Document:

Exhibit 10.1

 

 

CREDIT
AGREEMENT

 

 

among

 

 

FAIRPOINT
COMMUNICATIONS, INC.,

 

 

VARIOUS
LENDING INSTITUTIONS,

 

 

BANC
OF AMERICA SECURITIES LLC,

as SYNDICATION AGENT,

 

 

[      ]

and

[        ],

as CO-DOCUMENTATION AGENTS,

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as ADMINISTRATIVE AGENT

 

Dated
as of February     , 2005

 

 

 

DEUTSCHE
BANK SECURITIES, INC.

and

BANC OF AMERICA SECURITIES LLC,

as JOINT LEAD ARRANGERS,

and

 

DEUTSCHE
BANK SECURITIES, INC.,

 

BANC
OF AMERICA SECURITIES,

 

GOLDMAN
SACHS CREDIT PARTNERS, L.P.,

 

and

 

MORGAN
STANLEY SENIOR FUNDING INC.,

as JOINT BOOK RUNNING MANAGERS

 

 

TABLE OF CONTENTS

 

	
  SECTION 1. Amount and Terms of Credit

  	
   

  
	
   

  	
   

  
	
  1.01 Commitment

  	
   

  
	
  1.02 Minimum Borrowing Amounts, etc.

  	
   

  
	
  1.03 Notice of Borrowing

  	
   

  
	
  1.04 Disbursement of Funds

  	
   

  
	
  1.05 Notes

  	
   

  
	
  1.06
  Conversions

  	
   

  
	
  1.07 Pro Rata Borrowings

  	
   

  
	
  1.08 Interest

  	
   

  
	
  1.09 Interest Periods

  	
   

  
	
  1.10 Increased Costs, Illegality, etc.

  	
   

  
	
  1.11 Compensation

  	
   

  
	
  1.12 Change of Lending Office

  	
   

  
	
  1.13 Replacement of Lenders

  	
   

  
	
  1.14 Incremental B Term Loan Commitments

  	
   

  
	
   

  	
   

  
	
  SECTION 1A.  Letters of Credit.

  	
   

  
	
   

  	
   

  
	
  1A.01  Letters of Credit

  	
   

  
	
  1A.02  Minimum Stated Amount

  	
   

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

  	
   

  
	
  1A.04  Agreement to Repay Letter
  of Credit Drawings

  	
   

  
	
  1A.05  Letter of Credit
  Participations

  	
   

  
	
  1A.06  Increased Costs

  	
   

  
	
  1A.07  Applicability of ISP and
  UCP, etc.

  	
   

  
	
   

  	
   

  
	
  SECTION
  2. Fees

  	
   

  
	
   

  	
   

  
	
  2.01 Fees

  	
   

  
	
  2.02 Voluntary Reduction of Commitments

  	
   

  
	
  2.03 Mandatory Adjustments of Commitments, etc.

  	
   

  
	
   

  	
   

  
	
  SECTION 3. Payments

  	
   

  
	
   

  	
   

  
	
  3.01 Voluntary Prepayments

  	
   

  
	
  3.02 Mandatory Prepayments

  	
   

  
	
  3.03 Method and Place of Payment

  	
   

  
	
  3.04 Net Payments

  	
   

  
	
   

  	
   

  
	
  SECTION 4. Conditions Precedent

  	
   

  
	
   

  	
   

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

  	
   

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

  	
   

  

 

i

 

	
  4.03 Special Condition Precedent to Incurrence
  of RF Loans and Delayed-Draw Term Loans Incurred to Finance an Optional
  Non-2008 Tender Offer Notes Redemption

  	
   

  
	
   

  	
   

  
	
  SECTION 5. Representations, Warranties and
  Agreements

  	
   

  
	
   

  	
   

  
	
  5.01 Company Status

  	
   

  
	
  5.02 Company Power and Authority

  	
   

  
	
  5.03 No Violation

  	
   

  
	
  5.04 Litigation

  	
   

  
	
  5.05 Use of Proceeds; Margin Regulations

  	
   

  
	
  5.06 Governmental Approvals

  	
   

  
	
  5.07 Investment Company Act

  	
   

  
	
  5.08 Public Utility Holding Company Act

  	
   

  
	
  5.09 True and Complete Disclosure

  	
   

  
	
  5.10 Financial Condition; Financial
  Statements

  	
   

  
	
  5.11 Security Interests

  	
   

  
	
  5.12 Compliance With Statutes

  	
   

  
	
  5.13 Tax Returns and Payments

  	
   

  
	
  5.14 Compliance with ERISA

  	
   

  
	
  5.15 Subsidiaries

  	
   

  
	
  5.16 Intellectual Property

  	
   

  
	
  5.17 Environmental Matters

  	
   

  
	
  5.18 Labor Relations

  	
   

  
	
  5.19 Subordination

  	
   

  
	
  5.20 Capitalization

  	
   

  
	
   

  	
   

  
	
  SECTION 6. Affirmative Covenants

  	
   

  
	
   

  	
   

  
	
  6.01 Information Covenants

  	
   

  
	
  6.02 Books, Records and Inspections

  	
   

  
	
  6.03
  Insurance

  	
   

  
	
  6.04
  Payment of Taxes

  	
   

  
	
  6.05 Company Franchises

  	
   

  
	
  6.06 Compliance with Statutes, etc.

  	
   

  
	
  6.07
  ERISA

  	
   

  
	
  6.08
  Good Repair

  	
   

  
	
  6.09 End of Fiscal Years; Fiscal Quarters; Etc.

  	
   

  
	
  6.10 Permitted Acquisitions

  	
   

  
	
  6.11 CoBank Capital

  	
   

  
	
  6.12
  Margin Stock

  	
   

  
	
  6.13
  Post-Closing Refinancing

  	
   

  
	
  6.14 Special Covenant Regarding Cash
  Management Policy

  	
   

  
	
  6.15 PIK Requirements.

  	
   

  
	
   

  	
   

  
	
  SECTION 7. Negative Covenants

  	
   

  
	
   

  	
   

  
	
  7.01
  Changes in Business

  	
   

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

  	
   

  
	
  7.03
  Liens

  	
   

  

 

ii

 

	
  7.04 Indebtedness

  	
   

  
	
  7.05 Capital Expenditures.

  	
   

  
	
  7.06 Advances, Investments and Loans

  	
   

  
	
  7.07 Limitation on Creation of Subsidiaries

  	
   

  
	
  7.08 Modifications

  	
   

  
	
  7.09 Restricted Payments, Etc.

  	
   

  
	
  7.10
  Transactions with Affiliates

  	
   

  
	
  7.11 Interest Coverage Ratio

  	
   

  
	
  7.12 Leverage Ratio

  	
   

  
	
  7.13
  Limitation On Issuance of Equity Interests

  	
   

  
	
  7.14 Designated Senior Debt

  	
   

  
	
   

  	
   

  
	
  SECTION 8. Events of Default

  	
   

  
	
   

  	
   

  
	
  8.01 Payments

  	
   

  
	
  8.02 Representations, etc.

  	
   

  
	
  8.03 Covenants

  	
   

  
	
  8.04
  Default Under Other Agreements

  	
   

  
	
  8.05 Bankruptcy, etc.

  	
   

  
	
  8.06 ERISA

  	
   

  
	
  8.07 Pledge Agreement

  	
   

  
	
  8.08 Subsidiary Guaranty

  	
   

  
	
  8.09 Judgments

  	
   

  
	
   

  	
   

  
	
  SECTION 9.
  Definitions

  	
   

  
	
   

  	
   

  
	
  SECTION 10. The Agents

  	
   

  
	
   

  	
   

  
	
  10.01 Appointment

  	
   

  
	
  10.02 Nature of Duties

  	
   

  
	
  10.03 Certain Rights of the Agents

  	
   

  
	
  10.04 Reliance by Agents

  	
   

  
	
  10.05 Notice of Default, etc.

  	
   

  
	
  10.06 Nonreliance on Agents and Other
  Lenders

  	
   

  
	
  10.07 Indemnification

  	
   

  
	
  10.08 Agents in their Individual Capacities

  	
   

  
	
  10.09
  Holders

  	
   

  
	
  10.10 Resignation of the Agents

  	
   

  
	
  10.11 Collateral Matters

  	
   

  
	
  10.12 Delivery of Information

  	
   

  
	
   

  	
   

  
	
  SECTION 11. Miscellaneous

  	
   

  
	
   

  	
   

  
	
  11.01 Payment of Expenses, etc.

  	
   

  
	
  11.02 Right of Setoff

  	
   

  
	
  11.03 Notices

  	
   

  
	
  11.04 Benefit of Agreement

  	
   

  
	
  11.05 No
  Waiver; Remedies Cumulative

  	
   

  
	
  11.06 Payments Pro Rata

  	
   

  

 

iii

 

	
  11.07 Calculations; Computations

  	
   

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

  	
   

  
	
  11.09
  Counterparts

  	
   

  
	
  11.10
  Effectiveness

  	
   

  
	
  11.11 Headings Descriptive

  	
   

  
	
  11.12 Amendment or Waiver

  	
   

  
	
  11.13 Survival

  	
   

  
	
  11.14 Domicile of Loans

  	
   

  
	
  11.15 Confidentiality

  	
   

  
	
  11.16 Lender Register

  	
   

  
	
  11.17 Patriot Act Notice

  	
   

  
	
  11.18 Post-Closing Actions

  	
   

  

 

 

	
  ANNEX I

  	
  —

  	
  Commitments

  
	
  ANNEX II

  	
  —

  	
  Addresses

  
	
  ANNEX III

  	
  —

  	
  Subsidiaries

  
	
  ANNEX IV

  	
  —

  	
  ERISA

  
	
  ANNEX V

  	
  —

  	
  Existing
  Liens

  
	
  ANNEX VI

  	
  —

  	
  Scheduled Existing Indebtedness

  
	
  ANNEX VII

  	
  —

  	
  Existing Investments

  
	
  ANNEX VIII

  	
  —

  	
  Affiliate Transactions

  
	
  ANNEX IX

  	
  —

  	
  Existing Letters of Credit

  

 

 

	
  EXHIBIT A-1

  	
  —

  	
  Form of Notice of Borrowing

  
	
  EXHIBIT A-2

  	
  —

  	
  Form of Letter of Credit Request

  
	
  EXHIBIT A-3

  	
  —

  	
  Form of Notice of Conversion/Continuation

  
	
  EXHIBIT B-1

  	
  —

  	
  Form of B Term Note

  
	
  EXHIBIT B-2

  	
  —

  	
  Form of Delayed-Draw Term Note

  
	
  EXHIBIT B-3

  	
  —

  	
  Form of RF Note

  
	
  EXHIBIT B-4

  	
  —

  	
  Form of Swingline Note

  
	
  EXHIBIT C

  	
  —

  	
  Form of Section 3.04 Certificate

  
	
  EXHIBIT D

  	
  —

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

  
	
  EXHIBIT E

  	
  —

  	
  Form of Officer’s Certificate

  
	
  EXHIBIT F

  	
  —

  	
  Form of Subsidiary Guaranty

  
	
  EXHIBIT G

  	
  —

  	
  Form of Pledge Agreement

  
	
  EXHIBIT H

  	
  —

  	
  Form of Solvency Certificate

  
	
  EXHIBIT I

  	
  —

  	
  Form of Assignment Agreement

  
	
  EXHIBIT J

  	
  —

  	
  Form of Intercompany Subordination Agreement

  
	
  EXHIBIT K

  	
  —

  	
  Form of Intercompany Note

  
	
  EXHIBIT L

  	
  —

  	
  Form of Incremental B Term Commitment Agreement

  

 

iv

 

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

 

W I  T  N  E  S
S  E  T  H :

 

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

 

NOW, THEREFORE, IT IS AGREED:

 

SECTION
1.  Amount and Terms of Credit.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

2

 

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

 

(e)           On
any Business Day, the Swingline Lender may, in its sole discretion, give notice
to the RF Lenders that its outstanding Swingline Loans shall be funded with a
Borrowing of RF Loans (provided that each such notice shall be deemed to
have been automatically given upon the occurrence of an Event of Default under
Section 8.05 or upon the exercise of any of the remedies provided in the last
paragraph of Section 8), in which case a Borrowing of RF Loans constituting
Base Rate Loans (each such Borrowing, a “Mandatory Borrowing”) shall be
made on the immediately succeeding Business Day by all RF Lenders pro  rata
based on each RF Lender’s Percentage, and the proceeds thereof shall be applied
directly to repay the Swingline Lender for such outstanding Swingline
Loans.  Each RF Lender hereby irrevocably agrees to make Base Rate
Loans upon one Business Day’s notice pursuant to each Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
date specified in writing by the Swingline Lender notwithstanding:  (i) that the amount of the Mandatory
Borrowing may not comply with the Minimum Borrowing Amount otherwise required
hereunder, (ii) whether any conditions specified in Section 4.02 or 4.03 are
then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction
in the Total Revolving Commitment after any such Swingline Loans were
made.  In the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code in respect of the Borrower), each RF Lender (other than the
Swingline Lender) hereby agrees that it shall forthwith purchase from the
Swingline

 

3

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

1.05  Notes.  (a)  The Borrower’s obligation to pay the
principal of, and interest on, the Loans made by each Lender shall be set forth
in the Lender Register maintained by the Administrative Agent pursuant to
Section 11.16 and, subject to the provisions of Section 1.05(g), shall be
evidenced (i) if B Term Loans, by a promissory note substantially in the form
of Exhibit B-1 with blanks appropriately completed in conformity herewith
(each, a “B Term Note” and, collectively, the “B Term Notes”),
(ii) if Delayed-Draw Term Loans, by a promissory note substantially in the form
of Exhibit B-2 with blanks appropriately completed in conformity herewith
(each, a “Delayed-Draw Term Note” and, collectively, the “Delayed-Draw
Term Notes”), (iii) if RF Loans, by a promissory note substantially in the
form of Exhibit B-3 with blanks appropriately completed in conformity herewith
(each, an “RF Note” and, collectively, the “RF Notes”) and (iv)
if Swingline Loans, by a promissory note substantially in the form of Exhibit
B-4 with blanks appropriately completed in conformity herewith (the “Swingline
Note”).

 

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

 

(c)           The Delayed-Draw Term Note issued to
each Lender that makes any Delayed-Draw Term Loan shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be
dated the date of the issuance thereof), (iii) be in a stated principal amount
equal to the Delayed-Draw Term Commitment of such Lender on the Initial
Borrowing Date (or, if issued

 

6

 

after the Initial Borrowing
Date, be in a stated principal amount equal to the sum of the Delayed-Draw Term
Commitment and the outstanding principal amount of Delayed-Draw Term Loans of
such Lender at such time) and be payable in the principal amount of
Delayed-Draw Term Loans evidenced thereby, (iv) mature on the Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 3.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.

 

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

 

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

 

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

 

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

 

7

 

1.06  Conversions.  The
Borrower shall have the option to convert on any Business Day all or a portion
at least equal to the applicable Minimum Borrowing Amount of the outstanding
principal amount of the Loans (other than Swingline Loans, which at all times
shall be maintained as Base Rate Loans) owing pursuant to a single Facility
into a Borrowing or Borrowings pursuant to such Facility of another Type of
Loan, provided that (i) no partial conversion of a Borrowing of
Eurodollar Loans shall reduce the outstanding principal amount of the
Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be
converted into Eurodollar Loans when a Default under Section 8.01 or an Event
of Default is in existence on the date of the proposed conversion if the
Administrative Agent or the Required Lenders shall have determined in its or
their sole discretion not to permit such conversion, (iii) unless the
Administrative Agent has determined that the Syndication Date has occurred (at
which time this clause (iii) shall no longer be applicable), prior to the 90th
day after the Initial Borrowing Date, conversions of Base Rate Loans into
Eurodollar Loans may only be made if any such conversion is effective on the first
day of the first, second or third Interest Period referred to in clause (y) of
the proviso appearing in each of Sections 1.01(a)(ii) and 1.01(c)(ii) and so
long as such conversion does not result in a greater number of Borrowings of
Eurodollar Loans prior to the 90th day after the Initial Borrowing Date as are
permitted under Sections 1.01(a)(ii) and 1.01(c)(ii) and (iv) Borrowings of
Eurodollar Loans resulting from this Section 1.06 shall be limited in number as
provided in Section 1.02.  Each such conversion shall be effected by
the Borrower giving the Administrative Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days’ (or one Business Day’s,
in the case of a conversion into Base Rate Loans) prior written notice (or
telephonic notice promptly confirmed in writing) (each, a “Notice of
Conversion/Continuation”) in the form of Exhibit A-3, appropriately
completed to specify the Loans to be so converted (including the relevant
Facility), the Type of Loans to be converted into and, if to be converted into
a Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto.  The Administrative Agent shall give each Lender prompt
notice of any such proposed conversion affecting any of its Loans.

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

1.09  Interest Periods.  (a)  At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans, it shall have the right to elect by giving
the Administrative Agent written notice (or telephonic notice promptly
confirmed in writing) of the Interest Period applicable to such Borrowing,
which Interest Period shall, at the option of the Borrower (but otherwise
subject to clause (y) of the provisos appearing in Sections 1.01(a)(ii) and
1.01(c)(ii) and clause (iii) of the proviso appearing in Section 1.06), be a
one, two, three, six or, to the extent available to all Lenders with a
Commitment and/or outstanding Loans under the respective Facility, nine or
twelve month period.  Notwithstanding anything to the contrary
contained above:

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

(c)           If any Lender shall have determined
that the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration thereof,
in each case after the Effective Date, or compliance by such Lender or its
parent corporation with any

 

11

 

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

 

1.11  Compensation.  (a)  The Borrower shall, without duplication,
compensate each Lender, upon its written request (which request shall set forth
the basis for requesting such compensation and reasonably detailed calculations
thereof), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Lender may sustain: 
(i) if for any reason (other than a default by any Lender or the
Administrative Agent) a Borrowing of Eurodollar Loans by the Borrower does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment or
conversion of any of its Eurodollar Loans occurs on a date which is not the
last day of an Interest Period applicable thereto; (iii) if any prepayment of
any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the
terms of this Agreement, (y) an election made pursuant to Section 1.10(b) or
(z) actions required to be taken by the Borrower pursuant to
Section 1.14(c).

 

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

 

1.12  Change of Lending Office.  Each
Lender agrees that, upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), 1.10(c), 1A.06 or 3.04 with respect
to such Lender, it will, if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Lender) to designate another
lending office for any Loans

 

12

 

affected by such event, provided
that such designation is made on such terms that such Lender and its lending
office suffer no material economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the operation of
any such Section.  Nothing in this Section 1.12 shall affect or
postpone any of the obligations of the Borrower or the right of any Lender
provided in Section 1.10, 1A.06 or 3.04.

 

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

 

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

 

13

 

unpaid, Fees owing to the Replaced Lender (but only with respect to the
relevant Facility, in the case of the replacement of less than all Facilities
of Loans then held by the respective Replaced Lender) pursuant to Section 2.01,
(y) except in the case of the replacement of only the Commitments and/or
outstanding Term Loans of one or more Facilities of Term Loans of a Replaced
Lender, each Letter of Credit Issuer an amount equal to such Replaced Lender’s
Percentage of any Unpaid Drawing relating to Letters of Credit issued by such
Letter of Credit Issuer (which at such time remains an Unpaid Drawing) to the
extent such amount was not theretofore funded by such Replaced Lender and (z)
in the case of any replacement of Revolving Commitments, the Swingline Lender
an amount equal to such Replaced Lender’s Percentage of any Mandatory Borrowing
to the extent such amount was not theretofore funded by such Replaced Lender;
and

 

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

 

Upon the execution of the respective
Assignment Agreements, the payment of amounts referred to in clauses (i) and
(ii) above, recordation of the assignment on the Lender Register by the
Administrative Agent pursuant to Section 11.16 and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, (x) the Replacement Lender shall become a
Lender hereunder and, unless the respective Replaced Lender continues to have
outstanding Term Loans and/or a Commitment hereunder, the Replaced Lender shall
cease to constitute a Lender hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 1A.06, 3.04, 11.01 and 11.06), which shall survive as to such Replaced
Lender and (y) except in the case of the replacement of only Commitments and/or
outstanding Term Loans under one or more Facilities of Term Loans, the
Percentages of the RF Lenders shall be automatically adjusted at such time to
give effect to such replacement.

