the aggregate, could reasonably be expected to result in a

Material Adverse Effect, (b) any Release required to be reported to any

federal, state or local governmental or regulatory agency, and (c) any

request for information from any governmental agency that suggests such agency

is investigating whether Borrower or any of its Subsidiaries may be potentially

responsible for any Hazardous Materials Activity where the liability that may

arise in connection with such investigation could reasonably be expected to

result in a Material Adverse Effect.

 

(iv)          Notice

of Certain Proposed Actions Having Environmental Impact.  Prompt written notice describing in reasonable

detail (a) any proposed acquisition of stock, assets, or property by

Borrower or any of its Subsidiaries that could reasonably be expected to (1)

expose Borrower or any of its Subsidiaries to, or result in, Environmental

Claims that could reasonably be expected to result in, individually or in the

aggregate, a Material Adverse Effect or (2) affect the ability of Borrower or

any of its Subsidiaries to maintain in full force and effect all material

Governmental Authorizations required under any Environmental Laws for their

respective operations and (b) any proposed action to be taken by Borrower

or any of its Subsidiaries to commence manufacturing or other industrial

operations or to modify current operations in a manner that could reasonably be

expected to subject Borrower or any of its Subsidiaries to any additional

obligations or requirements under any Environmental Laws that could reasonably

be expected to result in, individually or in the aggregate, a Material Adverse

Effect.

 

(v)           Final

Phase I Environmental Assessment. 

Within 30 days of the Closing Date, the final Phase I environmental

assessment for the Closing Date Mortgaged Property that meets all of the

requirements of subsection 4.1L.

 

B.            Borrower’s Actions Regarding

Hazardous Materials Activities, Environmental Claims and Violations of

Environmental Laws.

 

(i)            Remedial

Actions Relating to Hazardous Materials Activities.  Borrower shall, in compliance with all

applicable Environmental Laws, promptly undertake, and shall cause each of its

Subsidiaries promptly to undertake, any and all investigations, studies,

sampling, testing, abatement, cleanup, removal, remediation or other response

actions necessary to remove, remediate, clean up or abate any Hazardous

Materials Activity on, under or about any Facility that is in violation of any

Environmental Laws or that presents a material risk of giving rise to an

Environmental Claim.  If Borrower or any

of its Subsidiaries undertakes any such action with respect to any Hazardous

Materials, Borrower or such Subsidiary shall conduct and complete such action

in compliance with all applicable Environmental Laws and in accordance with the

policies, orders and directives of all federal, state and local governmental

authorities except when, and only to the extent that, Borrower’s or such

Subsidiary’s liability with respect to such Hazardous Materials Activity is

being diligently contested in good faith and by appropriate proceedings by

Borrower or such Subsidiary.

 

(ii)           Actions with Respect to

Environmental Claims and Violations of Environmental Laws.  Borrower shall promptly take, and shall

cause each of its Subsidiaries promptly to take, any and all actions necessary

to (i) cure any violation of applicable Environmental Laws by Borrower or its

Subsidiaries that could reasonably be expected to result in, individually or in

the aggregate, a Material Adverse Effect and (ii) make an appropriate response

to any Environmental Claim against Borrower or any of its Subsidiaries and

discharge any obligations it may have to any Person thereunder where failure to

do so could reasonably be expected to result in, individually or in the

aggregate, a Material Adverse Effect.

 

C.            Environmental Investigations.  Borrower agrees that Administrative Agent

may, from time to time and in its reasonable discretion, (i) retain, at

Borrower’s expense, an independent professional consultant to review any

environmental audits, investigations, analyses and reports relating to

Hazardous Materials prepared by or for Borrower and (ii) in the event (a)

Administrative Agent reasonably believes that Borrower has breached any

representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6,

6.7 or that there has been a material violation of Environmental Laws at any

Facility or by Borrower or any of its Subsidiaries at any other location or (b)

an Event of Default has occurred and is continuing, conduct its own

investigation of any Facility; provided that, in the case of any

Facility no longer owned, leased, operated or used by Borrower or any of its

Subsidiaries, Borrower shall only be obligated to use its best efforts to

obtain permission for Administrative Agent’s professional consultant to conduct

an investigation of such Facility.  For

purposes of conducting such a review and/or investigation, Borrower hereby

grants to Administrative Agent and its agents, employees, consultants and

contractors the right to enter into or onto any Facilities currently owned,

leased, operated or used by Borrower or any of its Subsidiaries and to perform

such tests on such property (including taking samples of soil, groundwater and

suspected asbestos-containing materials) as are reasonably necessary in

connection therewith.  Any such

investigation of any Facility shall be conducted, unless otherwise agreed to by

Borrower and Administrative Agent, during normal business hours and, to the

extent reasonably practicable, shall be conducted so as not to interfere with

the ongoing operations at such Facility or to cause any damage or loss to any

property at such Facility.  Borrower and

Administrative Agent hereby acknowledge and agree that any report of any

investigation conducted at the request of Administrative Agent pursuant to this

subsection 6.7C will be obtained and shall be used by Administrative Agent and

Lenders for the purposes of Lenders’ internal credit decisions, to monitor and

police the Loans and to protect Lenders’ security interests, if any, created by

the Loan Documents.  Administrative

Agent agrees to deliver a copy of any such report to Borrower with the

understanding that Borrower acknowledges and agrees that (x) it will

indemnify and hold harmless Administrative Agent and each Lender from any

costs, losses or liabilities relating to Borrower’s use of or reliance on such

report, (y) neither Administrative Agent nor any Lender makes any

representation or warranty with respect to such report, and (z) by

delivering such report to Borrower, neither Administrative Agent nor any Lender

is requiring or recommending the implementation of any suggestions or recommendations

contained in such report.

 

6.8          Execution

of Subsidiary Guaranty and Personal Property Collateral Documents

After the Closing Date

 

A.            Execution of Subsidiary Guaranty and

Personal Property Collateral Documents.  If any

Person becomes a Domestic Subsidiary of Borrower after the date hereof, or if

AmNet, ResNet Inc. or ResNet LLC conducts business or operations or acquires,

obtains or receives any asset or income from any source (other than, in the

case of ResNet Inc., 95% of the membership interests in ResNet LLC and the

promissory notes listed on Schedule 7.3 issued by Global Interactive

Communications Corporation and Global Interactive Technologies Corporation, as

long as such promissory notes remain pledged by ResNet Inc. to Borrower),

Borrower will promptly notify Administrative Agent of that fact and cause such

Domestic Subsidiary to execute and deliver to Administrative Agent a

counterpart of the Subsidiary Guaranty and Security Agreement and to take all

such further actions and execute all such further documents and instruments

(including actions, documents and instruments comparable to those described in

subsection 4.1M) as may be necessary or, in the reasonable opinion of

Administrative Agent, desirable to create in favor of Administrative Agent, for

the benefit of Lenders, a valid and perfected First Priority Lien (except for

Liens permitted by subsection 7.2A) on all of the personal and mixed property

assets of such Domestic Subsidiary described in the applicable forms of

Collateral Documents.

 

B.            Foreign Subsidiaries.  If any Person becomes a Foreign Subsidiary of Borrower

or any Subsidiary after the date hereof, Borrower will promptly notify

Administrative Agent of that fact and, if such Subsidiary is directly or

indirectly owned by Borrower or a Domestic Subsidiary, cause such Subsidiary

and the owner of such Subsidiary to execute and deliver to Administrative Agent

such documents and instruments and take such further actions (including

actions, documents and instruments comparable to those described in subsection

4.1M) as may be necessary, or in the reasonable opinion of Administrative

Agent, desirable to create in favor of Administrative Agent, for the benefit of

Lenders, a valid and perfected First Priority Lien on 65% of the voting Capital

Stock and all of the non-voting Capital Stock of such Foreign Subsidiary.

 

C.            Subsidiary Organizational Documents,

Legal Opinions, Etc.  Borrower shall deliver to Administrative

Agent, together with such Loan Documents, (i) certified copies of such Subsidiary’s

Organizational Documents, together with, if such Subsidiary is a Domestic

Subsidiary, a good standing certificate from the Secretary of State of the

jurisdiction of its organization and each other state in which such Person is

qualified to do business and, to the extent generally available, a certificate

or other evidence of good standing as to payment of any applicable franchise or

similar taxes from the appropriate taxing authority of each of such

jurisdictions, each to be dated a recent date prior to their delivery to

Administrative Agent; (ii) a certificate executed by the secretary or

similar Officer of such Subsidiary as to (a) the fact that the attached

resolutions of the Governing Body of such Subsidiary approving and authorizing

the execution, delivery and performance of such Loan Documents are in full

force and effect and have not been modified or amended; and (b) the

incumbency and signatures of the Officers of such Subsidiary executing such

Loan Documents; and (iii) a favorable opinion of counsel to such

Subsidiary, addressed to Administrative Agent and Lenders, in form and

substance satisfactory to Administrative Agent and its counsel, as to

(a) the due organization and good standing of such Subsidiary;

(b) the due authorization, execution and delivery by such Subsidiary of

such Loan Documents; (c) the enforceability of such Loan Documents against

such Subsidiary; and (d) such other matters (including matters relating to

the creation and perfection of Liens in any Collateral pursuant to such Loan

Documents) as Administrative Agent may reasonably request, all of the foregoing

to be satisfactory in form and substance to Administrative Agent and its

counsel.

 

D.            Pledge of Capital Stock of AmNet.  If Borrower

does not liquidate, wind up and dissolve AmNet within 30 days of the Closing

Date, Borrower shall deliver to Administrative Agent stock certificates (which

certificates shall be accompanied by irrevocable undated stock powers, duly

endorsed in blank and otherwise satisfactory in form and substance to

Administrative Agent) representing all of the Capital Stock of AmNet and an

amendment to Schedule 1(e)(i) of the Security Agreement to reflect the

pledge of such shares.

 

6.9          Matters

Relating to Additional Real Property Collateral

 

A.            Additional

Mortgages, Etc. 

From and after the Closing Date, if (i) Borrower or any Subsidiary

Guarantor acquires any fee interest in Material Real Property or any Material

Leasehold Property; or (ii) at the time any Person becomes a Subsidiary

Guarantor, such Person owns or holds any fee interest in Material Real Property

or any Material Leasehold Property, in the case of clause (ii) above excluding

any such Real Property Asset the encumbrancing of which requires the consent of

any applicable lessor or then-existing senior lienholder, where Borrower and

its Subsidiaries have attempted in good faith, but are unable, to obtain such

lessor’s or senior lienholder’s consent after use of their best efforts (any

such non-excluded Real Property Asset described in the foregoing clause (i) or

(ii) being an “Additional Mortgaged Property”), Borrower or such Subsidiary

Guarantor shall deliver to Administrative Agent, as soon as practicable after

such Person acquires such Additional Mortgaged Property or becomes a Subsidiary

Guarantor, as the case may be, a fully executed and notarized Mortgage (an “Additional

Mortgage”), in proper form for recording in all appropriate places

in all applicable jurisdictions, encumbering the interest of such Loan Party in

such Additional Mortgaged Property; and such opinions, appraisal, documents,

title insurance, Survey and environmental reports that either would have been

delivered on the Closing Date if such Additional Mortgaged Property were a

Closing Date Mortgaged Property or that may be reasonably required by

Administrative Agent, in each case, in form and substance satisfactory to

Administrative Agent.  Borrower further covenants and

agrees that the fair market value of all fee interests in real property owned

or acquired by Borrower or any Subsidiary Guarantor that are not included

within the definitions of “Material Real Property” and “Additional Mortgaged

Property” shall not exceed $5,000,000 in the aggregate.

 

B.            Real Estate Appraisals.  Borrower shall, and shall cause each of its

Subsidiaries to, permit an independent real estate appraiser satisfactory to

Administrative Agent, upon reasonable notice, to visit and inspect any

Additional Mortgaged Property for the purpose of preparing an appraisal of such

Additional Mortgaged Property satisfying the requirements of any applicable

laws and regulations (in each case to the extent required under such laws and

regulations as determined by Administrative Agent in its discretion).

 

C.            Conforming

Leasehold Interests.  If Borrower or any of its Subsidiaries

acquires any Material Leasehold Property, at Administrative Agent’s request,

Borrower shall, or shall cause such Subsidiary to, cause such Material

Leasehold Property to be a Conforming Leasehold Interest.

 

6.10        Interest Rate

Protection.

 

At all times after

the date that is 90 days after the Closing Date, Borrower shall maintain in

effect one or more Interest Rate Agreements with a Lender with respect to the

Term Loans, each such Interest Rate Agreement to be for a term of at least two

years and in form and substance reasonably satisfactory to Administrative

Agent, which Interest Rate Agreements shall effectively limit that component of

the interest costs to Borrower in respect of a LIBOR Loan that is based upon

the rate obtained pursuant to clause (a) of the definition of Adjusted LIBOR

with respect to an aggregate notional principal amount of not less than 50% of

the aggregate principal amount of the Term Loans outstanding from time to time

(based on the assumption that such notional principal amount was a LIBOR Loan

with an Interest Period of three months) to a rate equal to not more than 11%

per annum.

 

6.11        Deposit

Accounts and Cash Management Systems

 

Borrower shall,

and shall cause each of its Subsidiaries to, use and maintain its Deposit Accounts

and cash management systems in a manner reasonably satisfactory to

Administrative Agent.  Information

regarding all Deposit Accounts with a principal balance in excess of

$2,500,000, including (a) the name and address of the financial institutions maintaining

the Deposit Accounts; and (b) the Deposit Account numbers, shall be set forth

on Schedule 6.11 annexed hereto. 

Borrower shall not permit any of such Deposit Accounts at any time to

have a principal balance in excess of $2,500,000 unless Borrower or such

Subsidiary, as the case may be, has (i) delivered to Administrative Agent

an agreement, satisfactory in form and substance to Administrative Agent and

executed by the financial institution at which such Deposit Account is

maintained, pursuant to which such financial institution confirms and

acknowledges Administrative Agent’s security interest in, and sole dominion and

control over, such Deposit Account and waives its rights to set-off with

respect to amounts in such Deposit Account; and (ii) taken all other steps

necessary or, in the opinion of Administrative Agent, desirable to ensure that

Administrative Agent will have sole dominion and control over such Deposit

Account at all times while such agreement is in effect; provided that if

Borrower or such Subsidiary is unable to obtain such agreement from such

financial institution Borrower shall, or shall cause such Subsidiary to, within

30 days after receiving a written request by Administrative Agent to do so,

transfer all amounts in the applicable Deposit Account to a Deposit Account

maintained at a financial institution from which Borrower or such Subsidiary

has obtained such an agreement. 

Borrower shall not permit the aggregate amount on deposit in all Deposit

Accounts of Borrower and of its Subsidiaries (other than Deposit Accounts

maintained with Administrative Agent) or Deposit Accounts for which a deposit

account control agreement described above has been executed and delivered) at

any time to exceed $5,000,000.

 

6.12        Solvency.

 

Borrower shall at

all times be Solvent and Borrower shall cause Borrower and its Subsidiaries,

taken as a whole, to be at all times Solvent.

 

Section 7.              BORROWER’S NEGATIVE COVENANTS

 

Borrower covenants

and agrees that until (i) all of the Commitments hereunder have been

terminated; (ii) payment in full of all of the Loans; (iii) payment in full of

all other Obligations then due and payable; and (iv) the cancellation or

expiration of all Letters of Credit, unless Requisite Lenders shall otherwise

give prior written consent, Borrower shall perform, and shall cause each of its

Subsidiaries to perform, all covenants in this Section 7.

 

7.1          Indebtedness.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, directly or indirectly,

create, incur, assume or guaranty, or otherwise become or remain directly or

indirectly liable with respect to, any Indebtedness, except:

 

(i)            Borrower

may become and remain liable with respect to the Obligations;

 

(ii)           Borrower

and its Domestic Subsidiaries that are Subsidiary Guarantors may become and

remain liable with respect to Contingent Obligations permitted by subsection

7.4 and, upon any matured obligations actually arising pursuant thereto, the

Indebtedness corresponding to the Contingent Obligations so extinguished;

 

(iii)          Borrower may become and remain liable

with respect to Indebtedness to any of its wholly-owned Domestic Subsidiaries

that are Subsidiary Guarantors, and any wholly-owned Domestic Subsidiary of

Borrower that is a Subsidiary Guarantor may become and remain liable with

respect to Indebtedness to Borrower or any other wholly-owned Domestic

Subsidiary of Borrower that is a Subsidiary Guarantor; provided that

(a) all such intercompany Indebtedness shall be evidenced by promissory

notes; (b) all such intercompany Indebtedness owed by Borrower to any of

its Subsidiaries shall be subordinated in right of payment to the payment in

full of the Obligations pursuant to the terms of the applicable promissory

notes or an intercompany subordination agreement; and (c) any payment by

any Subsidiary of Borrower under any guaranty of the Obligations shall result

in a pro tanto reduction of the amount of any intercompany

Indebtedness owed by such Subsidiary to Borrower or to any of its Subsidiaries

for whose benefit such payment is made;

 

(iv)          Borrower

may remain liable with respect to the Senior Notes (and senior unsecured or

subordinated Indebtedness to refinance the Senior Notes acceptable to

Administrative Agent) in an aggregate principal amount not to exceed the lesser

of $174,000,000 or the then outstanding principal amount of the Senior Notes

plus any reasonable transaction costs associated with any acceptable

refinancing of such Senior Notes;

 

(v)           Borrower

and its Subsidiaries, as applicable, may remain liable with respect to

Indebtedness described on Schedule 7.1 annexed hereto;

 

(vi)          Borrower may remain liable with

respect to Subordinated Indebtedness in an aggregate principal amount not to

exceed $100,000,000; and

 

(vii)         Borrower and its Domestic Subsidiaries

that are Subsidiary Guarantors may become and remain liable with respect to

other Indebtedness (including letters of credit) in an aggregate principal

amount not to exceed $20,000,000 at any time outstanding.

