Document:

Exhibit 10.1

 

 

CREDIT AGREEMENT

 

DATED AS OF SEPTEMBER 10, 2008,

 

among

 

ATLANTIC TELE-NETWORK, INC.,

 

as Borrower,

 

each of the

 

GUARANTORS

 

referred to herein,

 

COBANK, ACB,

 

as Administrative Agent, Arranger, an Issuing Lender and a Lender,

 

and

 

the other Lenders referred to herein

 

 

 

TABLE OF CONTENTS

 

	
  SECTION 1 AMOUNTS AND TERMS OF FACILITIES

  	
  1

  
	
  1.1

  	
  Facilities

  	
  1

  
	
  1.2

  	
  Interest

  	
  7

  
	
  1.3

  	
  Notice of Borrowing, Conversion or Continuation of Loans

  	
  10

  
	
  1.4

  	
  Fees and Expenses

  	
  11

  
	
  1.5

  	
  Payments

  	
  12

  
	
  1.6

  	
  Repayments of Loans and Reduction of the Revolver Loan Commitment

  	
  13

  
	
  1.7

  	
  Voluntary Prepayments and Other Mandatory Repayments

  	
  15

  
	
  1.8

  	
  Application of Prepayments and Repayments; Payment of Breakage Fees,
  Etc

  	
  16

  
	
  1.9

  	
  Loan Accounts

  	
  16

  
	
  1.10

  	
  Changes in LIBOR Rate Availability

  	
  17

  
	
  1.11

  	
  Capital Adequacy and Other Adjustments

  	
  17

  
	
  1.12

  	
  Optional Prepayment/Replacement of Lender in Respect of Increased
  Costs

  	
  18

  
	
  1.13

  	
  Taxes

  	
  19

  
	
  1.14

  	
  Changes in Tax Laws

  	
  20

  
	
  1.15

  	
  Term of This Agreement

  	
  21

  
	
  1.16

  	
  Letter of Credit Liability

  	
  21

  
	
   

  	
   

  	
   

  
	
  SECTION 2 AFFIRMATIVE COVENANTS

  	
  22

  
	
  2.1

  	
  Compliance With Laws

  	
  22

  
	
  2.2

  	
  Maintenance of Books and Records; Properties; Insurance

  	
  22

  
	
  2.3

  	
  Inspection

  	
  23

  
	
  2.4

  	
  Legal Existence, Etc

  	
  24

  
	
  2.5

  	
  Use of Proceeds

  	
  24

  
	
  2.6

  	
  Further Assurances; Notices of Acquisition of Real Property

  	
  24

  
	
  2.7

  	
  CoBank Patronage Capital

  	
  25

  
	
  2.8

  	
  Collateral Assignments of Material Contracts

  	
  25

  
	
  2.9

  	
  Investment Company Act

  	
  26

  
	
  2.10

  	
  Payment of Obligations

  	
  26

  
	
  2.11

  	
  Environmental Laws

  	
  26

  
	
  2.12

  	
  Creation or Acquisition of Subsidiaries

  	
  27

  
	
  2.13

  	
  Interest Rate Protection

  	
  28

  
	
  2.14

  	
  ERISA

  	
  28

  
	
  2.15

  	
  Post-Closing Letter

  	
  28

  
	
   

  	
   

  	
   

  
	
  SECTION 3 NEGATIVE COVENANTS

  	
  28

  
	
  3.1

  	
  Indebtedness

  	
  29

  
	
  3.2

  	
  Liens and Related Matters

  	
  30

  
	
  3.3

  	
  Investments

  	
  31

  
	
  3.4

  	
  Contingent Obligations

  	
  32

  
	
  3.5

  	
  Restricted Junior Payments

  	
  33

  
	
  3.6

  	
  Restriction on Fundamental Changes

  	
  33

  
	
  3.7

  	
  Disposal of Assets or Subsidiary Stock

  	
  34

  

 

 

	
  3.8

  	
  Transactions with Affiliates

  	
  34

  
	
  3.9

  	
  Management Fees

  	
  34

  
	
  3.10

  	
  Conduct of Business

  	
  35

  
	
  3.11

  	
  Fiscal Year

  	
  35

  
	
  3.12

  	
  Modification of Agreements

  	
  35

  
	
  3.13

  	
  Inconsistent Agreements

  	
  35

  
	
  3.14

  	
  Hedging Agreements

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 4 FINANCIAL COVENANTS AND REPORTING

  	
  35

  
	
  4.1

  	
  Total Net Leverage Ratio

  	
  36

  
	
  4.2

  	
  Total Interest Coverage Ratio

  	
  36

  
	
  4.3

  	
  Equity to Assets Ratio

  	
  36

  
	
  4.4

  	
  Financial Statements and Other Reports

  	
  36

  
	
  4.5

  	
  Accounting Terms; Utilization of GAAP for Purposes of Calculations
  Under Agreement

  	
  39

  
	
   

  	
   

  	
   

  
	
  SECTION 5 REPRESENTATIONS AND WARRANTIES

  	
  40

  
	
  5.1

  	
  Disclosure

  	
  40

  
	
  5.2

  	
  No Material Adverse Effect

  	
  40

  
	
  5.3

  	
  Organization, Powers, Authorization and Good Standing

  	
  40

  
	
  5.4

  	
  Compliance of Agreement, Loan Documents and Borrowings with
  Applicable Law

  	
  41

  
	
  5.5

  	
  Compliance with Law; Governmental Approvals

  	
  41

  
	
  5.6

  	
  Tax Returns and Payments

  	
  41

  
	
  5.7

  	
  Environmental Matters

  	
  42

  
	
  5.8

  	
  Financial Statements

  	
  42

  
	
  5.9

  	
  Intellectual Property

  	
  42

  
	
  5.10

  	
  Litigation, Investigations, Audits, Etc

  	
  42

  
	
  5.11

  	
  Employee Labor Matters

  	
  43

  
	
  5.12

  	
  ERISA Compliance

  	
  43

  
	
  5.13

  	
  Communications Regulatory Matters

  	
  44

  
	
  5.14

  	
  Perfection and Priority

  	
  44

  
	
  5.15

  	
  Solvency

  	
  45

  
	
  5.16

  	
  Investment Company Act

  	
  45

  
	
  5.17

  	
  Intentionally omitted

  	
  45

  
	
  5.18

  	
  Title to Properties

  	
  45

  
	
  5.19

  	
  Subsidiaries

  	
  45

  
	
  5.20

  	
  Transactions with Affiliates

  	
  45

  
	
  5.21

  	
  Patriot Act

  	
  46

  
	
   

  	
   

  	
   

  
	
  SECTION 6 EVENTS OF DEFAULT AND RIGHTS AND
  REMEDIES

  	
  46

  
	
  6.1

  	
  Event of Default

  	
  46

  
	
  6.2

  	
  Suspension of Loan Commitments

  	
  49

  
	
  6.3

  	
  Acceleration

  	
  49

  
	
  6.4

  	
  Rights of Collection

  	
  50

  
	
  6.5

  	
  Consents

  	
  50

  

 

 

	
  6.6

  	
  Intentionally omitted

  	
  50

  
	
  6.7

  	
  Set Off and Sharing of Payments

  	
  50

  
	
  6.8

  	
  Application of Payments

  	
  51

  
	
  6.9

  	
  Adjustments

  	
  51

  
	
   

  	
   

  	
   

  
	
  SECTION 7 CONDITIONS TO LOANS

  	
  51

  
	
  7.1

  	
  Conditions to Initial Loan

  	
  51

  
	
  7.2

  	
  Conditions to All Loans

  	
  54

  
	
   

  	
   

  	
   

  
	
  SECTION 8 ASSIGNMENT AND PARTICIPATION

  	
  55

  
	
  8.1

  	
  Assignments and Participations in Loans and Notes

  	
  55

  
	
  8.2

  	
  Administrative Agent

  	
  58

  
	
  8.3

  	
  Amendments, Consents and Waivers for Certain Actions

  	
  63

  
	
  8.4

  	
  Disbursement of Funds

  	
  64

  
	
  8.5

  	
  Disbursements of Advances; Payments

  	
  64

  
	
   

  	
   

  	
   

  
	
  SECTION 9 MISCELLANEOUS

  	
  65

  
	
  9.1

  	
  Indemnities

  	
  65

  
	
  9.2

  	
  Amendments and Waivers

  	
  66

  
	
  9.3

  	
  Notices

  	
  67

  
	
  9.4

  	
  Failure or Indulgence Not Waiver; Remedies Cumulative

  	
  68

  
	
  9.5

  	
  Marshaling; Payments Set Aside

  	
  68

  
	
  9.6

  	
  Severability

  	
  68

  
	
  9.7

  	
  Lenders’ Obligations Several; Independent Nature of Lenders’ Rights

  	
  68

  
	
  9.8

  	
  Headings

  	
  68

  
	
  9.9

  	
  Applicable Law

  	
  68

  
	
  9.10

  	
  Successors and Assigns

  	
  69

  
	
  9.11

  	
  No Fiduciary Relationship

  	
  69

  
	
  9.12

  	
  Construction

  	
  69

  
	
  9.13

  	
  Confidentiality

  	
  69

  
	
  9.14

  	
  Consent to Jurisdiction and Service of Process

  	
  69

  
	
  9.15

  	
  Waiver of Jury Trial

  	
  70

  
	
  9.16

  	
  Survival of Warranties and Certain Agreements

  	
  71

  
	
  9.17

  	
  Entire Agreement

  	
  71

  
	
  9.18

  	
  Counterparts; Effectiveness

  	
  71

  
	
  9.19

  	
  Patriot Act

  	
  71

  
	
  9.20

  	
  Guaranty of Secured Obligations by Guarantors

  	
  71

  
	
  9.21

  	
  FCC and PUC Compliance

  	
  76

  
	
   

  	
   

  	
   

  
	
  SECTION 10 DEFINITIONS

  	
  76

  
	
  10.1

  	
  Certain Defined Terms

  	
  76

  
	
  10.2

  	
  Other Definitional Provisions

  	
  93

  

 

 

	
  SCHEDULES

  
	
   

  	
   

  
	
  Schedule 3.3(C)

  	
  Existing
  Investments

  
	
  Schedule 3.8

  	
  Transactions
  with Affiliates

  
	
  Schedule 5.3(A)

  	
  Jurisdiction of
  Organization

  
	
  Schedule 5.3(C)

  	
  Qualification to
  Transact Business

  
	
  Schedule 5.4

  	
  Compliance

  
	
  Schedule 5.10

  	
  Litigation, Etc

  
	
  Schedule 5.11

  	
  Labor Matters

  
	
  Schedule 5.13(A)

  	
  License
  Information

  
	
  Schedule 5.13(B)

  	
  Valid Licenses

  
	
  Schedule 5.19

  	
  Subsidiaries

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  Exhibit 1.3

  	
  Form of
  Notice of Borrowing/Conversion/Continuation

  
	