 

1.14  Incremental B Term Loan
Commitments.  (a)  The
Borrower, with the prior consent of the Administrative Agent, shall have the
right to request from time to time (by written notice to the Lenders) that one
or more Lenders (and/or one or more other Persons which will become Lenders as
provided below) provide Incremental B Term Commitments and, subject to the
terms and conditions contained in this Agreement, make Incremental B Term Loans
pursuant thereto, so long as (w) no Default or Event of Default then exists or
would result therefrom, (x) any Incremental B Term Loans are incurred on the
date of the effectiveness of the respective Incremental B Term Commitment
Agreement pursuant to which the related Incremental B Term Commitments are
provided, (y) the Borrower shall have demonstrated to the Administrative Agent’s
reasonable satisfaction that the full amount of the respective Incremental B
Term Facility (assuming the full utilization of the Incremental B Term
Commitments thereunder) may be incurred without violating the terms of any
Permitted Junior Capital, any Permitted Senior Unsecured Notes, any other
material debt of the Borrower or the documentation governing any such
Indebtedness and (z) the Borrower and its subsidiaries are in compliance
on a Pro Forma

 

14

 

Basis with each of the
covenants contained in Sections 7.11 and 7.12 (determined after giving effect
to the full utilization of the commitments provided under such Incremental B
Term Facility); it being understood and agreed, however, that (i) no Lender
shall be obligated to provide an Incremental B Term Commitment as a result of
any such request by the Borrower, and until such time, if any, as such Lender
has agreed in its sole discretion to provide an Incremental B Term Commitment
and executed and delivered to the Administrative Agent an Incremental B Term
Commitment Agreement as provided in clause (b) of this Section 1.14, such
Lender shall not be obligated to fund any Incremental B Term Loans, (ii) any
Lender (or, in the circumstances contemplated by clause (v) below, any other
Person which will qualify as an Eligible Transferee) may so provide an
Incremental B Term Commitment without the consent of any other Lender, (iii)
each provision of Incremental B Term Commitments pursuant to this Section 1.14
on a given date shall be in a minimum aggregate amount (for all Lenders
(including in the circumstances contemplated by clause (v) below, Eligible
Transferees who will become Lenders)) of at least $20,000,000 and in integral
multiples of $5,000,000 in excess thereof, (iv) the aggregate amount of all
Incremental B Term Commitments permitted to be provided pursuant to this
Section 1.14 shall not exceed $200,000,000, (v) if the Borrower has requested
the then existing Lenders (other than Defaulting Lenders) to provide at least
75% of the aggregate Incremental B Term Commitments then being requested
pursuant to this Section 1.14, then the Borrower may request Incremental B Term
Commitments from Persons reasonably acceptable to the Administrative Agent
which would qualify as Eligible Transferees hereunder in an aggregate amount
equal to the sum of (x) 25% of the aggregate Incremental B Term Commitments
then being requested pursuant to this Section 1.14 plus (y) if the
Borrower has not received Incremental B Term Commitments in an aggregate amount
equal to 75% of that aggregate amount of the Incremental B Term Commitments
which the Borrower desires to obtain pursuant to such request (as set forth in
the notice provided by the Borrower in connection with its initial request),
the amount of such deficiency, provided that any such Incremental B Term
Commitment provided by any such Eligible Transferee which is not already a
Lender shall be in a minimum amount (for such Eligible Transferee) of at least
$1,000,000 (and with the fees to be paid to such Eligible Transferee to be no
greater than those fees to be paid to the then existing Lenders (if any)
providing Incremental B Term Commitments) and (vi) all actions taken by the
Borrower pursuant to this Section 1.14 shall be done in coordination with the
Administrative Agent.

 

(b)           In connection with any provision of
Incremental B Term Commitments pursuant to this Section 1.14, (i) the Borrower,
the Administrative Agent and each such Lender or other Eligible Transferee
(each, an “Incremental B Term Lender”) which agrees to provide an
Incremental B Term Commitment shall execute and deliver to the Administrative
Agent an Incremental B Term Commitment Agreement substantially in the form of
Exhibit L hereto (appropriately completed) (each, an “Incremental B Term
Commitment Agreement”), with the effectiveness of such Incremental B Term
Lender’s Incremental B Term Commitment to occur upon delivery of such
Incremental B Term Commitment Agreement to the Administrative Agent, the
payment of any fees required in connection therewith (including, without
limitation, any agreed upon up-front or arrangement fees owing to the
Administrative Agent) and the satisfaction of the other terms and conditions
described in this Section 1.14 (it being understood that no fees shall be
required to be paid to any existing Lender (in its capacity as such) in
connection with the provision of any Incremental B Term Commitment by an
Incremental B Term Lender), and (ii) the Borrower shall deliver to the
Administrative Agent (x) an opinion or

 

15

 

opinions, in form and substance
reasonably satisfactory to the Administrative Agent, from counsel to the
Borrower reasonably satisfactory to the Administrative Agent and dated the
applicable Incremental B Term Loan Borrowing Date, covering such matters
relating to the provision of the Incremental B Term Commitments as may be
reasonably requested by the Administrative Agent and (y) a solvency certificate
from the Chief Financial Officer of the Borrower, dated the applicable
Incremental B Term Loan Borrowing Date, in form and substance satisfactory to
the Administrative Agent. The Administrative Agent shall promptly notify each
Lender as to the effectiveness of each Incremental B Term Commitment Agreement,
and at such time (A) Annex I to the Credit Agreement shall be deemed modified
to reflect the Incremental B Term Commitments of such Incremental B Term
Lenders and (B) to the extent requested by any Incremental B Term Lender, a B
Term Note will be issued at the Borrower’s expense to such Incremental B Term
Lender, to be in conformity with the requirements of Section 1.05 (with
appropriate modification) to the extent needed to reflect the new Incremental B
Term Loans made by such Incremental B Term Lender.  Each Incremental
B Term Lender with an outstanding B Term Note which requests a new B Term Note
as contemplated by preceding clause (B) agrees to use good faith efforts to
return the outstanding B Term Note held by it to the Borrower for cancellation.

 

(c)           In
connection with each incurrence of Incremental B Term Loans pursuant to Section
1.01(f), the Lenders and the Borrower hereby agree that, notwithstanding
anything to the contrary contained in this Agreement, the Borrower and the
Administrative Agent may take all such actions as may be necessary to ensure
that all Lenders with outstanding B Term Loans continue to participate in each
Borrowing of outstanding B Term Loans (after giving effect to the incurrence of
Incremental B Term Loans pursuant to Section 1.01(f)) on a pro  rata
basis, including by adding the Incremental B Term Loans to be so incurred to
the then outstanding Borrowings of Initial B Term Loans on a pro  rata
basis even though as a result thereof such new Incremental B Term Loans (to the
extent required to be maintained as Eurodollar Loans) may effectively have a
shorter Interest Period than the then outstanding Borrowings of Initial B Term
Loans.  It is hereby agreed that, to the extent the Incremental B
Term Loans are to be so incurred or added to the then outstanding Borrowings of
Initial B Term Loans which are maintained as Eurodollar Loans, the Lenders that
have made such Incremental B Term Loans shall be entitled to receive from the
Borrower such amounts, as reasonably determined by the respective Lenders, to
compensate them for funding the various Incremental B Term Loans during an
existing Interest Period (rather than at the beginning of the respective
Interest Period, based upon rates then applicable thereto).  All
determinations by any Lender pursuant to the immediately preceding sentence
shall, absent manifest error, be final and conclusive and binding on all
parties hereto.

 

SECTION 1A.  Letters of Credit.

 

1A.01  Letters of Credit.  (a)  Subject
to and upon the terms and conditions herein set forth, the Borrower may request
that a Letter of Credit Issuer, at any time and from time to time on or after
the Effective Date and prior to the date which is thirty Business Days prior to
the RF Maturity Date, issue, for the account of the Borrower and in support of
such obligations of the Borrower and/or its Subsidiaries that are incurred in
the ordinary course of business or are acceptable to the Administrative Agent
and, subject to and upon the terms and conditions herein set forth, such Letter
of Credit Issuer agrees to issue from time to time, irrevocable standby

 

16

 

letters of credit (each such
letter of credit, a “Letter of Credit” and, collectively, the “Letters
of Credit”) denominated in Dollars and issued on a sight basis, in such
form as may be approved by such Letter of Credit Issuer and the Administrative
Agent.

 

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

 

(x)            any
order, judgment or decree of any governmental authority or arbitrator shall
purport by its terms to enjoin or restrain such Letter of Credit Issuer from
issuing such Letter of Credit or any requirement of law applicable to such
Letter of Credit Issuer or any request or directive (whether or not having the force
of law) from any governmental authority with jurisdiction over such Letter of
Credit Issuer shall prohibit, or request that such Letter of Credit Issuer
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Lender with respect to
such Letter of Credit any restriction or reserve or capital requirement (for
which such Letter of Credit Issuer is not otherwise compensated hereunder) not
in effect with respect to such Letter of Credit Issuer on the Effective Date,
or any unreimbursed loss, cost or expense which was not applicable or in effect
with respect to such Letter of Credit Issuer as of the date hereof and which
such Letter of Credit Issuer in good faith deems material to it; or

 

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

 

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

 

17

 

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

 

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

 

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

 

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

 

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

 

1A.04  Agreement to Repay Letter of
Credit Drawings.  (a)  The Borrower hereby
agrees to reimburse the respective Letter of Credit Issuer, by making payment
to the Administrative Agent at the Payment Office, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an “Unpaid Drawing”)
immediately after, and in any event on the date on which the Borrower is
notified by such Letter of Credit Issuer of, such payment or disbursement with
interest on the amount so paid or disbursed by such Letter of Credit Issuer, to
the extent not

 

18

 

reimbursed prior to 3:00 P.M.
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the Applicable
Base Rate Margin plus the Base Rate as in effect from time to time (plus
an additional 2% per annum if not reimbursed by the third Business Day after
the date of such notice of payment or disbursement), such interest also to be
payable on demand.

 

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

 

1A.05  Letter of Credit Participations.  (a)  Immediately
upon the issuance by any Letter of Credit Issuer of any Letter of Credit, such
Letter of Credit Issuer shall be deemed to have sold and transferred to each
other RF Lender, and each such RF Lender (each, a “Participant”) shall
be deemed irrevocably and unconditionally to have purchased and received from
such Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant’s Percentage, in
such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with
respect thereto (although the Letter of Credit Fee shall be payable directly to
the Administrative Agent for the account of the RF Lenders as provided in
Section 2.01(b) and the Participants shall have no right to receive any portion
of any Facing Fees) and any security therefor or guaranty pertaining
thereto.  Upon any change in the Revolving Commitments pursuant to
Section 1.13 or 11.04(b), it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 1A.05 to reflect the
new Percentages of the RF Lenders.

 

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

 

(c)           In
the event that any Letter of Credit Issuer makes any payment under any Letter
of Credit and the Borrower shall not have reimbursed such amount in full to
such Letter of Credit Issuer pursuant to Section 1A.04(a), such Letter of
Credit Issuer shall promptly notify the

 

19

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

(f)            To
the extent the respective Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify such Letter of Credit
Issuer, in proportion to their respective Percentages, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by such Letter of Credit Issuer
in performing its respective duties in any way relating to or arising out of
its issuance of Letters of Credit; provided that no Participants shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Letter of Credit Issuer’s gross negligence or willful
misconduct as determined by a final judgment issued by a court of competent
jurisdiction.

 

1A.06  Increased Costs.  If at any time
after the Effective Date, the adoption or effectiveness of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central lender or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Letter of Credit Issuer or any Participant with any request
or directive (whether or not having the force of law) by any such authority,
central lender or comparable agency shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued by any Letter of Credit Issuer or such
Participant’s participation therein, or (ii) shall impose on any Letter of
Credit Issuer or any Participant any other conditions affecting this Agreement,
any Letter of Credit or such Participant’s participation therein; and the
result of any of the foregoing is to increase the cost to any Letter of Credit
Issuer or such Participant of issuing, maintaining or participating in any
Letter of Credit, or to reduce the amount of any sum received or receivable by
any Letter of Credit Issuer or such Participant hereunder (other than, in the
case of a change in the basis of taxation of payments to a Letter of Credit
Issuer or Participant of the principal of or interest on the Loans or any other
amounts

 

21

 

payable hereunder, changes in
the rate of tax on, or determined by reference to, the net income or net
profits of such Letter of Credit Issuer or Participant imposed by the
jurisdiction in which its principal office or applicable lending office is
located), then, upon demand to the Borrower by any Letter of Credit Issuer or
such Participant (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Participant to the Administrative Agent), the Borrower shall pay
to such Letter of Credit Issuer or such Participant such additional amount or
amounts as will compensate such Letter of Credit Issuer or such Participant for
such increased cost or reduction.  A certificate submitted to the
Borrower by such Letter of Credit Issuer or such Participant, as the case may
be (a copy of which certificate shall be sent by such Letter of Credit Issuer
or such Participant to the Administrative Agent), setting forth the basis for
the determination of such additional amount or amounts necessary to compensate
such Letter of Credit Issuer or such Participant as aforesaid shall be
conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish any of
the Borrower’s obligations to pay additional amounts pursuant to this Section
1A.06 upon the subsequent receipt thereof.

 

1A.07  Applicability of ISP, etc.         (a) 
Unless otherwise expressly agreed by the Letter of Credit Issuer and the
Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to
each Letter of Credit.

 

(b)           For
all purposes of this Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by
reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be
deemed to be “outstanding” in the amount so remaining available to be drawn.

 

SECTION 2.  Fees.

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

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

 

2.02  Voluntary Reduction of Commitments.  (a)  Upon
at least three Business Day’s prior written notice (or telephonic notice
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice shall be deemed to be given on a certain day only if given before 2:00
P.M. (New York time) on such day and shall be promptly transmitted by the
Administrative Agent to each of the Lenders), the Borrower shall have the
right, without premium or penalty, to reduce, in whole or in part, the Total
Unutilized Revolving Commitment or the Total Delayed-Draw Term Commitment, provided
that (x) any such partial reduction shall apply to proportionately and
permanently reduce the Revolving Commitments or Delayed-Draw Term Commitments,
as the case may be, of each Lender with such a Commitment, (y) in the case

 

23

 

of any reduction to the Total
Unutilized Revolving Commitment, no such reduction shall reduce any Lender’s
Revolving Commitment by an amount greater than the then Unutilized Revolving
Commitment of such Lender and (z) any partial reduction pursuant to this
Section 2.02(a) shall be in integral multiples of $1,000,000.

 

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

 

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

 

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

 

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

 

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

 

24

 

applied pursuant to said
Sections as a result of the events described therein (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans being repaid as a result of such events.

 

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

 

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

 

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

 

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

 

SECTION 3.  Payments.

 

3.01  Voluntary Prepayments.  The
Borrower shall have the right to prepay Loans, in whole or in part, without
premium or penalty, from time to time on the following terms and
conditions:  (i) the Borrower shall give
the Administrative Agent at the Payment Office written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay the Loans,
whether such Loans are B Term Loans, Delayed-Draw Term Loans, RF Loans or
Swingline Loans, the amount of such prepayment and (in the case of Eurodollar
Loans) the specific Borrowing(s) pursuant to which made, which notice shall be
given by the Borrower prior to 12:00 Noon (New York time) at least one Business
Day prior to the date of such prepayment with respect to Base Rate Loans (other
than Swingline Loans, with respect to which notice shall be given by the
Borrower on the date of prepayment) and at least three Business Days prior to
the date of such prepayment with respect to Eurodollar Loans, and which notice
(except in the case of a prepayment of Swingline Loans) shall promptly be
transmitted by the Administrative Agent to each of the Lenders; (ii) each
partial prepayment of any Borrowing shall be in an aggregate principal amount
of at least $1,000,000 (or $100,000, in the case of a partial prepayment of any
Borrowing of Swingline Loans), provided that no partial prepayment of

 

25

Eurodollar Loans made pursuant
to a Borrowing shall reduce the aggregate principal amount of the Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) except as provided in clause (vi) below,
each prepayment in respect of any Loans of a given Facility made pursuant to a
Borrowing shall be applied pro  rata among such Loans, provided
that at the Borrower’s election in connection with any prepayment of RF Loans
pursuant to this Section 3.01, such prepayment shall not be applied to any RF
Loans of a Defaulting Lender; (iv) at the time of any prepayment of
Eurodollar Loans pursuant to this Section 3.01 on any date other than the last
day of the Interest Period applicable thereto, the Borrower shall pay the
amounts required pursuant to Section 1.11; (v) except as provided in clause
(vi) below, each voluntary prepayment of Term Loans pursuant to this Section
3.01 shall be applied to the B Term Loans and the Delayed-Draw Term Loans on a pro
rata basis (with the B TL Percentage of the aggregate amount of such
prepayment to be applied as a prepayment of outstanding B Term Loans and the
Delayed-Draw TL Percentage of the aggregate amount of such prepayment to be
applied as a prepayment of outstanding Delayed-Draw Term Loans); and (vi) in
the event of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders as provided in Section 11.12(b),
the Borrower may, upon two Business Days’ prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), repay all Loans of such
Lender (including all amounts, if any, owing pursuant to Section 1.11),
together with accrued and unpaid interest, Fees and all other amounts then
owing to such Lender (or owing to such Lender with respect to each Facility
which gave rise to the need to obtain such Lender’s individual consent) in
accordance with said Section 11.12(b), so long as (A) in the case of the
repayment of RF Loans of any Lender pursuant to this clause (vi), the Revolving
Commitment of such Lender is terminated concurrently with such repayment (at
which time Annex I shall be deemed modified to reflect the changed Revolving
Commitments), (B) in the case of the repayment of Delayed-Draw Term Loans of
any Lender pursuant to this clause (vi), the Delayed-Draw Term Commitment of
such Lender (if any) is terminated concurrently with such repayment (at which
time Annex I shall be deemed modified to reflect the changed Delayed-Draw Term
Commitments) and (C) the consents required by Section 11.12(b) in connection
with the repayment pursuant to this clause (vi) shall have been obtained.

 

3.02  Mandatory Prepayments.

 

(A)          Requirements:

 

(a)           (i) If on any date (and after giving
effect to all other repayments on such date) the sum of (I) the aggregate
outstanding principal amount of RF Loans made by Non-Defaulting Lenders, (II)
the aggregate outstanding principal amount of all Swingline Loans and (III) the Letter of Credit Outstandings (less any amount
thereof as to which Section 1A.01(c) Arrangements are in place) exceeds
the Adjusted Total Revolving Commitment as then in effect, the Borrower shall
repay on such date the principal of outstanding Swingline Loans and, after all
Swingline Loans have been repaid in full or if no Swingline Loans are
outstanding, the principal of outstanding RF Loans of Non-Defaulting Lenders in
an aggregate amount equal to such excess.  If, after giving effect to
such repayment or repayments, the Letter of Credit Outstandings (less
any amount thereof as to which Section 1A.01(c) Arrangements are in place)
exceeds the Adjusted Total Revolving Commitment then in effect, the Borrower
shall pay to the Collateral

 

26

 

Agent an amount in cash and/or
Cash Equivalents equal to such excess and the Collateral Agent shall hold such
payment as security for the obligations of the Borrower in respect of Letters
of Credit owing to Non-Defaulting Lenders pursuant to a cash collateral
agreement to be entered into in form and substance reasonably satisfactory to
the Collateral Agent (which shall permit certain investments in Cash
Equivalents reasonably satisfactory to the Collateral Agent, until all proceeds
are applied to such secured obligations or until all Letters of Credit so
secured expire undrawn, at which time such amount shall be returned to the
Borrower).

 

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

 

(b)           On the fifth Business Day following
the date of receipt thereof on or after the Effective Date by the Borrower
and/or any of its Subsidiaries of the Net Cash Proceeds from any Asset Sale, an
amount equal to 100% of the Net Cash Proceeds from such Asset Sale shall be
applied as a mandatory repayment of principal of the then outstanding Term
Loans, provided that up to 100% of the Net Cash Proceeds from Asset
Sales shall not be required to be used to so repay Term Loans to the extent (i)
the Borrower elects, as hereinafter provided, to cause such Net Cash Proceeds
to be used within 270 days of such Asset Sale to finance Permitted Acquisitions
(a “Reinvestment Election”) or (ii) in the case of Net Cash Proceeds
from an Asset Sale constituting a Non-Core Asset Sale and so long as RF Loans
in an aggregate principal amount equal to at least such amount of Net Cash
Proceeds were incurred to finance Permitted Acquisitions within 120 days prior
to the date of receipt of such Net Cash Proceeds, the Borrower applies all (and
not less than all) of such Net Cash Proceeds to repay outstanding principal of
RF Loans in accordance with Section 3.01 (a “Repayment Election”).  The
Borrower may exercise (x) its Repayment Election with respect to a Non-Core
Asset Sale as provided above if (A) no Default or Event of Default exists and
(B) the Borrower delivers a written notice signed by an Authorized Officer to
the Administrative Agent no later than five Business Days following the
respective Non-Core Asset Sale stating that it has incurred RF Loans in an
aggregate principal amount equal to or greater than the Net Cash Proceeds
received from such Non-Core Asset Sale to finance a Permitted Acquisition
within the time period specified in clause (ii) above and specifying the
relevant Permitted Acquisition(s) consummated during such period and (y) its
Reinvestment Election with respect to an Asset Sale if (A) no Default or Event
of Default exists and (B) the Borrower delivers a Reinvestment Notice to the
Administrative Agent no later than five Business Days following the date of the
consummation of the respective Asset Sale, with such Reinvestment Election
being effective with respect to the Net Cash Proceeds of such Asset Sale equal
to the Anticipated Reinvestment Amount specified in such Reinvestment
Notice.  Notwithstanding the foregoing provisions of this
Section 3.02(A)(b), in no event shall the Borrower or any of its
Subsidiaries use any proceeds from any Asset Sale to make any voluntary or
mandatory repayment or prepayment of Permitted Senior Unsecured Notes or
Permitted Junior Capital and, in each case, before any such obligation to use
such proceeds to make such repayment shall arise, the Borrower or the
respective Subsidiary shall reinvest the respective amounts pursuant to a
Reinvestment Election as, and to the extent, permitted above in this Section
3.02(A)(b) or apply such proceeds as a mandatory prepayment and/or commitment
reduction in accordance with the requirements of Section 3.02(B), 2.03(d) or
2.03(f), as applicable.