 

7.2          Liens and

Related Matters.

 

A.            Prohibition

on Liens. 

Borrower shall not, and shall not permit any of its Subsidiaries to,

directly or indirectly, create, incur, assume or permit to exist any Lien on or

with respect to any property or asset of any kind (including any document or

instrument in respect of goods or accounts receivable) of Borrower or any of

its Subsidiaries, whether now owned or hereafter acquired, or any income or

profits therefrom or proceeds thereof, or file or permit the filing of, or

permit to remain in effect, any financing statement or other similar notice of

any Lien with respect to any such property, asset, income or profits or

proceeds under the UCC of any State or under any similar recording or notice

statute, except:

 

(i)            Permitted Encumbrances;

 

(ii)           Liens

granted pursuant to the Collateral Documents;

 

(iii)          Liens existing on the Closing Date and

set forth on Schedule 7.2A; provided that (a) no such Lien shall at

any time be extended to cover property or assets other than the property or

assets subject thereto on the Closing Date and (b) the principal amount of

the Indebtedness secured by such Liens shall not be extended, renewed, refunded

or refinanced; and

 

(iv)          Other

Liens on assets acquired with proceeds of Indebtedness permitted under

subsection 7.1(vii) securing such Indebtedness; provided such Liens attach

concurrently with or within ten days after the acquisition thereof and only to

the asset acquired with the proceeds of such Indebtedness.

 

B.            Equitable Lien in Favor of Lenders. 

If Borrower or any of its Subsidiaries shall create or assume any Lien

upon any of its properties or assets, whether now owned or hereafter acquired,

other than Liens excepted by the provisions of subsection 7.2A, Borrower or its

Subsidiary shall make or cause to be made effective provision whereby the

Obligations will be secured by such Lien equally and ratably with any and all

other Indebtedness secured thereby as long as any such Indebtedness shall be so

secured which provision shall not cure any default that may have occurred and

which provision shall be made without prejudice to any rights of Administrative

Agent or Lenders with respect to such default; provided that,

notwithstanding the foregoing, this covenant shall not be construed as a

consent by Requisite Lenders to the creation or assumption of any such Lien not

permitted by the provisions of subsection 7.2A.

 

C.            No Further Negative Pledges. 

Neither Borrower nor any of its Subsidiaries shall enter into any

agreement prohibiting the creation or assumption of any Lien in favor of

Administrative Agent or any Lender upon any of its properties or assets,

whether now owned or hereafter acquired, except with respect to specific

property encumbered to secure payment of particular Indebtedness or to be sold

pursuant to an executed agreement with respect to an Asset Sale permitted by

this Agreement.

 

D.            No Restrictions on Subsidiary

Distributions to Borrower or Other Subsidiaries.  Borrower will

not, and will not permit any of its Subsidiaries to, create or otherwise cause

or suffer to exist or become effective any consensual encumbrance or

restriction of any kind on the ability of any such Subsidiary to (i) pay

dividends or make any other distributions on any of such Subsidiary’s Capital

Stock owned by Borrower or any other Subsidiary of Borrower, (ii) repay or

prepay any Indebtedness owed by such Subsidiary to Borrower or any other

Subsidiary of Borrower, (iii) make loans or advances to Borrower or any

other Subsidiary of Borrower, or (iv) transfer any of its property or

assets to Borrower or any other Subsidiary of Borrower, except as provided in

this Agreement.

 

7.3          Investments;

Acquisitions.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, directly or indirectly,

make or own any Investment in any Person, including any Joint Venture, or

acquire, by purchase or otherwise, all or substantially all the business,

property or fixed assets of, or Capital Stock or other ownership interest of,

any Person or any division or line of business of any Person except:

 

(i)            Borrower

and its Subsidiaries may make and own Investments in Cash Equivalents;

 

(ii)           Borrower

and its Subsidiaries may continue to own the Investments owned by them as of

the Closing Date in any Subsidiaries of Borrower and Borrower and its

wholly-owned Domestic Subsidiaries that are Subsidiary Guarantors may make and

own additional equity Investments in their respective wholly-owned Domestic

Subsidiaries that are Subsidiary Guarantors;

 

(iii)          Borrower

and its Subsidiaries may make intercompany loans to the extent permitted under subsection

7.1(iii);

 

(iv)          Borrower

and its Subsidiaries may make Consolidated Capital Expenditures permitted by

subsection 7.8;

 

(v)           Borrower

and its Subsidiaries may continue to own the Investments owned by them and

described on Schedule 7.3 annexed hereto;

 

(vi)          Borrower and its Domestic Subsidiaries

that are Subsidiary Guarantors may make and own other Investments in an

aggregate amount not to exceed at any time $5,000,000; provided, however,

if Borrower has achieved, and for so long as Borrower is maintaining (and on a

pro forma basis, after giving effect to any additional Investments, will

continue to maintain), a Consolidated Total Leverage Ratio of less than

3.00:1.00, and so long as no Potential Event of Default or Event of Default has

occurred and is continuing at the time the Investment is made, Borrower and its

Domestic Subsidiaries that are Subsidiary Guarantors may make and own other

Investments in an aggregate amount not to exceed at any time $10,000,000; and, provided,

further that if at any time Borrower is no longer maintaining a

Consolidated Total Leverage Ratio of less than 3.00:1.00, the amount of

Investments permitted under this subsection (vi) shall once again be $5,000,000

(it being understood that any Investment made or committed to be made before

such reduction shall continue to be permitted hereunder);

 

(vii)         Borrower

may acquire and hold obligations of one or more officers or other employees of

Borrower or its Subsidiaries in connection with such officers’ or employees’

acquisition of shares of Borrower’s common stock, so long as no cash is

actually advanced by Borrower or any of its Subsidiaries to such officers or

employees in connection with the acquisition of any such obligations; and

 

(viii)        Borrower

and its Subsidiaries may receive and hold promissory notes and other non-cash

consideration received in connection with any Asset Sale permitted by

subsection 7.7(iv).

 

7.4          Contingent

Obligations.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, directly or indirectly,

create or become or remain liable with respect to any Contingent Obligation,

except:

 

(i)            Subsidiaries

of Borrower may become and remain liable with respect to Contingent Obligations

in respect of the Subsidiary Guaranty;

 

(ii)           Borrower

may become and remain liable with respect to Contingent Obligations in respect

of Letters of Credit and Borrower and its Subsidiaries may become and remain

liable with respect to Contingent Obligations in respect of other commercial

letters of credit in an aggregate amount not to exceed at any time $5,000,000

and Contingent Obligations in respect of other standby letters of credit in an

aggregate amount not to exceed at any time $2,500,000;

 

(iii)          Borrower

may become and remain liable with respect to Contingent Obligations under Hedge

Agreements required under subsection 6.10 and under other Hedge Agreements with

respect to Indebtedness in an aggregate notional principal amount not to exceed

at any time $150,000,000;

 

(iv)          Borrower

and its Subsidiaries may become and remain liable with respect to Contingent

Obligations in respect of customary indemnification and purchase price

adjustment obligations incurred in connection with Asset Sales or other sales

of assets; and

 

(v)           Borrower

and its Domestic Subsidiaries that are Subsidiary Guarantors may become and

remain liable with respect to other Contingent Obligations of Indebtedness

permitted under subsection 7.1.

 

7.5          Restricted

Junior Payments.

 

Borrower shall not, and

shall not permit any of its Subsidiaries to, directly or indirectly, declare,

order, pay, make or set apart any sum for any Restricted Junior Payment; provided

that Borrower may make regularly scheduled payments of interest in respect of

any Subordinated Indebtedness in accordance with the terms of, and only to the

extent required by, and subject to the subordination provisions contained in,

the indenture or other agreement pursuant to which such Subordinated

Indebtedness was issued, as such indenture or other agreement may be amended

from time to time to the extent permitted under subsection 7.14; provided, that if Borrower

has achieved, and for so long as Borrower is maintaining (and on a pro forma

basis, after giving effect to any Restricted Junior Payment, will continue to

maintain), a Consolidated Total Leverage Ratio of less than 3.00:1.00, and so

long as no Potential Event of Default or Event of Default has occurred and is

continuing, Borrower and its Subsidiaries may make Restricted Junior Payments

in the form of share repurchases or dividends in an amount not to exceed at any

time $15,000,000; provided, further that if at any time Borrower

is no longer maintaining a Consolidated Total Leverage Ratio of less than

3.00:1.00, the Restricted Junior Payments permitted under the immediately

preceding proviso of this subsection 7.5 shall no longer be permitted (it being

understood that any Restricted Junior Payment made at a time when such

restriction was not in effect shall continue to be permitted hereunder).

 

7.6          Financial Covenants.

 

A.            Minimum Consolidated Interest

Coverage Ratio.  Borrower shall not permit the Consolidated

Interest Coverage Ratio for any four consecutive Fiscal Quarter period ending

during any of the periods set forth below to be less than the correlative ratio

indicated:

 

	

  Period

  	

   

  	

  Minimum Consolidated Interest

  Coverage Ratio

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2001

  	

   

  	

  2.25:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2001

  	

   

  	

  2.25:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  2.25:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  2.25:1.00

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  2.25:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  2.25:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  2.25:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  2.50:1.00

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  2.50:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  2.50:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2004 and each Fiscal Quarter thereafter

  	

   

  	

  2.75:1.00

  	

   

  

 

B.            Maximum

Consolidated Total Leverage Ratio.  Borrower shall not

permit the Consolidated Total Leverage Ratio as of the last day of the most

recently ended Fiscal Quarter ending during any of the periods set forth below

to exceed the correlative ratio indicated:

 

	

  Period

  	

   

  	

  Maximum Consolidated Total Leverage

  Ratio

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2001

  	

   

  	

  4.75:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2001

  	

   

  	

  4.75:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  4.50:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  4.50:1.00

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  4.50:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2002

  	

   

  	

  4.25:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  4.25:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  4.25:1.00

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  4.00:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2003

  	

   

  	

  4.00:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2004

  	

   

  	

  3.75:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2004

  	

   

  	

  3.75:1.00

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2004

  	

   

  	

  3.75:1.00

  	

   

  
	

  4th

  Fiscal Quarter, Fiscal Year 2004

  	

   

  	

  3.50:1.00

  	

   

  
	

  1st

  Fiscal Quarter, Fiscal Year 2005

  	

   

  	

  3.50:1.00

  	

   

  
	

  2nd

  Fiscal Quarter, Fiscal Year 2005 and each Fiscal Quarter thereafter

  	

   

  	

  3.25:1.00

  	

   

  

 

C.            Maximum Consolidated Senior Secured Leverage Ratio. 

Borrower shall not permit the Consolidated Senior Secured Leverage Ratio

as of the last day of the most recently ended Fiscal Quarter ending during any

of the periods set forth below to exceed the correlative ratio indicated:

 

	

  Period

  	

   

  	

  Maximum Consolidated Senior Secured

  Leverage Ratio

  	

   

  
	

  3rd

  Fiscal Quarter, Fiscal Year 2001 and each Fiscal Quarter thereafter

  	

   

  	

  2.25:1.00

  	

   

  

 

D.            Minimum

Guest Pay Rooms. 

Borrower shall not permit the number of Guest Pay Rooms at any time to

be less than 700,000.

 

7.7          Restriction on Fundamental Changes;

Asset Sales.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, alter the corporate,

capital or legal structure of Borrower or any of its Subsidiaries, or enter

into any transaction of merger or consolidation, or liquidate, wind-up or

dissolve itself (or suffer any liquidation or dissolution), or convey, sell,

lease or sub-lease (as lessor or sublessor), transfer or otherwise dispose of,

in one transaction or a series of transactions, all or any part of its

business, property or assets (including its notes or receivables and Capital

Stock of a Subsidiary, whether newly issued or outstanding), whether now owned

or hereafter acquired, or acquire by purchase or otherwise all or substantially

all the business, property or fixed assets of, or stock or other evidence of

beneficial ownership of, any Person or any division or line of business of any

Person (other than purchases or other acquisitions of Inventory, materials and

equipment in the ordinary course of Borrower’s, or any of its Subsidiary’s,

business) except:

 

(i)            any

Subsidiary of Borrower may be merged with or into Borrower or any wholly-owned

Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all or any

part of its business, property or assets may be conveyed, sold, leased,

transferred or otherwise disposed of, in one transaction or a series of

transactions, to Borrower or any wholly-owned Subsidiary Guarantor; provided

that, in the case of such a merger, Borrower or such wholly-owned Subsidiary

Guarantor shall be the continuing or surviving Person and (ii) in the case of

such a liquidation, winding up or dissolution, all of the assets of such

wholly-owned Subsidiary Guarantor are transferred to Borrower or a Subsidiary

Guarantor that is wholly owned, directly or indirectly, by Borrower or as

otherwise expressly permitted under this Agreement;

 

(ii)           Borrower

and its Subsidiaries may sell or otherwise dispose of assets in transactions

that do not constitute Asset Sales; provided that the consideration

received for such assets shall be in an amount at least equal to the fair

market value thereof;

 

(iii)          Borrower

and its Subsidiaries may dispose of obsolete, worn out or surplus property in

the ordinary course of business;

 

(iv)          Borrower and its Subsidiaries may make

Asset Sales to Persons who are not Affiliates of Borrower and its Subsidiaries

of assets having a fair market value not in excess of $1,000,000 in any Fiscal

Year; provided that (a) the consideration received for such assets

shall be in an amount at least equal to the fair market value thereof;

(b) a minimum of 75% of the consideration received shall be in Cash, and

(c) the proceeds of such Asset Sales shall be applied as required by

subsection 2.4B(iii)(a) or subsection 2.4D;

 

(v)           in order to resolve disputes that

occur in the ordinary course of business, Borrower and its Subsidiaries may

discount or otherwise compromise for less than the face value thereof, notes or

accounts receivable;

 

(vi)          Borrower

or a Subsidiary may sell or dispose of shares of Capital Stock of any of its

Subsidiaries in order to qualify members of the Governing Body of the

Subsidiary if required by applicable law;

 

(vii)         Any

Person may be merged with or into Borrower or any Subsidiaries if the

acquisition of the Capital Stock of such Person by Borrower or such Subsidiary

would have been permitted pursuant to subsections 7.3 and 7.8; provided

that (a) in the case of Borrower, Borrower shall be the continuing or surviving

Person, (b) if a Subsidiary of Borrower is not the surviving or continuing

Person, the surviving Person becomes a Subsidiary of Borrower and complies with

the provisions of subsection 6.8 and 6.9 and (c) no Potential Event of Default

or Event of Default shall have occurred or be continuing after giving effect

thereto; and

 

(viii)        Borrower

may dissolve a Subsidiary that is not a Subsidiary Guarantor; provided

that immediately thereafter, all of the proceeds thereof are received by

Borrower and its Subsidiaries in proportion to their respective ownership

interests in such Subsidiary.

 

7.8          Consolidated

Capital Expenditures.

 

Borrower shall

not, and shall not permit its Subsidiaries to, make or incur Consolidated

Capital Expenditures, in any Fiscal Year indicated below, in an aggregate

amount in excess of the corresponding amount (the “Maximum Consolidated Capital

Expenditures Amount”) set forth below opposite such Fiscal Year; provided

that the Maximum Consolidated Capital Expenditures Amount for any Fiscal Year

shall be increased by an amount equal to the excess, if any, (but in no event

more than $15,000,000) of the Maximum Consolidated Capital Expenditures Amount

for the previous Fiscal Year (without giving effect to any adjustment in accordance

with this proviso) over the actual amount of Consolidated Capital Expenditures

for such previous Fiscal Year:

 

	

  Fiscal Year

  	

   

  	

  Maximum Consolidated Capital

  Expenditures

  	

   

  
	

  2001

  	

   

  	

  $

  	

  85,000,000

  	

   

  
	

  2002

  	

   

  	

  90,000,000

  	

   

  
	

  2003

  	

   

  	

  95,000,000

  	

   

  
	

  2004

  	

   

  	

  95,000,000

  	

   

  
	

  2005

  	

   

  	

  90,000,000

  	

   

  
	

  2006

  	

   

  	

  90,000,000

  	

   

  
	

  2007

  	

   

  	

  90,000,000

  	

   

  
					

 

7.9          Transactions with Affiliates.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, directly or indirectly,

enter into or permit to exist any transaction (including the purchase, sale,

lease or exchange of any property or the rendering of any service) with any

Affiliate of Borrower on terms that are less favorable to Borrower or that

Subsidiary, as the case may be, than those that might be obtained at the time

from Persons who are not such a holder or Affiliate; provided that the

foregoing restriction shall not apply to (i) any transaction between

Borrower and any of its wholly-owned Domestic Subsidiaries that are Subsidiary

Guarantors or between any of its wholly-owned Domestic Subsidiaries that are

Subsidiary Guarantors or (ii) reasonable and customary fees paid to

members of the Governing Bodies of Borrower and its Subsidiaries.

 

7.10        Sales and Lease-Backs

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, directly or indirectly,

become or remain liable as lessee or as a guarantor or other surety with

respect to any lease, whether an Operating Lease or a Capital Lease, of any

property (whether real, personal or mixed), whether now owned or hereafter

acquired, (i) that Borrower or any of its Subsidiaries has sold or

transferred or is to sell or transfer to any other Person (other than Borrower

or any of its Subsidiaries) or (ii) that Borrower or any of its

Subsidiaries intends to use for substantially the same purpose as any other

property that has been or is to be sold or transferred by Borrower or any of

its Subsidiaries to any Person (other than Borrower or any of its Subsidiaries)

in connection with such lease.