  Exhibit 2.12

  	
  Form of
  Joinder Agreement

  
	
  Exhibit 4.4(C)

  	
  Form of
  Compliance Certificate

  
	
  Exhibit 10.1(A)

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit 10.1(B)

  	
  Form of
  Revolver Note

  
	
  Exhibit 10.1(C)

  	
  Form of
  Term Loan Note

  

 

 

INDEX OF DEFINED TERMS

 

	
  Defined Term

  	
   

  	
  Defined in Section

  
	
   

  	
   

  	
   

  
	
  Accounting
  Change

  	
   

  	
  §4.5

  
	
  Act

  	
   

  	
  §10.1

  
	
  Adjustment Date

  	
   

  	
  §10.1

  
	
  Administrative
  Agent

  	
   

  	
  §10.1

  
	
  Affiliate

  	
   

  	
  §10.1

  
	
  Affected Lender

  	
   

  	
  §1.12

  
	
  Agreement

  	
   

  	
  §10.1

  
	
  Applicable Law

  	
   

  	
  §10.1

  
	
  Approved Fund

  	
   

  	
  §10.1

  
	
  Arranger

  	
   

  	
  §10.1

  
	
  Asset
  Disposition

  	
   

  	
  §10.1

  
	
  Assignment and
  Assumption

  	
   

  	
  §10.1

  
	
  Available
  Revolver Loan Commitment

  	
   

  	
  §10.1

  
	
  Avoidance
  Provisions

  	
   

  	
  §9.20(A)

  
	
  Bankruptcy Code

  	
   

  	
  §10.1

  
	
  Base Rate

  	
   

  	
  §10.1

  
	
  Base Rate Loans

  	
   

  	
  §10.1

  
	
  BDC

  	
   

  	
  §10.1

  
	
  Benefited Lender

  	
   

  	
  §6.9

  
	
  Borrower

  	
   

  	
  Preamble

  
	
  Breakage Fee

  	
   

  	
  §1.4(C)

  
	
  Budgets

  	
   

  	
  §4.4(G)

  
	
  Business Day

  	
   

  	
  §10.1

  
	
  Calculation
  Period

  	
   

  	
  §10.1

  
	
  Capital Lease

  	
   

  	
  §10.1

  
	
  Cash Equivalents

  	
   

  	
  §10.1

  
	
  Certificate of
  Exemption

  	
   

  	
  §1.13(B)

  
	
  Change of
  Control

  	
   

  	
  §10.1

  
	
  Closing Date

  	
   

  	
  §10.1

  
	
  CoBank

  	
   

  	
  Preamble

  
	
  Collateral

  	
   

  	
  §10.1

  
	
  Collateral
  Contract Assignments

  	
   

  	
  §10.1

  
	
  Communications
  Act

  	
   

  	
  §10.1

  
	
  Communications
  System

  	
   

  	
  §10.1

  
	
  Compliance
  Certificate

  	
   

  	
  §4.4(C)

  
	
  Contingent
  Obligation

  	
   

  	
  §10.1

  
	
  Default

  	
   

  	
  §10.1

  
	
  Defaulting
  Lender

  	
   

  	
  §10.1

  
	
  EBITDA

  	
   

  	
  §10.1

  
	
  Environmental
  Laws

  	
   

  	
  §10.1

  

 

 

	
  Equity

  	
   

  	
  §10.1

  
	
  Equity to Assets
  Ratio

  	
   

  	
  §10.1

  
	
  ERISA

  	
   

  	
  §10.1

  
	
  ERISA Affiliate

  	
   

  	
  §10.1

  
	
  ERISA Event

  	
   

  	
  §10.1

  
	
  Event of Default

  	
   

  	
  §6.1

  
	
  Excluded Taxes

  	
   

  	
  §10.1

  
	
  Facility(ies)

  	
   

  	
  §10.1

  
	
  FCC

  	
   

  	
  §10.1

  
	
  FDPA

  	
   

  	
  §2.2

  
	
  Federal Funds
  Rate

  	
   

  	
  §10.1

  
	
  Foreign Lender

  	
   

  	
  §1.13(B)

  
	
  Fund

  	
   

  	
  §10.1

  
	
  Funding Date

  	
   

  	
  §7.2

  
	
  GAAP

  	
   

  	
  §10.1

  
	
  Governmental
  Approvals

  	
   

  	
  §10.1

  
	
  Governmental
  Authority

  	
   

  	
  §10.1

  
	
  GTT

  	
   

  	
  §10.1

  
	
  Guarantor(s)

  	
   

  	
  Preamble

  
	
  Hedge Agreements

  	
   

  	
  §10.1

  
	
  Incremental Term
  Loan(s)

  	
   

  	
  §1.1(C)

  
	
  Incremental Term
  Loan Commitment(s)

  	
   

  	
  §1.1(C)

  
	
  Incremental Term
  Loan Facility(ies)

  	
   

  	
  §1.1(C)

  
	
  Indebtedness

  	
   

  	
  §10.1

  
	
  Indemnitees

  	
   

  	
  §9.1

  
	
  Intellectual
  Property Rights

  	
   

  	
  §5.9

  
	
  Interest Period

  	
   

  	
  §10.1

  
	
  Investment

  	
   

  	
  §10.1

  
	
  IRC

  	
   

  	
  §10.1

  
	
  ISP

  	
   

  	
  §1.1(F)

  
	
  Issuing Lender

  	
   

  	
  §10.1

  
	
  Joinder Agreement

  	
   

  	
  §10.1

  
	
  Lender(s)

  	
   

  	
  §8.2(F)

  
	
  Letter(s) of
  Credit

  	
   

  	
  §1.1(F)

  
	
  Letter of Credit
  Liability

  	
   

  	
  §10.1

  
	
  Letter of
  Non-Exemption

  	
   

  	
  §1.13(B)

  
	
  LIBOR

  	
   

  	
  §10.1

  
	
  LIBOR Interest
  Period

  	
   

  	
  §1.2(C)

  
	
  LIBOR Loans

  	
   

  	
  §10.1

  
	
  LIBOR Margin

  	
   

  	
  §10.1

  
	
  Licenses

  	
   

  	
  §10.1

  
	
  Lien

  	
   

  	
  §10.1

  
	
  Loan(s)

  	
   

  	
  §10.1

  
	
  Loan
  Commitment(s)

  	
   

  	
  §10.1

  
	
  Loan Documents

  	
   

  	
  §10.1

  

 

2

 

	
  Loan Party(ies)

  	
   

  	
  Preamble

  
	
  Material Adverse
  Effect

  	
   

  	
  §10.1

  
	
  Material
  Contracts

  	
   

  	
  §10.1

  
	
  Material Leased
  Property

  	
   

  	
  §10.1

  
	
  Material Owned
  Property

  	
   

  	
  §10.1

  
	
  Maximum
  Guarantor Liability

  	
   

  	
  §9.20(A)

  
	
  Multi-employer
  Plan

  	
   

  	
  §10.1

  
	
  Net Proceeds

  	
   

  	
  §10.1

  
	
  Non-Consenting
  Lender

  	
   

  	
  §9.2

  
	
  Note(s)

  	
   

  	
  §10.1

  
	
  Notice of
  Borrowing/Conversion/Continuation

  	
   

  	
  §1.3(A)

  
	
  Obligations

  	
   

  	
  §10.1

  
	
  Other Debtor
  Relief Law

  	
   

  	
  §9.20(A)

  
	
  Other Parties

  	
   

  	
  §9.20(G)(iii)

  
	
  Participant(s)

  	
   

  	
  §8.1(D)

  
	
  Patriot Act

  	
   

  	
  §9.19

  
	
  PBGC

  	
   

  	
  §10.1

  
	
  Pension Plan

  	
   

  	
  §10.1

  
	
  Permitted
  Acquisition

  	
   

  	
  §10.1

  
	
  Permitted
  Encumbrances

  	
   

  	
  §10.1

  
	
  Person

  	
   

  	
  §10.1

  
	
  Plan

  	
   

  	
  §10.1

  
	
  Portfolio
  Interest Exemption Certificate

  	
   

  	
  §1.13(B)

  
	
  Post-Closing
  Letter

  	
   

  	
  §10.1

  
	
  Prime Rate

  	
   

  	
  §10.1

  
	
  Pro forma Basis

  	
   

  	
  §10.1

  
	
  Pro Rata Share

  	
   

  	
  §10.1

  
	
  Proposed Change

  	
   

  	
  §9.2

  
	
  PUC

  	
   

  	
  §10.1

  
	
  PUC Laws

  	
   

  	
  §10.1

  
	
  Register

  	
   

  	
  §8.1(C)

  
	
  Replacement
  Lender

  	
   

  	
  §1.12(A)

  
	
  Representatives

  	
   

  	
  §8.2(E)

  
	
  Related Parties

  	
   

  	
  §10.1

  
	
  Reportable Event

  	
   

  	
  §10.1

  
	
  Requisite
  Lenders

  	
   

  	
  §8.2(F)

  
	
  Restricted
  Junior Payment

  	
   

  	
  §10.1

  
	
  Revolver
  Commitment Fee

  	
   

  	
  §1.4(A)

  
	
  Revolver
  Expiration Date

  	
   

  	
  §10.1

  
	
  Revolver
  Facility

  	
   

  	
  §10.1

  
	
  Revolver Loan
  Commitment

  	
   

  	
  §10.1

  
	
  Revolver Loan(s)

  	
   

  	
  §10.1

  
	
  Revolver Note(s)

  	
   

  	
  §10.1

  
	
  SEC

  	
   

  	
  §4.4(A)

  
	
  Secured Hedge
  Agreement

  	
   

  	
  §10.1

  

 

3

 

	
  Secured
  Obligations

  	
   

  	
  §10.1

  
	
  Secured Parties

  	
   

  	
  §10.1

  
	
  Security
  Agreements

  	
   

  	
  §10.1

  
	
  Security
  Agreement Collateral

  	
   

  	
  §5.14

  
	
  Security
  Documents

  	
   

  	
  §10.1

  
	
  Security
  Interest

  	
   

  	
  §10.1

  
	
  Statement

  	
   

  	
  §4.4(B)

  
	
  Subordinated
  Intercompany Lender

  	
   

  	
  §9.20(J)

  
	
  Subsidiary

  	
   

  	
  §10.1

  
	
  Substitute
  Lender

  	
   

  	
  §9.2

  
	
  Tax Liabilities

  	
   

  	
  §1.13(A)

  
	
  Term Loan

  	
   

  	
  §10.1

  
	
  Term Loan
  Commitment

  	
   

  	
  §10.1

  
	
  Term Loan
  Facility

  	
   

  	
  §10.1

  
	
  Term Loan
  Maturity Date

  	
   

  	
  §10.1

  
	
  Term Loan
  Note(s)

  	
   

  	
  §10.1

  
	
  Total Interest
  Coverage Ratio

  	
   

  	
  §10.1

  
	
  Total Net
  Leverage Ratio

  	
   

  	
  §10.1

  
	
  UCP

  	
   

  	
  §1.1(F)

  

 

4

 

CREDIT AGREEMENT

 

This CREDIT
AGREEMENT is entered into as of September 10, 2008, among ATLANTIC TELE-NETWORK, INC., a Delaware
corporation (“Borrower”), each of
the Subsidiaries of Borrower which is or hereafter becomes a guarantor of the
Secured Obligations (individually, a “Guarantor” and,
collectively, the “Guarantors”;
and together with Borrower, individually a “Loan Party”
and, collectively, the “Loan Parties”),
COBANK, ACB (individually, “CoBank”), as Administrative Agent,
Arranger, an Issuing Lender and a Lender, BANCO POPULAR DE PUERTO
RICO, BROWN BROTHERS HARRIMAN & CO., and RAYMOND JAMES BANK, FSB,
each as an initial Lender, and such other Lenders as may from time to time
become a party to this Agreement. 
Capitalized terms used and not otherwise defined herein shall have the
meanings given to them in Subsection 10.1.