 

27

 

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

 

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

 

(e)           On the date of delivery of each
Quarterly Compliance Certificate pursuant to Section 6.01(e) demonstrating that
the Leverage Ratio as at the last day of the fiscal quarter of the Borrower
covered by such Quarterly Compliance Certificate is greater than 5.00:1.00 (or,
if the Borrower shall have failed to deliver a Quarterly Compliance Certificate
as required by Section 6.01(e) with respect to any fiscal quarter of the
Borrower, on the date of the required delivery of a Quarterly Compliance
Certificate for such fiscal quarter pursuant to said Section), an amount equal
to 50% of the increase, if any, in Cumulative Distributable Cash during such
fiscal quarter shall be applied as a mandatory repayment of principal of the
then outstanding Term Loans; provided that, so long as (x) no Default or
Event of Default exists at the time of the required mandatory repayment
pursuant to this clause (e) and (y) no Dividend Suspension Period

 

28

 

existed during the fiscal
quarter of the Borrower ended immediately prior to such fiscal quarter, the
Borrower shall not be so required to repay Term Loans as otherwise required by
this clause (e); provided  however, that if the Borrower is
subsequently prohibited from paying Dividends on the Borrower Common Stock
during the fiscal quarter of the Borrower immediately succeeding such fiscal
quarter as a result of the existence of a Dividend Suspension Period, a Default
or an Event of Default, a mandatory repayment of Term Loans shall be required
within 60  days after the last day of such immediately succeeding
fiscal quarter in the amount originally required by this clause (e) for the
respective prior fiscal quarter (determined without regard to this and the
immediately preceding proviso).

 

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

 

(B)           Application:

 

(a)           Each mandatory repayment of Term Loans
required to be made pursuant to Section 3.02(A)(b), (c), (d) or (e) shall be
applied to then outstanding B Term Loans and Delayed-Draw Term Loans on a pro
rata basis (with the B TL Percentage of the aggregate amount of such
prepayment to be applied as a prepayment of the then outstanding B Term Loans
and the Delayed-Draw TL Percentage of the aggregate amount of such prepayment
to be applied as a prepayment of the then outstanding Delayed-Draw Term Loans).

 

(b)           With respect to each prepayment of Loans required by
Section 3.02(A), the Borrower may designate the Types of Loans which are to be
prepaid and the specific Borrowing(s) under the affected Facility pursuant to
which made, provided that (i) if any prepayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount for such
Borrowing, such Borrowing shall be immediately converted into Base Rate Loans;
(ii) except for the differing treatments of Defaulting Lenders and
Non-Defaulting Lenders as expressly provided in Section 3.02(A)(a), each
prepayment of any Loans under a Facility made pursuant to a given Borrowing
shall be applied pro  rata among such Loans; (iii) repayments of
Eurodollar Loans pursuant to this Section 3.02 may only be made on the last day
of an Interest Period applicable thereto unless (x) all Eurodollar Loans of the
respective Facility with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Facility have been paid in
full and/or (y) concurrently with such repayment, the Borrower pays all
breakage costs and other amounts owing to each Lender pursuant to Section
1.11.  In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section
1.11.  Notwithstanding the foregoing provisions of this Section 3.02,
if at any time the mandatory repayment of Loans pursuant to this Section 3.02
would result, after giving effect to the procedures set forth in clause (iii)
of the second preceding sentence, in the Borrower incurring breakage costs
under Section 1.11 as a result of Eurodollar Loans being repaid other than on
the last day of an Interest

 

29

 

Period applicable thereto (any
such Eurodollar Loans, “Affected Loans”), the Borrower may (in lieu of
making such payment) elect, by written notice to the Administrative Agent, to
have the provisions of the following sentence be applicable.  At the
time any Affected Loans are otherwise required to be prepaid, the Borrower may
elect to deposit 100% (or such lesser percentage elected by the Borrower as not
being repaid) of the principal amounts that otherwise would have been paid in
respect of the Affected Loans with the Administrative Agent to be held as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance satisfactory to
the Administrative Agent, with such cash collateral to be released from such
cash collateral account (and applied to repay the principal amount of such
Eurodollar Loans) upon each occurrence thereafter of the last day of an Interest
Period applicable to Eurodollar Loans (or such earlier date or dates as shall
be requested by the Borrower), with the amount to be so released and applied on
the last day of each Interest Period to be the amount of such Eurodollar Loans
to which such Interest Period applies (or, if less, the amount remaining in
such cash collateral account).

 

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

 

3.04  Net Payments.  (a)  All
payments made by the Borrower hereunder and/or under any Note will be made
without setoff, counterclaim or other defense.  Except as provided in
Section 3.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as provided
in the second succeeding sentence, any tax imposed on or measured by the net
income or net profits of a Lender pursuant to the laws of the jurisdiction in
which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as “Taxes”).  If
any Taxes are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement and/or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or therein.  If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, the Borrower
agrees to reimburse each Lender, upon the written request of

 

30

 

such Lender, for taxes imposed
on or measured by the net income or net profits of such Lender pursuant to the
laws of the jurisdiction in which such Lender is organized or in which the
principal office or applicable lending office of such Lender is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Lender is organized or in which the principal office
or applicable lending office of such Lender is located and for any withholding
of taxes as such Lender shall determine are payable by, or withheld from, such
Lender, in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence.  The Borrower will
furnish to the Administrative Agent within 45 days after the date the payment
of any Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower.  The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.

 

(b)           Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes agrees to deliver to the Borrower and the Administrative
Agent on or prior to the Effective Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to Section
1.13 or 11.04 (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or W-8BEN (with respect
to a complete exemption under an income tax treaty) (or successor form))
certifying to such Lender’s entitlement as of such date to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement and under any Note, or (ii) if the Lender is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a complete
exemption under an income tax treaty) pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit C (any such certificate, a “Section
3.04 Certificate”) and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Lender’s entitlement
as of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note.  In addition, each Lender agrees that from time to time after
the Effective Date, when a lapse of time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form W-8ECI or
W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN
(with respect to the portfolio interest exemption) and a Section 3.04
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such Form
or Certificate, in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this Section
3.04(b).  Notwithstanding anything to the contrary contained in
Section 3.04(a), but subject to Section 11.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required
to do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein)

 

31

 

from interest, Fees or other
amounts payable by it hereunder for the account of any Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Borrower U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to Section 3.04(a) hereof to gross-up
payments to be made by it to a Lender in respect of income or similar taxes
imposed by the United States (I) if such Lender has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 3.04(b) or (II) in the case of a payment,
other than interest, to a Lender described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding of such
taxes.  Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 3.04 and except as set forth in
Section 11.04(b), the Borrower agrees to pay any additional amounts and to
indemnify each Lender in the manner set forth in Section 3.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such income or similar taxes.

 

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

 

SECTION 4.  Conditions Precedent.

 

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

 

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

 

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

 

32

 

matters incident to the
transactions contemplated herein as the Agents may reasonably request and (z)
be in form, scope and substance reasonably satisfactory to the Agents.

 

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

 

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

 

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

 

(i)            all
Plans (and for each Plan that is required to file an annual report on Internal
Revenue Service Form 5500-series, a copy of the most recent such report
(including, to the extent required, the related financial and actuarial
statements and other supporting statements, certifications, schedules and
information), and for each Plan that is a “single-employer plan,” as defined in
Section 4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other “employee benefit plans,” as defined in Section 3(3) of
ERISA, and any other material agreements, plans or arrangements, with or for
the benefit of current or former employees of the Borrower or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall apply in
the case of any multiemployer plan, as defined in 4001(a)(3) of ERISA, only to
the extent that any document described herein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or reasonably
available thereto from the sponsor or trustee of any such plan);

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)            Pledge Agreement.  The Borrower, each 1st-Tier
Subsidiary of the Borrower on the Initial Borrowing Date and each Parent
Company that is a Subsidiary on the Initial Borrowing Date shall have each duly
authorized, executed and delivered a Pledge Agreement in the form of Exhibit G
(as modified, amended, restated and/or supplemented from time to time in
accordance with the terms thereof and hereof, the “Pledge Agreement”) and
shall have delivered to the Collateral Agent, as pledgee thereunder:

 

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

 

(ii)           proper Financing Statements (Form
UCC-1 or the equivalent) fully executed (where required) for filing under the
UCC or other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Collateral

 

34

 

Agent,
desirable to perfect the security interests purported to be created by the
Pledge Agreement;

 

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

 

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

 

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

 

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

 

(k)           Initial Public Offering.  On
the Initial Borrowing Date, the Borrower shall have (x) issued shares of
Borrower Common Stock pursuant to an underwritten initial public generating
gross cash proceeds (calculated before underwriting costs) of approximately
$[475.0](1) million (the “IPO”) and (y) utilized the full amount of the
cash proceeds described in preceding clause (x) to make payments owing in
connection with the Transaction prior to the utilization by the Borrower of any
proceeds of Loans for such purpose.  On the Initial Borrowing Date,
(i) the IPO shall have been consummated in accordance with the terms and
conditions of the IPO Documents and all applicable law, (ii) the Administrative
Agent shall have received true and correct copies of all IPO Documents and
(iii) all conditions precedent to the consummation of the IPO as set forth in
the IPO Documents shall have been satisfied, and not waived unless consented to
by each Agent and the Required Lenders, to the reasonable satisfaction of each
Agent and the Required Lenders.

 

(l)            Refinancing.  (i)  Prior to the Initial Borrowing Date and the
Credit Events then occurring, the Borrower shall have commenced tender offers
and consent solicitations with

 

(1)           If the IPO prices in
the mid-point of the contemplated pricing range, the IPO will generate $475.0
million of gross cash proceeds. The amount of gross cash proceeds from the IPO
required hereby may be adjusted to as low as (but not below) $440.0 million, in
which case the Existing Seller/Opco Notes in an aggregate principal amount equal
to approximately $21.0 million will not be required to be refinanced (see
Section 4.02(l)(vi)) and other adjustments to sources and uses will be made.
All amounts will be finalized at least 3 days prior to the Initial Borrowing
Date. 

 

35

 

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

 

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

 

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

 

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

 

(v)           On
or prior to the Initial Borrowing Date, the Borrower shall have redeemed or
repurchased all of its outstanding shares of Series A Preferred Stock for an
aggregate redemption price (including any and all accrued but unpaid dividends
with respect to the Series A Preferred Stock) equal to approximately $131.0
million.

 

36

 

(vi)          On
the Initial Borrowing Date and concurrently with the incurrence of Loans on
such date, approximately $[197.0] million of Indebtedness of the Borrower and
its Subsidiaries consisting of, inter  alia, all Indebtedness
under the Existing Credit Agreement (other than Existing Letters of Credit)
[and the Existing Seller/Opco Notes](2) shall have been repaid in full,
together with all fees, accrued interest and other amounts owing thereon
(collectively, the “Additional Refinanced Indebtedness”), all
commitments under the documents evidencing Additional Refinanced Indebtedness
shall have been terminated, all letters of credit issued pursuant to the
documents evidencing the Additional Refinanced Indebtedness shall have been
terminated or incorporated hereunder as Letters of Credit as contemplated by
Section 1A.01(d) and all guaranties issued in support of such Additional
Refinanced Indebtedness shall have been terminated.

 

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

 

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

 

(m)          Intercompany Subordination Agreement.  The
Borrower and each of its Subsidiaries shall have duly authorized, executed and
delivered a Subordination Agreement

 

(2)           See previous footnote.

 

37

 

substantially in the form of
Exhibit J hereto (as amended, restated, modified and/or supplemented from time
to time in accordance with the terms hereof and thereof, the “Intercompany
Subordination Agreement”), and the Intercompany Subordination Agreement
shall be in full force and effect.

 

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

 

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

 

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

 

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

 

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

 

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

 

4.03  Special Condition Precedent to Incurrence of
RF Loans and Delayed-Draw Term Loans Incurred to Finance an Optional Non-2008
Tender Offer Notes Redemption.  The 

 

38

 

obligation of each Lender to
make RF Loans and Delayed-Draw Term Loans to finance any Optional Non-2008
Tender Offer Notes Redemption is subject to the absence, at the time of making
such Loans and also after giving effect thereto, of any Default or Event of
Default under Section 8.01 or 8.05.

 

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

 

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

 

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

 

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

 

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

 

39

 

indenture, mortgage, deed of
trust or other material agreement or instrument to which the Borrower or any of
its Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
organizational documents (including by-laws) of the Borrower or any of its
Subsidiaries.

 

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

 

5.05  Use of Proceeds; Margin
Regulations.  (a) 
The proceeds of all Initial B Term Loans shall be utilized solely (i) to
finance, in part, the Refinancing (including to fund the Segregated Account and
to finance the Existing 2008 Senior Subordinated Notes Redemption but excluding
the Optional Non-2008 Tender Offer Notes Refinancing) and to pay certain fees
and expenses relating to the Transaction and (ii) after the application for the
purposes described in preceding clause (i), for working capital and general
corporate requirements of the Borrower and its Subsidiaries; provided
that not more than $[5.0](3) million of proceeds of Initial B Term Loans may be
used for the purposes described in this clause (ii).

 

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

 

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

 

(d)           The proceeds of RF Loans may be used
(x) on the Initial Borrowing Date to finance, in part, the Refinancing (other
than the Existing 2008 Senior Subordinated Notes Redemption and the Optional
Non-2008 Tender Offer Notes Refinancing) and to pay certain fees and expenses
relating to the Transaction and (y) for working capital, general corporate and
capital expenditure requirements of the Borrower and its Subsidiaries
(including to finance Permitted Acquisitions and the Optional Non-2008 Tender
Offer Notes Refinancing and, subject to the satisfaction of the Minimum
Liquidity Condition, to pay dividends on Borrower Common Stock permitted to be
paid pursuant to the terms of this Agreement); provided that no more
than $[15.0](4) million of proceeds of RF Loans may be used for the purposes
described in preceding clause (x).

 

(e)           The proceeds of Swingline Loans may
be used for the general corporate and working capital purposes of the Borrower
and its Subsidiaries; provided that no proceeds

 

(3)          Subject
to adjustment based upon the gross proceeds received from the IPO.

 

(4)          
See footnote 1.  May be reduced to not
less than $10.0 million, depending on the gross proceeds actually generated by
the IPO.

 

 

40

 

from Swingline Loans may be
used to finance the Refinancing or to pay fees and expenses incurred in
connection with the Transaction.

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

the time made (it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ from the projected results and that such
assumptions and estimates may prove to be inaccurate).

 

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

 

(b)           (i) 
The audited consolidated statements of financial condition of the
Borrower and its Subsidiaries at December 31, 2001, December 31, 2002 and December
31, 2003 and the related consolidated statements of income and cash flows and
changes in shareholders’ equity of the Borrower and its Subsidiaries for the
fiscal years of the Borrower ended on such dates, in each case furnished to the
Lenders prior to the Initial
Borrowing Date, present fairly in all material respects the
consolidated financial position of the Borrower and its Subsidiaries at the
date of said financial statements and the results for the respective periods
covered thereby and (ii) the unaudited statement of financial condition of the
Borrower and its Subsidiaries at September 30, 2004 and the related
consolidated statement of income and cash flows and change in shareholder’s
equity of the Borrower and its Subsidiaries for nine-month period of the
Borrower ended on such date, in each case furnished to the Lenders prior to the
Initial Borrowing Date, present fairly in all material respects the
consolidated financial position of the Borrower and its Subsidiaries at the
date of said financial statements and the results for the period covered
thereby, subject to normal year-end adjustments.  All such financial
statements have been prepared in accordance with GAAP and practices
consistently applied except to the extent provided in the notes to said
financial statements and subject, in the case of unaudited financial
statements, to normal year-end adjustments (all of which are of a recurring
nature and none of which, individually or in the aggregate, would be material)
and the absence of footnotes.  The pro  forma
consolidated balance sheet of the Borrower as at September 30, 2004, a copy of
which has been included in the Form S-1, presents a good faith estimate of the
consolidated pro  forma financial condition of the Borrower (after
giving effect to the Transaction and all Indebtedness incurred or to be
incurred in connection therewith) as at the date thereof.  Nothing
has occurred since December 31, 2003 that has had, or is reasonably likely to
have, a Material Adverse Effect.

 

42

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

5.15  Subsidiaries.  On
and as of the Initial Borrowing Date and after giving effect to the consummation
of the Transaction, the Borrower has no Subsidiaries other than those

 

44

 

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

 

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

 

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

 

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

 

45

 

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

 

5.20  Capitalization.  On
the Initial Borrowing Date, after giving effect to the Transaction, the
authorized capital stock of the Borrower shall consist of [200,000,000] shares
of common stock, $[.01] par value per share (such authorized shares of common
stock, together with any subsequently authorized shares of such common stock,
the “Borrower Common Stock”), of which [        ]
shares are issued and outstanding.  All
such outstanding shares have been duly and validly issued, are fully paid and
nonassessable and are free of preemptive rights.  On the Initial
Borrowing Date, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the purchase of, or
any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock or
any stock appreciation or similar rights.

 

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

 

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

 

(a)           Annual Financial Statements.  As
soon as available and in any event within 75 days after the close of each
fiscal year of the Borrower, the consolidated and consolidating balance sheet
of the Borrower and the Intermediary Holding Companies, as at the end of such
fiscal year and the related consolidated and consolidating statements of
operations and of cash flows for such fiscal year, and in each case setting
forth comparative consolidated and consolidating figures for the preceding
fiscal year, and (x) in the case of consolidated statements, examined by
independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit and as to the status of
the Borrower as a going concern or (y) in the case of consolidating statements,
certified by the chief financial officer of the Borrower, together with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of the Borrower and the Intermediary Holding Companies,
which audit was conducted in accordance with generally accepted auditing
standards, no Default or Event of Default which has occurred and is continuing
has come to their attention or, if such a Default or Event of Default has come
to their attention a statement as to the

 

46

 

nature thereof.  If the Borrower has designated any
Unrestricted Subsidiaries hereunder, then the annual financial information
required by this Section 6.01(a) shall include a reasonably detailed
presentation, either on the face of the financial statements or in the
footnotes thereto, of the financial condition and results of operations of the
Borrower and its Subsidiaries excluding the financial condition and results of
operations of the Unrestricted Subsidiaries of the Borrower (although such
separate presentation of financial information excluding the effects of
Unrestricted Subsidiaries need not be audited).

 

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

 

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

 

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

 

(e)           Quarterly Compliance Certificate.
Within 60 days following the end of each fiscal quarter of the Borrower
(commencing with the first full fiscal quarter of the Borrower ending after the
Initial Borrowing Date), a certificate (each, a “Quarterly Compliance
Certificate”) from an Authorized Officer, which certificate shall set forth
(i) the calculations

 

47

 

required to establish (I) the
Interest Coverage Ratio and the Leverage Ratio as of the last day of the Test
Period then last ended and (II) the Available Cash and Cumulative Distributable
Cash, in each case determined as at the last day of the Test Period then last
ended, and (ii) the amount of Dividends, if any, that the Borrower intends to
pay on the immediately succeeding date on which the Borrower’s dividend policy
provides for Dividends to be paid by the Borrower on the Borrower Common Stock.

 

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

 

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

 

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

 

6.03  Insurance.  The
Borrower will, and will cause each of its Subsidiaries to, at all times
maintain in full force and effect insurance with reputable and solvent insurers
in such amounts, covering such risks and liabilities and with such deductibles
or self-insured retentions as are in accordance with normal industry
practice.  The Borrower will, and will cause each of its Subsidiaries
to, furnish to the Administrative Agent on the Initial Borrowing Date and
thereafter annually, upon request of the Administrative Agent, a summary of the
insurance carried.

 

48

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

6.10  Permitted Acquisitions.  (a)  Subject
to the provisions of this Section 6.10 and the requirements contained in the
definition of Permitted Acquisition, the Borrower, any of its Wholly-Owned
Domestic Subsidiaries and any Qualified Pledged Subsidiary may from time to
time effect Permitted Acquisitions, so long as (except to the extent the
Required Lenders otherwise specifically agree in writing in the case of a
specific Permitted Acquisition): (i) no Default or Event of Default shall
be in existence at the time of the consummation of the proposed Permitted
Acquisition or immediately after giving effect thereto; (ii) the Borrower shall
have

 

50

 

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

 

51

 

requirements of preceding
clauses (i) through (vii), inclusive, and containing the calculations required
by the preceding clauses (iv), (v), (vii) and (viii).