 

7.11        Disposal of Subsidiary Stock.

 

Except for any

sale of 100% of the Capital Stock of any of its Subsidiaries in compliance with

the provisions of clauses (i), (iv), (vi) and (vii) of subsection 7.7, Borrower

shall not directly or indirectly sell, assign, pledge or otherwise encumber or

dispose of any shares of Capital Stock of any of its Subsidiaries, except to

qualify directors if required by applicable law; or permit any of its

Subsidiaries directly or indirectly to sell, assign, pledge or otherwise

encumber or dispose of any shares of Capital Stock of any of its Subsidiaries

(including such Subsidiary), except to Borrower, another wholly owned Domestic

Subsidiary of Borrower that is a Subsidiary Guarantor, or to qualify directors

if required by applicable law.

 

7.12        Sale or Discount of Receivables.

 

Except for sales

permitted pursuant to subsection 7.7(v), Borrower shall not, and shall not

permit any of its Subsidiaries to, directly or indirectly, sell with recourse,

or discount or otherwise sell for less than the face value thereof, any of its

notes or accounts receivable.

 

7.13        Conduct of

Business.

 

From and after the

Closing Date, Borrower shall not, and shall not permit any of its Subsidiaries

to, engage in any business other than (i) the businesses engaged in by

Borrower and its Subsidiaries on the Closing Date and similar or related

businesses and (ii) such other lines of business as may be consented to by

Requisite Lenders.

 

7.14        Amendments

of Documents Relating to Senior Note Documents and Subordinated Indebtedness.

 

Borrower shall

not, and shall not permit any of its Subsidiaries to, amend or otherwise change

the terms of any Senior Note Document or Subordinated Indebtedness, or make any

payment consistent with an amendment thereof or change thereto, if the effect

of such amendment or change is to increase the interest rate on such Senior

Note or Subordinated Indebtedness, change (to earlier dates) any dates upon

which payments of principal or interest are due thereon, change any event of

default or condition to an event of default with respect thereto (other than to

eliminate any such event of default or increase any grace period related

thereto), change the redemption, prepayment or defeasance provisions thereof,

change the subordination provisions thereof (or of any guaranty thereof), or change

any collateral therefor (other than to release such collateral), or if the

effect of such amendment or change, together with all other amendments or

changes made, is to increase materially the obligations of the obligor

thereunder or to confer any additional rights on the holders of such Senior

Note or Subordinated Indebtedness (or a trustee or other representative on

their behalf) which would be adverse to Borrower or Lenders.

 

7.15        Fiscal Year.

 

Borrower shall not

change its Fiscal Year-end from December 31.

 

Section 8.              EVENTS OF DEFAULT

 

If any of the

following conditions or events (“Events of Default”) shall occur:

 

8.1          Failure

to Make Payments When Due.

 

Failure by

Borrower to pay any installment of principal of any Loan when due, whether at

stated maturity, by acceleration, by notice of voluntary prepayment, by

mandatory prepayment or otherwise; failure by Borrower to pay when due any

amount payable to an Issuing Lender in reimbursement of any drawing under a

Letter of Credit; or failure by Borrower to pay any interest on any Loan or any

fee or any other amount due under this Agreement within three Business Days

after the date due; or

 

8.2          Default

in Other Agreements; Termination of Material Intellectual Property License.

 

(i)            Failure

of Borrower or any of its Subsidiaries to pay when due any principal of or

interest on or any other amount payable in respect of one or more items of

Indebtedness (other than Indebtedness referred to in subsection 8.1) or

Contingent Obligations in an individual principal amount of $2,500,000 or more

or with an aggregate principal amount of $2,500,000 or more, in each case

beyond the end of any grace period provided therefor; or

 

(ii)           breach

or default by Borrower or any of its Subsidiaries with respect to any other

material term of (a) one or more items of Indebtedness or Contingent

Obligations in the individual or aggregate principal amounts referred to in

clause (i) above or (b) any loan agreement, mortgage, indenture or other

agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),

if the effect of such breach or default is to cause, or to permit the holder or

holders of that Indebtedness or Contingent Obligation(s) (or a trustee on

behalf of such holder or holders) to cause, that Indebtedness or Contingent

Obligation(s) to become or be declared due and payable prior to its stated

maturity or the stated maturity of any underlying obligation, as the case may

be (upon the giving or receiving of notice, lapse of time, both, or otherwise);

or

 

(iii)          any

license of material Intellectual Property used or useful in the business of

Borrower and/or any of its Subsidiaries is prematurely terminated and not

replaced by Borrower and/or such Subsidiary within 30 days of such termination

and the result thereof could reasonably be expected to result in a Material

Adverse Effect; or

 

8.3          Breach of Certain Covenants.

 

Failure of

Borrower to perform or comply with any term or condition contained in

subsection 2.5 or 6.2 or Section 7 of this Agreement; or

 

8.4          Breach of Warranty.

 

Any

representation, warranty, certification or other statement made by Borrower or

any of its Subsidiaries in any Loan Document or in any statement or certificate

at any time given by Borrower or any of its Subsidiaries in writing pursuant hereto

or thereto or in connection herewith or therewith shall be false in any

material respect on the date as of which made; or

 

8.5          Other Defaults Under Loan Documents.

 

Any Loan Party

shall default in the performance of or compliance with any term contained in

this Agreement or any of the other Loan Documents, other than any such term

referred to in any other subsection of this Section 8, and such default shall

not have been remedied or waived within 30 days after the earlier of (i) an

Officer of Borrower or such Loan Party becoming aware of such default or (ii)

receipt by Borrower and such Loan Party of notice from Administrative Agent or

any Lender of such default; or

 

8.6          Involuntary

Bankruptcy; Appointment of Receiver, etc.

 

(i)            A

court having jurisdiction in the premises shall enter a decree or order for

relief in respect of Borrower or any of its Subsidiaries in an involuntary case

under the Bankruptcy Code or under any other applicable bankruptcy, insolvency

or similar law now or hereafter in effect, which decree or order is not stayed;

or any other similar relief shall be granted under any applicable federal or

state law; or

 

(ii)           an

involuntary case shall be commenced against Borrower or any of its Subsidiaries

under the Bankruptcy Code or under any other applicable bankruptcy, insolvency

or similar law now or hereafter in effect; or a decree or order of a court

having jurisdiction in the premises for the appointment of a receiver,

liquidator, sequestrator, trustee, custodian or other officer having similar

powers over Borrower or any of its Subsidiaries, or over all or a substantial

part of its property, shall have been entered; or there shall have occurred the

involuntary appointment of an interim receiver, trustee or other custodian of

Borrower or any of its Subsidiaries for all or a substantial part of its

property; or a warrant of attachment, execution or similar process shall have

been issued against any substantial part of the property of Borrower or any of

its Subsidiaries, and any such event described in this clause (ii) shall

continue for 60 days unless dismissed, bonded or discharged; or

 

8.7          Voluntary

Bankruptcy; Appointment of Receiver, etc.

 

(i)            Borrower

or any of its Subsidiaries shall have an order for relief entered with respect

to it or commence a voluntary case under the Bankruptcy Code or under any other

applicable bankruptcy, insolvency or similar law now or hereafter in effect, or

shall consent to the entry of an order for relief in an involuntary case, or to

the conversion of an involuntary case to a voluntary case, under any such law,

or shall consent to the appointment of or taking possession by a receiver,

trustee or other custodian for all or a substantial part of its property; or

Borrower or any of its Subsidiaries shall make any assignment for the benefit

of creditors; or

 

(ii)           Borrower

or any of its Subsidiaries shall be unable, or shall fail generally, or shall

admit in writing its inability, to pay its debts as such debts become due; or

the Governing Body of Borrower or any of its Subsidiaries (or any committee

thereof) shall adopt any resolution or otherwise authorize any action to

approve any of the actions referred to in clause (i) above or this clause (ii);

or

 

8.8          Judgments

and Attachments.

 

Any money

judgment, writ or warrant of attachment or similar process involving

(i) in any individual case an amount in excess of $5,000,000 or

(ii) in the aggregate at any time an amount in excess of $5,000,000 (in

either case not adequately covered by insurance as to which a solvent and

unaffiliated insurance company has acknowledged coverage) shall be entered or

filed against Borrower or any of its Subsidiaries or any of their respective

assets and shall remain undischarged, unvacated, unbonded or unstayed for a

period of 30 days (or in any event later than five days prior to the date of

any proposed sale thereunder); or

 

8.9          Dissolution.

 

Any order,

judgment or decree shall be entered against Borrower or any of its Subsidiaries

decreeing the dissolution or split up of Borrower or that Subsidiary and such

order shall remain undischarged or unstayed for a period in excess of 30 days;

or

 

8.10        Employee Benefit Plans.

 

There shall occur

one or more ERISA Events which individually or in the aggregate results in or

might reasonably be expected to result in liability of Borrower, any of its

Subsidiaries or any of their respective ERISA Affiliates in excess of

$2,500,000 during the term of this Agreement; or there shall exist an

accumulated benefit obligation, individually or in the aggregate for all

Pension Plans (excluding for purposes of such computation any Pension Plans

with respect to which assets exceed the accumulated benefit obligation), which

exceeds the fair market value of the assets of such Pension Plans by more than

$2,500,000; or

 

8.11        Material Adverse Effect.

 

Any event or

change shall occur that has caused or evidences, either in any case or in the

aggregate, a Material Adverse Effect; or

 

8.12        Change in Control.

 

A Change in

Control shall have occurred; or

 

8.13        Invalidity of Subsidiary Guaranty; Failure of

Security; Repudiation of Obligations.

 

At any time after

the execution and delivery thereof, (i) the Subsidiary Guaranty for any reason,

other than the satisfaction in full of all Obligations, shall cease to be in

full force and effect (other than in accordance with its terms) or shall be

declared to be null and void, (ii) any Collateral Document shall cease to be in

full force and effect (other than by reason of a release of Collateral

thereunder in accordance with the terms hereof or thereof, the satisfaction in

full of the Obligations or any other termination of such Collateral Document in

accordance with the terms hereof or thereof) or shall be declared null and

void, or Administrative Agent shall not have or shall cease to have a valid and

perfected First Priority Lien in any Collateral purported to be covered

thereby, or (iii) any Loan Party shall contest the validity or enforceability

of any Loan Document in writing or deny in writing that it has any further

liability, including with respect to future advances by Lenders, under any Loan

Document to which it is a party; or

 

8.14        Subordinated

Indebtedness.

 

There shall occur

any default under any Subordinated Indebtedness, or there shall occur any event

that requires Borrower or any of its Subsidiaries to purchase, redeem or

otherwise acquire or offer to purchase, redeem or otherwise acquire all or any

portion of any Subordinated Indebtedness; or Borrower or any of its

Subsidiaries shall for any reasons purchase, redeem or otherwise acquire or

offer to purchase, redeem or otherwise acquire, or make any other payments in

respect of, all or any portion of any Subordinated Indebtedness, except to the

extent expressly permitted by subsection 7.5;

 

THEN (i) upon the occurrence of any Event of Default

described in subsection 8.6 or 8.7, each of (a) the unpaid principal

amount of and accrued interest on the Loans, (b) an amount equal to the

maximum amount that may at any time be drawn under all Letters of Credit then

outstanding (whether or not any beneficiary under any such Letter of Credit

shall have presented, or shall be entitled at such time to present, the drafts

or other documents or certificates required to draw under such Letter of

Credit), and (c) all other Obligations shall automatically become

immediately due and payable, without presentment, demand, protest or other

requirements of any kind, all of which are hereby expressly waived by Borrower,

and the obligation of each Lender to make any Loan, the obligation of Administrative

Agent to issue any Letter of Credit and the right of any Lender to issue any

Letter of Credit hereunder shall thereupon terminate, and (ii) upon the

occurrence and during the continuation of any other Event of Default,

Administrative Agent shall, upon the written request or with the written

consent of Requisite Lenders, by written notice to Borrower, declare all or any

portion of the amounts described in clauses (a) through (c) above to be, and

the same shall forthwith become, immediately due and payable, and the

obligation of each Lender to make any Loan, the obligation of Administrative

Agent to issue any Letter of Credit and the right of any Lender to issue any

Letter of Credit hereunder shall thereupon terminate; provided that the

foregoing shall not affect in any way the obligations of Lenders under

subsection 3.3C(i) or the obligations of Lenders to purchase assignments of any

unpaid Swing Line Loans as provided in subsection 2.1A(iii).

 

Any amounts

described in clause (b) above, when received by Administrative Agent, shall be

held by Administrative Agent pursuant to the terms of the Security Agreement

and shall be applied as therein provided.

 

Notwithstanding

anything contained in the second preceding paragraph, if at any time within 60

days after an acceleration of the Loans pursuant to clause (ii) of such

paragraph Borrower shall pay all arrears of interest and all payments on

account of principal which shall have become due otherwise than as a result of

such acceleration (with interest on principal and, to the extent permitted by

law, on overdue interest, at the rates specified in this Agreement) and all

Events of Default and Potential Events of Default (other than non-payment of

the principal of and accrued interest on the Loans, in each case which is due

and payable solely by virtue of acceleration) shall be remedied or waived

pursuant to subsection 10.6, then Requisite Lenders, by written notice to

Borrower, may at their option rescind and annul such acceleration and its

consequences; but such action shall not affect any subsequent Event of Default

or Potential Event of Default or impair any right consequent thereon.  The provisions of this paragraph are

intended merely to bind Lenders to a decision which may be made at the election

of Requisite Lenders and are not intended, directly or indirectly, to benefit

Borrower, and such provisions shall not at any time be construed so as to grant

Borrower the right to require Lenders to rescind or annul any acceleration

hereunder or to preclude Administrative Agent or Lenders from exercising any of

the rights or remedies available to them under any of the Loan Documents, even

if the conditions set forth in this paragraph are met.

 

Section 9.              ADMINISTRATIVE AGENT

 

9.1          Appointment.

 

A.            Appointment of Administrative Agent. 

CIBC is hereby appointed Administrative Agent hereunder and under the

other Loan Documents and each Lender hereby authorizes Administrative Agent to

act as its administrative agent in accordance with the terms of this Agreement

and the other Loan Documents. 

Administrative Agent agrees to act upon the express conditions contained

in this Agreement and the other Loan Documents, as applicable.  The provisions of this Section 9 are solely

for the benefit of Administrative Agent and Lenders and no Loan Party shall

have any rights as a third party beneficiary of any of the provisions

thereof.  In performing its functions

and duties under this Agreement, Administrative Agent shall act solely as an

Administrative Agent of Lenders and does not assume and shall not be deemed to

have assumed any obligation towards or relationship of agency or trust with or

for Borrower or any of its Subsidiaries.

 

B.            Appointment

of Supplemental Collateral Agents.  It is the purpose of this Agreement and the

other Loan Documents that there shall be no violation of any law of any

jurisdiction denying or restricting the right of banking corporations or

associations to transact business as agent or trustee in such

jurisdiction.  It is recognized that in

case of litigation under this Agreement or any of the other Loan Documents, and

in particular in case of the enforcement of any of the Loan Documents, or in

case Administrative Agent reasonably deems that by reason of any present law of

any jurisdiction or future law of any jurisdiction that is enacted it may not

exercise any of the rights, powers or remedies granted herein or in any of the

other Loan Documents or take any other action which may be desirable or

necessary in connection therewith, it may be necessary that Administrative

Agent appoint an additional individual or institution as a separate trustee,

co-trustee, collateral agent or collateral co-agent (any such additional

individual or institution being referred to herein individually as a “Supplemental

Collateral Agent” and collectively as “Supplemental Collateral Agents”).

 

If Administrative

Agent appoints a Supplemental Collateral Agent with respect to any Collateral,

(i) each and every right, power, privilege or duty expressed or intended by

this Agreement or any of the other Loan Documents to be exercised by or vested

in or conveyed to Administrative Agent with respect to such Collateral shall be

exercisable by and vest in such Supplemental Collateral Agent to the extent,

and only to the extent, necessary to enable such Supplemental Collateral Agent

to exercise such rights, powers and privileges with respect to such Collateral

and to perform such duties with respect to such Collateral, and every covenant

and obligation contained in the Loan Documents and necessary to the exercise or

performance thereof by such Supplemental Collateral Agent shall run to and be

enforceable by either Administrative Agent or such Supplemental Collateral

Agent, and (ii) the provisions of this Section 9 and of subsections 10.2 and

10.3 that refer to Administrative Agent shall inure to the benefit of such

Supplemental Collateral Agent and all references therein to Administrative

Agent shall be deemed to be references to Administrative Agent and/or such

Supplemental Collateral Agent, as the context may require.

 

Should any

instrument in writing from Borrower or any other Loan Party be required by any

Supplemental Collateral Agent so appointed by Administrative Agent for more

fully and certainly vesting in and confirming to him or it such rights, powers,

privileges and duties, Borrower shall, or shall cause such Loan Party to,

execute, acknowledge and deliver any and all such instruments promptly upon

request by Administrative Agent.  In

case any Supplemental Collateral Agent, or a successor thereto, shall die,

become incapable of acting, resign or be removed, all the rights, powers,

privileges and duties of such Supplemental Collateral Agent, to the extent

permitted by law, shall vest in and be exercised by Administrative Agent until

the appointment of a new Supplemental Collateral Agent.

 

9.2          Powers and Duties; General

Immunity.

 

A.            Powers; Duties Specified. 

Each Lender irrevocably authorizes Administrative Agent to take such

action on such Lender’s behalf and to exercise such powers, rights and remedies

hereunder and under the other Loan Documents as are specifically delegated or

granted to Administrative Agent by the terms hereof and thereof, together with

such powers, rights and remedies as are reasonably incidental thereto.  Administrative Agent shall have only those

duties and responsibilities that are expressly specified in this Agreement and

the other Loan Documents. 