 

R E C I T A L S:

 

WHEREAS,
Borrower desires that the Lenders extend to Borrower (A) a revolving loan
facility, the proceeds of which are to be available to repay the existing debt
of Borrower and to provide funds for the working capital, capital expenditures
and other lawful corporate purposes of Borrower and its Subsidiaries, to
finance certain Permitted Acquisitions permitted herein, to finance certain
Restricted Junior Payments permitted herein, and to support the issuance of
Letters of Credit, and (B) a term loan facility, the proceeds of which are
to be available to repay the existing debt of the Borrower, to provide funds
for the working capital, capital expenditures and other lawful corporate
purposes of Borrower and its Subsidiaries, to finance certain Permitted
Acquisitions permitted herein, to finance certain Restricted Junior Payments
permitted herein and to finance certain costs associated with the Revolver and
Term Loan Facilities; and

 

NOW,
THEREFORE, in
consideration of the premises and the agreements, provisions and covenants herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

 

SECTION 1

AMOUNTS AND TERMS OF FACILITIES

 

1.1  Facilities.  Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Loan Parties contained herein and in the other Loan Documents:

 

(A)          Revolver
Facility.  Each Lender, severally and
not jointly, agrees to lend to Borrower, from time to time during the period
commencing on the date all conditions precedent set forth in Subsections 7.1
and 7.2 are satisfied or waived as provided herein and ending on the Business
Day immediately preceding the Revolver Expiration Date, its Pro Rata Share of each
Revolver Loan; provided that no Lender shall be required at any time to
lend more than its respective Pro Rata Share of the Available Revolver Loan
Commitment; and provided, further, that at any one 

 

 

time the aggregate principal amount of the Revolver Loans outstanding
may not exceed the Revolver Loan Commitment less the outstanding Letter of
Credit Liability.  Within the limits of
and subject to the Available Revolver Loan Commitment, this Subsection 1.1(A) and
Subsections 1.6, 1.7 and 1.8, amounts borrowed under this Subsection 1.1(A) may
be repaid or prepaid and, at any time up to and including the Business Day
immediately preceding the Revolver Expiration Date, reborrowed.

 

(B)           Term
Loan Facility.  Each Lender,
severally and not jointly, agrees to lend to Borrower, in a single advance on
the Closing Date, its Pro Rata Share of the Term Loan Commitment; provided
all conditions precedent set forth in Subsections 7.1 and 7.2 are satisfied or
waived by Administrative Agent as provided herein.  Amounts borrowed under this Subsection 1.1(B) that
are repaid or prepaid may not be reborrowed.

 

(C)           Incremental
Term Loan Facilities. Borrower and any one or more Lenders (including any
Person not previously a Lender hereunder who executes and delivers a joinder agreement
executed by Borrower, Administrative Agent, and such Lender, in form and
substance reasonably acceptable to each of them), which Lenders are reasonably
acceptable to Administrative Agent and to Borrower, may agree, upon at least 10
days’ prior written notice to Administrative Agent, that such Lenders shall
make one or more additional term loan facilities available to Borrower under
this Subsection 1.1(C) (each, an “Incremental
Term Loan Facility” and collectively, the “Incremental
Term Loan Facilities”; each commitment thereunder an “Incremental Term Loan Commitment” and
collectively, the “Incremental Term Loan
Commitments”; and the loans thereunder, each, an “Incremental Term Loan” and collectively,
the “Incremental Term Loans”).  Any Incremental Term Loan Facility shall be
documented by an amendment or supplement to this Agreement (or restatement
hereof) signed by Borrower and the Lenders providing such Incremental Term Loan
Commitments.  Notwithstanding the
foregoing: (i) the aggregate principal amount of all Incremental Term Loan
Commitments shall not exceed $50,000,000; (ii) the maturity date of any
Incremental Term Loan Facility shall be no earlier than the maturity date of
the Term Loan Facility; (iii) the weighted average life of any Incremental
Term Loan Facility shall be equal to or greater than the remaining weighted
average life of the Term Loan Facility, determined as of the initial funding
date for such Incremental Term Loan Facility; (iv) to the extent that the
applicable interest rate margins for any Incremental Term Loan Facility exceed
by more than 0.25% the applicable interest rate margins for the existing Term
Loan Facility, determined as of the initial funding date for such Incremental
Term Loan Facility, the applicable interest rate margins for the existing Term
Loan Facility shall be increased so that the interest rate margins on such
Incremental Term Loan Facility and the existing Term Loan Facility are equal; (v) any
covenant or Event of Default applicable to the Incremental Term Loan Facility
that is more restrictive than the equivalent covenant or Event of Default set
forth in this Agreement shall be deemed to be applicable to the Loans
hereunder; and (vi) no Default or Event of Default shall have occurred and
be continuing or result after giving effect to any Incremental Term Loan
Facility and the borrowings contemplated thereunder, and the Loan Parties shall
be in pro forma compliance with the financial covenants contained in Section 4.  The Lenders shall have no obligation, and
shall have no right, to participate any Incremental Term Loan Facility.  Any new Lender providing a Incremental Term
Loan Commitment shall for all purposes be a Lender party to the loan
documentation and shall have all rights and obligations of a Lender.

 

2

 

(D)          Notes.  Upon any Lender’s request, Borrower shall
execute and deliver to such Lender a Revolver Note, and a Term Loan Note, as
applicable, each dated the Closing Date, or, if later, the date of such
request, in the principal amount of such Lender’s Pro Rata Share of the
Revolver Loan Commitment, and Term Loan Commitment, respectively.  Upon the request of any applicable Lender,
Borrower shall execute and deliver to such Lender a separate note for each
applicable Incremental Term Loan Facility, each dated the closing date of such
Incremental Term Loan Facility, or, if later, the date of such request, in the
principal amount of such Lender’s Pro Rata Share of such Incremental Term Loan
Commitment.

 

(E)           Advances.  Loans will be made available by wire transfer
of immediately available funds.  Wire
transfers will be made to such account or accounts as may be authorized by
Borrower.  Advances under the Term Loan
are only available on the Closing Date.

 

(F)           Letters
of Credit.  The Revolver Loan
Commitment shall, in addition to advances as Revolver Loans, be utilized, upon
the request of Borrower, for the issuance of irrevocable standby or trade
letters of credit (individually, a “Letter of
Credit” and, collectively, the “Letters
of Credit”) by an Issuing Lender for the account of any Loan
Party.  Immediately upon the issuance by
an Issuing Lender of a Letter of Credit, and without further action on the part
of Administrative Agent or any Lenders, each Lender shall be deemed to have
purchased from such Issuing Lender a participation in such Letter of Credit
equal to such Lender’s Pro Rata Share of the Revolver Loan Commitment of the
aggregate amount available to be drawn under such Letter of Credit.  Each Letter of Credit shall reduce the amount
available under the Revolver Loan Commitment by the maximum amount capable of
being drawn under such Letter of Credit.

 

(i)            Maximum Amount.  The aggregate amount of Letter of Credit
Liability with respect to all Letters of Credit outstanding at any time for the
account of Borrower or any of its Subsidiaries may not exceed $5,000,000 and
the aggregate amount of Letter of Credit Liability with respect to all Letters
of Credit outstanding for the account of Borrower or any Loan Party plus
the aggregate principal amount of Revolver Loans outstanding at any time may
not exceed the Revolver Loan Commitment.

 

(ii)           Reimbursement.  Borrower is irrevocably and unconditionally
obligated without presentment, demand, protest or other formalities of any kind
to reimburse an Issuing Lender in immediately available funds for any amounts
paid by an Issuing Lender with respect to a Letter of Credit issued hereunder
for the account of any Loan Party.  Upon
receipt from the beneficiary of any Letter of Credit of any notice of drawing
under such Letter of Credit, the Issuing Lender shall notify Borrower and  Administrative Agent thereof.  Not later than 11:00 a.m. on the date of
any payment by the Issuing Lender under a Letter of Credit, Borrower shall
reimburse the Issuing Lender through Administrative Agent in the amount equal
to the amount of such drawing.  If
Borrower fails to so reimburse the Issuing Lender by such time, Borrower shall
be deemed to have requested Administrative Agent to make a Revolver Loan in the
amount of the payment made by such Issuing Lender with respect to such Letter
of Credit.  If the Letter of Credit is
payable in a foreign currency, the amount owed by Borrower in connection with
such Letter of Credit shall equal the United States dollar equivalent of such
foreign currency (determined by Administrative Agent in its reasonable
discretion) on the date such payment is made by such Issuing Lender.  All

 

3

 

amounts paid by an Issuing
Lender with respect to any Letter of Credit that are not immediateliy repaid by
Borrower or that are not repaid with a Revolver Loan shall bear interest at the
sum of the Base Rate plus 0.50% per annum. 
Each Lender agrees to fund its Pro Rata Share of any Revolver Loan made
pursuant to this Subsection 1.1(F)(ii). 
In the event Administrative Agent elects not to debit Borrower’s account
and Borrower fails to reimburse an Issuing Lender in full on the date of any
payment in respect of a Letter of Credit issued for the account of any Loan
Party, Administrative Agent shall promptly notify each Lender of the amount of
such unreimbursed payment and the accrued interest thereon and each such
Lender, on the next Business Day, shall deliver to Administrative Agent an
amount equal to its Pro Rata Share thereof in same day funds.  Each Lender hereby absolutely and
unconditionally agrees to pay to each Issuing Lender upon demand by such
Issuing Lender such Lender’s Pro Rata Share of each payment made by such Issuing
Lender in respect of a Letter of Credit and not immediately reimbursed by
Borrower.  Each Lender acknowledges and
agrees that its obligations to acquire participations pursuant to this
Subsection 1.1(F)(ii) in respect of Letters of Credit and to make the
payments to each Issuing Lender required by the preceding sentence are absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default or
any failure by Borrower to satisfy any of the conditions set forth in
Subsection 7.2.  If any Lender fails to
make available to an Issuing Lender the amount of such Lender’s Pro Rata Share
of any payments made by such Issuing Lender in respect of a Letter of Credit as
provided in this Subsection 1.1(F)(ii), such Issuing Lender shall be entitled
to recover such amount on demand from such Lender together with interest at the
Base Rate.