 

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

 

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

 

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

 

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

 

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

 

6.12  Margin Stock.  The
Borrower will take all actions so that at all times the fair market value of
all Margin Stock owned by the Borrower and its Subsidiaries (other than capital
stock of the Borrower held in treasury) shall not exceed
$500,000.  So long as the covenant

 

52

 

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

 

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

 

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

 

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

 

6.15  PIK Requirements.  On and after the date of the initial issuance
of any Additional Permitted Subordinated Debt, the Borrower shall pay interest
owing on any outstanding Additional Permitted Subordinated Debt solely through
(x) the accretion of the principal amount thereof or (y) the issuance of
additional notes evidencing Additional Permitted Subordinated Debt, rather than
in cash.

 

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

 

53

 

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

 

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

 

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

 

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

 

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

 

7.02  Consolidation, Merger, Sale or Purchase of
Assets, etc.  The Borrower
will not, and will not permit any Subsidiary to, wind up, liquidate or dissolve
its affairs, or enter into any transaction of merger or consolidation, or
convey, sell, lease or otherwise dispose of all or any part of its property or
assets (other than inventory or obsolete equipment or excess equipment no
longer needed in the conduct of its business in the ordinary course of
business) or purchase, lease or otherwise acquire all or any part of the
property or assets of any Person (other than purchases or other acquisitions of
inventory, leases, materials and equipment in the ordinary

 

54

 

course of business) or agree to
do any of the foregoing at any future time without a contingency relating to
obtaining any required approval hereunder, except that the following shall be
permitted:

 

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

 

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

 

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

 

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

 

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

 

(f)            (i)            Excluded Asset Sales and (ii) additional
sales or dispositions of assets to the extent that the aggregate Net Cash
Proceeds received from all such sales and dispositions permitted by this clause
(f)(ii) after the Initial Borrowing Date shall not exceed $4,000,000 in any
fiscal year of the Borrower, provided that (x) each such sale or
disposition pursuant to this clause (f) shall be in an amount at least equal to
the fair market value thereof and for proceeds consisting of at least 85% cash
and (y) the Net Cash Proceeds of any such sale are reinvested and/or applied as
a mandatory repayment or commitment reduction to the extent required by Section
3.02(A)(b) or Section 2.03(d) or (f), as the case may be, provided, further,
that the sale or disposition of the capital stock or other equity interests of
any Subsidiary of the Borrower pursuant to this clause (f) shall be prohibited
unless it is for all of the outstanding capital stock or other equity interests
of such Subsidiary owned by the Borrower and its Subsidiaries;

 

55

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

 

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

 

(i)            Permitted
Swap Transactions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(o)           Liens
on property or assets of a Person in existence at the time such Person is
acquired pursuant to an Investment permitted under Section 7.06(l), in each
case securing Indebtedness permitted under Section 7.04, provided that
(i) such Liens do not attach to the capital stock or other equity interests of
any Subsidiary of the Borrower 

 

57

 

(other than
any capital stock or other equity interests not held by the Borrower or any of
its Subsidiaries) and (ii) such Liens existed prior to, and were not incurred
in contemplation of, such Investment and do not attach to any other asset of
the Borrower or any of its Subsidiaries.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

58

 

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

 

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

 

(i)            Permitted
Acquired Debt;

 

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

 

(k)           Permitted
MJD Capital Debt;

 

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

 

59

 

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

 

(n)           unsecured
Indebtedness of the Borrower incurred under the Permitted Senior Unsecured
Notes and the other Permitted Senior Unsecured Notes Documents, and of the
Subsidiary Guarantors under guarantees of the obligations of the Borrower under
the Permitted Senior Unsecured Notes Documents, so long as (i) all such
Indebtedness is incurred in accordance with the requirements of the definition
of Permitted Senior Unsecured Notes, (ii) no Default or Event of Default then
exists or would result therefrom, (iii) 100% of the Net Cash Proceeds therefrom
are applied as a mandatory repayment and/or commitment reduction in accordance
with the requirements of Section 3.02(A)(c), 2.03(d) or 2.03(f), as the case
may be, (iv) calculations are made by the Borrower demonstrating compliance, on
a Pro Forma Basis, with the covenants contained in Sections 7.11 and
7.12 for the Calculation Period most recently ended prior to the date of the
respective issuance of Permitted Senior Unsecured Notes, and (v) the Borrower
shall have furnished to the Administrative Agent a certificate from an
Authorized Officer certifying as to compliance with the requirements of
preceding clauses (i), (ii), (iii) and (iv) and containing the calculations
required by preceding clause (iv);

 

(o)           Additional
Permitted Subordinated Debt, so long as (i) no Default or Event of Default then
exists or would result from the incurrence or issuance thereof, (ii) 100% of
the Net Cash Proceeds therefrom are (x) applied as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 3.02(A)(c),
2.03(d) or 2.03(f), as the case may be, (y) used to effect a Permitted
Acquisition in accordance with the requirements of Section 6.10 and/or (z)
concurrently used by the Borrower (I) to make a voluntary prepayment of RF
Loans pursuant to, and in accordance with the requirements of, Section 3.01
and/or (II) to redeem and/or refinance Permitted Junior Capital, in each case
in an aggregate principal amount or with an aggregate liquidation preference,
as applicable, equal to the aggregate principal amount or liquidation
preference, as applicable, of RF Loans and/or Permitted Junior Capital, as the
case may be, actually incurred or issued by the Borrower to finance a Permitted
Acquisition or Permitted Acquisitions (and pay related accrued interest and
dividends thereon, if any) in the 364-day period prior to such issuance of
Additional Permitted Subordinated Debt, (iii) calculations are made by the
Borrower demonstrating compliance, on a Pro  Forma Basis, with the
covenants contained in Sections 7.11 and 7.12 for the Calculation Period most
recently ended prior to the date of such incurrence or issuance of Additional
Permitted Subordinated Debt, and (iv) the Borrower shall have furnished to the
Administrative Agent a certificate from an Authorized Officer certifying as to
compliance with the requirements of preceding clauses (i), (ii) and (iii) and
containing the calculations required by preceding clause (iii) ; provided
however, that Additional Permitted Subordinated Debt issued as in kind
regularly scheduled interest payments on theretofore outstanding Additional
Permitted Subordinated Debt shall not be subject to the requirements specified
in preceding clauses (i) through (iv); and

 

60

 

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

 

7.05  Capital Expenditures.

 

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

 

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

 

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

 

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

 

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

 

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

 

(d)           loans
and advances to officers, directors and employees in the ordinary course of
business (x) for relocation purposes and/or the purchase from the Borrower of
the capital stock (or options or warrants relating thereto) of the Borrower and

 

61

 

(y) otherwise in an aggregate principal
amount not to exceed $1.0 million at any time outstanding shall be permitted;

 

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

 

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

 

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

 

(h)           the
Borrower, each Wholly-Owned Domestic Subsidiary and each Qualified Pledged
Subsidiary may make capital contributions (i) to any of their respective
Subsidiaries, to the extent a Subsidiary Guarantor and (ii) to any Wholly-Owned
Domestic Subsidiary or Qualified Pledged Subsidiary that is not a Subsidiary
Guarantor, so long as, in the case of this subclause (ii), no Default or Event
of Default has occurred and is continuing at the time of the respective
contribution;

 

(i)            Subsidiaries
may be established or created in accordance with the provisions of Section
7.07;

 

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

 

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

 

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

 

62

 

of a non-cash Investment, taking the fair
market value of the asset so invested (as determined in good faith by senior
management of the Borrower)) exceed $45,000,000.

 

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

 

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

 

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

 

63

 

(b)           In addition to Subsidiaries of the  Borrower created pursuant to preceding clause
(a), the Borrower and its Subsidiaries may establish, acquire or create, and
make Investments in, Non-Wholly Owned Subsidiaries after the Initial Borrowing
Date as a result of Permitted Acquisitions (subject to the limitations
contained in the definition thereof) and Investments expressly permitted to be
made pursuant to Section 7.06, provided that (i) all of the capital
stock or other equity interests of each such Non-Wholly Owned Subsidiary shall
be pledged by any Pledge Party which owns same as, and to the extent, required
by the Pledge Agreement and (ii) such new Subsidiary executes a counterpart of
the Intercompany Subordination Agreement.

 

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

 

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

 

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

 

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

 

(i)            (x) any
Subsidiary of the Borrower may pay Dividends to the Borrower or any
Wholly-Owned Subsidiary of the Borrower and (y) any Non-Wholly-Owned Subsidiary
of the Borrower may pay cash Dividends to its shareholders generally, so long
as the Borrower or its respective Subsidiary which owns the equity interest in
the Subsidiary paying such Dividends receives at least its proportionate share
thereof (based upon its relative holding of the equity interests in the
Subsidiary paying such Dividends

 

64

 

and taking
into account the relative preferences, if any, of the various classes of equity
interests of such Subsidiary);

 

(ii)           the Borrower may redeem or repurchase shares of
Borrower Common Stock (or options, warrants and/or appreciation rights in respect
thereof) from shareholders, officers, employees, consultants and directors (or
their estates) upon the death, permanent disability, retirement or termination
of employment of any such Person or otherwise in accordance with any
shareholder agreement, stock option plan or any employee stock ownership plan, provided
that (x) no Default or Event of Default is then in existence or would arise
therefrom and (y) the aggregate amount of all cash paid in respect of all such
shares, options, warrants and rights so redeemed or repurchased in any calendar
year, does not exceed $2,000,000;

 

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

 

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

 

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

 

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

 

(vii)         Existing
2010 Senior Notes and Existing 2010 Senior Subordinated Notes not repurchased
in connection with the Tender Offer and Consent Solicitation therefor may from
time to time be redeemed in accordance with the terms of the respective

 

65

 

indenture
therefor and/or repurchased on the open-market, so long as (I) the aggregate
amount of cash expended by the Borrower to effect such repurchases or
redemptions shall not exceed the sum of (A) the principal amount of the
Indebtedness so repurchased or redeemed plus (B) the amount of accrued
but unpaid interest on the Indebtedness so repurchased or redeemed through the
respective date of repurchase or redemption plus (C) any required
premium payable in connection with such repurchase or redemption, (II) no
Default or Event of Default then exists or would result therefrom (or, in the
case of any redemption of Existing 2010 Senior Notes and/or Existing 2010
Senior Subordinated Notes pursuant to the respective indenture therefor, no
Default or Event of Default under Section 8.01 or 8.05 then exists or would
result therefrom), (III) all such Existing 2010 Senior Notes and/or any
Existing 2010 Senior Subordinated Notes, as the case may be, so repurchased or
redeemed are promptly cancelled by the purchaser thereof and (IV) at the time
of any delivery of an irrevocable notice of redemption pursuant to the
indenture governing the Existing 2010 Senior Notes or the Existing 2010 Senior
Subordinated Notes, no Default or Event of Default then exists;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

66

 

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

 

(xvi)        so
long as (x) no Default or Event of Default then exists or would exist
immediately after giving effect thereto and (y) the Minimum Liquidity Condition
is satisfied at such time, the Borrower may make a one-time payment of cash
Dividends on the Borrower Common Stock within 70 days following the last day of
the first fiscal quarter of the Borrower ended after the Initial Borrowing Date
in an aggregate amount equal to approximately $[      ]
million;

 

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

 

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

 

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

 

67

 

 Subsidiary existing at the time of the acquisition
thereof as a result of an Investment pursuant to Section 7.06 or a Permitted
Acquisition effected in accordance with Section 6.10; provided that the
restrictions applicable to such joint venture are not made more burdensome,
from the perspective of the Borrower and its Subsidiaries, than those as in
effect immediately before giving effect to the consummation of the respective
Investment or Permitted Acquisition; (viii) on and after the execution and
delivery thereof, the Permitted Senior Unsecured Notes Documents; (ix) on and
after the execution and delivery thereof, the Permitted Senior Subordinated
Notes Documents; and (x) on and after the execution and delivery thereof, any
agreements or instruments relating to any Additional Permitted Subordinated Debt.

 

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

 

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

 

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

 

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

 

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

 

68

 

issue capital stock or other
equity interests in accordance with the requirements of Section 7.07 and (iv) to qualify directors to the extent required
by applicable law.

 

(c)           The Borrower may issue Qualified Preferred Stock (x)
in payment of regularly accruing dividends on theretofore outstanding shares of
Qualified Preferred Stock as contemplated by Section 7.09(a)(xiv) and (y) with
respect to each other issue of Qualified Preferred Stock, so long as the
Borrower receives reasonably equivalent consideration therefor (as determined
in good faith by the Borrower).

 

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

 

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

 

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

 

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

 

8.02  Representations, etc.  Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate

 

69

 

delivered or
required to be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or

 

8.03  Covenants.  Any Credit
Party shall (a) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 6.09, 6.10, 6.13, 6.14 or 7, or (b)
default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 8.01, 8.02 or clause (a) of
this Section 8.03) contained in this Agreement and such default shall continue
unremedied for a period of at least 30 days after written notice to the
Borrower by the Administrative Agent or the Required Lenders; or

 

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

 

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

 

70

 

8.06  ERISA.  (a)  Any Plan or
Multiemployer Plan shall fail to satisfy the minimum funding standard required
for any plan year or part thereof under Section 412 of the Code or Section 302
of ERISA or a waiver of such standard or extension of any amortization period
is sought or granted under Section 412 of the Code or Section 303 or 304 of
ERISA, a Reportable Event shall have occurred, a contributing sponsor (as defined
in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall
be subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof) and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 shall be reasonably expected to occur with respect to such Plan within the
following 30 days, any Plan which is subject to Title IV of ERISA shall have
had or is likely to have a trustee appointed to administer such Plan, any Plan
or Multiemployer Plan which is subject to Title IV of ERISA is, shall have been
or is likely to be terminated or to be the subject of termination proceedings
under ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made with respect to a Plan or Multiemployer Plan has not been
timely made, the Borrower or any Subsidiary or any ERISA Affiliate has incurred
or is likely to incur any liability to or on account of a Plan or Multiemployer
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account
of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or
any Subsidiary has incurred or is likely to incur liabilities pursuant to one
or more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or Plans; (b) there shall result from
any such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (c)
such lien, security interest or liability, individually, or in the aggregate,
in the opinion of the Required Lenders, has had, or is reasonably likely to
have, a Material Adverse Effect; or

 

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

 

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

 

8.09  Judgments.  One or more
judgments or decrees shall be entered against the Borrower or any of its
Subsidiaries involving a liability (to the extent not paid or covered by
insurance) in excess of $7,500,000 in the aggregate for all such judgments and
decrees for the Borrower and its Subsidiaries and all such judgments and
decrees in excess of such amount shall

 

71

 

not have been
vacated, discharged or stayed or bonded pending appeal within 60 days from the
entry thereof;

 

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

 

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

 

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

 

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

 

72

 

conditions of, and
documentation governing, such Indebtedness is otherwise reasonably satisfactory
to the Agents.

 

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

 

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

 

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

 

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

 

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

 

73

 

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

 

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

 

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

 

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

 

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

 

“Approved Bank”
shall have the meaning provided in the definition of “Cash Equivalents.”

 

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

 

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

 

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

 

74

 

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

 

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

 

75

 

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

 

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

 

76

 

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

 

“B Term Loan” shall mean,
collectively, each Initial B Term Loan and each Incremental B Term Loan.

 

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

 

“B TL Percentage” shall mean,
at any time, a fraction (expressed as a percentage) the numerator of which is
equal to the aggregate principal amount of all B Term Loans outstanding at such
time and the denominator of which is equal to [the sum of (x) the aggregate
principal amount of all Term Loans outstanding at such time plus (y) the
Total Delayed-Draw Term Commitment in effect at such time].(5)

 

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

 

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

 

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

 

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

 

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

 

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

 

“Borrowing” shall
mean the incurrence of (i) Swingline Loans by the Borrower from the Swingline
Lender on a given date or (ii) Base Rate Loans or Eurodollar Loans pursuant to
a single Facility by the Borrower from the Lenders having Commitments (and/or
outstanding Loans) with respect to such Facility on a pro  rata
basis on a given date (or resulting from conversions on a given date), having
in the case of Eurodollar Loans the same Interest Period; provided that
(x) Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered
part of any related Borrowing of Eurodollar Loans and (y) any Incremental
B Term Loans incurred pursuant to Section 1.01(f) shall be considered part of
the related Borrowing of the then outstanding Initial B Term Loans to which
such Incremental B Term Loans are added pursuant to Section 1.14; it

 

(5)   Subject to finalization.

 

77

 

being understood and agreed,
however, that for purposes of Section 1.08, the incurrence of Incremental B
Term Loans on a given Incremental B Term Loan Borrowing Date shall be deemed to
be a “Borrowing” of such Loans.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Cash Equivalents”
shall mean [(a) marketable direct
obligations issued by, or unconditionally guaranteed by, the United States
government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition; (b) certificates of
deposit, time deposits, bankers acceptances, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date
of acquisition issued by any Lender or by any commercial bank organized under
the laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by Standard & Poor’s Ratings Services, a division of
McGraw-Hill, Inc. (“S&P”) or P-2 by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within 270 days from the date of acquisition; (d) repurchase obligations of any Lender or of
any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to securities
issued or fully guaranteed or insured by the United States government; (e) securities (including tax-exempt debt
obligations) with maturities of one year or less from the date of acquisition
issued or fully

 

78

 

guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A2 by Moody’s (or publicly traded or open-ended
bond funds that invest exclusively in such securities); (f) securities with maturities of six months or
less from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; (g) Dollar denominated debt obligations of corporations
maturing within 12 months from the date of the acquisition rated at least A by
S&P or A2 by Moody’s; (h) shares of bond funds rated at least A by S&P
or A2 by Moody’s having weighted average maturities of 12 months or less; (i)
auction rate securities rated at least AAA by S&P or Aaa by Moody’s; (j)
debt obligations of corporations maturing within 12 months from the date of
acquisition rated at least A by S&P or A2 by Moody’s; and (k) shares of
money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (j) of this definition.](6)

 

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

 

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

 

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

 

(6)           Subject to finalization.

 

79

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

80

 

maximum mandatory fixed
repurchase price of any such Disqualified Preferred Stock deemed to be a
component of “Consolidated Debt”.

 

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

 

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

 

“Consolidated Tangible Assets” shall mean, at any time, the
total consolidated assets of the Borrower and its Subsidiaries as same would be
shown on a consolidated balance sheet of the Borrower prepared in accordance
with GAAP, provided that all intangible assets (including goodwill)
shall be excluded in making such determination.

 

81

 

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

 

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

 

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

 

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

 

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

 

“Cumulative Distributable Cash” shall
mean, as at any date of determination, an amount equal to the remainder of (i)
Available Cash for the Reference Period most recently ended prior to such date less
(ii) the aggregate amount of Dividends paid by the Borrower on the Borrower
Common Stock during such Reference Period (other than Dividends paid pursuant
to Section 7.09(xvi)) less (iii) the aggregate amount of Investments
made by the Borrower and its Subsidiaries during such Reference Period in
reliance on Section 7.06(m) (determined at the time of the making of the
Investment and without regard to any write-downs or write-offs thereof and, in
the case of any Investment in the form of a contribution of a non-cash asset,
taking the fair market value of the asset so contributed (as determined in good
faith by the Board of Directors of the Borrower) plus (iv) the aggregate
amount of all cash returns on Investments previously made pursuant to Section
7.06(m) (which cash return may be made by way of repayment of principal

 

82

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

83

 

“Delayed-Draw TL Percentage” shall mean, at
any time, a fraction (expressed as a percentage) the numerator of which is
equal to the aggregate principal amount of all Delayed-Draw Term Loans
outstanding at such time and the denominator of which is equal to [the sum of
(x) the aggregate principal amount of all Term Loans outstanding at such time plus
(y) the Total Delayed-Draw Term Commitment in effect at such time].

 

“Disqualified
Preferred Stock” shall mean any Preferred Stock of the Borrower (other than
Qualified Preferred Stock), all terms and conditions of which (including
covenants, defaults, remedies, redemption provisions, maturity, voting
provisions, dividend rate and cash-pay limitations), and the documentation
therefor, are on market terms for a placement of preferred equity securities
and are otherwise reasonably satisfactory to the Administrative Agent and the
Required Lenders (it being understood that, after the Administrative Agent has
approved the relevant documentation with respect to any Disqualified Preferred
Stock, such documentation shall be distributed to the Lenders and, if a given
Lender has not objected to the terms of the relevant documentation within 5
Business Days after delivery thereof, such terms, conditions and documentation
shall be deemed satisfactory to such Lender); provided, that in any
event, unless the Required Lenders otherwise expressly consent in writing prior
to the issuance thereof, the terms of any such Preferred Stock shall not
contain any mandatory redemption, repayment, sinking fund or similar provision
prior to the date occurring one year following the Term Loan Maturity Date
(except upon the occurrence of a “change of control” or similar event
(including Asset Sales), in each case so long as the provisions relating to a
“change of control” or similar event included in the documentation and
agreements governing the Disqualified Preferred Stock provide that either (I)
the consent of the Required Lenders shall have been obtained or (II) the
Obligations shall have been paid in full in cash, in either case prior to the
satisfaction of such provisions).