Administrative Agent may exercise such powers, rights and remedies and

perform such duties by or through its agents or employees.  Administrative Agent shall not have, by

reason of this Agreement or any of the other Loan Documents, a fiduciary

relationship in respect of any Lender; and nothing in this Agreement or any of

the other Loan Documents, expressed or implied, is intended to or shall be so

construed as to impose upon Administrative Agent any obligations in respect of

this Agreement or any of the other Loan Documents except as expressly set forth

herein or therein.

 

B.            No Responsibility for Certain

Matters.  Administrative Agent shall not be

responsible to any Lender for the execution, effectiveness, genuineness,

validity, enforceability, collectibility or sufficiency of this Agreement or

any other Loan Document or for any representations, warranties, recitals or

statements made herein or therein or made in any written or oral statements or

in any financial or other statements, instruments, reports or certificates or

any other documents furnished or made by Administrative Agent to Lenders or by

or on behalf of Borrower to Administrative Agent or any Lender in connection

with the Loan Documents and the transactions contemplated thereby or for the

financial condition or business affairs of Borrower or any other Person liable

for the payment of any Obligations, nor shall Administrative Agent be required

to ascertain or inquire as to the performance or observance of any of the

terms, conditions, provisions, covenants or agreements contained in any of the

Loan Documents or as to the use of the proceeds of the Loans the use of the

Letters of Credit or as to the existence or possible existence of any Event of

Default or Potential Event of Default. 

Anything contained in this Agreement to the contrary notwithstanding,

Administrative Agent shall not have any liability arising from confirmations of

the amount of outstanding Loans or the Letter of Credit Usage or the component

amounts thereof.

 

C.            Exculpatory

Provisions. 

Neither Administrative Agent nor any of its officers, directors,

employees or agents shall be liable to Lenders for any action taken or omitted

by Administrative Agent under or in connection with any of the Loan Documents

except to the extent caused by Administrative Agent’s gross negligence or

willful misconduct.  Administrative

Agent shall be entitled to refrain from any act or the taking of any action

(including the failure to take an action) in connection with this Agreement or

any of the other Loan Documents or from the exercise of any power, discretion

or authority vested in it hereunder or thereunder unless and until

Administrative Agent shall have received instructions in respect thereof from

Requisite Lenders (or such other Lenders as may be required to give such

instructions under subsection 10.6) and, upon receipt of such instructions from

Requisite Lenders (or such other Lenders, as the case may be), Administrative

Agent shall be entitled to act or (where so instructed) refrain from acting, or

to exercise such power, discretion or authority, in accordance with such

instructions.  Without prejudice to the

generality of the foregoing, (i) Administrative Agent shall be entitled to

rely, and shall be fully protected in relying, upon any communication,

instrument or document believed by it to be genuine and correct and to have

been signed or sent by the proper person or persons, and shall be entitled to

rely and shall be protected in relying on opinions and judgments of attorneys

(who may be attorneys for Borrower and its Subsidiaries), accountants, experts

and other professional advisors selected by it; and (ii) no Lender shall

have any right of action whatsoever against Administrative Agent as a result of

Administrative Agent acting or (where so instructed) refraining from acting

under this Agreement or any of the other Loan Documents in accordance with the

instructions of Requisite Lenders (or such other Lenders as may be required to

give such instructions under subsection 10.6).

 

D.            Administrative Agent Entitled to Act

as Lender.  The agency hereby created shall in no way

impair or affect any of the rights and powers of, or impose any duties or

obligations upon, Administrative Agent in its individual capacity as a Lender

hereunder.  With respect to its

participation in the Loans and the Letters of Credit, Administrative Agent

shall have the same rights and powers hereunder as any other Lender and may

exercise the same as though it were not performing the duties and functions

delegated to it hereunder, and the term “Lender” or “Lenders” or any similar

term shall, unless the context clearly otherwise indicates, include

Administrative Agent in its individual capacity.  Administrative Agent and its Affiliates may accept deposits from,

lend money to, acquire equity interests in and generally engage in any kind of

commercial banking, investment banking, trust, financial advisory or other

business with Borrower or any of its Affiliates as if it were not performing

the duties specified herein, and may accept fees and other consideration from

Borrower for services in connection with this Agreement and otherwise without

having to account for the same to Lenders.

 

9.3          Representations and Warranties; No

Responsibility For Appraisal of Creditworthiness.

 

Each Lender

represents and warrants that it has made its own independent investigation of

the financial condition and affairs of Borrower and its Subsidiaries in

connection with the making of the Loans hereunder and that it has made and

shall continue to make its own appraisal of the creditworthiness of Borrower

and its Subsidiaries.  Administrative

Agent shall not have any duty or responsibility, either initially or on a

continuing basis, to make any such investigation or any such appraisal on

behalf of Lenders or to provide any Lender with any credit or other information

with respect thereto, whether coming into its possession before the making of

the Loans or at any time or times thereafter, and Administrative Agent shall

not have any responsibility with respect to the accuracy of or the completeness

of any information provided to Lenders.

 

9.4          Right to

Indemnity.

 

Each Lender, in

proportion to its Pro Rata Share, severally agrees to indemnify Administrative

Agent and the officers, directors, employees, agents, attorneys, professional

advisors and affiliates of each of them to the extent that any such Person

shall not have been reimbursed by Borrower, for and against any and all

liabilities, obligations, losses, damages, penalties, actions, judgments,

suits, costs, expenses (including reasonable outside counsel fees and

disbursements and reasonable fees and disbursements of any financial advisor

engaged by Administrative Agent) or disbursements of any kind or nature

whatsoever which may be imposed on, incurred by or asserted against

Administrative Agent or and other such Persons in exercising its powers, rights

and remedies or performing its duties of an Administrative Agent hereunder or

under the other Loan Documents or otherwise in its capacity as Administrative

Agent in any way relating to or arising out of this Agreement or the other Loan

Documents; provided that no Lender shall be liable for any portion of

such liabilities, obligations, losses, damages, penalties, actions, judgments,

suits, costs, expenses or disbursements resulting from Administrative Agent’s

gross negligence or willful misconduct. 

If any indemnity furnished to Administrative Agent or any other such

Person for any purpose shall, in the opinion of Administrative Agent, be

insufficient or become impaired, Administrative Agent may call for additional

indemnity and cease, or not commence, to do the acts indemnified against until

such additional indemnity is furnished.

 

9.5          Successor

Administrative Agent and Successor Swing Line Lender.

 

A.            Successor

Administrative Agent. 

Administrative Agent may resign at any time by giving 30 days’ prior

written notice thereof to Lenders and Borrower, and Administrative Agent may be

removed at any time with or without cause by an instrument or concurrent

instruments in writing delivered to Borrower and Administrative Agent and

signed by Requisite Lenders.  Upon any

such notice of resignation or any such removal, Requisite Lenders shall have

the right, upon five Business Days’ notice to Borrower, to appoint a successor

Administrative Agent, who shall, unless

an Event of Default has occurred and is continuing, be satisfactory to Borrower

and shall be an unincorporated bank or trust company.  Upon the acceptance of any appointment as

Administrative Agent hereunder by a successor Administrative Agent, that

successor Administrative Agent shall thereupon succeed to and become vested

with all the rights, powers, privileges and duties of the retiring or removed

Administrative Agent and the retiring or removed Administrative Agent shall be

discharged from its duties and obligations under this Agreement.  After any retiring or removed Administrative

Agent’s resignation or removal hereunder as Administrative Aogent, the

provisions of this Section 9 shall inure to its benefit as to any actions taken

or omitted to be taken by it while it was Administrative Agent under this

Agreement.  If

no successor Administrative Agent has been appointed by the twentieth (20th)

Business Day after the date such notice of resignation was given by

Administrative Agent, then the Administrative Agent's resignation shall become

effective and the Lenders shall thereafter perform all the duties of the

Administrative Agent hereunder until such time, if any, as the Requisite

Lenders, with the consent of Borrower (as long as no Event of Default has

occurred and is continuing), appoint a successor administrative agent as provided

above.

 

B.            Successor

Swing Line Lender.  Swing Line Lender may resign at any time by

giving 30 days’ prior written notice thereof to Administrative Agent, Lenders

and Borrower, and Swing Line Lender may be removed at any time with or without

cause by an instrument or concurrent instruments in writing delivered to

Borrower and Administrative Agent and signed by Requisite Lenders.  In such event (i) Borrower shall prepay

any outstanding Swing Line Loans made by the retiring or removed Swing Line

Lender in its capacity as Swing Line Lender, (ii) upon such prepayment,

the retiring or removed Swing Line Lender shall surrender the Swing Line Note

held by it to Borrower for cancellation, and (iii)  Borrower shall issue a

new Swing Line Note to the successor Swing Line Lender substantially in the

form of Exhibit XII annexed hereto, in the principal amount of the Swing

Line Loan Commitment then in effect and with other appropriate insertions.

 

9.6          Collateral Documents and Guaranties.

 

Each Lender hereby

further authorizes Administrative Agent, on behalf of and for the benefit of

Lenders, to enter into each Collateral Document as secured party and to be

Administrative Agent for and representative of Lenders under each of the

Guaranties, and each Lender agrees to be bound by the terms of each Collateral

Document and each of the Guaranties; provided that Administrative Agent

shall not (i) enter into or consent to any material amendment, modification,

termination or waiver of any provision contained in any Collateral Document or

any of the Guaranties or (ii) release any Collateral or Subsidiary Guarantor

(except as otherwise expressly permitted or required pursuant to the terms of

this Agreement or the applicable Collateral Document), in each case without the

prior consent of Requisite Lenders (or, if required pursuant to subsection

10.6, all Lenders); provided further, however, that,

without further written consent or authorization from Lenders, Administrative

Agent may execute any documents or instruments necessary to (a) release

any Lien encumbering any item of Collateral that is the subject of a sale or

other disposition of assets permitted by this Agreement or to which Requisite

Lenders have otherwise consented, or (b) release any Subsidiary Guarantor

from the Subsidiary Guaranty if all of the Capital Stock of such Subsidiary

Guarantor is sold to any Person (other than an Affiliate of Borrower) pursuant

to a sale or other disposition permitted hereunder or to which Requisite

Lenders have otherwise consented or (c) subordinate the Liens of Administrative

Agent, on behalf of Lenders, to any Liens permitted by subsection 7.2.  Anything contained in any of the Loan

Documents to the contrary notwithstanding, Borrower, Administrative Agent and

each Lender hereby agree that (X) no Lender shall have any right individually

to realize upon any of the Collateral under any Collateral Document or to

enforce any Guaranty, it being understood and agreed that all powers, rights

and remedies under the Collateral Documents and the Guaranties may, and shall,

be exercised solely by Administrative Agent for the benefit of Lenders in

accordance with the terms thereof, and (Y) in the event of a foreclosure by

Administrative Agent on any of the Collateral pursuant to a public or private

sale, Administrative Agent or any Lender may be the purchaser of any or all of

such Collateral at any such sale and Administrative Agent, as Administrative

Agent for and representative of Lenders (but not any Lender or Lenders in its

or their respective individual capacities unless Requisite Lenders shall

otherwise agree in writing) shall be entitled, for the purpose of bidding and

making settlement or payment of the purchase price for all or any portion of

the Collateral sold at any such public sale, to use and apply any of the

Obligations as a credit on account of the purchase price for any Collateral

payable by Administrative Agent at such sale.

 

9.7          Administrative

Agent May File Proofs

of Claim.

 

In case of the

pendency of any receivership, insolvency, liquidation, bankruptcy,

reorganization, arrangement, adjustment, composition or other judicial

proceeding relative to Borrower or any of the Subsidiaries of Borrower,

Administrative Agent (irrespective of whether the principal of any Loan shall

then be due and payable as herein expressed or by declaration or otherwise and

irrespective of whether Administrative Agent shall have made any demand on

Borrower) shall be entitled and empowered, by intervention in such proceeding

or otherwise

 

(i)            to

file and prove a claim for the whole amount of principal and interest owing and

unpaid in respect of the Loans and any other Obligations that are owing and

unpaid and to file such other papers or documents as may be necessary or

advisable in order to have the claims of Lenders and Agents (including any

claim for the reasonable compensation, expenses, disbursements and advances of

Lenders and Agents and their agents and counsel and all other amounts due

Lenders and Agents under subsections 2.3 and 10.2) allowed in such judicial proceeding,

and

 

(ii)           to

collect and receive any moneys or other property payable or deliverable on any

such claims and to distribute the same;

 

and any custodian,

receiver, assignee, trustee, liquidator, sequestrator or other similar official

in any such judicial proceeding is hereby authorized by each Lender to make

such payments to Administrative Agent and, if Administrative Agent shall

consent to the making of such payments directly to Lenders, to pay to

Administrative Agent any amount due for the reasonable compensation, expenses,

disbursements and advances of Agents and their agents and counsel, and any

other amounts due Agents under subsections 2.3 and 10.2.

 

Nothing herein

contained shall be deemed to authorize Administrative Agent to authorize or consent

to or accept or adopt on behalf of any Lender any plan of reorganization,

arrangement, adjustment or composition affecting the Obligations or the rights

of any Lenders or to authorize Administrative Agent to vote in respect of the

claim of any Lender in any such proceeding.

 

Section

10.            MISCELLANEOUS

 

10.1        Assignments

and Participations in Loans and Letters of Credit.

 

A.            General. 

Subject to subsections 10.1B and 10.1C, each Lender shall have the right

at any time to (i) sell, assign or transfer to any Eligible Assignee, or

(ii) sell participations to any Person in, all or any part of its

Commitments or any Loan or Loans made by it or its Letters of Credit or

participations therein or any other interest herein or in any other Obligations

owed to it; provided that no such sale, assignment, transfer or

participation shall, without the consent of Borrower, require Borrower to file

a registration statement with the Securities and Exchange Commission or apply

to qualify such sale, assignment, transfer or participation under the

securities laws of any state; provided, further, that no such

sale, assignment, or transfer described in clause (i) above shall be effective

unless and until an Assignment Agreement effecting such sale, assignment or

transfer shall have been accepted by Administrative Agent and recorded in the

Register as provided in subsection 10.1B(ii); provided, further,

that no such sale, assignment, or transfer of any Letter of Credit or any

participation therein may be made separately from a sale, assignment, transfer

or participation of a corresponding interest in the Revolving Loan Commitment

and the Revolving Loans of the Lender effecting such sale, assignment, transfer

or participation; and provided, further, that, anything contained

herein to the contrary notwithstanding, except as provided in subsection

2.1A(iii) and subsection 10.5, the Swing Line Loan Commitment and the Swing

Line Loans of Swing Line Lender may not be sold, assigned or transferred as

described in clause (i) above to any Person other than a successor Swing Line

Lender to the extent contemplated by subsection 9.5.  Except as otherwise provided in this subsection 10.1, no Lender

shall, as between Borrower and such Lender, be relieved of any of its

obligations hereunder as a result of any sale, assignment or transfer of, or

any granting of participations in, all or any part of its Commitments or the

Loans, or participations therein, or the other Obligations owed to such Lender,

and such Lender shall remain solely responsible for the performance of such

Obligations, and Borrower shall continue to deal solely and directly with such

Lender in connection with such Lender’s rights and obligations under this

Agreement.

 

B.            Assignments.

 

(i)            Amounts and Terms of Assignments.  Each Commitment or Loan may (a) be

assigned in any amount to another Lender, or to an Affiliate or Approved Fund

of the assigning Lender or another Lender, with the giving of notice to

Borrower and Administrative Agent or (b) be assigned in an aggregate amount

of not less than $1,000,000 (or such lesser amount as shall constitute the

aggregate amount of the Commitments or Loans of the assigning Lender) to any

other Eligible Assignee treating any two or more Approved Funds with the same

investment advisor as a single Eligible Assignee with the giving of notice to

Borrower and with the consent of Borrower (unless a Potential Event of Default

or an Event of Default has occurred and is continuing) and Administrative Agent

(which consent of Borrower and Administrative Agent shall not be unreasonably

withheld or delayed).  To the extent of

any such assignment in accordance with either clause (a) or (b) above, the

assigning Lender shall be relieved of its obligations with respect to its

Commitments or Loans or the portion thereof so assigned.  The parties to each such assignment shall

execute and deliver to Administrative Agent, for its acceptance and recording

in the Register, an Assignment Agreement, together with a processing and recordation

fee of $3,500 (provided that (i) no such processing and recordation fee

shall be payable if the assignee is an Affiliate of the assignor or a Person

under common management with the assignor, and (ii) only one such fee shall be

required in connection with a simultaneous assignment to a group of Approved

Funds with the same investment advisor) 

and such forms (including an administrative questionnaire if the

Eligible Assignee is not a Lender), certificates or other evidence, if any,

with respect to United States federal income tax withholding matters as the

assignee under such Assignment Agreement may be required to deliver to

Administrative Agent pursuant to subsection 2.7B(iii)(a).  Upon such execution, delivery, acceptance

and recordation, from and after the effective date specified in such Assignment

Agreement, (y) the assignee thereunder shall be a party hereto and, to the

extent that rights and obligations hereunder have been assigned to it pursuant

to such Assignment Agreement, shall have the rights and obligations of a Lender

hereunder, and (z) the assigning Lender thereunder shall, to the extent

that rights and obligations hereunder have been assigned by it pursuant to such

Assignment Agreement, relinquish its rights (other than any rights which

survive the termination of this Agreement under subsection 10.9B) and be

released from its obligations under this Agreement (and, in the case of an

Assignment Agreement covering all or the remaining portion of an assigning

Lender’s rights and obligations under this Agreement, such Lender shall cease

to be a party hereto; provided that, anything contained in any of the

Loan Documents to the contrary notwithstanding, if such Lender is the Issuing

Lender with respect to any outstanding Letters of Credit such Lender shall

continue to have all rights and obligations of an Issuing Lender with respect

to such Letters of Credit until the cancellation or expiration of such Letters

of Credit and the reimbursement of any amounts drawn thereunder).  The Commitments hereunder shall be modified

to reflect the Commitment of such assignee and any remaining Commitment of such

assigning Lender and, if any such assignment occurs after the issuance of any

Notes hereunder, the assigning Lender shall, upon the effectiveness of such

assignment or as promptly thereafter as practicable, surrender its applicable

Notes, if any, to Administrative Agent for cancellation, and thereupon new

Notes shall, if so requested by the assignee and/or the assigning Lender in

accordance with subsection 2.1D, be issued to the assignee and/or to the

assigning Lender, substantially in the form of Exhibit IX, Exhibit

XII or Exhibit XIII annexed hereto, as the case may be, with

appropriate insertions, to reflect the new Commitments and/or outstanding

Revolving Loans and/or outstanding Term Loans, as the case may be, of the

assignee and/or the assigning Lender. 