 

(iii)          Conditions of Issuance of Letters
of Credit.  In addition to all other
terms and conditions set forth in this Agreement, the issuance by an Issuing
Lender of any Letter of Credit shall be subject to the conditions precedent
that the Letter of Credit shall be in such form, be for such amount, and
contain such terms and conditions as are reasonably satisfactory to
Administrative Agent and the Issuing Lender. 
The expiration date of each Letter of Credit must be on a date which is
the earlier of (1)(a) for a standby Letter of Credit, one year from its
date of issuance and (b) for a trade Letter of Credit, 180 days from its
date of issuance or (2) the 30th day before the date set forth in
clause (B) of the definition of the term “Revolver Expiration Date,”
or such later date as agreed to by both Administrative Agent and the Issuing
Lender, in their sole discretion.

 

(iv)          Request for Letters of Credit.  Borrower must give Administrative Agent at
least three Business Days’ prior written notice, which notice will be
irrevocable, specifying the date a Letter of Credit is requested to be issued
and the amount and the currency in which such Letter of Credit is payable,
identifying the beneficiary, stating whether the Letter of Credit will be a
standby or trade Letter of Credit, and describing the nature of the
transactions proposed to be supported thereby. 
Any notice requesting the issuance of a Letter of Credit shall be
accompanied by the form of the Letter of Credit to be provided by an Issuing
Lender.  Borrower must also complete any
application procedures and documents required by an Issuing Lender in
connection with the issuance of any Letter of Credit, including a certificate
regarding Borrower’s compliance with the provisions of Subsection 7.2 of this
Agreement.

 

4

 

(v)           Borrower
Obligations Absolute.  The
obligations of Borrower under this Subsection 1.1(F) are irrevocable,
will remain in full force and effect until the Issuing Lender and Lenders have
no further obligations to make any payments or disbursements under any
circumstances with respect to any Letter of Credit, shall be absolute and
unconditional, shall not be subject to counterclaim, setoff or other defense or
any other qualification or exception whatsoever and shall be paid in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:

 

(1)           Any lack of validity or
enforceability of this Agreement, any of the other Loan Documents or any
documents or instruments relating to any Letter of Credit;

 

(2)           Any change in the time, manner or
place of payment of, or in any other term of, all or any of the obligations in
respect of any Letter of Credit or any other amendment, modification or waiver
of or any consent to or departure from any Letter of Credit, any documents or
instruments relating thereto, or any Loan Document in each case whether or not
any Loan Party or any of its Subsidiaries has notice or knowledge thereof;

 

(3)           The existence of any claim, setoff,
defense or other right that any Loan Party 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), Administrative Agent, any Issuing Lender, any Lender, or any other
Person, whether in connection with this Agreement, any other Loan Document, any
Letter of Credit, the transactions contemplated hereby or any other related or
unrelated transaction or transactions (including any underlying transaction
between any Loan Party or any of its Subsidiaries and the beneficiary named in
any such Letter of Credit);

 

(4)           Any draft, certificate or any other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, telecopier or otherwise, or
any errors in translation or in interpretation of technical terms;

 

(5)           Payment under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;

 

(6)           Any defense based upon the failure of
any drawing under any Letter of Credit to conform to the terms of such Letter
of Credit (provided that any draft, certificate or other document presented
pursuant to such Letter

 

5

 

of Credit appears on its face to comply with
the terms thereof), any nonapplication or misapplication by the beneficiary or
any transferee of the proceeds of such drawing or any other act or omission of
such beneficiary or transferee in connection with such Letter of Credit;

 

(7)           The exchange, release, surrender or
impairment of any collateral or other security for the obligations;

 

(8)           The occurrence of any Default or
Event of Default; or

 

(9)           Any other circumstance or event
whatsoever, including, without limitation, any other circumstance that might
otherwise constitute a defense available to, or a discharge of, any Loan Party,
any of its Subsidiaries or a guarantor.

 

Any action taken or omitted to be taken by an Issuing Lender under or
in connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, is binding upon the Loan Parties and
their Subsidiaries and shall not create or result in any liability of such
Issuing Lender to any Loan Party or any of its Subsidiaries.

 

(vi)          Obligations
of Issuing Lenders.  Each Issuing
Lender (other than CoBank) hereby agrees that it will not issue a Letter of
Credit hereunder until it has provided Administrative Agent with written notice
specifying the amount and intended issuance date of such Letter of Credit and
Administrative Agent has returned a written acknowledgment of such notice to
Issuing Lender.  Each of Issuing Lender
and Administrative Agent agrees to provide such notices and acknowledgement promptly
upon Borrower’s request of a Letter of Credit provided such request satisfies
all of the requirements provided herein. 
Each Issuing Lender (other than CoBank) further agrees to provide to
Administrative Agent:  (1) a copy of
each Letter of Credit issued by such Issuing Lender promptly after its
issuance; (2) a monthly report summarizing available amounts under Letters
of Credit issued by such Issuing Lender, the dates and amounts of any draws
under such Letters of Credit, the effective date of any increase or decrease in
the face amount of any Letters of Credit during such month and the amount of
any unreimbursed draws under such Letters of Credit; and (3) such
additional information reasonably requested by Administrative Agent from time
to time with respect to the Letters of Credit issued by such Issuing Lender.

 

(vii)         UCP
and ISP. 
The Uniform Customs and Practice for Documentary Credits as
most recently published from time to time by the International Chamber of
Commerce (the “UCP”) is hereby
incorporated in this Agreement with respect to trade Letters of Credit and
shall be deemed incorporated by this reference into each trade Letter of Credit
issued pursuant to this Agreement.  The
terms and conditions of the UCP shall be binding with respect to trade Letters
of Credit on the parties to this Agreement and each beneficiary of any trade
Letter of Credit issued pursuant to this Agreement.  The International Standby Practices as most
recently published from time to time by the International Chamber of Commer
(the “ISP”) is hereby incorporated
in this Agreement with respect to standby Letters of Credit and shall be deemed
incorporated by this reference into each standby Letter

 

6

 

of Credit issued pursuant to this Agreement.  The terms and conditions of the ISP shall be
binding with respect to standby Letters of Credit on the parties to this
Agreement and each beneficiary of any standby Letter of Credit issued pursuant
to this Agreement.

 

1.2   Interest.

 

(A)          Interest Options.  From the date each Loan is made, based upon
the election of Borrower, at such time and from time to time thereafter (as
provided in Subsection 1.3 and subject to the conditions set forth in such
Subsection and Subsection 1.2(G)), each such Loan shall accrue interest as
follows:

 

(i)    as a Base Rate Loan, at the
sum of the Base Rate plus the Base Rate Margin applicable to such Loan
from time to time as provided in Subsection 1.2(B); or

 

(ii)   as a LIBOR Loan, for the
applicable LIBOR Interest Period, at the sum of LIBOR plus the LIBOR
Margin applicable to such Loan from time to time as provided in Subsection
1.2(B); or

 

provided, that any
Incremental Term Loan shall accrue interest as provided in the amendment or
supplement to this Agreement evidencing such Incremental Term Loan Facility.

 

(B)           Applicable
Margins.  Initially, and continuing
through the day immediately preceding the first Adjustment Date occurring on or
after September 30, 2008, the LIBOR Margin shall be 1.25% and the Base
Rate Margin will be 0.00%.  Commencing on
such Adjustment Date, the applicable Base Rate Margin and LIBOR Margin for any
Revolver Loan, the Term Loan and the applicable Commitment Fee Margin for the
unused portion of the Revolver Loan Commitment shall be for each Calculation
Period the applicable per annum percentage set forth in the pricing table below
opposite the applicable Total Net Leverage Ratio of Borrower, determined on a
consolidated basis for Borrower and its Subsidiaries; provided, that,
in the event that Administrative Agent shall not receive the financial
statements and Compliance Certificate required pursuant to Subsections 4.4(A),
4.4(B) and 4.4(C) when due, from such due date and until the fifth
Business Day following Administrative Agent’s receipt of such overdue financial
statements and Compliance Certificate (and in the event a decrease in the
applicable margin is then warranted, receipt of Borrower’s written request to
decrease such margin), the Base Rate Margin and the LIBOR Margin shall be 0.50%
and 2.00% per annum, respectively, with respect to any Revolver Loan and the
Term Loan, and the Commitment Fee Margin shall be 0.375% with respect to the
unused portion of the Revolver Loan Commitment; provided, further,
that effective upon the closing of any acquisition that will increase the Total
Net Leverage Ratio on a pro forma basis, the Base Rate Margin, LIBOR Margin and
Commitment Fee Margin will immediately adjust to reflect such higher ratio.

 

PRICING TABLE – Revolver Loan, Term Loan and Commitment Fee

 

	
  Total Net

  Leverage Ratio

  	
   

  	
  Base Rate Margin

  	
   

  	
  LIBOR Margin

  	
   

  	
  Commitment

  Fee Margin

  	
   

  
	
  >
  2.50x

  	
   

  	
  0.50

  	
  %

  	
  2.00

  	
  %

  	
  0.375

  	
  %

  
	
  >
  2.00x and < 2.50x

  	
   

  	
  0.25

  	
  %

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  
	
  >
  1.50x and < 2.00x

  	
   

  	
  0.00

  	
  %

  	
  1.50

  	
  %

  	
  0.325

  	
  %

  
	
  >
  1.00x and < 1.50x

  	
   

  	
  0.00

  	
  %

  	
  1.375

  	
  %

  	
  0.250

  	
  %

  
	
  < 1.00x

  	
   

  	
  0.00

  	
  %

  	
  1.25

  	
  %

  	
  0.250

  	
  %

  

 

7

 

If, as a result of any restatement of or
other adjustment to any financial statements referred to above (i) the
Total Net Leverage Ratio as calculated by Borrower as of any applicable date
was inaccurate and (ii) a proper calculation of the Total Net Leverage
Ratio would have resulted in different pricing for any period, then (1) if
the proper calculation of the Total Net Leverage Ratio would have resulted in
higher pricing for such period, Borrower shall automatically and retroactively
be obligated to pay to Administrative Agent, promptly on demand by
Administrative Agent, an amount equal to the excess of the amount of interest
that should have been paid for such period over the amount of interest actually
paid for such period; and (2) if the proper calculation of the Total Net
Leverage Ratio would have resulted in lower pricing for such period,
Administrative Agent and the Lenders shall have no obligation to repay any
interest to Borrower; provided that if, as a result of any restatement or other
event a proper calculation of the Total Net Leverage Ratio would have resulted
in higher pricing for one or more periods and lower pricing for one or more
other periods (due to the shifting of income or expenses form one period to
another period or any similar reason), then the amount payable by Borrower
pursuant to clause (1) above shall be based upon the excess, if any, of
the amount of interest that should have been paid for all applicable periods
over the amount of interest paid for all such periods.