 

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

 

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

 

84

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

85

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Excluded Investments” shall mean (i)
any Investment made pursuant to clause (a), (b), (e), (f), (g), (j), (k) or (m)
of Section 7.06 and (ii) any Investment made pursuant to clause (c), (h) or (i)
of Section 7.06 in any Wholly-Owned Domestic Subsidiary or any Qualified
Pledged Subsidiary of the Borrower.

 

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

 

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

 

86

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

87

 

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

 

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

 

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

 

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

 

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

 

“Expiration Date”
shall mean April 8, 2005.

 

“Facility” shall
mean any of the credit facilities established under this Agreement, i.e.,
the Initial B Term Facility, the Delayed-Draw Term Facility, the Incremental B
Term Facility or the Revolving Facility; provided that for
purposes of Sections 1.06 and 11.12(a)(t) and (u) and the definitions of “Borrowing”
and “Majority Lenders”, the Initial B Term
Facility and the Incremental B Term
Facility shall be deemed to be a single “Facility”.

 

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

 

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

 

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

 

“Federal Funds Effective
Rate” shall mean for any period, a fluctuating interest rate equal for each
day during such period to the weighted average of the rates on overnight

 

88

 

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

 

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

 

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

 

“Form S-1” shall mean the Form S-1
registration statement of the Borrower filed with the SEC on [                  
    ], 2005, as in effect on the Effective Date.

 

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

 

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

 

“Incremental B
Term Commitment” shall mean, with respect to each Incremental B Term
Lender, the commitment of such Lender to make Incremental B Term Loans pursuant
to Section 1.01(f) on a given Incremental B Term Loan Borrowing Date, as such
commitment is set forth in the respective Incremental B Term Commitment
Agreement delivered pursuant to Section 1.14(b) and as same may be terminated
pursuant to Sections 2.02, 2.03 and/or 8.

 

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

 

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

 

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

 

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

 

89

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

90

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“IPO Documents” shall mean the Form
S-1, the Underwriting Agreement, dated as of February [    ],
2005, between the Borrower, the underwriters named therein and the selling
shareholders named therein, and all other documents executed and delivered with
respect to the IPO, as in effect on the Initial Borrowing Date and as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof.

 

“ISP” means, with respect to any
Letter of Credit, the “International Standby Practices 1998” published by the
Institute of International Banking Law & Practice (or such later version
thereof as may be in effect at the time of issuance.)

 

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

 

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

 

“Joint Venture” shall mean any Person,
other than an individual or a Wholly-Owned Subsidiary of the Borrower,
(i) in which the Borrower or a Subsidiary of the

 

91

 

Borrower holds or acquires
an ownership interest (whether by way of capital stock, partnership or limited
liability company interest, or other evidence of ownership) and (ii) which is
engaged in the Business.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

92

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Minimum Liquidity Condition” shall
mean, as of any date on which a Dividend is to be paid on the Borrower Common
Stock, the condition existing on such date if (but only if) the sum of (i)
Total Unutilized Revolving Commitment on such date (determined on a pro  forma
basis after giving effect to any incurrence of RF Loans and Swingline Loans on
such date to make such Dividend) plus (ii) the amount of Unrestricted
cash and Cash Equivalents of the Borrower and its Subsidiaries, is equal to or
greater than $10,000,000.

 

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

 

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

 

93

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

94

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

95

 

immediately
prior to such termination by the Total Revolving Commitment immediately prior
to such termination.

 

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

 

“Permitted Acquisition” shall mean the
acquisition by the Borrower, any of its Wholly-Owned Domestic Subsidiaries or
any of its Qualified Pledged Subsidiaries of assets constituting a business,
division or product line of any Person not already a Subsidiary of the
Borrower, any of its Wholly-Owned Subsidiaries or any of its Qualified Pledged
Subsidiaries or of 100% of the capital stock or other equity interests of any such
Person, provided that (A) the consideration paid by the Borrower, such
Wholly-Owned Domestic Subsidiary or such Qualified Pledged Subsidiary consists
solely of cash (including proceeds of RF Loans), the issuance of Borrower
Common Stock, the issuance of Indebtedness otherwise permitted in Section 7.04
and the assumption/acquisition of any Permitted Acquired Debt relating to such
business, division, product line or Person which is permitted to remain
outstanding in accordance with the requirements of Section 7.04, (B) those
acquisitions that are structured as equity acquisitions shall be effected
through a purchase of 100% of the capital stock or other equity interests of
such Person by the Borrower, such Wholly-Owned Domestic Subsidiary or such
Qualified Pledged Subsidiary or through a merger between such Person and a
Wholly-Owned Domestic Subsidiary or a Qualified Pledged Subsidiary of the
Borrower, so that after giving effect to such merger, 100% of the capital stock
or other equity interests of the surviving entity of such merger is owned by
the Borrower or a Wholly-Owned Domestic Subsidiary (or, in the case of a merger
with a Qualified Pledged Subsidiary, the surviving entity of such merger
continues to constitute a Qualified Pledged Subsidiary of the Borrower), (C) in
the case of the acquisition of 100% of the capital stock or other equity
interests of any Person, such Person (the “Acquired Person”) shall own
no capital stock or other equity interests of any other Person unless either
(x) the Acquired Person owns 100% of the capital stock or other equity
interests of such other Person or (y) if the Acquired Person owns capital stock
or equity interests in any other Person which is not a Wholly-Owned Subsidiary
of the Acquired Person (a “Non-Wholly Owned Entity” ), (1) the Acquired
Person shall not have been created or established in contemplation of, or for
purposes of, the respective Permitted Acquisition, (2) any Non-Wholly
Owned Entity of the Acquired Person shall have been non-wholly-owned prior to
the date of the respective Permitted Acquisition and not created or established
in contemplation thereof and (3) such Acquired

 

96

 

Person and/or its
Wholly-Owned Subsidiaries own at least 80% of the consolidated assets of such
Acquired Person and its Subsidiaries taken as a whole, (D) substantially all of
the business, division or product line acquired pursuant to the respective
Permitted Acquisition, or the business of the Acquired Person and its
Subsidiaries taken as a whole, is in the U.S., (E) the assets acquired, or the
business of the Acquired Person and its Subsidiaries, shall be in the Business,
and (F) all requirements of Section 7.02 applicable to Permitted
Acquisitions are satisfied.  Notwithstanding anything to the contrary
contained in the immediately preceding sentence, an acquisition which does not
otherwise meet the requirements set forth above in the definition of “Permitted
Acquisition” shall constitute a Permitted Acquisition if, and to the extent,
the Required Lenders agree in writing that such acquisition shall constitute a
Permitted Acquisition for purposes of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

97

 

and for
the benefit of sellers of goods to the Borrower or such Subsidiary in support
of commercial transactions of the Borrower or such Subsidiary in the ordinary
course of business.

 

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

 

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

 

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

 

“Permitted Senior Subordinated Notes”
shall mean any Indebtedness of the Borrower evidenced by subordinated notes and
incurred pursuant to one or more issuances of such subordinated notes, all of
terms and conditions (including, without limitation, with respect to interest
rate, amortization, redemption provisions, maturities, covenants, defaults,
remedies, guaranties and subordination provisions) which are on market terms
for a public offering of subordinated notes or for a private placement of
subordinated notes under Rule 144A of the Securities Act and are otherwise
reasonably satisfactory to the Administrative Agent and the Required Lenders (it
being understood that, after the Administrative Agent has approved the relevant
documentation with respect to any Permitted Senior Subordinated Notes, such
documentation shall be distributed to the Lenders and, if a given Lender has
not objected to the terms of the relevant documentation within 5 Business Days
after delivery thereof, such terms, conditions and documentation shall be
deemed satisfactory to such Lender), as such Indebtedness may be amended,
modified and/or supplemented from time to time in accordance with the terms
hereof and thereof; provided, that in any event, unless the Required
Lenders otherwise expressly consent in writing prior to the issuance thereof,
(i) no such Indebtedness shall be secured by any asset of the Borrower or any
of its Subsidiaries, (ii) no such Indebtedness shall be guaranteed by any
Person other than a Subsidiary Guarantor and (iii) no such Indebtedness shall
be subject to scheduled amortization or have a final maturity, in either case
prior to the date occurring one year following the Term Loan Maturity
Date.  As used in this

 

98

 

Agreement (other than this
definition), the term “Permitted Senior Subordinated Notes” shall include any
Permitted Exchange Senior Subordinated Notes issued pursuant to the respective
Permitted Senior Subordinated Notes Indenture in exchange for outstanding
Permitted Senior Subordinated Notes, as contemplated by the definition of “Permitted
Exchange Senior Subordinated Notes”.  The
issuance of Permitted Senior Subordinated Notes shall be deemed to be a
representation and warranty by the Borrower that all conditions thereto have
been satisfied in all material respects and that same is permitted in
accordance with the terms of this Agreement, which representation and warranty
shall be deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 4.02 and 8.

 

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

 

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

 

“Permitted Senior Unsecured Notes”
shall mean any Indebtedness of the Borrower evidenced by senior notes and
incurred pursuant to one or more issuances of such senior notes, all of terms
and conditions of which (including, without limitation, with respect to
interest rate, amortization, redemption provisions, maturities, covenants,
defaults, remedies and guaranties) are on market terms for a public offering of
senior notes or for a private placement of senior notes under Rule 144A of the
Securities Act and are otherwise reasonably satisfactory to the Administrative
Agent and the Required Lenders (it being understood that, after the
Administrative Agent has approved the relevant documentation with respect to
any Permitted Senior Unsecured Notes, such documentation shall be distributed
to the Lenders and, if a given Lender has not objected to the terms of the
relevant documentation within 5 Business Days after delivery thereof, such
terms, conditions and documentation shall be deemed satisfactory to such
Lender), as such Indebtedness may be amended, modified and/or supplemented from
time to time in accordance with the terms hereof and thereof; provided,
that in any event, unless the Required Lenders otherwise expressly consent in
writing prior to the issuance thereof, (i) no such Indebtedness shall be
secured by any asset of the Borrower or any of its Subsidiaries, (ii) no such
Indebtedness shall be guaranteed by any Person other than a Subsidiary
Guarantor and (iii) no such Indebtedness shall be subject to scheduled
amortization or have a final maturity, in either case prior to the date
occurring one year following the Term Loan Maturity Date.  As used in this Agreement (other than this
definition), the term “Permitted Senior Unsecured Notes” shall include any
Permitted Exchange Senior Unsecured Notes issued pursuant to the relevant
Permitted Senior Unsecured Notes Indenture in exchange for outstanding Permitted
Senior Unsecured Notes, as contemplated by the definition of “Permitted
Exchange Senior Unsecured Notes”.   The issuance of Permitted Senior
Unsecured Notes shall be deemed to be a representation and warranty by the
Borrower that all conditions thereto have been satisfied in all material
respects and that same is permitted in accordance with the terms of this
Agreement,

 

99

 

which representation and
warranty shall be deemed to be a representation and warranty for all purposes
hereunder, including, without limitation, Sections 4.02 and 8.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

100

 

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

 

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

 

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

 

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

 

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

 

101

 

while same was actually outstanding during the respective period shall
be calculated using the actual rates applicable thereto while same was actually
outstanding); and

 

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

 

“Pro Forma EBITDA Test”
shall be satisfied (i) if, after giving effect to any merger, consolidation,
conveyance, sale or transfer referred to in Section 7.02(a) or the creation or
acquisition of a new Telco or Carrier Services Company pursuant to a Permitted
Acquisition the capital stock or other equity interests of which is or are not
to be pledged under the Pledge Agreement, the percentage of Adjusted
Consolidated EBITDA for the 12 months last ended at such time (determined, in
the case of the acquisition or creation of a new Telco or Carrier Services
Company pursuant to a Permitted Acquisition, on a Pro  Forma
Basis, as if such Permitted Acquisition was consummated on the first day of
such 12 month period and taking account of the adjustments described in clause
(iii) of the definition of “Pro  Forma Basis” for such period)
attributable to all Non-Pledged Subsidiaries does not exceed 10% and (ii) for
purposes of Section 6.10(a)(vii) only, if, after giving effect to the creation
or acquisition of any Acquired Person or business pursuant to a Permitted
Acquisition by a Qualified Pledged Subsidiary that is not a Pledge Party, the
percentage of Adjusted Consolidated EBITDA for the 12 months last ended at such
time (determined on a Pro  Forma Basis, as if such Permitted
Acquisition was consummated on the first day of such 12 month period and taking
account of the adjustments described in clause (iii) of the definition of “Pro
Forma Basis” for such period) attributable to all Non-Pledged
Subsidiaries acquired after the Initial Borrowing Date by Qualified Pledged
Subsidiaries does not exceed 40%.

 

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

 

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

 

“Qualified Pledged Subsidiary” shall
mean each Pledged Subsidiary (i) that is incorporated or organized in the
United States or any State or territory thereof or the District of Columbia,
and (ii) in which the Investments of cash, property, services and/or other
assets are made in each class of equity interests of such Subsidiary by the
Pledged Parties, on the one hand, and the other holders of such class of equity
interests, on the other hand, in amounts which are proportional to the
respective equity percentages of the Pledged Parties, on the one hand, and such
other holders, on the other hand, for each class of equity interests of such
Subsidiary (as reasonably determined by senior management of the Borrower).

 

102

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

103

 

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

 

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

 

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

 

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

 

“Reinvestment Prepayment
Date” shall mean, with respect to any Reinvestment Election, the earliest
of (i) the date, if any, upon which the Administrative Agent, on behalf of the
Required Lenders, shall have delivered a written termination notice to the
Borrower, provided that such notice may only be given while an Event of
Default under Section 8.01 exists and (ii) the date occurring 270 days after
the date of the related Reinvestment Notice.

 

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

 

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

 

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

 

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

 

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

 

“Required RF Lenders”
shall mean those RF Lenders which are Non-Defaulting Lenders and which would
constitute the Required Lenders under, and as defined in, this

 

104

 

Agreement if all outstanding
Term Loans were repaid in full and the Total Delayed-Draw Term Commitment had
terminated in its entirety.

 

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

 

“Restricted Payment” shall mean, with
respect to the Borrower or any of its Subsidiaries, (i) any Dividend by such
Person, (ii) any payment of cash interest by such Person on account of any
Indebtedness that is subordinated in right of payment to the Obligations
(including, without limitation, any Permitted Senior Subordinated Notes, any
Additional Permitted Subordinated Debt and guaranties thereof), (iii) any
payment by the Borrower or any of its Subsidiaries with respect to any
Intercompany Debt and (iv) the making of (or giving any notice in respect of) any
voluntary or optional payment or prepayment on or redemption, repurchase or
acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto or any other Person money or securities
before due for the purpose of paying when due), or any prepayment, repurchase,
redemption or acquisition for value as a result of any asset sale, change of
control or similar event of any Permitted Acquired Debt, any Scheduled Existing
Indebtedness,(7) any Existing 2008 Subordinated Notes Document, any Existing
2010 Subordinated Notes Document, any Existing 2010 Senior Notes Document and,
on and after the execution, delivery and/or incurrence thereof, any Permitted
Senior Unsecured Notes Document, any Permitted Senior Subordinated Notes
Document, any other Permitted Junior Capital and any Permitted Refinancing
Indebtedness.

 

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

 

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

 

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

 

(7)                                  If
the Existing Seller/Opco Notes constitute Scheduled Existing Indebtedness
because same are not refinanced pursuant to the Refinancing on the Initial
Borrowing Date, then the repurchase of the Existing Seller/Opco Notes will be
excluded from the definition of “Restricted Payment”, so long as no Default or
Event of Default then exists or would result from the respective repurchase.

 

105

 

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

 

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

 

“RF Maturity Date”
shall mean February [    ], 2011.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

106

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

107

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Total Unutilized Revolving Commitment”
shall mean, at any time, (i) the Total Revolving Commitment at such time less
(ii) the sum of (x) the aggregate principal amount of all

 

108

 

RF Loans and Swingline Loans
at such time plus (y) the Letter of Credit Outstandings at such time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

109

 

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

 

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

 

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

 

SECTION
10.  The Agents.

 

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

 

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

 

10.02  Nature of Duties.  (a)  No
Agent shall have any duties or responsibilities except those expressly set
forth in this Agreement and in the other Credit Documents.  Neither

 

110

 

any Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable for any
action taken or omitted by it hereunder or under any other Credit Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct (as determined by a court of competent
jurisdiction in a final and non-appealable decision).  The duties of
the Agents shall be mechanical and administrative in nature; no Agent shall
have by reason of this Agreement or any other Credit Document a fiduciary
relationship in respect of any Lender or the holder of any Note and nothing in
this Agreement or in any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.

 

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

 

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

 

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

 

111

 

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

 

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

 

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

 

112

 

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

 

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

 

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

 

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

 

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

 

(b)                                 Upon any such notice
of resignation by the Administrative Agent, the Required Lenders shall appoint
a successor Administrative Agent hereunder and/or under the

 

113

 

other Credit Documents who shall be a commercial bank or trust company
acceptable to the Borrower, which acceptance shall not be unreasonably withheld
or delayed (provided that the Borrower’s approval shall not be required
if an Event of Default then exists).

 

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

 

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

 

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

 

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

 

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

 

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

 

114

 

(b)                                 The Lenders hereby
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien granted to or held by the Collateral Agent upon any Collateral (i)
upon termination of the Commitments and payment and satisfaction of all of the
Obligations at any time arising under or in respect of this Agreement or the
Credit Documents or the transactions contemplated hereby or thereby, (ii)
constituting property being sold or otherwise disposed of (to Persons other
than the Borrower and its Subsidiaries) upon the sale or other disposition
thereof in compliance with Section 7.02, (iii) if approved, authorized or
ratified in writing by the Required Lenders (or all of the Lenders hereunder,
to the extent required by Section 11.12) or (iv) as otherwise may be
expressly provided in the Pledge Agreement.  Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Collateral Agent’s authority to release particular types or items of Collateral
pursuant to this Section 10.11.

 

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

 

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

 

SECTION 11.  Miscellaneous.

 

11.01  Payment of Expenses,
etc.  (a)  The Borrower agrees to:  (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative
Agent in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and
instruments referred to therein and any amendment, waiver or consent relating
thereto (including, without limitation, the reasonable fees and disbursements
of White & Case LLP) and of each Agent, the Collateral Agent, each Letter
of Credit Issuer, the Swingline Lender and each of the Lenders in connection
with the enforcement of the Credit Documents and the documents and instruments
referred to

 

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therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agents,
the Collateral Agent, each Letter of Credit Issuer, the Swingline Lender and
each of the Lenders); (ii) pay and hold each of the Lenders (including in its
capacity as Agent, Collateral Agent, Swingline Lender and/or Letter of Credit
Issuer) harmless from and against any and all present and future stamp and
other similar taxes with respect to the foregoing matters and save each of the
Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify each Lender (including in
its capacity as Agent, Collateral Agent, Swingline Lender and/or Letter of
Credit Issuer) and its affiliates, and each officer, director, trustee,
employee, representative, advisor and agent thereof (each, an “Indemnified
Person”) from and hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of, (a) any investigation,
litigation or other proceeding (whether or not any Agent or any Lender is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among any Agent, any Lender, any Credit Party or any
third Person or otherwise (except to the extent between or among any Lenders in
their capacity as such)) related to the entering into and/or performance of any
Credit Document or the use of the proceeds of any Loans hereunder or the
Transaction or the consummation of any transactions contemplated in any Credit
Document, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or ground water or on the surface or subsurface of any
property owned or operated at any time by Borrower or any of its Subsidiaries
or the generation, storage, transportation, handling or disposal of Hazardous
Materials by the Borrower or any of its Subsidiaries at any location, or the
noncompliance by the Borrower or any of its Subsidiaries with any Environmental
Law or any Environmental Claim in connection with the Borrower or any of its
Subsidiaries or business or operations or any property owned or operated at any
time by the Borrower or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel incurred
in connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of any
Indemnified Person as determined by a court of competent jurisdiction in a final
and non-appealable decision).

 

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

 

11.02  Right of Setoff.  In addition to
any rights now or hereafter granted under applicable law or otherwise, and not
by way of limitation of any such rights, if an Event of

 

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Default then exists, each Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special but not trust accounts) and any other Indebtedness at any
time held or owing by such Lender (including, without limitation, by branches
and agencies of such Lender wherever located) to or for the credit or the
account of any Pledge Party against and on account of the Obligations and
liabilities of such Pledge Party to such Lender under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations of such Pledge Party purchased by such Lender pursuant to Section 11.06(b),
and all other claims of any nature or description arising out of or connected with
this Agreement or any other Credit Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.