Any assignment or transfer by a Lender of rights or obligations under

this Agreement that does not comply with this subsection 10.1B 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 subsection 10.1C.

 

(ii)           Acceptance by Administrative

Agent; Recordation in Register. 

Upon its receipt of an Assignment Agreement executed by an assigning

Lender and an assignee representing that it is an Eligible Assignee, together

with the processing and recordation fee (if so required) referred to in

subsection 10.1B(i) and any forms, certificates or other evidence with respect

to United States federal income tax withholding matters that such assignee may

be required to deliver to Administrative Agent pursuant to subsection

2.7B(iii)(a), Administrative Agent shall, if Administrative Agent (and if

necessary, Borrower) has consented to the assignment evidenced thereby (in each

case to the extent such consent is required pursuant to subsection 10.1B(i)),

(a) accept such Assignment Agreement by executing a counterpart thereof as

provided therein (which acceptance shall evidence any required consent of

Administrative Agent to such assignment), (b) record the information contained

therein in the Register, and (c) give prompt notice thereof to

Borrower.  Administrative Agent shall

maintain a copy of each Assignment Agreement delivered to and accepted by it as

provided in this subsection 10.1B(ii).

 

(iii)          Consent

by Borrower.  If the consent of

Borrower to an assignment or to an Eligible Assignee is required hereunder

(including a consent to an assignment which does not meet the minimum

assignment thresholds specified in subsection 10.1B(i)), Borrower shall be

deemed to have given its consent five Business Days after the date notice

thereof has been delivered by the assigning Lender (through Administrative

Agent) unless such consent is expressly refused by Borrower prior to such fifth

Business Day.

 

C.            Participations.  Any Lender may, without the consent of, or

notice to, Borrower or 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/or obligations under this

Agreement (including all or a portion of its Commitment and/or the Loans owing

to it); provided that (i) such Lender’s obligations under this

Agreement shall remain unchanged, (ii) such Lender shall remain solely

responsible to the other parties hereto for the performance of such

obligations, and (iii) Borrower, 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 the Loan Documents and to approve any

amendment, modification or waiver of any provision of the Loan Documents; provided

that such agreement or instrument may provide that such Lender will not,

without the consent of such Participant, agree to any amendment, modification

or waiver that affects such Participant if such amendment, modification or

waiver requires the unanimous written consent of all Lenders pursuant to

subsection 10.6.  Subject to subsection

10.1D, Borrower agrees that each Participant shall be entitled to the benefits

of subsections 2.6D, 2.7, and 3.6 to the same extent as if it were a Lender and

had acquired its interest by assignment pursuant to this subsection 10.1C; provided,

however, that in no event shall Borrower be obligated to make any

payment with respect to such subsections which is greater than the amount that

Borrower would have paid to the Lender had no such participation been

sold.  To the extent permitted by law,

each Participant also shall be entitled to the benefits of subsection 10.4 as

though it were a Lender, provided such Participant agrees to be subject to

subsection 10.5 as though it were a Lender if any amounts outstanding under

this Agreement are due and unpaid, or shall have been declared or shall have

become due and payable upon the occurrence of an Event of Default, each

participant shall be deemed to have the right of set-off in respect of its

participating interest in amounts owing under this Agreement to the same extent

as if the amount of its participating interest were owing directly to it as a

Lender under this Agreement.

 

D.            A

Participant shall not be entitled to receive any greater payment under

subsections 2.6D, 2.7, and 3.6 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

Borrower’s prior written consent.  A

Participant that would be a Non-US Lender if it were a Lender shall not be

entitled to the benefits of subsection 2.7 unless Borrower is notified of

the participation sold to such Participant and such Participant agrees, for the

benefit of Borrower, to comply with subsection 2.7B(iii) as though it were a

Lender.

 

E.             Pledges

and Assignments.

 

(i)            Any

Lender may at any time pledge or assign a security interest in all or any

portion of its Loans, and the other Obligations owed to such Lender, to secure

obligations of such Lender, including, without limitation, any pledge or

assignment to secure obligations to any Federal Reserve Bank and; provided

that (a) no Lender shall, as between Borrower and such Lender, be relieved

of any of its obligations hereunder as a result of any such assignment or

pledge, (b) in no event shall any assignee or pledgee be considered to be

a “Lender” or be entitled to require the assigning Lender to take or omit to

take any action hereunder and (c) any Lender that is a Fund may pledge its

Notes to its trustee for the benefit of its investors.

 

(ii)           Any

Lender which is a Fund may pledge its Notes to its trustee for the benefit of

its investors.

 

F.             Information. 

Each Lender may furnish any information concerning Borrower and its

Subsidiaries in the possession of that Lender from time to time to assignees

and participants (including prospective assignees and participants), subject to

subsection 10.19.

 

G.            Representations of Lenders. 

Each Lender listed on the signature pages hereof hereby represents and

warrants (i) that it is an Eligible Assignee described in clause (A) of the

definition thereof; (ii) that it has experience and expertise in the making of

loans such as the Loans; and (iii) that it will make its Loans for its own

account in the ordinary course of its business and without a present view to

distribution of such Loans within the meaning of the Securities Act or the

Exchange Act or other federal securities laws (it being understood that,

subject to the provisions of this subsection 10.1, the disposition of such

Loans or any interests therein shall at all times remain within its exclusive

control).  Each Lender that becomes a

party hereto pursuant to an Assignment Agreement shall be deemed to agree that

the representations and warranties of such Lender contained in Section 2(c) of

such Assignment Agreement are incorporated herein by this reference.

 

10.2        Expenses.

 

Whether or not the

transactions contemplated hereby shall be consummated, Borrower agrees to pay

promptly (i) all of the reasonable costs and expenses of preparation by

the Administrative Agent of the Loan Documents and any consents, amendments,

waivers or other modifications thereto; (ii) all of the costs of furnishing

all requisite opinions by counsel for Borrower (including any opinions

reasonably requested by Lenders as to any legal matters arising hereunder) and

of Borrower’s performance of and compliance with all agreements and conditions

on its part to be performed or complied with under this Agreement and the other

Loan Documents including with respect to confirming compliance with

environmental, insurance and solvency requirements; (iii) all of the

reasonable fees, expenses and disbursements of counsel to Administrative Agent

in connection with the negotiation, preparation, execution and administration

of the Loan Documents and any consents, amendments, waivers or other

modifications thereto and any other documents or matters requested by Borrower;

(iv) all of the reasonable costs and expenses of creating and perfecting

Liens in favor of Administrative Agent on behalf of Lenders pursuant to any

Collateral Document, including filing and recording fees, expenses and taxes,

stamp or documentary taxes, search fees, title insurance premiums, and

reasonable fees, expenses and disbursements of counsel to Administrative Agent

and of counsel providing any opinions that Administrative Agent or Requisite

Lenders may request in respect of the Collateral Documents or the Liens created

pursuant thereto; (v) all of the reasonable costs and expenses (including

the reasonable fees, expenses and disbursements of any environmental or other

consultants, advisors and agents employed or retained by Administrative Agent

or its counsel) of obtaining and reviewing any environmental audits or reports

provided for as a result of its due diligence under subsection 4.1L or 6.7B;

(vi) the custody or preservation of any of the Collateral; (vii) all

other reasonable costs and expenses incurred by Administrative Agent in

connection with the syndication of the Commitments and the negotiation,

preparation and execution of the Loan Documents and any consents, amendments,

waivers or other modifications thereto and the transactions contemplated

thereby; and (viii) after the occurrence of an Event of Default, all costs

and expenses, including reasonable attorneys’ fees (including allocated costs

of internal counsel) and costs of settlement, incurred by Administrative Agent

and Lenders in enforcing any Obligations of or in collecting any payments due

from any Loan Party hereunder or under the other Loan Documents by reason of

such Event of Default (including in connection with the sale of, collection

from, or other realization upon any of the Collateral or the enforcement of the

Subsidiary Guaranty) or in connection with any refinancing or restructuring of

the credit arrangements provided under this Agreement in the nature of a

“work-out” or pursuant to any insolvency or bankruptcy proceedings.

 

10.3        Indemnity.

 

In addition to the

payment of expenses pursuant to subsection 10.2, whether or not the

transactions contemplated hereby shall be consummated, Borrower agrees to

defend (subject to Indemnitees’ selection of counsel), indemnify, pay and hold

harmless Administrative Agent and Lenders, and the officers, directors,

employees, counsel, agents, representatives, advisors and affiliates of

Administrative Agent and Lenders (collectively called the “Indemnitees”), from and

against any and all Indemnified Liabilities (as hereinafter defined); provided

that Borrower shall not have any obligation to any Indemnitee hereunder with

respect to any Indemnified Liabilities to the extent such Indemnified

Liabilities arise solely from the gross negligence or willful misconduct of that

Indemnitee as determined by a final judgment of a court of competent

jurisdiction.

 

As used herein, “Indemnified

Liabilities” means, collectively, any and all liabilities,

obligations, losses, damages (including natural resource damages), penalties,

actions, judgments, suits, claims (including Environmental Claims), costs

(including the costs of any investigation, study, sampling, testing, abatement,

cleanup, removal, remediation or other response action necessary to remove,

remediate, clean up or abate any Hazardous Materials Activity), reasonable

expenses and disbursements of any kind or nature whatsoever (including the

reasonable fees and disbursements of counsel for Indemnitees in connection with

any investigative, administrative or judicial proceeding commenced or

threatened by any Person, whether or not any such Indemnitee shall be

designated as a party or a potential party thereto, and any fees or expenses

incurred by Indemnitees in enforcing this indemnity), whether direct, indirect

or consequential and whether based on any federal, state or foreign laws,

statutes, rules or regulations (including securities and commercial laws,

statutes, rules or regulations and Environmental Laws), on common law or

equitable cause or on contract or otherwise, that may be imposed on, incurred

by, or asserted against any such Indemnitee, in any manner relating to or

arising out of (i) this Agreement or the other Loan Documents or the

transactions contemplated hereby or thereby (including Lenders’ agreement to

make the Loans hereunder or the use or intended use of the proceeds thereof or

the issuance of Letters of Credit hereunder or the use or intended use of any

thereof, or any enforcement of any of the Loan Documents (including any sale

of, collection from, or other realization upon any of the Collateral or the

enforcement of the Subsidiary Guaranty); or (ii) any Environmental Claim or any

Hazardous Materials Activity relating to or arising from, directly or

indirectly, any past or present activity, operation, land ownership, or

practice of Borrower or any of its Subsidiaries.

 

To the extent that

the undertakings to defend, indemnify, pay and hold harmless set forth in this

subsection 10.3 may be unenforceable in whole or in part because they are

violative of any law or public policy, Borrower shall contribute the maximum

portion that it is permitted to pay and satisfy under applicable law to the

payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees

or any of them.

 

10.4        Set-Off;

Security Interest in Deposit Accounts.

 

In addition to any

rights now or hereafter granted under applicable law and not by way of

limitation of any such rights, upon the occurrence of any Event of Default each

Lender is hereby authorized by Borrower at any time or from time to time,

without notice to Borrower or to any other Person, any such notice being hereby

expressly waived, to set off and to appropriate and to apply any and all

deposits or other amounts held by any Lender for the credit or account of

Borrower (general or special, including Indebtedness evidenced by certificates

of deposit, whether matured or unmatured, but not including trust accounts) and

any other Indebtedness at any time held or owing by that Lender or any

Affiliate of such Lender to or for the credit or the account of Borrower and

each other Loan Party against and on account of the obligations and liabilities

of Borrower and each other Loan Party to that Lender (or any Affiliate of such

Lender) or to any other Lender (or any Affiliate of any other Lender) under

this Agreement, the Letters of Credit and participations therein and the other

Loan Documents, including all claims of any nature or description arising out

of or connected with this Agreement, the Letters of Credit and participations

therein or any other Loan Document, irrespective of whether or not that Lender

shall have made any demand hereunder.

 

10.5        Ratable Sharing.

 

Lenders hereby

agree among themselves that if any of them shall, whether by voluntary payment

(other than a voluntary prepayment of Loans made and applied in accordance with

the terms of this Agreement), by realization upon security, through the

exercise of any right of set-off or banker’s lien, by counterclaim or cross

action or by the enforcement of any right under the Loan Documents or

otherwise, or as adequate protection of a deposit treated as cash collateral

under the Bankruptcy Code, receive payment or reduction of a proportion of the

aggregate amount of principal, interest, amounts payable in respect of Letters

of Credit, fees and other amounts then due and owing to that Lender hereunder

or under the other Loan Documents (collectively, the “Aggregate Amounts Due” to

such Lender) that is greater than the proportion received by any other Lender

in respect of the Aggregate Amounts Due to such other Lender hereunder, then

the Lender receiving such proportionately greater payment shall (i) notify

Administrative Agent and each other Lender of the receipt of such payment and

(ii) apply a portion of such payment to purchase participations (which it

shall be deemed to have purchased from each seller of a participation

simultaneously upon the receipt by such seller of its portion of such payment)

in the Aggregate Amounts Due to the other Lenders so that all such recoveries

of Aggregate Amounts Due shall be shared by all Lenders in proportion to the

Aggregate Amounts Due to them hereunder; provided that if all or part of

such proportionately greater payment received by such purchasing Lender is

thereafter recovered from such Lender upon the bankruptcy or reorganization of

Borrower or otherwise (and whether by litigation, demand, settlement or

otherwise), those purchases shall be rescinded and the purchase prices paid for

such participations shall be returned to such purchasing Lender ratably to the

extent of such recovery, but without interest. 

Borrower expressly consents to the foregoing arrangement and agrees that

any holder of a participation so purchased may exercise any and all rights of

banker’s lien, set-off or counterclaim with respect to any and all monies owing

by Borrower to that holder with respect thereto as fully as if that holder were

owed the amount of the participation held by that holder.

 

10.6        Amendments and Waivers.

 

No amendment,

modification, termination or waiver of any provision of this Agreement or of

the Notes or of any of the other Loan Documents, and no consent to any

departure by Borrower herefrom or therefrom, shall in any event be effective

without the written concurrence of Requisite Lenders; unless otherwise provided

elsewhere in this Agreement; provided that:

 

(a)           any such amendment, modification,

termination, waiver or consent which:

 

(i)            postpones the date (except in

accordance with subsection 2.10) or reduces the amount of any scheduled payment

of principal of any of the Loans;

 

(ii)           postpones the date (except in

accordance with subsection 2.10) on which any interest or any fees are payable

or reduces the amount of any interest or any fees payable hereunder; or

 

(iii)          amends,

modifies, terminates or waives any provision of subsection 2.2 that decreases

the interest rate borne by Loans of any Class (other than any waiver of any

increase in the interest rate applicable to such Loans pursuant to subsection

2.2E) or the percentages set forth in the definitions of “Applicable Base Rate

Margin” and “Applicable LIBOR Margin”;

 

shall be effective

only if evidenced by the written concurrence of all Lenders of the affected

Class (and not Requisite Lenders);

 

(b)           any such amendment, modification,

termination, waiver or consent which:

 

(i)            changes

in any manner the definition of “Pro Rata Share”, the definition of “Class”,

the definition of “Requisite Class Lenders” or the definition of “Requisite

Lenders”;

 

(ii)           changes

in any manner any provision of this Agreement which, by its terms, expressly

requires the approval or concurrence of all Lenders;

 

(iii)          releases

any Lien granted in favor of Administrative Agent with respect to all or

substantially all of the Collateral other than in accordance with the terms of the

Loan Documents;

 

(iv)          releases

any material Subsidiary Guarantor from its obligations under the Subsidiary

Guaranty, in each case other than in accordance with the terms of the Loan

Documents; or

 

(v)           changes

in any manner the provisions contained in subsection 8.1 or this subsection 10.6;

shall be effective only

if evidenced by the written concurrence of all Lenders; and

 

(c)           subject to the provisions of

subsections 10.6(a) and (b), any other amendment relating to subsection 2.1 or

2.2 that relates solely to matters affecting only one Class of Lenders and not

any other Class shall be effective only if evidenced by the written concurrence

of Requisite Class Lenders for such affected Class (and not Requisite Lenders).