 

(C)           LIBOR
Interest Periods.  Each LIBOR Loan
may be obtained for a one, two, three, or six month period or, if available to
all Lenders under the applicable facility, nine or 12 month period (each such
period being an “LIBOR Interest Period”).
With respect to all LIBOR Loans:

 

(i)            the
LIBOR Interest Period will commence on the date that the LIBOR Loan is made or
the date on which any portion of any Base Rate Loan is converted into a LIBOR
Loan, or, in the case of immediately successive LIBOR Interest Periods, each
successive LIBOR Interest Period shall commence on the day on which the
immediately preceding LIBOR Interest Period expires;

 

(ii)           if
the LIBOR Interest Period would otherwise expire on a day that is not a Business
Day, then it will expire on the next Business Day; provided, that if any
LIBOR Interest Period would otherwise expire on a day that is not a Business
Day and such day is the last Business Day of a calendar month, such LIBOR
Interest Period shall expire on the Business Day next preceding such day;

 

(iii)          any
LIBOR Interest Period that begins on the last Business Day of a calendar month
or on a day for which there is no numerically corresponding day in the last

 

8

 

calendar month in such LIBOR Interest Period shall end on the last
Business Day of the last calendar month in such LIBOR Interest Period; and

 

(iv)          no
LIBOR Interest Period shall be selected under the Term Loan Facility if, in
order to make scheduled repayments of the Term Loan required pursuant to
Subsection 1.6(A), repayment of all or any portion of the LIBOR Loan prior to
the expiration of such Interest Period would be necessary; and

 

(v)           no
LIBOR Interest Period shall be selected under the Revolver Facility that
extends beyond the date set forth in clause (B) of the definition of
Revolver Expiration Date, and no LIBOR Interest Period shall be selected under
the Term Loan Facility that extends beyond the date set forth in clause (B) of
the definition of Term Loan Maturity Date.

 

(D)          Calculation
and Payment.  Interest on Base Rate Loans shall be
calculated on the basis of a 365-6-day year for the actual number of days
elapsed.  Interest on LIBOR Loans,
including amounts due under Subsection 1.4, shall be calculated on the basis of
a 360-day year for the actual number of days elapsed.  The date of funding or conversion of a LIBOR
Loan to a Base Rate Loan and the first day of a LIBOR Interest Period shall be
included in the calculation of interest. 
The date of payment (as determined in Subsection 1.5) of any Loan and
the last day of a LIBOR Interest Period shall be excluded from the calculation
of interest; provided, if a Loan is repaid on the same day that it is
made, one day’s interest shall be charged.

 

Interest accruing on Base Rate Loans is payable in arrears on each of
the following dates or events: (i) the last day of each calendar quarter; (ii) the
prepayment of such Loan (or portion thereof), to the extent accrued on the
principal prepaid; and (iii) the Term Loan Maturity Date or the Revolver
Expiration Date, as the case may be, whether by acceleration or otherwise, with
respect to the principal to be repaid. 
Interest accruing on each LIBOR Loan is payable in arrears on each of
the following dates or events: (1) the last day of each applicable LIBOR
Interest Period; (2) if the LIBOR Interest Period is longer than three
months, on each three-month anniversary of the commencement date of such LIBOR
Interest Period; (3) the prepayment of such Loan (or portion thereof), to
the extent accrued on the principal prepaid; and (4) the Term Loan
Maturity Date or the Revolver Expiration Date, as the case may be, whether by
acceleration or otherwise, with respect to the principal to be repaid.

 

(E)           Default
Rate of Interest.  At the election of Administrative Agent or
Requisite Lenders, after the occurrence of an Event of Default and for so long
as it continues, all Loans and other Obligations shall bear interest at rates
that are 2% in excess of the rates otherwise in effect, including, without
limitation, rates in effect pursuant to the first or the second proviso in the
first sentence or pursuant to the second sentence of Subsection 1.2(B), with
respect to such Loans and other Obligations. 
Interest accruing pursuant to this Subsection 1.2(E) is payable on
demand.

 

(F)           Excess
Interest.  Notwithstanding anything to the contrary set
forth herein, the aggregate interest, fees and other amounts required to be
paid by Borrower to Lenders or any Lender hereunder are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of maturity of the Indebtedness evidenced hereby or otherwise,
shall the amount paid or agreed to be paid to Lenders or any Lender for the use
or the forbearance of

 

9

 

the Indebtedness or Obligations evidenced hereby exceed the maximum
permissible under Applicable Law.  If
under or from any circumstances whatsoever, fulfillment of any provision hereof
or of any of the other Loan Documents at the time of performance of such
provision shall be due, shall involve exceeding the limit of such validity
prescribed by Applicable Law then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity and if under or from
circumstances whatsoever Lenders or any Lender should ever receive as interest
any amount which would exceed the highest lawful rate, the amount of such
interest that is excessive shall be applied to the reduction of the principal
balance of the Obligations evidenced hereby and not to the payment of
interest.  Additionally, should the
method used for calculating interest on LIBOR Loans (i.e., using a 360-day
year) be unlawful, such calculation method shall be automatically changed to a
365-6-day year or such other lawful calculation method as is reasonably
acceptable to Administrative Agent.  This
provision shall control every other provision of this Agreement and all
provisions of every other Loan Document.

 

(G)           Selection,
Conversion or Continuation of Loans; LIBOR Availability. 
Provided that no Event of Default has occurred and is then continuing,
Borrower shall have the option to (i) select all or any part of a new
borrowing to be a Base Rate Loan or a LIBOR Loan, in the case of a Base Rate
Loan in a principal amount equal to at least $100,000, in the case of a LIBOR
Loan in a principal amount equal to $1,000,000 or any whole multiple of
$500,000 in excess thereof,  (ii) convert
at any time all or any portion of a Base Rate Loan in a principal amount equal
to $1,000,000 or any whole multiple of $500,000 in excess thereof into a LIBOR
Loan, (iii) upon the expiration of its Interest Period, convert all or any
part of any LIBOR Loan into a Base Rate Loan, and (iv) upon the expiration
of its Interest Period, continue any LIBOR Loan into one or more LIBOR Loans in
a principal amount of $1,000,000 or any whole multiple of $500,000 in excess
thereof for such new Interest Period(s) as selected by Borrower.  Each LIBOR Loan shall be made under any one
of the Revolver Facility, the Term Loan Facility, or any Incremental Term Loan
Facility, but may not be made under more than one Facility concurrently.  During any period in which any Event of Default
is continuing, as the Interest Periods for LIBOR Loans then in effect expire,
such Loans shall be converted into a Base Rate Loan and the LIBOR option will
not be available to Borrower until all Events of Default are cured or waived.
In the event Borrower fails to elect a LIBOR Loan upon any advance hereunder or
upon the termination of any Interest Period, Borrower shall be deemed to have
elected to have such amount constitute a Base Rate Loan.  There shall be no more than an aggregate of
five LIBOR Loans outstanding at any one time.

 

1.3   Notice of Borrowing, Conversion or Continuation
of Loans.  Whenever Borrower desires
to request a Loan pursuant to Subsection 1.1(A) or (B) or to
convert or continue Loans pursuant to Subsection 1.2(G), Borrower shall
give Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit 1.3 (a “Notice
of Borrowing/Conversion/Continuation”) (A) if requesting a
borrowing of a Base Rate Loan (or any portion thereof), not later than 11:00 a.m.
(Denver, Colorado time) one Business Day before the proposed borrowing,
conversion or continuation is to be effective or, (B) if requesting a
borrowing of, or conversion to or continuation of a LIBOR Loan, not later than
11:00 a.m. (Denver, Colorado time) three Business Days before the proposed
borrowing, conversion or continuation is to be effective.  Each Notice of
Borrowing/Conversion/Continuation shall specify (i) the Loan (or portion
thereof) to be advanced, converted or continued and, with respect to any LIBOR
Loan to be converted or continued, the last day of the current Interest Period
therefor, (ii) the effective date of such borrowing, conversion or

 

10

 

continuation (which shall be a Business Day), (iii) the principal
amount of such Loan to be borrowed, converted or continued, (iv) the
Interest Period to be applicable to any new LIBOR Loan, and (v) the
Facility under which such borrowing, conversion or continuation is to be
made.  Administrative Agent shall give
each Lender prompt written notice of any Notice of
Borrowing/Conversion/Continuation given by Borrower.

 

1.4   Fees and Expenses.

 

(A)          Unused
Commitment Fees.  From the Closing Date, Borrower shall be
obligated to pay Administrative Agent, for the benefit of all Lenders (based
upon their respective Pro Rata Shares of the Revolver Loan Commitment), a fee
(the “Revolver Commitment Fee”) in
an amount equal to (i) the Revolver Loan Commitment less the sum of
(1) the average daily outstanding balance of Revolver Loans plus (2) the
average daily outstanding Letter of Credit Liability, in each case during the
preceding calendar quarter multiplied  by (ii) the applicable
Commitment Fee Margin as provided in this Subsection 1.4(B), calculated on the
basis of a 360-day year for the actual number of days elapsed.  Such fees are to be paid quarterly in arrears
on the last day of each calendar quarter for such calendar quarter (or portion
thereof), with the final such payment due on the Revolver Expiration Date.

 

(B)           Certain
Other Fees.  Borrower shall be obligated to pay to CoBank,
individually, fees in the amounts and at the times specified in the letter
agreement dated April 14, 2008, between Borrower and CoBank.

 

(C)           Breakage
Fee.  Upon any repayment or payment of a LIBOR Loan
on any day that is not the last day of the Interest Period applicable thereto
(regardless of the source of such repayment or prepayment and whether
voluntary, mandatory, by acceleration or otherwise), Borrower shall be
obligated to pay Administrative Agent, for the benefit of all affected Lenders,
an amount (the “Breakage Fee”)
equal to the present value of any losses, expenses and liabilities (including
any loss (including interest paid) sustained by each such affected Lender in
connection with the reemployment of such funds) that any such affected Lender
may sustain as a result of the payment of such LIBOR Loan on such day.  For purposes of calculating amounts payable
by Borrower to Lenders under this Subsection 1.4(C), each LIBOR Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBOR rate for such LIBOR
Loan by a matching deposit or other borrowing in the interbank eurocurrency
market for a comparable amount and for a comparable period, whether or not such
LIBOR Loan is in fact so funded.  In
addition, upon any repayment or prepayment of a LIBOR Loan on any day that is
not the last day of the Interest Period applicable thereto (regardless of the
source of such repayment or prepayment and whether voluntary, mandatory, by
acceleration or otherwise), Borrower shall be obligated to pay Administrative
Agent, not for the benefit of Lenders, an administrative fee of $300.