 

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

 

11.04  Benefit of Agreement.  (a)  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that the Borrower may not assign
or transfer any of its rights or obligations hereunder without the prior
written consent of each of the Lenders.  Each Lender may at any time
grant participations in any of its rights hereunder or under any of the Notes
to another financial institution, provided that in the case of any such
participation, the participant shall not have any rights under this Agreement
or any of the other Credit Documents (the participant’s rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Lender
had not sold such participation, except that the participant shall be entitled
to the benefits of Sections 1.10, 1A.06 and 3.04 of this Agreement to the
extent that such Lender would be entitled to such benefits if the participation
had not been entered into or sold, and, provided, further, that
no Lender shall transfer, grant or assign any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (i) extend the final scheduled maturity of any Loan or Note in
which such participant is participating (it being understood that any waiver of
any prepayment of, or the method of any application of any prepayment to, the
Loans shall not constitute an extension of the Maturity Date therefor), or
reduce the rate or extend the time of payment of interest or Fees (except in
connection with a waiver of the applicability of any post-default increase in
interest rates), or reduce the principal amount thereof, or increase such
participant’s participating interest in any Commitment over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment or a mandatory
prepayment shall not constitute a change in the terms of

 

117

 

any Commitment), (ii) release all or substantially all of the
Collateral, (iii) release all or substantially all of the Subsidiaries from the
Subsidiary Guaranty (except as provided therein) or (iv) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or any other Credit Document.

 

(b)           Notwithstanding
the foregoing, (x) any Lender may assign all or a portion of its outstanding
Term Loans and/or Revolving Commitment and its rights and obligations hereunder
(which assignment does not have to be pro  rata among the
Facilities) to (i)(A) its parent company and/or any affiliate of such Lender
which is at least 50% owned by such Lender or its parent company or (B) to one
or more other Lenders or any affiliate of any such other Lender which is at
least 50% owned by such other Lender or its parent company (provided
that any fund that invests in loans and is managed or advised by the same
investment advisor of another fund which is a Lender (or by an affiliate of
such investment advisor) shall be treated as an affiliate of such other Lender
for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any
Lender that is a fund that invests in loans, any other fund that invests in
loans and is managed and/or advised by the same investment advisor of such Lender
or by an Affiliate of such investment advisor and (y) with the consent of the
Administrative Agent and, if no Default under Section 8.01 or 8.05 or
Event of Default exists, the Borrower (which consents shall not be unreasonably
withheld or delayed), any Lender (or any Lender together with one or more other
related Lenders) may assign all, or if less than all, a portion equal to at
least (I) in the case of Revolving Commitments, $2,500,000 in the aggregate for
the assigning Lender or Lenders of such outstanding Loans and Commitments and
its or their related rights and obligations hereunder and (II) in the case of
Term Loans, $1,000,000 in the aggregate for the assigning Lender or Lenders of
such outstanding Loans and its or their related rights and obligations
hereunder, to one or more Eligible Transferees (treating any fund that invests
in loans and any other fund that invests in loans and is managed and/or advised
by the same investment advisor of such fund or by an Affiliate of such
investment advisor of such fund or by an Affiliate of such investment advisor
as a single Eligible Transferee).  If any Lender so sells or assigns
all or a part of its rights hereunder or under the Notes, any reference in this
Agreement or the Notes to such assigning Lender shall thereafter refer to such
Lender and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would if it were such assigning Lender.  Each assignment pursuant
to this Section 11.04(b) shall be effected by the assigning Lender and the
assignee Lender executing an Assignment Agreement and giving the Administrative
Agent written notice thereof.  At the time of any such assignment,
(i) either the assigning or the assignee Lender shall pay to the Administrative
Agent a nonrefundable assignment fee of $3,500 (provided that only one
assignment fee shall be payable in respect of any reasonably contemporaneous
assignment by a Lender to any one or more funds that invest in loans and are
managed and/or advised by the same investment advisor of such Lender or by an
Affiliate of such investment advisor), (ii) Annex I shall be deemed to be
amended to reflect the Commitments and Loans of the respective assignee (which
shall result in a direct reduction to the Commitment of the assigning Lender)
and of the other Lenders, and (iii) upon surrender of the old Notes the
Borrower will, at its own expense, issue new Notes to the respective assignee
and to the assigning Lender in conformity with the requirements of Section 1.05,
provided, further, that such transfer or assignment will not
become effective until recorded by the Administrative Agent on the Lender
Register pursuant to Section 11.16.  To the extent of any
assignment pursuant to this Section 11.04(b) to a Person which is not
already a Lender hereunder and which

 

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is not a United States Person (as such term is defined in Section 7701(a)(30)
of the Code) for Federal income tax purposes, the respective assignee Lender
shall provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable, a Section 3.04 Certificate)
described in Section 3.04(b).  To the extent that an assignment
pursuant to this Section 11.04(b) would, at the time of such assignment,
result in increased costs under Section 1.10 or 3.04 from those being
charged by the respective assigning Lender prior to such assignment, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).  Nothing in this clause (b) shall prevent or prohibit
any Lender from pledging its Notes or Loans to a Federal Reserve Bank in
support of borrowings made by such Lender from such Federal Reserve Bank and,
with prior written notice to the Administrative Agent, any Lender which is a
fund may pledge all or any portion of its Notes or Loans to its trustee or to a
collateral agent or to another creditor providing credit or credit support to
such Lender in support of its obligations to such trustee, such collateral
agent or a holder of, or any other representative of a holder of, such
obligations, or such other creditor, as the case may be; provided that
no such pledge shall release the transferor Lender from any of its obligations
hereunder or substitute any such trustee, collateral agent or other assignee
for such Lender as a party hereto.

 

(c)           Notwithstanding
any other provisions of this Section 11.04, no transfer or assignment of
the interests or obligations of any Lender hereunder or any grant of
participation therein shall be permitted if such transfer, assignment or grant
would require the Borrower or any of its Subsidiaries to (i) file a
registration statement with the SEC, (ii) qualify the Loans under the “Blue Sky”
laws of any State or (iii) integrate such transfer or assignment with a
separate securities offering of securities of the Borrower or any of its
Subsidiaries.

 

(d)           Each
Lender initially party to this Agreement hereby represents, and each Person
that became a Lender pursuant to an assignment permitted by this Section 11
will, upon its becoming party to this Agreement, represent that it is an
Eligible Transferee which makes or invests in loans in the ordinary course of
its business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that subject to the preceding
clauses (a) and (b), the disposition of any promissory notes or other evidences
of or interests in Indebtedness held by such Lender shall at all times be
within its exclusive control.

 

11.05  No Waiver; Remedies Cumulative.  No failure or
delay on the part of the Administrative Agent or any Lender in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between any Credit Party and the Administrative Agent or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder.  The rights
and remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have.  No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Administrative
Agent or the Lenders to any other or further action in any circumstances
without notice or demand.

 

119

 

11.06  Payments Pro Rata.  (a)  The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of any Pledge Party in
respect of any Obligations of such Pledge Party hereunder, it shall distribute
such payment to the Lenders (other than any Lender that has expressly waived
its right to receive its pro rata share thereof) pro  rata based
upon their respective shares, if any, of the Obligations with respect to which
such payment was received.

 

(b)           Each
of the Lenders agrees that, if it should receive any amount hereunder (whether
by voluntary payment, by realization upon security, by the exercise of the
right of setoff or banker’s lien, by counterclaim or cross action, by the
enforcement of any right under the Credit Documents, or otherwise) which is
applicable to the payment of the principal of, or interest on, the Loans or
Fees, of a sum which with respect to the related sum or sums received by other
Lenders is in a greater proportion than the total of such Obligation then owed
and due to such Lender bears to the total of such Obligation then owed and due
to all of the Lenders immediately prior to such receipt, then such Lender
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations of the
respective Pledge Party to such Lenders in such amount as shall result in a
proportional participation by all of the Lenders in such amount, provided
that if all or any portion of such excess amount is thereafter recovered from
such Lender, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, but without interest.

 

(c)           Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 11.06(a) and (b) shall be subject to the express provisions of this
Agreement which require, or permit, differing payments to be made to Non-Defaulting
Lenders as opposed to Defaulting Lenders.

 

11.07  Calculations; Computations.  (a)  The financial statements to be furnished to
the Lenders pursuant hereto shall be made and prepared in accordance with GAAP
consistently applied throughout the periods involved (except as set forth in
the notes thereto or as otherwise disclosed in writing by the Borrower to the
Lenders), provided that (x) except as otherwise specifically provided
herein, all computations determining compliance with Sections 7.11 and 7.12,
including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 2003 historical financial
statements of the Borrower delivered to the Lenders pursuant to Section 5.10(b),
(y) that if at any time such computations utilize accounting principles
different from those utilized in the financial statements furnished to the
Lenders, such financial statements shall be accompanied by reconciliation
work-sheets and (z) for purposes of calculating financial terms, all covenants
and related definitions, all such calculations based on the operations of the
Borrower and its Subsidiaries on a consolidated basis shall be made without
giving effect to the operations of any Unrestricted Subsidiaries.

 

(b)           All
computations of interest and Fees hereunder shall be made on the actual number
of days elapsed over a year of 360 days (365-366 days in the case of interest
on Base Rate Loans).

 

11.08  Governing Law; Submission to
Jurisdiction; Venue; Waiver of Jury Trial.  (a)  This Agreement and the other Credit Documents
and the rights and obligations of the

 

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parties hereunder and thereunder
shall be construed in accordance with and be governed by the law of the State
of New York.  Any legal action or proceeding with respect to this
Agreement or any other Credit Document may be brought in the courts of the
State of New York sitting in the Borough of Manhattan or of the United
States for the Southern District of New York, and, by execution and
delivery of this Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts.  Each Credit Party further
irrevocably consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to each Credit Party located
outside New York City and by hand delivery to each Credit Party located
within New York City, at its address for notices pursuant to Section 11.03,
such service to become effective 30 days after such mailing.  Nothing
herein shall affect the right of the Administrative Agent, any Lender to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against any Credit Party in any other jurisdiction.

 

(b)           Each
Credit Party hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.

 

(c)           Each
of the parties to this Agreement hereby irrevocably waives all right to a trial
by jury in any action, proceeding or counterclaim arising out of or relating to
this Agreement, the other Credit Documents or the transactions contemplated
hereby or thereby.

 

11.09  Counterparts.  This Agreement
may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together constitute one and the
same instrument.  A set of counterparts executed by all the parties
hereto shall be lodged with the Borrower and the Administrative Agent.

 

11.10  Effectiveness.  This Agreement
shall become effective on the date (the “Effective Date”) on which each
of the Borrower, the Administrative Agent, the Syndication Agent, each
Co-Documentation Agent and each Lender shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered the same
(including by way of facsimile transmission) to the Administrative
Agent.  The Administrative Agent will give the Borrower and each
Lender prompt written notice of the occurrence of the Effective Date.

 

11.11  Headings Descriptive.  The headings of
the several sections and subsections of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

 

11.12  Amendment or Waiver.  (a)  Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Borrower and the Required Lenders, provided that no such
change, waiver, discharge or termination shall,

 

121

 

without the
consent of each Lender (other than a Defaulting Lender) (with Obligations being
directly affected thereby in the case of the following clauses (i) and (vii)),
(i) extend the final scheduled maturity of any Loan or Note (it being
understood that any waiver of any prepayment of, or the method of application
of any prepayment to, the Loans shall not constitute any such extension), or
reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees, or reduce the principal amount thereof, or increase the
Commitment of any Lender over the amount thereof then in effect (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitment of any Lender,
and that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase in the Commitment of such Lender), (ii) amend,
modify or waive any provision of this Section 11.12 (except for technical
amendments with respect to additional extensions of credit pursuant to this
Agreement which afford the protections to such additional extensions of credit
of the type provided to the Initial B Term Loans and the Revolving Commitments
on the Initial Borrowing Date), (iii) reduce the percentage specified in, or
(except to give effect to any additional facilities hereunder) otherwise
modify, the definition of Required Lenders, (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, (v) release all or substantially all of the Collateral, (vi) release
all or substantially all of the Subsidiaries from the Subsidiary Guaranty
(except as provided therein) or (vii) alter the requirements set forth in
Sections 3.02(B) and 11.06 that certain payments with respect to Loans under a
given Facility be applied or distributed on a pro
rata basis to the holders of such Loans; provided, further,
that no such change, waiver, discharge or termination shall, (t) except in
cases where additional extensions of term loans and/or revolving loans are
being afforded substantially the same treatment afforded to the Term Loans and
RF Loans pursuant to this Agreement as originally in effect, without the
consent of the Majority Lenders of each Facility which is being allocated a
lesser prepayment, repayment or commitment reduction as a result of the actions
described below, alter the required application of any prepayments or
repayments (or commitment reduction), as between the various Facilities,
pursuant to Sections 3.02(A)(b) through (g) and Section 2.03(c) or (e), as
applicable (it being understood, however, that the Required Lenders may waive,
in whole or in part, any such prepayment, repayment or commitment reduction, so
long as the application, as amongst the various Facilities, of any such
prepayment, repayment or commitment reduction which is still required to be
made is not altered), (u) without the consent of the Majority Lenders of the
respective Facility affected thereby, amend the definition of Majority Lenders
(it being understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Majority Lenders on substantially the same basis as the
extensions of Loans and Commitments are included on the Effective Date), (v)
without the written consent of the Required RF Lenders, amend, modify or waive
any condition precedent set forth in Section 4.02 or 4.03 with respect to
the making of RF Loans, Swingline Loans or the issuance of Letters of Credit,
(w) without the consent of each Letter of Credit Issuer, amend, modify or waive
any provision of Section 1A or alter its rights or obligations with
respect to Letters of Credit, (x) without the consent of the Swingline Lender,
alter its rights or obligations with respect to Swingline Loans, (y) without
the consent of the respective Agent, amend, modify or waive any provision of Section 11
as same applies to such Agent or any other provision as same relates to the
rights or obligations of such

 

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Agent and (z)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent.

 

(b)           If, in connection with
any proposed change, waiver, discharge or termination of or to any of the
provisions of this Agreement as contemplated by clauses (i) through (vi),
inclusive, of the first proviso to Section 11.12(a), the consent of the
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrower shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clause (A) or (B) below, to either
(A) replace each such non-consenting Lender or Lenders (or, at the option of
the Borrower if the respective Lender’s consent is required with respect to
less than all Facilities of Loans (or related Commitments), to replace only the
Revolving Commitments and/or Loans of the respective non-consenting Lender
which gave rise to the need to obtain such Lender’s individual consent) with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the
time of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender’s Revolving Commitment (if such Lender’s consent is required as a result
of its Revolving Commitment) and/or repay each Facility of outstanding Loans of
such Lender which gave rise to the need to obtain such Lender’s consent and/or
cash collateralize its applicable Percentage of the Letter of Credit of
Outstandings, in accordance with Sections 2.02(b) and/or 3.02(A)(a), provided
that, unless the Commitments which are terminated and Loans which are repaid
pursuant to preceding clause (B) are immediately replaced in full at such
time through the addition of new Lenders or the increase of the Commitments
and/or outstanding Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B), the Required Lenders (determined after giving effect
to the proposed action) shall specifically consent thereto, provided, further,
that the Borrower shall not have the right to replace a Lender, terminate its
Commitment or repay its Loans solely as a result of the exercise of such Lender’s
rights (and the withholding of any required consent by such Lender) pursuant to
the second proviso to Section 11.12(a).

 

(c)           Notwithstanding
anything to the contrary contained in clause (a) above of this Section 11.12,
the Borrower, the Administrative Agent and each Incremental B Term Lender may,
in accordance with the provisions of Section 1.14, enter into an
Incremental B Term Commitment Agreement, provided that after the
execution and delivery by the Borrower, the Administrative Agent and each such
Incremental B Term Lender of such Incremental B Term Commitment Agreement, such
Incremental B Term Commitment Agreement may thereafter only be modified in
accordance with the requirements of clause (a) above of this Section 11.12.

 

11.13  Survival.  All indemnities
set forth herein including, without limitation, in Section 1.10, 1.11,
3.04, 10.06 or 11.01 shall survive the execution and delivery of this Agreement
and the making and repayment of the Loans.

 

11.14  Domicile of Loans.  Each
Lender may transfer and carry its Loans at, to or for the account of any branch
office, subsidiary or affiliate of such Lender, provided that the Borrower
shall not be responsible for costs arising under Section 1.10 or 3.04
resulting from any such transfer (other than a transfer pursuant to Section 1.12)
to the extent not otherwise applicable to such Lender prior to such transfer.

 

123

 

11.15  Confidentiality.  (a)  Each of the Lenders agrees that it will use
its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Lender if the Lender or such Lender’s holding or
parent company in its sole discretion determines that any such party should
have access to such information) any information with respect to the Borrower
or any of its Subsidiaries which is furnished pursuant to any Credit Document
and which is designated by the Borrower or the Borrower to the Lenders in
writing as confidential; provided, that any Lender may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors or to the National Association of
Insurance Commissioners, (c) as may be required or appropriate in response to
any summons or subpoena or in connection with any litigation (notice of which
will be promptly sent to the Borrower to the extent permitted by law), (d) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, and (e) to any pledgee referred to in Section 11.04(b) or any prospective
transferee that is an Eligible Transferee that is acceptable to the Borrower in
connection with any contemplated transfer of any of the Notes or any interest
therein by such Lender to the extent that such prospective transferee is
notified of the confidentiality requirements relating thereto.  No
Lender shall be obligated or required to return any materials furnished by the
Borrower or any Subsidiary.  The Borrower hereby agrees that the
failure of a Lender to comply with the provisions of this Section 11.15
shall not relieve the Credit Parties of any of their obligations to such Lender
under this Agreement and the other Credit Documents.

 

(b)           The
Borrower hereby represents and acknowledges that, to the best of its knowledge,
neither any Lender, nor any employees or agents of, or other persons affiliated
with, any Lender, have directly or indirectly made or provided any statement
(oral or written) to the Borrower or to any of its employees or agents, or
other persons affiliated with or related to the Borrower (or, so far as the
Borrower is aware, to any other person), as to the potential tax consequences
of the Transaction.

 

11.16  Lender Register.  The
Borrower hereby designates the Administrative Agent to serve as the Borrower’s
agent, solely for purposes of this Section 11.16, to maintain a register
(the “Lender Register”) on which it will record the Commitments from
time to time of each of the Lenders, the Loans made by each of the Lenders and
each repayment in respect of the principal amount of the Loans of each of the
Lenders.  Failure to make any such recordation,
or any error in such recordation shall not affect the Borrower’s obligations in
respect of such Loans.  With respect to any Lender, the transfer of
the Commitments or Loans of such Lender and the rights to the principal of, and
interest on, such Loans or any Loan made pursuant to such Commitments shall not
be effective until such transfer is recorded on the Lender Register maintained
by the Administrative Agent with respect to ownership of such Commitments and
Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the
transferor.  The registration of assignment or transfer of all or
part of any Commitments and Loans shall be recorded by the Administrative Agent
on the Lender Register only upon the acceptance by the Administrative Agent of
a properly executed and delivered Assignment Agreement pursuant to Section 11.04(b).  Any

 

124

 

provision of Incremental B Term
Commitments pursuant to Section 1.14 shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance of the
Administrative Agent of a properly executed and delivered Incremental B Term
Commitment Agreement.  The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section 11.16
(but excluding such losses, claims, liabilities or liabilities incurred by
reason of the Administrative Agent’s gross negligence or willful misconduct).

 

11.17  Patriot Act Notice.  Each Lender that
is subject to the Patriot Act, the Letter of Credit Issuer and the
Administrative Agent (for itself and not on behalf of any Lender) hereby notify
the Borrower that, pursuant to the requirements of the Patriot Act, each of
them is required to obtain, verify and record information that identifies each
Credit Party, which information includes the name and address of such Credit
Party and other information that will allow such Lender, the Letter of Credit
Issuer or the Administrative Agent, as applicable, to identify such Credit
Party in accordance with the Patriot Act.

 

11.18  Post-Closing Actions.  Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:

 

(a)           (i)  The security interests in respect of, and
Liens securing, the Existing Seller/Opco Notes (other than the Existing
Seller/Opco Note owed by the Borrower) are not required to have been terminated
and released, and the Borrower and the other Credit Parties are not required to
have delivered to the Administrative Agent all such releases as may have been
reasonably requested by the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent (including without
limitation proper termination statements (Form UCC-3 or the appropriate
equivalent)), pursuant to Section 4.01(l)(vii), and (ii) within [90] days
after the Initial Borrowing Date, all security interests in respect of, and
Liens securing, such Existing Seller/Opco Notes shall have been terminated and
released, and the Administrative Agent shall have received all such releases as
may have been reasonably requested by the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent (including without
limitation proper termination statements (Form UCC-3 or the appropriate
equivalent)).

 

(b)           [Reserved].