 

In

addition,

 

(1)           no amendment, modification,

termination or waiver of any provision of any Note shall be effective without

the written concurrence of the Lender that is the holder of that Note and no

increase or extension of any Commitment of any Lender shall be effective

without the written concurrence of such Lender;

 

(2)           no amendment, modification,

termination or waiver of any provision of subsection 2.1A(ii) or of any other

provision of this Agreement relating to the Swing Line Loan Commitment or the

Swing Line Loans shall be effective without the written concurrence of Swing

Line Lender; and

 

(3)           no amendment, modification,

termination or waiver of any provision of Section 9 or of any other provision

of this Agreement that by its terms, expressly requires the approval or

concurrence of Administrative Agent shall be effective without the written

concurrence of Administrative Agent.

 

Administrative

Agent may, but shall have no obligation to, with the concurrence of any Lender,

execute amendments, modifications, waivers or consents on behalf of that

Lender.  Any waiver or consent shall be

effective only in the specific instance and for the specific purpose for which

it was given.  No notice to or demand on

Borrower in any case shall entitle Borrower to any other or further notice or

demand in similar or other circumstances. 

Any amendment, modification, termination, waiver or consent effected in

accordance with this subsection 10.6 shall be binding upon each Lender at the

time outstanding, each future Lender and, if signed by Borrower, on Borrower.  Notwithstanding anything contained herein to

the contrary, as among Lenders and Administrative Agent in connection with the

exercise of remedies under any of Loan Documents, the written concurrence of

Requisite Lenders shall be required for Administrative Agent to execute proxy

rights in the election of the board of directors of any Loan Party owning real

property or to acquire any ownership interest in real property of any Loan

Party.

 

10.7        Independence of Covenants.

 

All covenants

hereunder shall be given independent effect so that if a particular action or

condition is not permitted by any of such covenants, the fact that it would be

permitted by an exception to, or would otherwise be within the limitations of,

another covenant shall not avoid the occurrence of an Event of Default or

Potential Event of Default if such action is taken or condition exists.

 

10.8        Notices;

Effectiveness of Signatures.

 

Unless otherwise

specifically provided herein, any notice or other communication herein required

or permitted to be given shall be in writing and may be personally served,

telexed or sent by telefacsimile or United States mail or courier service and

shall be deemed to have been given when delivered in person or by courier

service, upon receipt of telefacsimile or telex, or three Business Days after

depositing it in the United States mail with postage prepaid and properly

addressed; provided that notices to Administrative Agent and Borrower

shall not be effective until received. 

For the purposes hereof, the address of each party hereto shall be as

set forth under such party’s name on the signature pages hereof or (i) as

to Borrower and Administrative Agent, such other address as shall be designated

by such Person in a written notice delivered to the other parties hereto and

(ii) as to each other party, such other address as shall be designated by

such party in a written notice delivered to Administrative Agent.  Electronic mail may be used to distribute

routine communications, such as financial statements and other information; provided,

however, that no signature with respect to any notice, request,

agreement, waiver, amendment or other document or any notice that is intended

to have binding effect may be sent by electronic mail.

 

Loan Documents and

notices under the Loan Documents may be transmitted and/or signed by

facsimile.  The effectiveness of any

such documents and signatures shall, subject to applicable law, have the same

force and effect as an original copy with manual signatures and shall be

binding on all Loan Parties, Agents and Lenders.  Administrative Agent may also require that any such documents and

signature be confirmed by a manually-signed copy thereof; provided, however,

that the failure to request or deliver any such manually-signed copy shall not

affect the effectiveness of any facsimile document or signature.

 

10.9        Survival of Representations, Warranties and

Agreements.

 

A.            All representations, warranties and agreements made

herein shall survive the execution and delivery of this Agreement and the

making of the Loans and the issuance of the Letters of Credit hereunder.  For the avoidance of doubt, all

representations and warranties made herein must be true only at the time such

representation or warranty was made or deemed to have been made.

 

B.            Notwithstanding

anything in this Agreement or implied by law to the contrary, the agreements of

Borrower set forth in subsections 2.6D, 2.7, 3.5A, 3.6, 10.2, 10.3, 10.4, 10.17

and 10.18 and the agreements of Lenders set forth in subsections 9.2C, 9.4,

10.5 and 10.18 shall survive the payment of the Loans, the cancellation or

expiration of the Letters of Credit and the reimbursement of any amounts drawn

thereunder, and the termination of this Agreement.

 

10.10      Failure or Indulgence Not Waiver; Remedies

Cumulative.

 

No failure or

delay on the part of Administrative Agent or any Lender in the exercise of any

power, right or privilege hereunder or under any other Loan Document shall

impair such power, right or privilege or be construed to be a waiver of any

default or acquiescence therein, nor shall any single or partial exercise of

any such power, right or privilege preclude other or further exercise thereof

or of any other power, right or privilege. 

All rights and remedies existing under this Agreement and the other Loan

Documents are cumulative to, and not exclusive of, any rights or remedies

otherwise available.

 

10.11      Marshalling; Payments Set Aside.

 

Neither

Administrative Agent nor any Lender shall be under any obligation to marshal

any assets in favor of Borrower or any other party or against or in payment of

any or all of the Obligations.  To the

extent that Borrower makes a payment or payments to Administrative Agent or

Lenders (or to Administrative Agent for the benefit of Lenders), or Administrative

Agent or Lenders enforce any security interests or exercise their rights of

setoff, and such payment or payments or the proceeds of such enforcement or

setoff or any part thereof are subsequently invalidated, declared to be

fraudulent or preferential, set aside and/or required to be repaid to a

trustee, receiver or any other party under any bankruptcy law, any other state

or federal law, common law or any equitable cause (whether by litigation,

demand, settlement or otherwise), then, to the extent of such recovery, the

obligation or part thereof originally intended to be satisfied, and all Liens,

rights and remedies therefor or related thereto, shall be revived and continued

in full force and effect as if such payment or payments had not been made or such

enforcement or setoff had not occurred.

 

10.12      Severability.

 

In case any

provision in or obligation under this Agreement or the Notes shall be invalid,

illegal or unenforceable in any jurisdiction, the validity, legality and

enforceability of the remaining provisions or obligations, or of such provision

or obligation in any other jurisdiction, shall not in any way be affected or

impaired thereby.

 

10.13      Obligations Several; Independent Nature of

Lenders’ Rights.

 

The obligations of

Lenders hereunder are several and no Lender shall be responsible for the

obligations or Commitments of any other Lender hereunder.  Nothing contained herein or in any other

Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall

be deemed to constitute Lenders, or Lenders and Borrower, as a partnership, an

association, a joint venture or any other kind of entity. The amounts payable

at any time hereunder to each Lender shall be a separate and independent debt,

and each Lender shall be entitled to protect and enforce its rights arising out

of this Agreement and it shall not be necessary for any other Lender to be

joined as an additional party in any proceeding for such purpose.

 

10.14      Headings.

 

Section and

subsection headings in this Agreement are included herein for convenience of

reference only and shall not constitute a part of this Agreement for any other

purpose or be given any substantive effect.

 

10.15      Applicable Law.

 

THIS AGREEMENT AND THE RIGHTS AND

OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE

CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF

NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE

OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

10.16      Successors and Assigns.

 

The provisions of

this Agreement shall be binding upon and inure to the benefit of the parties

hereto and their respective successors and assigns permitted hereby, except

that 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 Borrower without such consent shall be null

and void).  Nothing in this Agreement,

expressed or implied, shall be construed to confer upon any Person (other than

the parties hereto, their respective successors and assigns permitted hereby

and, to the extent expressly contemplated hereby, Affiliates of Administrative

Agent and Affiliates of Lenders) any legal or equitable right, remedy or claim

under or by reason of this Agreement.

 

10.17      Consent to

Jurisdiction and Service of Process.

 

ALL JUDICIAL PROCEEDINGS BROUGHT

AGAINST BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN

DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL

COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT,

BORROWER, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

 

(I)            ACCEPTS GENERALLY AND

UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

 

(II)           WAIVES ANY DEFENSE OF FORUM NON

CONVENIENS;

 

(III)         AGREES THAT SERVICE OF ALL PROCESS IN

ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED

MAIL, RETURN RECEIPT REQUESTED, TO BORROWER AT ITS ADDRESS PROVIDED IN

ACCORDANCE WITH SUBSECTION 10.8;

 

(IV)         AGREES THAT SERVICE AS PROVIDED IN

CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER BORROWER

IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE

AND BINDING SERVICE IN EVERY RESPECT;

 

(V)          AGREES THAT LENDERS RETAIN THE RIGHT

TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS

AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION; AND

 

(VI)         AGREES THAT THE PROVISIONS OF THIS

SUBSECTION 10.17 RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND

ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL

OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.

 

10.18      Waiver of

Jury Trial.

 

EACH OF THE

PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A

JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS

AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM

RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER

RELATIONSHIP THAT IS BEING ESTABLISHED. 

The scope of this waiver is intended to be all-encompassing of all

disputes that may be filed in any court and that relate to the subject matter

of this transaction, including contract claims, tort claims, breach of duty

claims and all other common law and statutory claims.  Each party hereto acknowledges that this waiver is a material

inducement to enter into a business relationship, that each has already relied

on this waiver in entering into this Agreement, and that each will continue to

rely on this waiver in their related future dealings.  Each party hereto further warrants and represents that it has

reviewed this waiver with its legal counsel and that it knowingly and

voluntarily waives its jury trial rights following consultation with legal

counsel.  THIS WAIVER IS IRREVOCABLE,

MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY

A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND

EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY

SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT

OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS

RELATING TO THE LOANS MADE HEREUNDER. 

In the event of litigation, this Agreement may be filed as a written

consent to a trial by the court.

 

10.19      Confidentiality.

 

Each Lender shall

hold all non-public information obtained pursuant to the requirements of this

Agreement that has been identified in writing as confidential by Borrower in

accordance with such Lender’s customary procedures for handling confidential

information of this nature and in accordance with safe and sound banking

practices, it being understood and agreed by Borrower that in any event a

Lender may make disclosures (a) to its and its Affiliates’ directors,

officers, employees and agents, including accountants, legal counsel and other

advisors (it being understood that the Persons to whom such disclosure is made

will be informed of the confidential nature of such information, instructed to

keep such information confidential and will be under a duty to keep such

information confidential on the same basis as contained in this subsection

10.19), (b) to the extent requested by any Government 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) to the extent necessary in connection with the exercise of

any remedies hereunder or any suit, action or proceeding relating to this

Agreement or the enforcement of rights hereunder, (f) subject to an

agreement containing provisions substantially the same as those of this

subsection 10.19, to (i) any Eligible Assignee of or participant in, or

any prospective Eligible Assignee of or Participant in, any of its rights or

obligations under this Agreement or (ii) any direct or indirect

contractual counterparty or prospective counterparty (or such contractual

counterparty’s or prospective counterparty’s professional advisor) to any

credit derivative transaction relating to obligations of Borrower,

(g) with the consent of Borrower, (h) to the extent such information

(i) becomes publicly available other than as a result of a breach of this

subsection 10.19, or (ii) becomes available to Administrative Agent or any

Lender on a nonconfidential basis from a source other than Borrower, or

(i) to the National Association of Insurance Commissioners or any other

similar organization or any nationally recognized rating agency that requires

access to information about a Lender’s or its Affiliates’ investment portfolio

in connection with ratings issued with respect to such Lender or its Affiliates

and that no written or oral communications from counsel to an Agent and no

information that is or is designated as privileged or as attorney work product

may be disclosed to any Person unless such Person is a Lender or a participant

hereunder; provided that, unless specifically prohibited by applicable

law or court order, each Lender shall notify Borrower of any request by any

Government Authority or representative thereof (other than any such request in

connection with any routine regulatory examination of such Lender by such

government authority) for disclosure of any such non-public information prior

to disclosure of such information; and provided, further, that in

no event shall any Lender be obligated or required to return any materials

furnished by Borrower or any of its Subsidiaries.  Notwithstanding anything contained herein to the contrary,

Borrower understands and agrees that Administrative Agent and each of the

institutions identified as “Lead Arranger,” “Co-Lead Arranger,”

“Co-Documentation Agent” or “Co-Syndication Agent” on the title page to this

Agreement may make customary disclosures of otherwise public information for

advertising and “league table” purposes.

 

10.20      Co-Lead Arranger, Bookrunner, Syndication Agent and

Co-Documentation Agent.

 

None of the institutions

identified as “Co-Lead Arranger”, “bookrunner” “Syndication Agent” or

“Co-Documentation Agent” on the title page to this Agreement shall have any

obligations, liabilities or duties under this Agreement other than those

applicable to a Lender (but only if such institution is a Lender) as such, and

no such institution shall have or be deemed to have any fiduciary relationship

with any Lender.  Each Lender

acknowledges that it has not relied, and will not rely, on any such institution

in deciding to enter into this Agreement or in taking or not taking any action

hereunder.

 

10.21      Counterparts; Effectiveness.

 

This Agreement and

any amendments, waivers, consents or supplements hereto or in connection

herewith may be executed in any number of counterparts and by different parties

hereto in separate counterparts, each of which when so executed and delivered

shall be deemed an original, but all such counterparts together shall

constitute but one and the same instrument; signature pages may be detached from

multiple separate counterparts and attached to a single counterpart so that all

signature pages are physically attached to the same document.  This Agreement shall become effective upon

the execution of a counterpart hereof by each of the parties hereto and receipt

by Borrower and Administrative Agent of written or telephonic notification of

such execution and authorization of delivery thereof.

 

(remainder of page

intentionally left blank)

 

IN

WITNESS WHEREOF, the parties hereto have caused this

Agreement to be duly executed and delivered by their respective officers

thereunto duly authorized as of the date first written above.

 

	

   

  	

  BORROWER:

  
	

   

  	

  LODGENET ENTERTAINMENT

  CORPORATION

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title: 

  	

  Gary H. Ritondaro

  Chief Financial Officer

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  
	

   

  	

   

  	

   

  
	

   

  	

  LODGENET ENTERTAINMENT

  CORPORATION

  3900 West Innovation Street

  Sioux Falls, South Dakota  57101

  Attn:  Chief Financial Officer

  Facsimile No.: (606) 988-1771

  
	

   

  
					

 

 

	

   

  	

  ADMINISTRATIVE AGENT:

  
	

   

  	

   

  
	

   

  	

  CANADIAN IMPERIAL BANK

  OF COMMERCE, as

  Administrative Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:  

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title: 

  	

  Dean J. Decker

  Managing Director

  
	

   

  	

   

  	

  CIBC World Markets

  Corp., as AGENT

  
	

   

  	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  CANADIAN IMPERIAL BANK OF COMMERCE

  425 Lexington Avenue

  New York, New York 10017

  Attn.:  Agency Services Dept.

  Facsimile No.: (212) 856-3799

  
	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  CIBC WORLD MARKETS

  CORP.

  350 South Grand Avenue, Suite 2600

  Los Angeles, California 90071

  
							

 

 

	

   

  	

  SYNDICATION

  AGENT:

  
	

   

  	

   

  
	

   

  	

  BEAR

  STEARNS CORPORATE LENDING INC., as Syndication Agent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Keith Barnish

  Executive Vice President

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BEAR, STEARNS & CO.

  245 Park Avenue, 4th Floor

  New York, New York 10167

  Attn.: Ms. Gloria Dombrowski

  Facsimile No.: (212) 272-4844

  
	

   

  
	

   

  
	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BEAR, STEARNS & CO.

  245 Park Avenue, 4th Floor

  New York, New York 10167

  Attn.: Kevin Cullen

  Facsimile No.: (212) 272-9184

  
								

 

 

	

   

  	

  CO-LEAD

  ARRANGERS:

  
	

   

  	

   

  
	

   

  	

  CIBC

  WORLD MARKETS CORP., as

  Co-Lead Arranger

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Dean J. Decker

  Managing Director

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  CIBC WORLD MARKETS

  CORP.
 350 South Grand Avenue, Suite 2600

  Los Angeles, California 90071

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  With a Copy to:

  
	

   

  	

   

  
	

   

  	

  CANADIAN IMPERIAL BANK OF COMMERCE

  425 Lexington Avenue

  New York, New York 10017

  Attn.:  Agency Services Dept.

  Facsimile No.: (212) 856-3799

  
							

 

 

	

   

  	

  BEAR

  STEARNS & CO. INC., as

  Co-Lead Arranger

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title: 

  	

  Keith Barnish

  Senior Managing Director

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BEAR, STEARNS & CO.

  INC.

  245 Park Avenue, 4th Floor

  New York, New York 10167

  Attn.: Ms. Gloria Dombrowski

  Facsimile No.: (212) 272-4844

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BEAR, STEARNS & CO.

  INC.

  245 Park Avenue, 4th Floor

  New York, New York 10167

  Attn.: Kevin Cullen

  Facsimile No.: (212) 272-4844

  
								

 

 

	

   

  	

  LENDERS:

  
	

   

  	

   

  
	

   

  	

  CIBC INC., as Swing Line Lender and as a Lender

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Dean J. Decker

  Managing Director

  
	

   

  	

   

  	

  CIBC World Markets

  Corp., As AGENT

  
	

   

  	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  CIBC INC.

  425 Lexington Avenue

  New York, New York 10017

  Attn.: Agency Services Dept.

  Facsimile No.: (212) 856-3799

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  CIBC WORLD MARKETS CORP.

  350 South Grand Avenue, Suite 2600

  Los Angeles, California 90071

  
									

 

 

	

   

  	

  U.S.

  BANK NATIONAL ASSOCIATION. as Co-documentation Agent and as a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Douglas P. Best

  Banking Officer

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FIRSTAR BANK, N.A.

  One Firstar Plaza

  7th and Washington, 12th Floor

  St. Louis, MO 63101

  Attn.: Douglas P. Best

  Facsimile No.: (314) 418-8292

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  FIRSTAR BANK, N.A.