 

(D)          Expenses
and Attorneys’ Fees.  In addition to fees due under Subsections 1.4(A) and
1.4(B), Borrower agrees to pay promptly all reasonable fees, costs and expenses
(including those of attorneys) incurred by Administrative Agent in connection
with (i) any matters contemplated by or arising out of the Loan Documents,
(ii) the continued administration of the Loan Documents, including any
such fees, costs and expenses incurred in perfecting,

 

11

 

maintaining, determining the priority of and releasing any security and
any tax payable in connection with any Loan Documents and any amendments,
modifications and waivers.  In addition
to fees due under Subsections 1.4(A) and (B), Borrower shall also
reimburse on demand Administrative Agent for its expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the documenting and
closing the transactions contemplated herein. 
In addition to fees due under Subsections 1.4(A) and (B),
Borrower agrees to pay promptly (1) all reasonable fees, costs and
expenses incurred by Administrative Agent in connection with any amendment,
supplement, waiver or modification of any of the Loan Documents and (2) all
reasonable out-of-pocket fees, costs and expenses incurred by each of
Administrative Agent  and Lenders
in connection with any Event of Default and any enforcement of collection
proceeding resulting therefrom or, during the continuance of any Event of
Default, any workout or restructuring of any of the transactions hereunder or
contemplated thereby or any action to enforce any Loan Document or to collect
any payments due from Borrower.  All
fees, costs and expenses for which Borrower is responsible under this
Subsection 1.4(D) shall be deemed part of the Obligations when
incurred, payable upon demand and in accordance with the second paragraph of
Subsection 1.5 and shall be secured by the Collateral.

 

(E)           Letter
of Credit Fees.  From the Closing Date, Borrower shall pay
Administrative Agent for the account of all Lenders committed to make Revolver
Loans (based upon their respective Pro Rata Shares) a fee for each Letter of
Credit from the date of issuance to the date of termination in an amount equal
to the applicable LIBOR Margin per annum multiplied by the face amount of such
Letter of Credit.  Such fee shall be
payable to Administrative Agent for the benefit of all Lenders committed to
make Revolver Loans (based upon their respective Pro Rata Shares).  Such fee is to be paid quarterly in arrears
on the last day of each calendar quarter and the termination of the Letter of Credit.  With respect to each Letter of Credit,
Borrower shall also pay Administrative Agent, for the benefit of the Issuing
Lender issuing such Letter of Credit, an issuance fee equal to the greater of (i) $100
or (ii) 0.125% of the face amount of such Letter of Credit, which amount
shall be paid upon the date of issuance and, if the expiration date of such
Letter of Credit is later than one year from its date of issuance, upon each
anniversary of the date of issuance during the term of such Letter of Credit.

 

1.5   Payments. 
All payments by Borrower of the Obligations shall be made in same day
funds and delivered to Administrative Agent, for the benefit of itself and
Lenders, as applicable, by wire transfer to the following account or such other
place as Administrative Agent may from time to time designate in writing:

 

CoBank, ACB

Greenwood Village, Colorado

ABA Number 3070-8875-4

Reference:  CoBank for the benefit of ATN

 

Borrower shall receive credit on the day of receipt for funds received
by Administrative Agent by 11:00 a.m. (Denver, Colorado time) on any
Business Day.  Funds received on any
Business Day after such time shall be deemed to have been paid on the next
Business Day.  Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment shall be due on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and fees
due hereunder.

 

12

 

To the extent Borrower or any other party or Person makes a payment or
payments to Administrative Agent for the ratable benefit of Lenders or for the
benefit of Administrative Agent in its individual capacity, which payments or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, or any combination of the foregoing (whether by demand,
litigation, settlement or otherwise), then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by Administrative Agent.

 

Each payment received by Administrative Agent under this Agreement or
any Note for account of any Lender shall be remitted by Administrative Agent to
such Lender promptly after Administrative Agent’s receipt thereof, and such
remittance shall be made in immediately available funds for the account of such
Lender for the Loans or other obligation in respect of which such payment is
made.

 

1.6   Repayments of Loans and
Reduction of the Revolver Loan Commitment.

 

(A)          Scheduled
Termination of Revolver Loan Commitment and Repayments of the Term Loan.

 

(i)            Scheduled
Termination of Revolver Loan Commitment. 
In addition to any reductions pursuant to Subsections 1.6(B) and
1.6(C), the Revolver Loan Commitment shall be permanently reduced and
terminated in full on the Revolver Expiration Date, and any outstanding
principal balance of the Revolver Loans not sooner due and payable will become
due and payable on the Revolver Expiration Date.

 

(ii)           Scheduled
Repayments of the Term Loan. 
Commencing on September 30, 2008, and on each December 31, March 31,
and June 30 thereafter, in addition to any repayments pursuant to
Subsections 1.7 and 1.8, Borrower shall repay the aggregate principal balance
of the Term Loan in the amount set forth below opposite such period:

 

TERM LOAN - REPAYMENT TABLE

 

	
  Period

  	
   

  	
  Quarterly Principal Payment

  	
   

  
	
  September 30, 2008 to June 30,
  2013

  	
   

  	
  $

  	
  187,500

  	
   

  
	
  September 30, 2013 to June 30,
  2015

  	
   

  	
  $

  	
  1,406,250

  	
   

  

 

The outstanding principal balance of the Term Loan not sooner due and
payable will become due and payable on the Term Loan Maturity Date.

 

13

 

(iii)          Incremental Term
Loans.  Borrower shall repay the
aggregate outstanding principal balance of any Incremental Term Loan as
provided in the amendment or supplement to this Agreement documenting such
Incremental Term Loan Facility.

 

All repayments of the Facilities pursuant to this Subsection 1.6(A) shall
be applied in accordance with Subsection 1.8, and shall be accompanied by any
applicable Breakage Fees and any other fees required pursuant to Subsection
1.4(C).

 

(B)           Reductions
Resulting From Mandatory Repayments.  The Revolver Loan Commitment also will be
permanently reduced to the extent and in the amount that Borrower is required,
pursuant to Subsection 1.8, to apply mandatory repayments to be made pursuant
to Subsection 1.7(B), (C) and (D) to the Revolver Facility (whether
or not any Revolver Loans are then outstanding and available to be
repaid).  All reductions provided for in
this Subsection 1.6(B) shall be in addition to the voluntary
reductions provided for in Subsection 1.6(C) and, accordingly, may result
in the termination of the Revolver Loan Commitment prior to the date set forth
in clause (B) of the definition of the term Revolver Expiration Date.

 

(C)           Voluntary
Reduction of the Revolver Loan Commitment.  Borrower shall have
the right, upon at least three Business Days’ prior written notice to
Administrative Agent, to terminate or permanently reduce the then unused
portion of the Revolver Loan Commitment. 
Each partial reduction shall be in a minimum amount of at least
$250,000, or any whole multiple thereof in excess thereof, and shall be applied
as to each Lender based upon its Pro Rata Share.  Notwithstanding the foregoing, no reduction
shall be permitted if, after giving effect thereto and to any prepayment made
in connection therewith, the aggregate principal balance of the Revolver Loans
then outstanding under the Revolver Facility plus the amount of the
Letter of Credit Liability would exceed the Revolver Loan Commitment as so
reduced.  All reductions elected under
this Subsection 1.6(C) shall be in addition to the reductions in the
Revolver Loan Commitment provided for in Subsections 1.6(A)(i) and 1.6(B) and,
accordingly, may result in the termination of the Revolver Loan Commitment
prior to the date set forth in clause (B) of the definition of the term
Revolver Expiration Date.

 

(D)          Mandatory
Repayments.  If at any time the aggregate outstanding
amount of Revolver Loans plus the amount of the Letter of Credit
Liability exceeds the Revolver Loan Commitment, Borrower shall repay promptly
the Revolver Loans or reduce the Letter of Credit Liability pursuant to Subsection
1.16 in an amount at least sufficient to reduce the aggregate principal
balance of such Revolver Loans then outstanding plus the amount of the
Letter of Credit Liability to the amount of the Revolver Loan Commitment, and
until such repayment is made, Lenders shall not be obligated to make any
additional Revolver Loans.  Any
repayments pursuant to this Subsection 1.6(D) shall be paid and applied in
accordance with Subsection 1.8 and must be accompanied by accrued interest
on the amount repaid and any applicable Breakage Fees and any other fees
required pursuant to Subsection 1.4.

 

1.7   Voluntary Prepayments and
Other Mandatory Repayments.

 

(A)          Voluntary
Prepayment of Loans.  Subject to the provisions of Subsection 1.8,
at any time, Borrower may prepay the Base Rate Loans, in whole or in part,
without penalty.  Subject

 

14

 

to the provisions of Section 1.8, payment of the Breakage Fees and
any other fees required pursuant to Subsection 1.4 and the notice requirement
in the following sentence, at any time Borrower may prepay any LIBOR Loan, in
whole or in part.  Notice of any
prepayment of (i) a Base Rate Loan shall be given not later than 11 a.m.
(Denver, Colorado time) on the Business Day immediately preceding the date of
prepayment, and (ii) a LIBOR Loan shall be given not later than 11:00 a.m.
(Denver, Colorado time) on the third Business Day immediately preceding the
date of prepayment.  All partial
prepayments shall be in a minimum amount of at least $250,000, or any whole
multiple thereof in excess thereof (or the entire remaining balance of the
applicable Loan), and shall be paid and applied in accordance with Subsection
1.8.  All prepayment notices shall be
irrevocable. All prepayments shall be accompanied by accrued interest on the amount
prepaid and any applicable Breakage Fees and any other fees required pursuant
to Subsection 1.4.

 

(B)           Repayments
from Insurance Proceeds.  Immediately upon receipt thereof, Borrower
shall be obligated to repay the Loans (or reduce the Letter of Credit Liability
pursuant to Subsection 1.16) in an amount equal to all Net Proceeds received by
Borrower or any Subsidiary of Borrower that are insurance proceeds from any
Asset Disposition (which Asset Disposition, together with all other such Asset
Dispositions covered by this Subsection 1.7(B), exceeds $5,000,000 in the
aggregate over the term of this Agreement); provided, however,
that if no Event of Default has occurred and is continuing, Borrower shall not
be required to repay the Loans with the Net Proceeds if Borrower or such
Subsidiary (i) has previously applied cash or (ii) applies such Net
Proceeds to repair or replace the lost, damaged or destroyed assets within 180
days of receipt by Borrower or such Subsidiary of such Net Proceeds.  All such repayments shall be paid and applied
in accordance with Subsection 1.8.  All
prepayments shall be accompanied by accrued interest on the amount prepaid and
any applicable Breakage Fees and any other fees required pursuant to Subsection
1.4.