 

All conditions precedent and representations
contained in this Agreement and the other Credit Documents shall be deemed
modified to the extent necessary to effect the foregoing (and to permit the
taking of the actions described above within the time periods required above,
rather than as elsewhere provided in the Credit Documents), provided
that (x) to the extent any representation and warranty would not be true
because the foregoing actions were not taken on the Initial Borrowing Date, the
respective representation and warranty shall be required to be true and correct
in all material respects at the time the respective action is taken (or was required
to be taken) in accordance with the foregoing provisions of this Section 11.18
and (y) all representations and warranties relating to the Pledge Agreement
shall be required to be true in all material respects immediately after the
actions required to be taken by Section 11.18 have been taken (or were
required to be taken).  The incurrence of
Loans on the Initial Borrowing Date

 

125

 

shall constitute a representation, warranty and
covenant by the Borrower to each of the Lenders that the actions required
pursuant to this Section 11.18 will be, or have been, taken within the
relevant time periods referred to in this Section 11.18 and that, at such
time, all representations and warranties contained in this Agreement and the
other Credit Documents shall then be true and correct in all material respects
without any modification pursuant to this Section 11.18, and the parties
hereto acknowledge and agree that the failure to take any of the actions
required above, within the relevant time periods required above, shall give
rise to an immediate Event of Default pursuant to this Agreement.

 

126

 

IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

	
  Address: 

  	
  FAIRPOINT COMMUNICATIONS, INC. 

  
	
  521 East Morehead Street, Suite 250

  	
   

  
	
  Charlotte, NC 28202

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  DEUTSCHE BANK TRUST COMPANY

  AMERICAS, Individually and as Administrative

  Agent 

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BANC OF AMERICA SECURITIES LLC, as

  Syndication Agent

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                    ],
  Individually and as Co-

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                    ],
  Individually and as Co-

  Documentation Agent 

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

	
   

  	
  [OTHER LENDERS]

  
	
   

  	
   

  
	
   

  	
  By 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

 

ANNEX I

 

LENDER COMMITMENTS AND/OR OUTSTANDING LOANS

 

	
   

  	
   

  	
  Revolving

  Commitment

  	
   

  	
  Initial B Term

  Commitments

  	
   

  	
  Delayed-Draw

  Term

  Commitments

  	
   

  
	
  Deutsche
  Bank Trust Company Americas

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
  100,000,000

  	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

 

ANNEX II

 

LENDER
ADDRESSES

 

	
  DEUTSCHE BANK TRUST COMPANY AMERICAS

  	
   

  	
  60 Wall Street

  New York, NY 10006

  Attention: Anca Trifan

  Telephone: 646-324-2184

  Facsimile: 646-324-7456

  
	
  [OTHER LENDERS]

  	
   

  	
   

  

 

 

ANNEX III

 

[ALL
SCHEDULES SUBJECT TO UPDATING]

 

SUBSIDIARIES

 

A.            FairPoint
Communications, Inc. (f/k/a MJD Communications, Inc.)

 

1.             Class A Common Stock

 

	
  Kelso Equity Partners V, L.P.

  	
   

  	
  1,771,770

  	
   

  
	
  Kelso Investment Associates V, L.P.

  	
   

  	
  16,427,726

  	
   

  
	
  JED Communications Associates, Inc.

  	
   

  	
  2,135,140

  	
   

  
	
  Meyer Haberman

  	
   

  	
  562,352

  	
   

  
	
  Susan Haberman

  	
   

  	
  180,000

  	
   

  
	
  Haberman Family Investments LLC

  	
   

  	
  184,000

  	
   

  
	
  Meyer Haberman 1999 Qualified Five Year
  Laura Annuity

  	
   

  	
  245,749

  	
   

  
	
  Meyer Haberman 1999 Qualified Five Year
  Deborah Annuity

  	
   

  	
  245,749

  	
   

  
	
  Eugene B. Johnson

  	
   

  	
  427,180

  	
   

  
	
  Jack H. Thomas

  	
   

  	
  1,473,390

  	
   

  
	
  Michael & Lindy Bergstein

  	
   

  	
  102,800

  	
   

  
	
  Joel Bergstein

  	
   

  	
  62,200

  	
   

  
	
  Peter Nixon

  	
   

  	
  9,200

  	
   

  
	
  Michael Stein

  	
   

  	
  60,000

  	
   

  
	
  Lisa Hood

  	
   

  	
  7,500

  	
   

  
	
  Pamela D. Clark

  	
   

  	
  9,000

  	
   

  
	
  Patrick L. Eudy

  	
   

  	
  127,200

  	
   

  
	
  STC Cust. Rollover, f/b/o Patrick L. Morse

  	
   

  	
  22,000

  	
   

  
	
  Timothy W. Henry

  	
   

  	
  17,800

  	
   

  
	
  Ryan D. Cure

  	
   

  	
  1,600

  	
   

  
	
  S. Whitfield Edwards

  	
   

  	
  8,000

  	
   

  
	
  Daniel Phillip Fine

  	
   

  	
  1,600

  	
   

  
	
  Leon Frazier

  	
   

  	
  1,100

  	
   

  
	
  Ross Fritz

  	
   

  	
  800

  	
   

  
	
  Robert D. Gniadek

  	
   

  	
  800

  	
   

  
	
  Michael L. Harrington

  	
   

  	
  800

  	
   

  
	
  Thomas Iachetta

  	
   

  	
  800

  	
   

  
	
  Stephen R. Lagasse

  	
   

  	
  800

  	
   

  
	
  Jack Morfield

  	
   

  	
  2,000

  	
   

  
	
  Neil A. Torpey

  	
   

  	
  17,600

  	
   

  
	
  City National Bank, f/b/o Neil A. Torpey

  	
   

  	
  17,020

  	
   

  
	
  Jeffrey D. Tousa

  	
   

  	
  2,000

  	
   

  
	
  Dana E. Twombly

  	
   

  	
  20,000

  	
   

  
	
  Brown Brothers Harriman Trust Co., f/b/o
  Dana E. Twombly

  	
   

  	
  2,000

  	
   

  
	
  Daniel J. Yamin, Jr.

  	
   

  	
  800

  	
   

  
	
  Darien Yamin

  	
   

  	
  800

  	
   

  

 

 

	
  John W. Bauchman Family Limited Partnership

  	
   

  	
  81,394

  	
   

  
	
  James and Susan Bauchman Limited
  Partnership

  	
   

  	
  81,394

  	
   

  
	
  Putnam Holdings, LLC

  	
   

  	
  294,820

  	
   

  
	
  Thomas H. Lee Equity Fund IV, L.P.

  	
   

  	
  17,927,740

  	
   

  
	
  Thomas H. Lee Foreign Fund IV, L.P.

  	
   

  	
  613,540

  	
   

  
	
  Thomas H. Lee Foreign Fund IV-B, L.P.

  	
   

  	
  1,741,200

  	
   

  
	
  Thomas H. Lee Charitable Investment Limited
  Partnership

  	
   

  	
  116,560

  	
   

  
	
  THL-CCI Investors Limited Partnership

  	
   

  	
  6,300

  	
   

  
	
  1997 Thomas H. Lee Nominee Trust

  	
   

  	
  276,540

  	
   

  
	
  David V. Harkins

  	
   

  	
  63,140

  	
   

  
	
  The 1995 Harkins Gift Trust

  	
   

  	
  7,080

  	
   

  
	
  Scott A. Schoen

  	
   

  	
  52,660

  	
   

  
	
  C. Hunter Boll

  	
   

  	
  52,660

  	
   

  
	
  Scott M. Sperling

  	
   

  	
  52,660

  	
   

  
	
  Anthony J. DiNovi

  	
   

  	
  52,660

  	
   

  
	
  Thomas M. Hagerty

  	
   

  	
  52,660

  	
   

  
	
  Warren C. Smith, Jr.

  	
   

  	
  52,660

  	
   

  
	
  Seth W. Lawry

  	
   

  	
  21,940

  	
   

  
	
  Kent R. Weldon

  	
   

  	
  14,660

  	
   

  
	
  Terrence M. Mullen

  	
   

  	
  11,680

  	
   

  
	
  Todd M. Abbrecht

  	
   

  	
  11,680

  	
   

  
	
  Charles A. Brizius

  	
   

  	
  8,780

  	
   

  
	
  Scott L. Jaeckel

  	
   

  	
  3,320

  	
   

  
	
  Soren L. Oberg

  	
   

  	
  3,320

  	
   

  
	
  Thomas R. Shepherd

  	
   

  	
  6,140

  	
   

  
	
  Wendy L. Masler

  	
   

  	
  1,520

  	
   

  
	
  Andrew D. Flaster

  	
   

  	
  1,320

  	
   

  
	
  RSL Trust

  	
   

  	
  3,820

  	
   

  
	
  Stephen Zachary Lee

  	
   

  	
  3,820

  	
   

  
	
  Charles W. Robins as Custodian for Nathan
  Lee

  	
   

  	
  1,900

  	
   

  
	
  Charles W. Robins as Custodian for Jesse
  Lee

  	
   

  	
  1,900

  	
   

  
	
  Charles W. Robins

  	
   

  	
  1,520

  	
   

  
	
  James Westra

  	
   

  	
  1,520

  	
   

  
	
  Subtotal

  	
   

  	
  45,773,784

  	
   

  

 

2.             Class
C Common Stock

 

	
  DLJ Capital Partners I, LLC

  	
   

  	
  173,060

  	
   

  
	
  DLJ Fund Investment Partners II, L.P.

  	
   

  	
  161,000

  	
   

  
	
  DLJ Private Equity Employees Fund, L.P.

  	
   

  	
  14,740

  	
   

  
	
  DLJ Private Equity Partners Fund, L.P.

  	
   

  	
  413,600

  	
   

  
	
  Greenwich Street Capital Partners II, L.P.

  	
   

  	
  681,100

  	
   

  
	
  GSCP Offshore Fund, L.P.

  	
   

  	
  14,200

  	
   

  
	
  Greenwich Fund, L.P.

  	
   

  	
  23,080

  	
   

  
	
  Greenwich Street Employees Fund, L.P.

  	
   

  	
  40,660

  	
   

  

 

2

 

	
  TRV Executives Fund, L.P.

  	
   

  	
  3,360

  	
   

  
	
  Magnetite Asset Investors LLC

  	
   

  	
  304,960

  	
   

  
	
  CoInvestment I, LLC

  	
   

  	
  152,480

  	
   

  
	
  DB Capital Investors, L.P.

  	
   

  	
  762,400

  	
   

  
	
  First Union Capital Partners, LLC

  	
   

  	
  762,400

  	
   

  
	
  BancAmerica Capital Investors I, L.P.

  	
   

  	
  762,400

  	
   

  
	
  Subtotal

  	
   

  	
  4,269,440

  	
   

  

 

3.             Series
A Preferred Stock as of December 31, 2002

 

	
  Wachovia Bank, National Association

  	
   

  	
  28,086.70598

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  15,353.03999

  	
   

  
	
  Deutsche Bank Trust Corporation

  	
   

  	
  15,353.03999

  	
   

  
	
  Citicorp USA, Inc.

  	
   

  	
  22,469.36478

  	
   

  
	
  Credit Suisse First Boston, Cayman Islands

  	
   

  	
  12,282.43197

  	
   

  
	
  CoBank, ACB

  	
   

  	
  5,617.34120

  	
   

  
	
  CIT Lending Services Corporation

  	
   

  	
  5,617.34120

  	
   

  
	
  Subtotal

  	
   

  	
  104,779.26510

  	
   

  

 

 

B.            FairPoint
Broadband, Inc. (f/k/a MJD Holdings Corp.) - 3,000 shares of Common
Stock, par value $.01 per share, authorized; 100 shares issued and outstanding.

 

FairPoint
Communications, Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

C.            ST
Enterprises, Ltd. - 200,000 shares of Common Stock, par value $.01 per
share, authorized; 90,000 shares issued and outstanding.

 

FairPoint
Communications, Inc. - 90,000 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

Common Stock Purchase Warrants - 222.98 warrants issued and outstanding

Steve
McGeeney - Warrants to purchase 111.49 shares

c/o Paul, Hastings, Janofsky & Walker LLP

Ninth Floor

1055 Washington Boulevard

Stamford, Connecticut  06901-2217

 

Sylvana
Zoberg - Warrants to purchase 111.49 shares

418 East 59th Street

New York, New York 
10022

 

3

 

D.            All
the issued and outstanding stock of the following entities is held by ST
Enterprises, Ltd., P.O. Box 199, Dodge City, Kansas 67801:

 

Northland Telephone Company of Maine, Inc.
- 200 shares of Common stock, par value $.01 per share, authorized; 100 shares
issued and outstanding

 

STE/NE Acquisition Corp. (d/b/a Northland
Telephone Company of Vermont) - 1,000 shares of Common
Stock, par value $.01 per share, authorized; 1,000 shares issued and
outstanding

 

ST Computer Resources, Inc.
- 10,000 shares of Common Stock, no par value, authorized; 500 shares issued
and outstanding

 

ST Long Distance, Inc. -
1,000 shares of Common Stock, par value $.01 per share, authorized; 100 shares
issued and outstanding

 

E.             Sunflower
Telephone Company, Inc. - 1,500 shares of Common Stock, par value $100
per share, authorized; 968 shares issued and outstanding.  1,500
shares of Preferred Stock, par value $100 per share, authorized; 234 preferred
shares issued and outstanding (234 preferred shares and 282 common shares held
in treasury).

 

ST
Enterprises, Ltd. - 684 common shares

P.O. Box 199

Dodge City, Kansas 67081

 

Frank
and Mathilda Schreck - 2 common shares

Marienthal, Kansas  67863

 

F.             MJD
Ventures, Inc. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint
Communications, Inc. - 100 common shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

G.            All
of the issued and outstanding stock of the following entities is held by MJD
Ventures, Inc., Morehead Place, 521 E. Morehead
Street, Suite 250, Charlotte, North Carolina 28202:

 

Sidney Telephone Company -
100,000 shares of Common Stock, par value $.01 per share, authorized; 100
common shares issued and outstanding.

 

Ellensburg Telephone Company
- 50,000 shares of Common Stock, par value $10.00 per share, authorized; 100
shares issued and outstanding.

 

4

 

Taconic Telephone Corp. -
100 shares of Common Stock, par value $100 per share, authorized; 100 shares
issued and outstanding.

 

Chouteau Telephone Company -
100 shares of Common Stock, par value $.01 per share, authorized; 100 shares issued
and outstanding.

 

C-R Communications, Inc. -
750 shares of Common Stock, without par value, authorized; 750 shares issued
and outstanding.

 

Telephone Service Co. -
8,000 shares of Common Stock, no par value, authorized; 100 shares issued and
outstanding.

 

Chautauqua and Erie Telephone Corporation
- 100,000 shares of Common Stock, par value $.01 per share, authorized; 100
shares issued and outstanding.  35,000 shares of Preferred Stock, par
value $50 per share, authorized; 0 shares issued and outstanding.

 

The Columbus Grove Telephone Company
- 500 shares of Common Stock, $100 par value, authorized; 318 shares issued and
outstanding.

 

Utilities, Inc. - 50,000
shares of Common Stock, par value $.01 per share, authorized; 100 shares issued
and outstanding; 20,000 shares of Preferred Stock authorized; 0 shares
outstanding.

 

The Orwell Telephone Company
- 10,000  shares
of Common Stock, no par value, authorized; 4,795.7461 shares issued and
outstanding.

 

GTC, Inc. – 1,500,000 shares
of Common Stock, par value $0.01 per share, authorized; 1,000,000 shares issued
and outstanding.

 

Peoples Mutual Telephone Company
– 12,000 shares of Common Stock, par value $25.00 per share, authorized; 9,832
shares issued and outstanding.

 

Fremont Telcom Co. - 100,000
shares of Common Stock, no par value, authorized; 5,155.5 issued and
outstanding.

 

Fretel Communications, LLC -
100% membership interest

 

Comerco, Inc. - 50,000
shares of Common Stock, $10 par value, authorized; 31,250 shares issued and
outstanding.

 

Marianna and Scenery Hill Telephone Company
- 2400 shares of Common Stock, par value $25 per share, authorized; 306 shares

 

5

 

issued and outstanding and 400
shares of Preferred Stock, par value $100 per share; 0 shares issued and
outstanding (194 shares of Common Stock are held in treasury).

 

H.            YCOM
Networks, Inc. - 450 shares of Common Stock, $100 par value,
authorized; 294 shares issued and outstanding.

 

Comerco,
Inc. - 294 shares

 

I.              Peoples
Mutual Services Company – 500 shares of Common Stock, no par value,
authorized; 1 share issued and outstanding.

 

Peoples
Mutual Telephone Company – 1 share

 

J.             Peoples
Mutual Long Distance Company – 10,000 shares of Common Stock, no par
value authorized; 10,000 shares issued and outstanding.

 

Peoples
Mutual Telephone Company – 10,000 shares

 

K.            St.
Joe Communications, Inc. – 1,000 shares of Common Stock, par value
$1.00 per share, authorized; 1,000 shares issued and outstanding.

 

GTC
Communications, Inc. – 1,000 shares

 

L.            GTC,
Inc. – 25,000 shares of Common Stock, par value $0.01 per share,
authorized; 14,890 shares issued and outstanding.

 

St.
Joe Communications, Inc. – 14,890 shares

 

M.           GTC
Finance Corporation (f/k/a TPGC Finance Corporation)  – 300 shares of Common
Stock, par value $0.01 per share, authorized; 300 shares issued and
outstanding.

 

GTC,
Inc. – 300 shares

 

N.            MJD
Services Corp. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint
Communications, Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

O.            Marianna
Tel, Inc. - 100 shares of Common Stock, par value $10 per share
authorized; 100 shares issued and outstanding.

 

Marianna
and Scenery Hill Telephone Company - 100 shares

 

P.            All
of the issued and outstanding stock of the following entities is held by MJD
Services Corp., Morehead Place, 521 E. Morehead
Street, Suite 250, Charlotte, North Carolina 28202:

 

6

 

Bluestem Telephone Company -
100 shares of Common Stock, par value $.01 per share, authorized; 100 shares
issued and outstanding.

 

Big Sandy Telecom, Inc. -
100 shares of Common Stock, par value $.01 per share, authorized; 100 shares
issued and outstanding.

 

Columbine Telecom Company (f/k/a Columbine
Acquisition Corp.) - 100 shares of Common Stock, par
value $.01 per share, authorized; 100 shares issued and outstanding.

 

Ravenswood Communications, Inc.
- 1,000 shares of Common Stock, no par value, authorized; 405 shares issued and
outstanding.

 

Kadoka Telephone Co. - 5,000
shares of Common Stock, par value $100 per share, authorized; 1,212 shares
issued and outstanding.

 

Union Telephone Company of Hartford
- 357 and 1/7 shares of Common Stock, par value $70.00 per share, authorized;
174 shares issued and outstanding.

 

WMW Cable TV Co. - 10,000
shares of Common Stock, $10.00 par value, authorized; 500 shares issued and
outstanding.

 

Yates City Telephone Company
- 500 shares of Common Stock, $20.00 par value, authorized; 252 issued and
outstanding.

 

Q.            Armour
Independent Telephone Co. - 6,000 shares of Common Stock, par value
$100 per share, authorized; 2,330 shares issued and outstanding.  400
shares of Preferred Stock, par value $1,000 per share, authorized, 200 shares
outstanding.

 

MJD
Services Corp. -  2,330
common shares

521 E. Morehead Street, Suite 250

Charlotte, North Carolina 28202

 

Union
Telephone Company of Hartford  - 200 preferred shares

116 N. Main Avenue

Hartford, South Dakota 57033

 

R.            Odin
Telephone Exchange, Inc. - 150 shares of Common Stock, no par value per
share, authorized; 101 shares issued and outstanding (5.7143 shares held in
treasury).

 

MJD
Services Corp. - 95.2857 common shares

521 E. Morehead Street, Suite 250

Charlotte, North Carolina 
28202

 

7

 

S.            Orwell
Communications, Inc. - 500 shares of Common Stock, no par value,
authorized; 500 issued and outstanding.

 

The Orwell Telephone Company – 500 shares

70 South Maple Street

P.O. Box 337

Orwell, Ohio 44076-0337

 

T.            MJD
Capital Corp. - 100 shares of Common Stock, par value $.01 per share,
authorized; 100 shares issued and outstanding.

 

FairPoint
Communications, Inc. - 100 shares

Morehead Place, 521 E. Morehead Street,

Suite 250, Charlotte, North Carolina 28202

 

U.            All of the issued and outstanding stock of
the following entities is held by C-R Communications, Inc., 106 N. 6th Street,
Cornell, Illinois 61319:

 

C-R Telephone Company - 750 shares of
Common Stock, par value $10.00 per share, authorized; 100 shares issued and
outstanding.

 

C-R Long Distance, Inc.  -  10,000 shares of
Common Stock, no par value, authorized; 100 shares issued and outstanding.