  One Firstar Plaza

  7th and Washington, 12th Floor

  St. Louis, MO 63101

  Attn.: Susan Kreutz

  Facsimile No.: (314)

  418-8292

  
								

 

 

	

   

  	

  FLEET

  NATIONAL BANK,  as Co-Documentation Agent and as a

  Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name: 

  Title:

  	

  Jeff McLaughlin

  Managing Director

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  FLEET NATIONAL BANK

  One Federal Street 

  Boston, Massachusetts 02110 

  Attn.: Patrick Bonebrake 

  Facsimile No.: (617) 434-8426

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  FLEET NATIONAL BANK

  One Federal Street 

  Boston, Massachusetts 02110 

  Attn.: Jeff McLaughlin 

  Facsimile No.: (617) 434-8426

  
								

 

 

	

   

  	

  UNION

  BANK OF CALIFORNIA, N.A.,  as a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Peter Connoy

  Vice President

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  UNION BANK OF CALIFORNIA, N.A.

  Communications, Media and Entertainment

  445 South Figueroa Street, 16th Floor

  Los Angeles, California 90071

  Attn.: Wyatt Bloomfield

  Phone: (213) 236-7544

  Facsimile No.: (213) 236-5747

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  
	

   

  	

   

  
	

   

  	

  UNION BANK OF

  CALIFORNIA, N.A. 

  Communications, Media and Entertainment 

  445 South Figueroa Street, 16th Floor 

  Los Angeles, California 90071 

  Attn.: Christina Buck 

  Facsimile No.: (213) 236-5747

  
								

 

 

	

   

  	

  HELLER

  FINANCIAL, INC.,

  as a Lender

  
	

   

  	

  By: HELLER FINANCIAL ASSET MANAGEMENT, LLC,

  as Authorized Agent

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Robert M. Reeg

  Assistant Vice President

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  HELLER FINANCIAL, INC. 

  500 West Monroe Street, 12th Floor 

  Chicago, Illinois 60661 

  Attn.: Bob Reeg 

  Facsimile No.: (312) 441-7357

  
	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  HELLER FINANCIAL, INC. 

  500 West Monroe Street, 13th Floor 

  Chicago, Illinois 60661 

  Attn.: Nancy Cooney

  
								

 

 

	

   

  	

  SUNAMERICA

  LIFE INSURANCE CO.,as a

  Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

   Deborah Gero  

  Authorized Agent

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SUNAMERICA INVENTMENTS 

  1 SunAmerica Center 

  Los Angeles, California  90067-6022 

  Attn.: Tom Brandt 

  Facsimile No.: (310) 772-6078

  
	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANKERS TRUST COMPANY 

  14 Wall Street, 4th Floor, Window 43 

  New York, New York 10005 

  Attn.:  Lorraine Squires

  
								

 

 

	

   

  	

  GALAXY

  CLO 1999-1,LTD., as

  a Lender

  
	

   

  	

  By: SAI INVESTMENT ADVISER, INC., its

  Collateral Manager

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Thomas G. Brandt 

  Authorized Agent

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SAI INVESTMENT ADVISER, INC. 

  1 SunAmerica Center, 34th Floor 

  Los Angeles, California 90067-6022 

  Attn.: Dawn Garcia 

  Facsimile No.: (310) 772-6078

  
	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  GALAXY CLO 1999-1, LTD.

  

  c/o Chase Bank of Texas, National Association 

  600 Travis Street, 48th Floor, 48-CTH-304 

  Houston, Texas 77002 

  Attn: T. Ajaz A/C 23206 

  Facsimile No.: (713) 216-3572

  
								

 

 

	

   

  	

  KZH

  SOLEIL-2 LLC, as

  a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Brian Turkfeld 

  Authorized Agent

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KZH SOLEIL-2 LLC 

  c/o The Chase Manhattan Bank 

  140 East 45th Street, 11th Floor New York, New York

  10017 

  Attn: Virginia Conway 

  Facsimile No.: (212) 622-0123

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  WEIL, GOTSHAL & MANGES LLP 

  767 Fifth Avenue, 34th Floor New York, New York 10153

  Attn.:  Shan D. McSweeney 

  Facsimile No.: (212) 833-3118

  
								

 

 

	

   

  	

  KZH

  SOLEIL LLC,  as a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name: 

  Title:

  	

  Brian Turkfeld

  Authorized Agent

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KZH SOLEIL-2 LLC 

  c/o The Chase Manhattan Bank 

  140 East 45th Street, 11th Floor New York, New York

  10017

  Attn: Virginia Conway 

  Facsimile No.: (212) 622-0123

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  WEIL, GOTSHAL & MANGES LLP 

  767 Fifth Avenue, 27th Floor 

  New York, New York 10153 

  Attn.:  Shan D. McSweeney 

  Facsimile No.: (212) 310-8007

  
								

 

 

	

   

  	

  RIVIERA

  FUNDING LLC, as

  a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Ann E. Morris 

  Asst. Vice President

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANK OF AMERICA, N.A. 

  101 North Tryon Street NC1-001-15-01 

  Charlotte, North Carolina 28273 

  Attn.: Sarah Harder 

  Facsimile No.: (704) 409-0171

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  INDOSUEZ CAPITAL 

  666 Third Avenue, 9th Floor 

  New York, NY 10017 

  Attn: Isabelle Pradell 

  Facsimile No.: (646) 658-2254

  
								

 

 

	

   

  	

  KZH

  SHOSHONE LLC, as

  a Lender

  
	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

   

  
	

   

  	

  Name:

  Title:

  	

  Brian Turkfeld

  Authorized Agent

  
	

   

  	

   

  
	

   

  	

  Notice Address:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  KZH SHOSHONE LLC 

  c/o The Chase Manhattan Bank

  140 East 45th Street, 11th Floor

  New York, New York 10017 

  Attn: Virginia Conway 

  Facsimile No.: (212) 622-0123

  
	

   

  	

   

  	

   

  
	

   

  	

  With a Copy to:

  	

   

  
	

   

  	

   

  
	

   

  	

  WEIL, GOTSHAL & MANGES LLP 

  767 Fifth Avenue, 27th Floor 

  New York, New York 10153 

  Attn.:  Shan D. McSweeney 

  Facsimile No.: (212) 310-8007Prepared by MERRILL CORPORATION

THIRD

AMENDMENT TO CREDIT AGREEMENT

 

THIS

THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered

into as of August 31, 2001, by and between DATALINK CORPORATION, a Minnesota

Corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION,

successor in interest to Wells Fargo Bank Minnesota, National Association

("Bank").

 

RECITALS

 

WHEREAS,

Borrower is currently indebted to Bank pursuant to the terms and conditions of

that certain Credit Agreement between Borrower and Bank dated as of June 30,

2000, as amended from time to time ("Credit Agreement").

 

WHEREAS,

Bank and Borrower have agreed to certain changes in the terms and conditions

set forth in the Credit Agreement and have agreed to amend the Credit Agreement

to reflect said changes.

 

NOW,

THEREFORE, for valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the parties hereto agree that the Credit Agreement shall

be amended as follows:

 

1.

            Section 1.2 is hereby amended

by deleting “August 31, 2001” as the last day on  which Bank will make advances under the Line A, and by

substituting for said date “June 30, 2002,” with such change to be effective

upon the execution and delivery to Bank of a promissory note substantially in

the form of Exhibit A attached hereto (which promissory not shall replace and

be deemed the Line of Credit Note defined in and made pursuant to the Credit

Agreement) and all other contracts, instruments and documents required by Bank

to evidence such change.

 

2.

            Section 2.2 is hereby amended

by deleting “August 31, 2001” as the last day on which Bank will make advances

under the Line B, and by substituting for said date “June 30, 2002,” with such

change to be effective upon the execution and delivery to Bank of a promissory

note substantially in the form of Exhibit B attached hereto (which promissory

note shall replace and be deemed the line of Credit Note defined in and made

pursuant to the Credit Agreement) and all other contracts, instruments and

documents required by Bank to evidence such change.

 

3.

            Except as specifically

provided herein, all terms and conditions of the Credit Agreement remain in

full force and effect, without waiver or modification.  All terms defined in the Credit Agreement

shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement

shall be read together, as one document.

 

4.

            Borrower hereby remakes all

representations and warranties contained in the Credit Agreement and reaffirms

all covenants set forth therein. 

Borrower further certifies that as of the date of this Amendment there

exists no Event of Default as defined in the Credit Agreement, nor any

condition, act or event which with the giving of notice or the passage of time

or both would constitute any such Event of Default.

 

IN

WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed

as of the day and year first written above.

 

	

  DATALINK

  CORPORATION

  	

  WELLS

  FARGO BANK,

  
	

   

  	

  NATIONAL

  ASSOCIATION

  
	

   

  	

   

  
	

  By:

  	

  /s/ Daniel

  J. Kinsella

  	

   

  	

  By:

  	

  /s/

  Jason Paulnock

  	

   

  
	

   

  	

  Daniel J.

  Kinsella

  	

   

  	

   

  	

  Jason Paulnock, Vice President

  	

   

  
	

   

  	

  Chief

  Financial Office

  	

   

  	

   

  	

   

  	

   

  

 

REVOLVING

LINE OF CREDIT NOTE A

 

	

  $10,000,000.00

  	

   

  	

  Minneapolis,

  Minnesota 

  
	

   

  	

   

  	

  August

  31, 2001

  

 

FOR

VALUE RECEIVED, the undersigned DATALINK CORPORATION ("Borrower")

promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION

("Bank") at its office at Minn RCBO-REG Coml Mpls Mid Mkt, Sixth

& Marquette, Minneapolis, MN 55479, or at such other place as the holder

hereof may designate, in lawful money of the United States of America and in

immediately available funds, the principal sum of Ten Million Dollars

($10,000,000.00), or so much thereof as may be advanced and be outstanding,

with interest thereon, to be computed on each advance from the date of its

disbursement as set forth herein.

 

DEFINITIONS:

 

As

used herein, the following terms shall have the meanings set forth after each,

and any other term defined in this Note shall have the meaning set forth at the

place defined:

 

(a)

          "Business Day" means

any day except a Saturday, Sunday or any other day on which commercial banks in

Minnesota are authorized or required by law to close.

 

(b)

          "Fixed Rate Term"

means a period commencing on a Business Day and continuing for 1, 2, 3 or 4

months, as designated by Borrower, during which all or a portion of the

outstanding principal balance of this Note bears interest determined in

relation to LIBOR; provided however, that no Fixed Rate Term may be selected

for a principal amount less than One Hundred Thousand Dollars ($100,000.00); and

provided further, that no Fixed Rate Term shall extend beyond the scheduled

maturity date hereof.  If any Fixed Rate

Term would end on a day which is not a Business Day, then such Fixed Rate Term

shall be extended to the next succeeding Business Day.

 

(c)

          "LIBOR" means the rate

per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and

determined pursuant to the following formula:

 

 

	

  LIBOR =

  	

  Base LIBOR

  	

   

  
	

   

  	

  100% - LIBOR Reserve Percentage

  	

   

  

 

(i)

           "Base LIBOR" means

the rate per annum for United States dollar deposits quoted by Bank as the

Inter-Bank Market Offered Rate, with the understanding that such rate is quoted

by Bank for the purpose of calculating effective rates of interest for loans

making reference thereto, on the first day of a Fixed Rate Term for delivery of

funds on said date for a period of time approximately equal to the number of

days in such Fixed Rate Term and in an amount approximately equal to the

principal amount to which such Fixed Rate Term applies.  Borrower understands and agrees that Bank

may base its quotation of the Inter-Bank Market Offered Rate upon such offers

or other market indicators of the Inter-Bank Market as Bank in its discretion

deems appropriate including, but not limited to, the rate offered for U.S.

dollar deposits on the London Inter-Bank Market.

 

(ii)

          "LIBOR Reserve

Percentage" means the reserve percentage prescribed by the Board of

Governors of the Federal Reserve System (or any successor) for

"Eurocurrency

 

Liabilities" (as defined in Regulation

D of the Federal Reserve Board, as amended), adjusted by Bank for expected

changes in such reserve percentage during the applicable Fixed Rate Term.

 

(d)

          "Prime Rate" means at

any time the rate of interest most recently announced within Bank at its principal

office as its Prime Rate, with the understanding that the Prime Rate is one of

Bank's base rates and serves as the basis upon which effective rates of

interest are calculated for those loans making reference thereto, and is

evidenced by the recording thereof after its announcement in such internal

publication or publications as Bank may designate.

 

INTEREST:

 

(a)

          Interest.  The outstanding principal balance of this

Note shall bear interest (computed on the basis of a 360-day year, actual days

elapsed) either (i) at a fluctuating rate per annum one percent (1.00%) below

the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum

determined by Bank to be equal to the margin described in Section 4.3 of the

Agreement plus LIBOR in effect on the first day of the applicable Fixed Rate

Term.  When interest is determined in

relation to the Prime Rate, each change in the rate of interest hereunder shall

become effective on the date each Prime Rate change is announced within

Bank.  With respect to each LIBOR

selection hereunder, Bank is hereby authorized to note the date, principal

amount, interest rate and Fixed Rate Term applicable thereto and any payments

made thereon on Bank's books and records (either manually or by electronic

entry) and/or on any schedule attached to this Note, which notations shall be

prima facie evidence of the accuracy of the information noted.  The initial margin applicable to LIBOR based

borrowings as of the date of this Note shall be ________ %.

 

(b)           Selection of Interest Rate Options.  At any time any portion of this Note bears

interest determined in relation to LIBOR, it may be continued by Borrower at

the end of the Fixed Rate Term applicable thereto so that all or a portion

thereof bears interest determined in relation to the Prime Rate or to LIBOR for

a new Fixed Rate Term designated by Borrower. 

At any time any portion of this Note bears interest determined in

relation to the Prime Rate, Borrower may convert all or a portion thereof so

that it bears interest determined in relation to LIBOR for a Fixed Rate Term

designated by Borrower.  At such time as

Borrower requests an advance hereunder or wishes to select a LIBOR option for

all or a portion of the outstanding principal balance hereof, and at the end of

each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the

interest rate option selected by Borrower; (ii) the principal amount subject

thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed

Rate Term.  Any such notice may be given

by telephone (or such other electronic method as Bank may permit) so long as,

with respect to each LIBOR selection, (A) if requested by Bank, Borrower

provides to Bank written confirmation thereof not later than three (3) Business

Days after such notice is given, and (B) such notice is given to Bank prior to

10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during

any Business Day if Bank, at it's sole option but without obligation to do so,

accepts Borrower's notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a

fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent

LIBOR request from Borrower shall be subject to a redetermination by Bank of

the applicable fixed rate.  If no

specific designation of interest is made at the time any advance is requested

hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to

have made a Prime Rate interest selection for such advance or the principal

amount to which such Fixed Rate Term applied.

 

(c)           Taxes and Regulatory Costs.  Borrower shall pay to Bank immediately upon

demand, in addition to any other amounts due or to become due hereunder, any

and all (i) withholdings, interest equalization taxes, stamp taxes or other

taxes (except income and franchise taxes) imposed by any domestic or foreign

governmental authority and related in any manner to LIBOR, and (ii) future,

supplemental, emergency or other changes in the LIBOR Reserve Percentage,

assessment rates imposed by the Federal Deposit Insurance Corporation, or

similar requirements or costs imposed by any domestic or foreign governmental

authority or resulting from compliance by Bank with any request or directive

(whether or not having the force of law) from any central bank or other

governmental authority and related in any manner to LIBOR to the extent they

are not included in the calculation of LIBOR. 

In determining which of the foregoing are attributable to any LIBOR

option available to Borrower hereunder, any reasonable allocation made by Bank

among its operations shall be conclusive and binding upon Borrower.

 

(d)

          Payment of Interest.  Interest accrued on this Note shall be

payable on the last day of each month, commencing September 30, 2001.

 

(e)           Default Interest.  At any time that the Borrower’s Funded Debt

to EBITDA Ratio, as described in Section 4.3 of the Agreement, is in excess of

1.65 to 1.0, or at any time from and after the maturity date of this Note, or

such earlier date as all principal owing hereunder becomes due and payable by

acceleration or otherwise, the outstanding principal balance of this Note shall

bear interest until paid in full at an increased rate per annum (computed on

the basis of a 360-day year, actual days elapsed) equal to two percent (2.0%)

above the rate of interest from time to time applicable to this Note.

 

BORROWING AND REPAYMENT:

 

(a)

          Borrowing and Repayment.  Borrower may from time to time during the

term of this Note borrow, partially or wholly repay its outstanding borrowings,

and reborrow, subject to all of the limitations, terms and conditions of this

Note and of any document executed in connection with or governing this Note;

provided however, that the total outstanding borrowings under this Note shall

not at any time exceed the principal amount stated above.  The unpaid principal balance of this

obligation at any time shall be the total amounts advanced hereunder by the

holder hereof less the amount of principal payments made hereon by or for any

Borrower, which balance may be endorsed hereon from time to time by the

holder.  The outstanding principal

balance of this Note shall be due and payable in full on June 30, 2002.

 

(b)

          Advances.  Advances hereunder, to the total amount of

the principal sum stated above, may be made by the holder at the oral or

written request of (i) _____________________ or ________________________ or

_______________________, any one acting alone, who are authorized to request

advances and direct the disposition of any advances until written notice of the

revocation of such authority is received by the holder at the office designated

above, or (ii) any person, with respect to advances deposited to the credit of

any deposit account of any Borrower, which advances, when so deposited, shall

be conclusively presumed to have been made to or for the benefit of each

Borrower regardless of the fact that persons other than those authorized to

request advances may have authority to draw against such account.  The holder shall have no obligation to

determine whether any person requesting an advance is or has been authorized by

any Borrower.