 

(C)           Repayments
from Certain Asset Dispositions.  Immediately upon receipt thereof, Borrower
shall be obligated to repay the Loans (or reduce the Letter of Credit Liability
pursuant to Subsection 1.16) in an amount equal to all Net Proceeds received by
Borrower or any Subsidiary of Borrower that are from Asset Dispositions, other
than insurance proceeds or from Asset Dispositions permitted pursuant to
Subsection 3.7(A) through (C), (E) or (F); provided, however,
that if (i) no Event of Default has occurred and is continuing and (ii) the
aggregate of all such Net Proceeds during the 12-month period ending on the
date of such proposed reinvestment does not exceed 5% of Borrower’s then amount
of consolidated assets, Borrower shall not be required to repay the Loans with
the Net Proceeds if Borrower or such Subsidiary applies such Net Proceeds to
acquire equipment or other assets that are used or useful in the business of
Borrower or such Subsidiary within 180 days of receipt by Borrower or such
Subsidiary of such Net Proceeds.  All such
repayments shall be paid and applied in accordance with Subsection 1.8.  All prepayments shall be accompanied by
accrued interest on the amount prepaid and any applicable Breakage Fees and any
other fees required pursuant to Subsection 1.4.

 

(D)          Repayments
from Debt Issuances.  Immediately upon receipt by Borrower or any
Subsidiary of Borrower of Net Proceeds relating to the issuance by Borrower or
any Subsidiary of Borrower of any public or private debt (other than
Indebtedness permitted under Subsection 3.1), Borrower shall be obligated to
repay the Loans (or reduce the Letter of Credit Liability pursuant to Subsection
1.16) in an amount equal to such Net Proceeds.  All such repayments shall be paid and applied
in accordance with Subsection 1.8. All prepayments shall be accompanied by
accrued

 

15

 

interest on the amount prepaid and any applicable Breakage Fees and any
other fees required pursuant to Subsection 1.4.

 

1.8   Application of Prepayments and Repayments;
Payment of Breakage Fees, Etc.    All prepayments to be applied to the Loans
pursuant to Subsection 1.7(A) shall be applied as Borrower shall
direct.  Absent a prior written direction
from Borrower to apply the Net Proceeds of any repayment made pursuant to
Subsection 1.7(B) through (D) to reduce the Revolver Loan Commitment
(and, to the extent as a result thereof the Revolver Loan Commitment exceeds
the then outstanding principal balance of the Revolver Loans plus the
amount of the Letter of Credit Liability, to repay the Revolver Loans (or
reduce the Letter of Credit Liability pursuant to Subsection 1.16)), each such
repayment shall be first applied to the principal balance of the Term Loan
Facility (pro rata to any Incremental Term Loan Facility, if and when
applicable) and then to repay the Revolver Loans (or reduce the Letter of
Credit Liability pursuant to Subsection 1.16). 
After the Revolver Loan Facility is repaid and the Revolver Loan
Commitment reduced in full, each repayment made pursuant to Subsection 1.7(B) through
(D) shall be applied to the principal balance of Term Loan Facility (pro
rata to any Incremental Term Loan Facility, if and when applicable).  All repayments made pursuant to Subsections
1.6 and 1.7 shall first be applied to a Base Rate Loan or such of the LIBOR
Loans as Borrower shall direct in writing and, in the absence of such
direction, shall first be applied to a Base Rate Loan and then to such LIBOR
Loans as Administrative Agent shall select. All prepayments and repayments
required or permitted hereunder shall be accompanied by payment of all
applicable Breakage Fees and accrued interest on the amount prepaid or repaid.
All prepayments and repayments applied to the Term Loan or any Incremental Term
Loan shall be applied to principal installments in the inverse order of
maturity.

 

1.9   Loan Accounts.  Administrative Agent will maintain loan
account records for (A) all Loans, interest charges and payments thereof, (B)  all
Letter of Credit Liability, (C) the charging and payment of all fees,
costs and expenses and (D) all other debits and credits pursuant to this
Agreement.  The balance in the loan
accounts shall be presumptive evidence of the amounts due and owing to Lenders,
absent manifest error, provided that any failure by Administrative Agent
to maintain such records shall not limit or affect Borrower’s obligation to
pay.  After the occurrence and during the
continuance of an Event of Default, Borrower irrevocably waives the right to
direct the application of any and all payments and Borrower hereby irrevocably
agrees that Administrative Agent and the Lenders shall have the continuing
exclusive right to apply and reapply payments to any of the Obligations in any
manner it or they deem appropriate.

 

1.10         Changes in LIBOR Rate Availability.

 

(A)          If
with respect to any proposed LIBOR Interest Period, Administrative Agent or any
Lender (after consultation with Administrative Agent) determines that deposits
in dollars (in the applicable amount) are not being offered in the relevant
market for such LIBOR Interest Period, or Lenders having a Pro Rata Share of
50% or more under a Facility determine (and notify Administrative Agent) that
the LIBOR rate applicable pursuant to Subsection 1.2(A)(i)(2) for any
requested LIBOR Interest Period with respect to a proposed LIBOR Loan under
such Facility does not adequately and fairly reflect the cost to such Lenders
of funding such Loan, Administrative Agent shall forthwith give notice thereof
to Borrower and Lenders, whereupon and until such affected Lender or Lenders
notifies Administrative Agent, and Administrative Agent notifies Borrower and
the other Lenders that the circumstances giving rise to such situation no
longer exist,

 

16

 

the obligations of any affected Lender to make its portion of such type
of LIBOR Loan shall be suspended and such affected Lender shall make its Pro
Rata Share of such type of LIBOR Loans as a Base Rate Loan or such other type
of Loan as permitted by Administrative Agent. 
Any Lender may, in its sole discretion, waive the benefits and
provisions of this Subsection with respect to any proposed LIBOR Interest
Period.

 

(B)           If the introduction
of, or any change in, any Applicable Law 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, or
compliance by any Lender with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or
comparable agency, in each case occurring after the Closing Date, shall make it
unlawful or impossible for one or more Lenders to honor its obligations
hereunder to make or maintain any LIBOR Loan, such Lender shall promptly give
notice thereof to Administrative Agent, and Administrative Agent shall promptly
give notice thereof to Borrower and all other Lenders.  Thereafter, until such Lender or Lenders
notifies Administrative Agent, and Administrative Agent notifies Borrower and
the other Lenders that such circumstances no longer exist, (i) the
obligations of such Lender or Lenders to make LIBOR Loans and the right of
Borrower to convert any Loan of such Lender or Lenders to a LIBOR Loan or
continue any Loan of such Lender or Lenders as a LIBOR Loan shall be suspended
and (ii) if any Lender may not lawfully continue to maintain a LIBOR Loan
to the end of the then current LIBOR Interest Period applicable thereto, such
Loan shall immediately be converted to the Base Rate Loan.

 

1.11         Capital Adequacy and
Other Adjustments.

 

(A)          If after the Closing
Date there occurs the introduction, or change in the interpretation, of any
law, rule, or regulation the effect of which would increase the reserve
requirement or otherwise increase the cost to any Lender of making or
maintaining a LIBOR Loan, then Administrative Agent, on behalf of all affected
Lenders, shall submit a certificate to Borrower setting forth the amount and
demonstrating the calculation of such increased cost. Borrower shall be
obligated to pay the amount of such increased cost to Administrative Agent for
the benefit of the affected Lenders within 15 days after receipt of such
certificate.  Such certificate shall,
absent manifest error, be final, conclusive and binding for all purposes.  There is no limitation on the number of times
such a certificate may be submitted; provided that any such certificate
may not seek increased costs for any period prior to the date that is six
months prior to the date of such certificate.

 

(B)           In the event that
the adoption after the Closing Date of any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any Lender
or any corporation controlling such Lender with any request or directive
regarding capital adequacy, reserve requirements or similar requirements
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) from any central bank or governmental agency or
body having jurisdiction does or shall have the effect of increasing the amount
of capital, reserves or other funds required to be maintained by such Lender or
any corporation controlling such Lender and thereby reducing the rate of return
on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder, then Borrower shall be obligated, from time to time
within 15 days after notice and demand from such Lender (together with the certificate
referred to in the next sentence

 

17

 

and with a
copy to Administrative Agent), to pay to Administrative Agent, for the account
of such Lender, additional amounts sufficient to compensate such Lender for
such reduction.  A certificate as to the
amount of such cost and showing the basis of the computation of such cost
submitted by such Lender to Borrower and Administrative Agent shall, absent
manifest error, be final, conclusive and binding for all purposes.  There is no limitation on the number of times
such a certificate may be submitted; provided that any such certificate
may not seek increased costs for any period prior to the date that is six
months prior to the date of such certificate.

 

1.12         Optional Prepayment/Replacement of Lender
in Respect of Increased Costs. 
Within 15 days after receipt by Borrower of written notice and demand
from any Lender for payment of additional costs as provided in Subsections
1.11, 1.13 or 1.14 or if it becomes illegal or impossible for any Lender to
continue to fund or to make LIBOR Loans pursuant to Subsection 1.10(B), as a
result of any condition described in any of such Subsections, or if any Lender
is a Defaulting Lender (any such Lender, an “Affected
Lender”) then, unless such Lender has theretofore removed or cured
the conditions creating the cause for such obligation to pay such additional
amounts or for such illegality or impossibility, or has ceased to be a
Defaulting Lender, Borrower may, at its option, notify Administrative Agent and
such Affected Lender of its intention to do one of the following:

 

(A)          Borrower may obtain,
at Borrower’s expense, a replacement Lender (“Replacement
Lender”) for such Affected Lender, which Replacement Lender shall be
reasonably satisfactory to Administrative Agent.  In the event Borrower obtains a Replacement
Lender within 90 days following notice of its intention to do so, the Affected
Lender shall sell and assign its Loans and its obligations under the Loan
Commitments to such Replacement Lender at a price (including accrued interest)
that is reasonably acceptable to the Affected Lender and the Replacement Lender
(it being agreed that an assignment at par (plus accrued interest) or a higher
price is deemed to be acceptable), provided that Borrower has reimbursed such
Affected Lender for its increased costs for which it is entitled to
reimbursement under this Agreement through the date of such sale and
assignment; or

 

(B)           Borrower may prepay
in full all outstanding Obligations owed to such Affected Lender and terminate
such Affected Lender’s Pro Rata Share of the Loan Commitments, in which case
the Loan Commitments will be permanently reduced by the amount of such Pro Rata
Share.  Borrower shall, within 90 days
following notice of its intention to do so, prepay in full all outstanding
Obligations owed to such Affected Lender (including all applicable Breakage
Fees and such Affected Lender’s increased costs for which it is entitled to
reimbursement under this Agreement through the date of such prepayment), and
terminate such Affected Lender’s obligations under the Loan Commitments.  Any such prepayment pursuant to this
Subsection 1.12(B) shall be applied in accordance with Subsection 1.8
(except that such prepayment shall be solely for the account of the Affected
Lender and not for the account of all the Lenders in accordance with their Pro
Rata Shares) and shall be accompanied by payment of all applicable Breakage
Fees and accrued interest on the amount repaid.