 

V.            C-R
Cellular, Inc. - 10,000 shares of Common Stock, no par value,
authorized; 2,500 shares issued and outstanding.

 

C-R
Telephone Company - 2,500 shares

 

W.           Elltel
Long Distance Corp. – 100 shares of Common Stock, $0.01 par value,  authorized; 100
shares issued and outstanding.

 

Ellensburg Telephone Company – 100 shares

305 N. Ruby

Ellensburg, WA 98926

 

X.            All
of the issued and outstanding stock of the following entities is held by
Taconic Telephone Corp., One Taconic Place, Chatham, NY 12037:

 

Taconic Cellular Corp. - 1
share of Common Stock, no par value, authorized; 1 share issued and
outstanding.

 

Taconic Technology Corp. -
200 shares of Common Stock, no par value, authorized; 200 shares issued and
outstanding.

 

Taconic TelCom Corp. - 1
share of Common Stock, no par value, authorized; 1 share issued and
outstanding.

 

8

 

Taconet Wireless Corp. - 1
share of Common Stock, no par value, authorized; 1 share issued and
outstanding.

 

Taconet Corp. - 1 share of
Common Stock, no par value, authorized; 1 share issued and outstanding.

 

Y.            Chouteau
Telecommunications & Electronics, Inc. - 200,000 shares of Common
Stock, par value $.01 per share, authorized; 100,000 shares issued and
outstanding.

 

Chouteau Telephone Company – 100,000 shares.

1025 S. McCracken

Chouteau, OK 74337

 

Z.            All
of the issued and outstanding stock of the following entities is held by
Utilities, Inc., One Ossippee Trail East, Standish, ME
04084:

 

Standish Telephone Company -
26,000 shares of Common Stock, par value $25.00 per share, authorized, 23,560
shares issued and outstanding.  12,000 shares of Preferred Stock authorized, 0 shares issued and outstanding.

 

China Telephone Company -
20,000 shares of Common Stock, par value $10.00 per share, authorized; 20,000
shares issued and outstanding.

 

Maine Telephone Company -
100,000 shares of Common Stock, par value $.01 per share, authorized; 100
shares issued and outstanding.

 

UI Long Distance, Inc. -
100,000 shares of Common Stock, par value $.01 per share, authorized; 100
shares issued and outstanding.

 

UI Communications, Inc. -
100,000 shares of Common Stock, par value $.01 per share, authorized; 100
shares issued and outstanding.

 

UI Telcom, Inc. - 100,000
shares of Common Stock, par value $.01 per share, authorized; 100 shares issued
and outstanding.

 

AA.         All of the issued and outstanding stock of
the following entities is held by Ravenswood Communications, Inc., 48 West
First Street, El Paso, Illinois 61738:

 

The El Paso Telephone Company
- 800 shares of Common Stock, par value $25 per share, authorized; 405 shares
issued and outstanding.

 

9

 

El Paso Long Distance Company
- 1,000 shares of Common Stock, no par value per share, authorized; 1,000
shares issued and outstanding.

 

BB.         Gemcell,
Inc. - 6,000 shares of Common Stock, no par, authorized; 2,000 issued
and outstanding.

 

The El
Paso Telephone Company - 2,000 shares.

 

CC.         Quality
One Technologies, Inc. - 850 shares of Common Stock, no par value,
authorized; 850 shares issued and outstanding.

 

The Columbus Grove Telephone Company – 850 shares.

 

DD.         All of the issued and outstanding stock of
the following entity is held by Armour Independent Telephone Co., 116 N. Main
Avenue, Hartford, South Dakota 57033:

 

Bridgewater-Canistota Independent Telephone Co.
- 10,000 shares of Common Stock, par value $10.00 per share, authorized; 10,000
shares issued and outstanding.

 

EE.          Union
TelNET, Inc. – 100,000 shares of Common Stock, par value $1.00 per
share, authorized; 25,000 shares issued and outstanding.

 

Union Telephone Company of
Hartford – 25,000 shares.

116 N. Main Avenue

Hartford, South Dakota 57033

 

FF.          All of the issued and outstanding stock
of the following entities is held by Chautauqua and Erie Telephone Corporation,
30 Main Street, Westfield, New York 14787:

 

Chautauqua
& Erie Communications, Inc. (f/k/a Chautauqua & Erie Technologies,
Inc.) – 200 shares of Common Stock, no par value,
authorized; 110 shares issued and outstanding.

 

Chautauqua & Erie Network, Inc. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

C&E Communications, Ltd. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

Western New York Cellular, Inc. – 200 shares of
Common Stock, no par value, authorized; 101 shares issued and outstanding.

 

GG.         Chautauqua Cable, Inc. – 200 shares
of Common Stock, no par value, authorized; 100 shares issued and outstanding.

 

Western New
York Cellular, Inc. – 100 shares.

 

10

 

ANNEX IV

 

ERISA

ACTIVE PLANS

 

1.             FairPoint
Communications, Inc. Employee Savings Plan.

 

2.             St. Joe
Communications, Inc. Hourly Employees Salary Deferral Plan

 

3.             Chautauqua
and Erie Telephone Corporation Union 401(k) Plan

 

FROZEN PLANS (NOT PAID
OUT)

 

1.             Marianna
and Scenery Hill Telephone Company Defined Benefit Plan.  Currently held at National Telephone Cooperative Association,
frozen at December 31, 2002 (the company ceased making contributions to
the plan at that time).

 

TERMINATED OR MERGED
PLANS

NO ASSETS REMAIN

 

1.             Retirement
Plan of Utilities, Inc and Associated Employers for Standish Telephone Company
and China Telephone Company

 

2.             Retirement
Plan of Utilities, Inc. and Associated Employers for Telephone Service Co.

 

3.             STE/NE
Acquisition Corp. Pension Plan for Vermont Employees of Transferred GTE Operations

 

4.             Retirement
Plan for Employees of the Ellensburg Telephone Company

 

5.             Chautauqua
and Erie Telephone Corporation Management Pension Plan

 

6.             Chautauqua
and Erie Telephone Corporation Union Pension Plan

 

7.             Taconic
Telephone Corp Union Employee Defined Benefit Plan

 

8.             Retirement
Plan of Utilities, Inc and Associated Employers for Utilities, Inc.

 

9.             Fremont
Telecom Co. 401(k) Retirement Savings Plan

 

10.           YCOM
Networks, Inc. Money Purchase Pension Plan and Trust

 

11.           YCOM
Networks, Inc. 401(k) Profit Sharing Plan and Trust

 

12.           Taconic
Telephone Corp. Management Employee Defined Benefit Plan

 

13.           Taconic
Telephone Corp. Management 401(k)

 

 

14.           The
Columbus Grove Telephone Company 401(k) Profit Sharing Plan

 

15.           Amended
and Restated Profit Sharing Plan and Trust of The
Orwell Telephone Company

 

16.           Peoples
Mutual Telephone Company Profit Sharing Plan

 

17.           St. Joe
Communications, Inc. Salaried Employees Salary Deferral Plan & Trust

 

18.           St. Joe
Communications, Inc. Salaried Employees Pension Plan

 

19.           St. Joe
Communications, Inc. Hourly Employees Pension Plan

 

20.           Union
Telephone Company of Hartford Profit Sharing Plan

 

21.           With
respect to Marianna and Scenery Hill Telephone Company, the Savings Plan of the
National Telephone Cooperative Association and its Member System (“401(k)”)

 

22.           Ellensburg
Telephone Company Thrift Plan

 

2

 

ANNEX V

 

EXISTING LIENS 

 

 

ANNEX VI

 

EXISTING INDEBTEDNESS AS OF THE
EFFECTIVE DATE

 

 

ANNEX VII

 

EXISTING INVESTMENTS AS OF THE EFFECTIVE
DATE

 

 

ANNEX VIII

 

AFFILIATE TRANSACTIONS

 

 

ANNEX IX

 

EXISTING LETTERS OF CREDIT

 

	
  Beneficiary

  	
   

  	
  Maturities

  	
   

  	
  AmountExhibit 10.12

 

FORM OF NOMINATING
AGREEMENT

THIS NOMINATING AGREEMENT (this “Agreement”), dated as of February
[__], 2005, is entered into by and among FairPoint Communications, Inc., a
Delaware corporation (the “Company”), Kelso Investment Associates V, L.P.,
a Delaware limited partnership (“KIA V”), Kelso Equity Partners V, L.P.,
a Delaware limited partnership (“KEP V” and together with KIA V, “Kelso”)
and Thomas H. Lee Equity Fund IV, L.P., a Delaware limited partnership (“THL”).
 Kelso and THL, together with the
affiliates of THL listed on Schedule A
attached hereto, are referred to herein collectively as the “Stockholders.”

WHEREAS, as of the date
hereof and immediately prior to the consummation of the Company’s initial
public offering of its common stock, par value $.01 per share (the “Common
Stock”), the Stockholders own in the aggregate [_____] shares (collectively,
the “Shares”) of Common Stock; and

WHEREAS, Kelso, THL and
the Company wish to make certain agreements with respect to the nomination of candidates
for election to the board of directors of the Company, upon the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, in
consideration of the premises and the mutual covenants and considerations
herein set forth, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

1.             Board of
Directors.  The size of the Board of
Directors of the Company (the “Board”) shall be established in
accordance with the Certificate of Incorporation and By-Laws of the Company.  The members of the Board shall be nominated
and elected in accordance with the Certificate of Incorporation and By-Laws of
the Company, and the provisions of this Agreement.  “Certificate of Incorporation” shall
mean the Eighth Amended and Restated Certificate of Incorporation of the
Company, as filed with the Secretary of State of the State of Delaware and
effective as of the date hereof, as may be amended from time to time.  “By-Laws” shall mean the Amended and
Restated By-Laws of the Company, effective as of the date hereof, as may be
amended from time to time.

2.             Staggered Board.  The Certificate of Incorporation and By-Laws
of the Company shall provide that the Board shall be divided into three
classes, as nearly equal in number as possible, as follows: (A) one class
initially consisting of two directors (“Class I”), the initial term of
which shall expire at the first annual meeting of the stockholders to be held
after the date hereof; (B) a second class initially consisting of two directors
(“Class II”), the initial term of which shall expire at the second
annual meeting of the stockholders to be held after the date hereof and (C) a
third class initially consisting of two directors (“Class III”), the
initial term of which shall expire at the third annual meeting of the
stockholders to be held after the date hereof, with each class to hold office
until its successors are elected and qualified. 
At each annual meeting of the stockholders of the Company, the
successors of the members of the class of directors whose term expires at that
meeting shall be elected to hold office for a term expiring at the third
succeeding annual meeting of stockholders. 
On the date hereof, the Board shall

 

 

 

consist of: (i)
Eugene B. Johnson and Patricia Garrison-Corbin in Class I, (ii) Frank K. Bynum
and David L. Hauser in Class II and (iii) Kent R. Weldon and Claude C. Lilly in
Class III.

3.             Designees.  Upon
expiration of the respective terms of the initial Board members set forth in
Section 2 above, and subject to the provisions of Section 4 hereof, Kelso and
THL shall have the right to designate individuals for nomination for election
to the Board as set forth below and the Company shall, acting through its Nominating
Committee, cause such individuals to be nominated for election to the Board as
set forth below; provided that the Nominating Committee’s obligations under
this Agreement are subject to the requirements of their fiduciary duties as
directors and the Delaware General Corporation Law.

(a)           For so long as the
Stockholders (together with any of their respective successors and permitted
assigns) own, in the aggregate, at least forty percent (40%) of the Shares and
Kelso (together with its successors and permitted assigns) owns at least one
(1) Share, (i) Kelso shall be entitled to designate one person for nomination
for election to the Board in Class II and (ii) THL shall be entitled to
designate one person for nomination for election to the Board in Class III; provided, however, that if
Kelso no longer owns any Shares, but THL (together with its successors and
permitted assigns)  owns at least
forty percent (40%) of the Shares, THL shall be entitled to designate one
person for nomination for election to the Board in Class II and one person for
nomination for election to the Board in Class III; or

(b)           For so long as the
Stockholders (together with any of their respective successors and permitted
assigns) own, in the aggregate, less than forty percent (40%), but at least
twenty percent (20%), of the Shares, THL shall be entitled to designate one
person for nomination for election to the Board in Class III.

4.             Mechanics of Designation.

(a)           In order to nominate an individual for election to the Board,
Kelso or THL, as applicable, must submit to the Company a prior written notice at
least ninety (90) days prior to the date of the next scheduled annual meeting
of the Company’s stockholders in accordance with the notice provisions set
forth in Section 11 hereof, which notice shall include (i) the name of the designee,
(ii) a current resume and curriculum vitae of the designee, (iii) a statement
describing the designee’s qualifications and (iv) contact information for
personal and professional references.  At
least one hundred and twenty (120) days prior to the date of such annual
meeting of the Company’s stockholders, the Company shall provide Kelso and THL
with written notice of the expected date of such meeting in accordance with the
notice provisions set forth in Section 11 hereof.

(b)           At each meeting of the Company’s stockholders at which the directors
of the Company are to be elected, the Company agrees to recommend that the
stockholders elect to the Board each designee of Kelso and/or THL nominated for
election at such meeting in accordance with the provisions of Section 3 above.

 

2

 

5.             Vacancies.

(a)           At
any time at which a vacancy shall be created on the Board in any class as a
result of the death, disability, retirement, resignation, removal or otherwise
of a designee of Kelso and Kelso maintains the right to designate a person for
nomination for election to the Board, as specified in Section 3 above, Kelso
shall have the right to designate for appointment by the remaining directors of
the Company under the Certificate of Incorporation an individual to fill such
vacancy and to serve as a director on the Board in such class.

(b)           At
any time at which a vacancy shall be created on the Board in any class as a
result of the death, disability, retirement, resignation, removal or otherwise
of a designee of THL and THL maintains the right to designate a person or
persons for nomination for election to the Board, as specified in Section 3
above, THL shall have the right to designate for appointment by the remaining
directors of the Company under the Certificate of Incorporation an individual
to fill such vacancy and to serve as a director on the Board in such
class.   In addition, in the event a
vacancy of a Kelso designee occurs at a time when Kelso no longer owns any
Shares, but THL owns at least forty percent (40%) of the Shares, THL shall be
entitled to designate an individual to fill such vacancy.

(c)           In
connection with the foregoing, THL or Kelso, as applicable, must submit to the
Company written notice of such designee or designees in accordance with the
notice provisions set forth in Section 11 hereof, which notice shall include
(i) the name of the designee, (ii) a current resume and curriculum vitae of the
designee, (iii) a statement describing the designee’s qualifications and (iv)
contact information for personal and professional references.  The Company agrees to take such actions as
will result in the appointment to the Board as soon as practicable of any
individual so designated by THL or Kelso, as applicable.

6.             Modification,
Amendment, Waiver.  No modification,
amendment or waiver of any provision of this Agreement shall be effective
unless approved in writing by the Company, THL and Kelso; provided, however,
that Kelso’s consent will not be required if Kelso no longer owns any Shares.  The failure of any party at any time to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the rights of the party
thereafter to enforce the provisions of this Agreement in accordance with its
terms.

7.             Invalid or
Unenforceable Provisions.  Whenever
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any term or provision
of this Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect and this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.  The parties
further agree that any court of competent jurisdiction is expressly authorized to
modify any such unenforceable provision of this Agreement in lieu of severing
such unenforceable provision from this Agreement in its entirety, whether by
rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such
other modifications as it deems warranted to carry out the intent and agreement
of the parties as

 

3

 

embodied herein to
the maximum extent permitted by law.  The
parties expressly agree that this Agreement as so modified by a court of
competent jurisdiction shall be binding upon and enforceable against each of
them.

8.             Entire
Agreement. Except as otherwise expressly set forth herein, this document
embodies the complete agreement and understanding among the parties hereto with
respect to the subject matter hereof and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

9.             Binding Effect; Assignment.  All of the terms of this Agreement shall
inure to the benefit of and shall be binding upon the Company, THL and Kelso
and their respective successors and permitted assigns; provided, however,
that this Agreement may not be assigned except in accordance with the following
sentence.  No party hereto shall assign
its rights, or delegate its duties, under this Agreement without the prior
written consent of all of the other parties hereto; provided, however,
that (a) THL and Kelso may assign their respective rights hereunder to their
respective affiliates without consent and (b) Kelso’s consent will not be
required if Kelso no longer owns any Shares.

10.           Remedies.  The parties hereto will be entitled to
enforce their rights under this Agreement specifically (without posting a bond
or other security), to recover damages by reason of any material breach of any
provision of this Agreement and to exercise all other rights existing in their
favor.  The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement. 
In the event of any dispute involving the terms of this Agreement, the
prevailing party shall be entitled to collect reasonable fees and expenses
incurred by the prevailing party in connection with such dispute from the other
parties to such dispute.

11.           Notices.  Any notice or other communication in
connection with this Agreement or the Shares shall be deemed to be delivered
and received if in writing (or in the form of a telex or telecopy) addressed as
provided below (a) when actually delivered, in person, (b) if telexed or
telecopied to said address, when electronically confirmed, (c) when delivered
if delivered by overnight courier or (d) in the case of delivery by mail, five
(5) business days shall have elapsed after the same shall have been deposited
in the United States mails, postage prepaid and registered or certified:

If
to the Company, to:

FairPoint Communications,
Inc.

521 East Morehead Street

Suite 250

Charlotte, North Carolina
28202

Attention: 
Shirley J. Linn, Esq.

Facsimile: 
(704) 344-1594

 

4

 

with a copy to:

 

Paul, Hastings, Janofsky & Walker LLP

75 East 55th Street

New York, New York  10022

Attention: Jeffrey J. Pellegrino, Esq.

 

If to Kelso, to:

 

Kelso & Company

320 Park Avenue, 24th Floor

New York, New York 10022

Attention: 
James J. Connors, II, Esq.

Facsimile: 
(212) 223-2379

 

If to THL, to:

 

Thomas H. Lee Partners, L.P.

100 Federal Street

35th Floor

Boston, Massachusetts 02110

Attention: 
Anthony J. DiNovi

                 
Kent R. Weldon

Facsimile: 
(617) 227-3514

 

12.           Term.  The term of this Agreement shall terminate
upon the earlier to occur of: (i) the mutual consent in writing of all of the
parties hereto, provided that Kelso’s consent will not be required if Kelso no
longer owns any Shares or (ii) the date on which the Stockholders (together
with any of their respective successors and permitted assigns) own, in the
aggregate, less than twenty percent (20%) of the Shares.

13.           Governing Law;
Submission to Jurisdiction.  All
questions concerning the construction, validity and interpretation of this Agreement
will be governed by the internal laws of the State of Delaware, without giving
effect to principles of conflicts of law. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts
of the State of Delaware or the United States of America located in the State
of Delaware for any actions, suits or proceedings arising out of or relating to
this Agreement and the transactions contemplated hereby (and the parties agree
not to commence any action, suit or proceeding relating hereto except in such
courts), and further agree that service of any process, summons, notice or
documents by United States registered mail to a party in accordance with Section
11 hereof shall be effective service of process for any action, suit or
proceeding brought against such party in any such court and, absent any
statute, rule or order to the contrary, that each party shall have thirty (30)
days from actual receipt of any complaint to answer or otherwise plead with
respect thereto.  The parties hereby irrevocably
and unconditionally

 

5

 

waive any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in the courts of the
State of Delaware or the United States of America located in the State of Delaware,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.

14.           Descriptive
Headings.  The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
part of this Agreement.

15.           Counterparts.  This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.

 

(Signature
Pages Follow)

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  FAIRPOINT
  COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO INVESTMENT
  ASSOCIATES V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Kelso Partners V, L.P.,

  
	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  KELSO EQUITY PARTNERS V, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THL:

  
	
   

  	
   

  	
   

  
	
   

  	
  THOMAS H. LEE EQUITY FUND IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By: THL Equity Advisors IV, LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

7

 

Schedule A

THL Related Parties

 

 

Thomas H. Lee Foreign Fund IV, L.P.

Thomas H. Lee Foreign Fund IV-B, L.P.

1987 Thomas H. Lee Nominee Trust

David V. Harkins

The Harkins 1995 Gift Trust

Scott A. Schoen

C. Hunter Boll

Scott M. Sperling

Anthony J. DiNovi

Thomas M. Hagerty

Warren C. Smith, Jr.

Seth W. Lawry

Kent R. Weldon

Terrence M. Mullen

Todd M. Abbrecht

Charles A. Brizius

Scott Jaeckel

Soren Oberg

Thomas R. Shepherd

Joseph J. Incandela

Wendy L. Malser

Andrew D. Flaster

Robert Schiff Lee 1988 Irrevocable Trust

Stephen Zachary Lee

Charles W. Robins as Custodian for Jesse Lee

Charles W. Robins as Custodian for Nathan Lee

Charles W. Robins

James Westra

Thomas H. Lee Charitable Investment L.P.

THL-CCI Investors Limited Partnership

Putnam Investments, Inc.

 

8

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