 

(c)

          Application of Payments.  Each payment made on this Note shall be

credited first, to any interest then due and second, to the outstanding

principal balance hereof.  All payments

credited to principal shall be applied first, to the outstanding principal

balance of this Note which bears interest determined in relation to the Prime

Rate, if any, and second, to the outstanding principal balance of this Note

which bears interest determined in relation to LIBOR, with such payments

applied to the oldest Fixed Rate Term first.

 

PREPAYMENT:

 

(a)

          Prime Rate.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to the Prime Rate at any

time, in any amount and without penalty.

 

(b)

          LIBOR.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to LIBOR at any time

and in the minimum amount of One Hundred Thousand Dollars ($100,000.00); provided

however, that if the outstanding principal balance of such portion of this Note

is less than said amount, the minimum prepayment amount shall be the entire

outstanding principal balance thereof. 

In consideration of Bank providing this prepayment option to Borrower,

or if any such portion of this Note shall become due and payable at any time

prior to the last day of the Fixed Rate Term applicable thereto by acceleration

or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is

the sum of the discounted monthly differences for each month from the month of

prepayment through the month in which such Fixed Rate Term matures, calculated

as follows for each such month:

 

(i)            Determine

the amount of interest which would have accrued each month on the amount

prepaid at the interest rate applicable to such amount had it remained

outstanding until the last day of the Fixed Rate Term applicable thereto.

 

(ii)           Subtract

from the amount determined in (i) above the amount of interest which would have

accrued for the same month on the amount prepaid for the remaining term of such

Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made

for such term and in a principal amount equal to the amount prepaid.

 

(iii)          If

the result obtained in (ii) for any month is greater than zero, discount that

difference by LIBOR used in (ii) above.

 

Each Borrower acknowledges that prepayment

of such amount may result in Bank incurring additional costs, expenses and/or

liabilities, and that it is difficult to ascertain the full extent of such

costs, expenses and/or liabilities. 

Each Borrower, therefore, agrees to pay the above-described prepayment

fee and agrees that said amount represents a reasonable estimate of the

prepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay any prepayment fee

when due, the amount of such prepayment fee shall thereafter bear interest

until paid at a rate per annum two percent (2.00%) above the Prime Rate in

effect from time to time (computed on the basis of a 360-day year, actual days

elapsed).  Each change in the rate of

interest on any such past due prepayment fee shall become effective on the date

each Prime Rate change is announced within Bank.

 

EVENTS OF DEFAULT:

 

This

Note is made pursuant to and is subject to the terms and conditions of that

certain Credit Agreement between Borrower and Bank dated as of June 30, 2000,

as amended from time to time (the "Credit Agreement").  Any default in the payment or performance of

any obligation under this Note, or any defined event of default under the

Credit Agreement, shall constitute an "Event of Default" under this

Note.

 

MISCELLANEOUS:

 

(a)

          Remedies.  Upon the occurrence of any Event of Default,

the holder of this Note, at the holder's option, may declare all sums of

principal and interest outstanding hereunder to be immediately due and payable

without presentment, demand, notice of nonperformance, notice of protest,

protest or notice of dishonor, all of which are expressly waived by each Borrower,

and the obligation, if any, of the holder to extend any further credit

hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder immediately upon demand the

full amount of all payments, advances, charges, costs and expenses, including

reasonable attorneys' fees (to include outside counsel fees and all allocated

costs of the holder's in-house counsel), expended or incurred by the holder in

connection with the enforcement of the holder's rights and/or the collection of

any amounts which become due to the holder under this Note, and the prosecution

or defense of any action in any way related to this Note, including without

limitation, any action for declaratory relief, whether incurred at the trial or

appellate level, in an arbitration proceeding or otherwise, and including any

of the foregoing incurred in connection with any bankruptcy proceeding

(including without limitation, any adversary proceeding, contested matter or

motion brought by Bank or any other person) relating to any Borrower or any

other person or entity.

 

(b)

          Obligations Joint and Several.  Should more than one person or entity sign

this Note as a Borrower, the obligations of each such Borrower shall be joint

and several.

 

(c)

          Governing Law.  This Note shall be governed by and construed

in accordance with the laws of the State of Minnesota.

 

IN

WITNESS WHEREOF, the undersigned has executed this Note as of the date first

written above.

 

	

  Datalink

  Corporation

  	

   

  
	

   

  	

   

  
	

  By:

  	

   /s/ Daniel J. Kinsella

  	

   

  	 

	

   

  	

  Daniel

  J. Kinsella 

  	

   

  	 

	

   

  	

  Chief

  Financial Officer

  	

   

  	 

 

REVOLVING

LINE OF CREDIT NOTE B

 

	

  $5,000,000.00

  	

   

  	

  Minneapolis,

  Minnesota

  
	

   

  	

   

  	

  August

  31, 2001

  

 

FOR

VALUE RECEIVED, the undersigned DATALINK CORPORATION ("Borrower")

promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION

("Bank") at its office at Minn RCBO-REG Coml Mpls Mid Mkt, Sixth

& Marquette, Minneapolis, MN 55479, Minnesota, or at such other place as

the holder hereof may designate, in lawful money of the United States of

America and in immediately available funds, the principal sum of Five Million

Dollars ($5,000,000.00), or so much thereof as may be advanced and be

outstanding, with interest thereon, to be computed on each advance from the

date of its disbursement as set forth herein.

 

DEFINITIONS:

 

As

used herein, the following terms shall have the meanings set forth after each,

and any other term defined in this Note shall have the meaning set forth at the

place defined:

 

(a)

          "Business Day" means

any day except a Saturday, Sunday or any other day on which commercial banks in

Minnesota are authorized or required by law to close.

 

(b)

          "Fixed Rate Term"

means a period commencing on a Business Day and continuing for 1, 2, 3 or 4

months as designated by Borrower, during which all or a portion of the outstanding

principal balance of this Note bears interest determined in relation to LIBOR;

provided however, that no Fixed Rate Term may be selected for a principal

amount less than One Hundred Thousand Dollars ($100,000.00); and provided

further, that no Fixed Rate Term shall extend beyond the scheduled maturity

date hereof.  If any Fixed Rate Term

would end on a day which is not a Business Day, then such Fixed Rate Term shall

be extended to the next succeeding Business Day.

 

(c)

          "LIBOR" means the rate

per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and

determined pursuant to the following formula:

 

	

  LIBOR =

  	

  Base LIBOR

  	

   

  
	

   

  	

  100% - LIBOR Reserve Percentage

  	

   

  

 

(i)

           "Base LIBOR" means

the rate per annum for United States dollar deposits quoted by Bank as the

Inter-Bank Market Offered Rate, with the understanding that such rate is quoted

by Bank for the purpose of calculating effective rates of interest for loans

making reference thereto, on the first day of a Fixed Rate Term for delivery of

funds on said date for a period of time approximately equal to the number of

days in such Fixed Rate Term and in an amount approximately equal to the

principal amount to which such Fixed Rate Term applies.  Borrower understands and agrees that Bank

may base its quotation of the Inter-Bank Market Offered Rate upon such offers

or other market indicators of the Inter-Bank Market as Bank in its discretion

deems appropriate including, but not limited to, the rate offered for U.S.

dollar deposits on the London Inter-Bank Market.

 

(ii)

          "LIBOR Reserve

Percentage" means the reserve percentage prescribed by the Board of

Governors of the Federal Reserve System (or any successor) for

"Eurocurrency Liabilities" (as defined in Regulation D of the Federal

Reserve Board, as amended), adjusted by Bank for expected changes in such

reserve percentage during the applicable Fixed Rate Term.

 

(d)

          "Prime Rate" means at

any time the rate of interest most recently announced within Bank at its

principal office as its Prime Rate, with the understanding that the Prime Rate

is one of Bank's base rates and serves as the basis upon which effective rates

of interest are calculated for those loans making reference thereto, and is

evidenced by the recording thereof after its announcement in such internal

publication or publications as Bank may designate.

INTEREST:

 

(a)

          Interest.  The outstanding principal balance of this

Note shall bear interest (computed on the basis of a 360-day year, actual days

elapsed) either (i) at a fluctuating rate per annum one percent (1.00%) below

the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum

determined by Bank to be one and one hundredths percent (1.10%) above LIBOR in

effect on the first day of the applicable Fixed Rate Term.  When interest is determined in relation to

the Prime Rate, each change in the rate of interest hereunder shall become

effective on the date each Prime Rate change is announced within Bank.  With respect to each LIBOR selection

hereunder, Bank is hereby authorized to note the date, principal amount,

interest rate and Fixed Rate Term applicable thereto and any payments made

thereon on Bank's books and records (either manually or by electronic entry)

and/or on any schedule attached to this Note, which notations shall be prima

facie evidence of the accuracy of the information noted.

 

(b)

          Selection of Interest Rate

Options.  At any time any portion of

this Note bears interest determined in relation to LIBOR, it may be continued

by Borrower at the end of the Fixed Rate Term applicable thereto so that all or

a portion thereof bears interest determined in relation to the Prime Rate or to

LIBOR for a new Fixed Rate Term designated by Borrower.  At any time any portion of this Note bears

interest determined in relation to the Prime Rate, Borrower may convert all or

a portion thereof so that it bears interest determined in relation to LIBOR for

a Fixed Rate Term designated by Borrower. 

At such time as Borrower requests an advance hereunder or wishes to

select a LIBOR option for all or a portion of the outstanding principal balance

hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice

specifying: (i) the interest rate option selected by Borrower; (ii) the

principal amount subject thereto; and (iii) for each LIBOR selection, the

length of the applicable Fixed Rate Term. Any such notice may be given by

telephone (or such other electronic method as Bank may permit) so long as, with

respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to

Bank written confirmation thereof not later than three (3) Business Days after

such notice is given, and (B) such notice is given to Bank prior to 10:00 a.m.

on the first day of the Fixed Rate Term, or at a later time during any Business

Day if Bank, at it's sole option but without obligation to do so, accepts

Borrower's notice and quotes a fixed rate to Borrower.  If Borrower does not immediately accept a

fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent

LIBOR request from Borrower shall be subject to a redetermination by Bank of

the applicable fixed rate.  If no

specific designation of interest is made at the time any advance is requested

hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to

have made a Prime Rate interest selection for such advance or the principal

amount to which such Fixed Rate Term applied.

 

(c)           Taxes and Regulatory Costs.  Borrower shall pay to Bank immediately upon

demand, in addition to any other amounts due or to become due hereunder, any

and all (i) withholdings, interest equalization taxes, stamp taxes or other

taxes (except income and franchise taxes) imposed by any domestic or foreign

governmental authority and related in any manner to LIBOR, and (ii) future,

supplemental, emergency or other changes in the LIBOR Reserve Percentage,

assessment rates imposed by the Federal Deposit Insurance Corporation, or

similar requirements or costs imposed by any domestic or foreign governmental

authority or resulting from compliance by Bank with any request or directive

(whether or not having the force of law) from any central bank or other

governmental authority and related in any manner to LIBOR to the extent they

are not included in the calculation of LIBOR. 

In determining which of the foregoing are attributable to any LIBOR

option available to Borrower hereunder, any reasonable allocation made by Bank

among its operations shall be conclusive and binding upon Borrower.

 

(d)           Payment of Interest.  Interest accrued on this Note shall be payable

on the last day of each month, commencing September 30, 2001.

 

(e)           Default Interest.  From and after the maturity date of this

Note, or such earlier date as all principal owing hereunder becomes due and

payable by acceleration or otherwise, the outstanding principal balance of this

Note shall bear interest until paid in full at an increased rate per annum

(computed on the basis of a 360-day year, actual days elapsed) equal to two

percent (2.0%) above the rate of interest from time to time applicable to this

Note.

 

BORROWING AND REPAYMENT:

 

(a)           Borrowing and Repayment.  Borrower may from time to time during the

term of this Note borrow, partially or wholly repay its outstanding borrowings,

and reborrow, subject to all of the limitations, terms and conditions of this

Note and of any document executed in connection with or governing this Note;

provided however, that the total outstanding borrowings under this Note shall

not at any time exceed the principal amount stated above.  The unpaid principal balance of this

obligation at any time shall be the total amounts advanced hereunder by the

holder hereof less the amount of principal payments made hereon by or for any

Borrower, which balance may be endorsed hereon from time to time by the holder.  The outstanding principal balance of this

Note shall be due and payable in full on June

30, 2002.

 

(b)           Advances.  Advances hereunder, to the total amount of

the principal sum stated above, may be made by the holder at the oral or

written request of (i) _____________________ or ________________________,

or_______________________ any one acting alone, who are authorized to request

advances and direct the disposition of any advances until written notice of the

revocation of such authority is received by the holder at the office designated

above, or (ii) any person, with respect to advances deposited to the credit of

any deposit account of any Borrower, which advances, when so deposited, shall

be conclusively presumed to have been made to or for the benefit of each Borrower

regardless of the fact that persons other than those authorized to request

advances may have authority to draw against such account.  The holder shall have no obligation to

determine whether any person requesting an advance is or has been authorized by

any Borrower.

 

(c)           Application of Payments.  Each payment made on this Note shall be

credited first, to any interest then due and second, to the outstanding

principal balance hereof.  All payments

credited to principal shall be applied first, to the outstanding principal

balance of this Note which bears interest determined in relation to the Prime

Rate, if any, and second, to the outstanding principal balance of this Note

which bears interest determined in relation to LIBOR, with such payments

applied to the oldest Fixed Rate Term first.

 

PREPAYMENT:

 

(a)           Prime Rate.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to the Prime Rate at

any time, in any amount and without penalty.

 

(b)           LIBOR.  Borrower may prepay principal on any portion

of this Note which bears interest determined in relation to LIBOR at any time

and in the minimum amount of One Hundred Thousand Dollars ($100,000.00);

provided however, that if the outstanding principal balance of such portion of

this Note is less than said amount, the minimum prepayment amount shall be the

entire outstanding principal balance thereof. 

In consideration of Bank providing this prepayment option to Borrower,

or if any such portion of this Note shall become due and payable at any time

prior to the last day of the Fixed Rate Term applicable thereto by acceleration

or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is

the sum of the discounted monthly differences for each month from the month of

prepayment through the month in which such Fixed Rate Term matures, calculated

as follows for each such month:

 

(i)            Determine

the amount of interest which would have accrued each month on the amount

prepaid at the interest rate applicable to such amount had it remained

outstanding until the last day of the Fixed Rate Term applicable thereto.

 

(ii)           Subtract

from the amount determined in (i) above the amount of interest which would have

accrued for the same month on the amount prepaid for the remaining term of such

Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made

for such term and in a principal amount equal to the amount prepaid.

 

(iii)          If

the result obtained in (ii) for any month is greater than zero, discount that

difference by LIBOR used in (ii) above.

 

Each Borrower acknowledges that prepayment

of such amount may result in Bank incurring additional costs, expenses and/or

liabilities, and that it is difficult to ascertain the full extent of such

costs, expenses and/or liabilities. 

Each Borrower, therefore, agrees to pay the above-described prepayment

fee and agrees that said amount represents a reasonable estimate of the

prepayment costs, expenses and/or liabilities of Bank.  If Borrower fails to pay any prepayment fee

when due, the amount of such prepayment fee shall thereafter bear interest

until paid at a rate per annum two percent (2.00%) above the Prime Rate in

effect from time to time (computed on the basis of a 360-day year, actual days

elapsed).  Each change in the rate of

interest on any such past due prepayment fee shall become effective on the date

each Prime Rate change is announced within Bank.

 

EVENTS OF DEFAULT:

 

This

Note is made pursuant to and is subject to the terms and conditions of that

certain Credit Agreement between Borrower and Bank dated as of June 30, 2000,

as amended from time to time (the "Credit Agreement").  Any default in the payment or performance of

any obligation under this Note, or any defined event of default under the

Credit Agreement, shall constitute an "Event of Default" under this

Note.

 

MISCELLANEOUS:

 

(a)

          Remedies.  Upon the occurrence of any Event of Default,

the holder of this Note, at the holder's option, may declare all sums of

principal and interest outstanding hereunder to be immediately due and payable

without presentment, demand, notice of nonperformance, notice of protest,

protest or notice of dishonor, all of which are expressly waived by each

Borrower, and the obligation, if any, of the holder to extend any further credit

hereunder shall immediately cease and terminate.  Each Borrower shall pay to the holder immediately upon demand the

full amount of all payments, advances, charges, costs and expenses, including

reasonable attorneys' fees (to include outside counsel fees and all allocated

costs of the holder's in-house counsel), expended or incurred by the holder in

connection with the enforcement of the holder's rights and/or the collection of

any amounts which become due to the holder under this Note, and the prosecution

or defense of any action in any way related to this Note, including without

limitation, any action for declaratory relief, whether incurred at the trial or

appellate level, in an arbitration proceeding or otherwise, and including any

of the foregoing incurred in connection with any bankruptcy proceeding

(including without limitation, any adversary proceeding, contested matter or

motion brought by Bank or any other person) relating to any Borrower or any

other person or entity.

 

(b)

          Obligations Joint and Several.  Should more than one person or entity sign

this Note as a Borrower, the obligations of each such Borrower shall be joint

and several.

 

(c)

          Governing Law.  This Note shall be governed by and construed

in accordance with the laws of the State of Minnesota.

 

IN

WITNESS WHEREOF, the undersigned has executed this Note as of the date first

written above.

 

 

	

  DATALINK CORPORATION

  	

   

  
	

   

  	

   

  
	

  By:

  	

   /s/ Daniel J. Kinsella

  	

   

  	 

	

   

  	

  Daniel

  J. Kinsella 

  	

   

  	 

	

   

  	

  Chief

  Financial Officer

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