 

1.13         Taxes.

 

(A)          No
Deductions.  Any and all payments or reimbursements made
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all taxes, levies,

 

18

 

imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (all such taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto, excluding such taxes
imposed on net income, herein “Tax
Liabilities”), excluding, however, any Excluded Taxes.  If Borrower shall be required by law to
deduct any such Tax Liabilities (net of Excluded Taxes) from or in respect of
any sum payable hereunder to any Lender or Administrative Agent, then, except
as provided in Subsection 1.13(B) and the last sentence of this Subsection
1.13(A), the sum payable hereunder shall be increased as may be necessary so
that, after making all required deductions, such Lender or Administrative Agent
receives an amount equal to the sum it would have received had no such
deductions been made.  Notwithstanding
the foregoing, any Lender that fails to provide Borrower and Administrative
Agent a properly completed and executed IRS Form W-9 will be subject to
backup withholding on payments to such Lender without any gross-up hereunder.

 

(B)           Foreign
Lenders.  Each Lender which would not be considered a
United States Person under the IRC (“Foreign
Lender”) as to which payments made under this Agreement or under the
Notes is exempt for withholding tax under the IRC or is subject to withholding
tax at a reduced rate under an applicable statute or tax treaty shall provide
to Borrower and Administrative Agent (i) a properly completed and executed
United States Internal Revenue Service Form W-8ECI or W-8BEN or other
applicable form, certificate or document prescribed by the Internal Revenue
Service of the United States certifying as to such Foreign Lender’s entitlement
to such exemption or reduced rate of withholding with respect to payments to be
made to such Foreign Lender under this Agreement and under the Notes (a “Certificate of Exemption”) and, in the case
of a Foreign Lender claiming exemption under Sections 871(h) or 881(c) of
the IRC, a certificate in form and substance acceptable to Borrower that such
Foreign Lender is not (1) receiving interest under the Notes as a bank on
an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of
the IRC, (2) a “10 percent shareholder” of the Borrower within the meaning
of Section 881(c)(3)(B) of the IRC and (3) a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the IRC (the “Portfolio Interest Exemption Certificate”)
or (ii) letter from any such Foreign Lender stating that it is not
entitled to any such exemption or reduced rate of withholding (a “Letter of Non-Exemption”).  Prior to
becoming a Lender under this Agreement and within 15 days after a reasonable
written request of Borrower or Administrative Agent from time to time
thereafter, each Foreign Lender that becomes a Lender under this Agreement
shall provide a Certificate of Exemption (and a Portfolio Interest Exemption
Certificate, if applicable) or a Letter of Non-Exemption to Borrower and
Administrative Agent.

 

If a Foreign Lender is entitled to an exemption with respect to
payments to be made to such Foreign Lender under this Agreement (or to a
reduced rate of withholding) and does not provide a Certificate of Exemption
(and a Portfolio Interest Exemption Certificate, if applicable) to Borrower and
Administrative Agent within the time periods set forth in the preceding
paragraph, Borrower shall withhold taxes from payments to such Foreign Lender
at the applicable statutory rates and Borrower shall not be required to pay any
additional amounts as a result of such withholding, provided that all
such withholding shall cease or be reduced, as appropriate, upon delivery by
such Foreign Lender of a Certificate of Exemption (and a Portfolio Interest
Exemption Certificate, if applicable) to Borrower and Administrative Agent.

 

19

 

(C)           Tax
Refund.  If  and  to  the  extent  that  Administrative  Agent  or  any  Lender  determines  in  its  good  faith  discretion  that  it  has  received  a  refund  for  or  a  credit  or  deduction  of  any  amounts  as  to  which  have  been  paid  under  this  Subsection  1.13  or  Subsection  1.14,  it  shall  pay  to  Borrower  the  portion  of  such  refund,  credit  or  deduction  that  it  determines  in  its  reasonable  discretion  will  leave  it,  after  such  payment,  in  no  better  or  worse  after-tax  financial  position  (taking  into  account  any  out-of-pocket  expenses  of  Administrative  Agent  or  such  Lender)  than  if  the  Tax  Liability  or  cost  giving  rise  to  the  payment  had  not  been  imposed  in  the  first  instance;  provided,  however,  that  Borrower,  upon  the  request  of  Administrative  Agent  or  such  Lender,  agrees  to  repay  the  amount  paid  over  to  Borrower  to  the  Administrative  Agent  or  such  Lender  (along  with  any  applicable  interest  or  penalties)  in  the  event  Administrative  Agent  or  such  Lender  is  required  to  repay  such  amounts  to  such  Governmental  Authority.  This  Subsection  1.13(C)  shall  not  be  construed  to  require  Administrative  Agent  or  any  Lender  to  make  available  its  tax  returns  or  other  confidential  tax  information  to  Borrower  or  any  other  Person.

 

1.14         Changes
in Tax Laws.  In the event that,
subsequent to the Closing Date, (A) any changes in any existing law,
regulation, treaty or directive or in the interpretation or application
thereof, (B) any new law, regulation, treaty or directive enacted or any
interpretation or application thereof, or (C) compliance by Administrative
Agent or any Lender with any request or directive (whether or not having the
force of law) from any Governmental Authority:

 

(i)            does or shall subject Administrative
Agent or any Lender to any tax of any kind whatsoever with respect to this Agreement,
the other Loan Documents or any Loans made hereunder, or change the basis of
taxation of payments to Administrative Agent or such Lender of principal, fees,
interest or any other amount payable hereunder (except for Excluded Taxes); or

 

(ii)           does or shall impose on
Administrative Agent or any Lender any other condition or increased cost in
connection with the transactions contemplated hereby or participations herein;

 

and the result of any of the foregoing is to increase the cost to
Administrative Agent or any such Lender of making or continuing any Loan
hereunder, or to reduce any amount receivable hereunder, as the case may be,
then, in any such case, Borrower shall be obligated to promptly pay to
Administrative Agent or such Lender, upon its demand, any additional amounts
necessary to compensate Administrative Agent or such Lender, on an after-tax
basis, for such additional cost or reduced amount receivable, as reasonably
determined by Administrative Agent or such Lender with respect to this Agreement
or the other Loan Documents.  If
Administrative Agent or such Lender becomes entitled to claim any additional
amounts pursuant to this Subsection 1.14, it shall promptly notify Borrower of
the event by reason of which Administrative Agent or such Lender has become so
entitled.  A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by
Administrative Agent or such Lender to Borrower and Administrative Agent shall,
absent manifest error, be final, conclusive and binding for all purposes.  There is no limitation on the number of times
such a certificate may be submitted.

 

Notwithstanding the forgoing, Administrative
Agent and any such Lender shall cooperate with Borrower to reduce or eliminate
any additional amounts owed under this

 

20

 

Subsection 1.14 and shall provide Borrower with such certificate or
similar document(s) as may reasonably be requested by Borrower in order to
relieve Borrower of any obligation to pay any portion of the payments
owed pursuant to this Subsection 1.14.

 

1.15         Term
of This Agreement.  All of the
Obligations shall become due and payable as otherwise set forth herein.  This Agreement shall remain in effect through
and including, and (except with respect to provisions hereof expressly stated
herein to survive any such termination) shall terminate immediately after, the
date on which all Obligations (other than contingent indemnity, expense
reimbursement and tax gross-up payments for which no claim has been asserted)
shall have been paid and satisfied in full in cash.

 

1.16         Letter
of Credit Liability  Upon the
occurrence and during the continuance of an Event of Default and at the
direction of Administrative Agent, and in the event any Letters of Credit are
outstanding at the time that Borrower terminates the Revolver Loan Commitment,
then (A) with respect to each such Letter of Credit, Borrower shall either
(i) deliver to Administrative Agent for the benefit of all Lenders with a
Revolver Loan Commitment a letter of credit in the same currency that such
Letter of Credit is payable, with a term that extends 60 days beyond the
expiration date of such Letter of Credit, issued by a bank satisfactory to
Administrative Agent and in an amount equal to 103% of the aggregate
outstanding Letter of Credit Liability with respect to such Letter of Credit,
which letter of credit shall be drawable by Administrative Agent to reimburse
payments of drafts drawn under such Letter of Credit and to pay any fees and
expenses related thereto or (ii) immediately deposit with Administrative
Agent an amount equal to the aggregate outstanding Letter of Credit Liability
to enable Administrative Agent to make payments under the Letters of Credit
when required and such amount shall become immediately due and payable, and (B) Borrower
shall prepay the fees payable under Subsection 1.4(E) with respect
to all such Letters of Credit for the full remaining terms of such Letters of
Credit.  Upon termination of any such
Letter of Credit, the unearned portion of such prepaid fee attributable to such
Letter of Credit shall be refunded to Borrower.

 

SECTION 2

AFFIRMATIVE COVENANTS

 

Each Loan Party hereby covenants and agrees that so long as this
Agreement is in effect and until payment in full of all Obligations (other than
contingent indemnity, expense reimbursement and tax gross-up payment for which
no claim has been asserted), unless Requisite Lenders shall otherwise give
their prior written consent, it shall perform and comply, and shall cause each
of its respective Subsidiaries to perform and comply, with all covenants in
this Section 2.

 

2.1   Compliance With Laws.  The Loan Parties will (A) comply with
and will cause their respective Subsidiaries to comply with the requirements of
all Applicable Laws (including laws, rules, regulations and orders relating to
taxes, employer and employee contributions, securities, employee retirement and
welfare benefits, environmental protection matters and employee health and
safety) as now in effect and which may be imposed in the future in all
jurisdictions in which the Loan

 

21

 

Parties and their respective Subsidiaries are now doing or hereafter do
business, (B) obtain and maintain and will cause their respective
Subsidiaries to obtain and maintain all licenses, qualifications and permits
(including the Licenses) now held or hereafter required for the Loan Parties or
any of their respective Subsidiaries to operate, and (C) comply with and
will cause their respective Subsidiaries to comply with all Material Contracts,
other than, in all such cases, as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.  This Subsection 2.1 shall not preclude
the Loan Parties or any of their respective Subsidiaries from contesting any
taxes or other payments, if they are being diligently contested in good faith
and if adequate reserves therefor are maintained in conformity with GAAP.

 

2.2   Maintenance of Books and Records; Properties;
Insurance.  The Loan Parties will
keep and will cause their respective Subsidiaries to keep adequate records and
books of account, in which full, true and correct entries will be made in
accordance with GAAP consistently applied, reflecting all financial
transactions of such Persons.  The Loan
Parties will maintain or cause to be maintained and will cause their respective
Subsidiaries to maintain or cause to be maintained in good repair, working
order and condition all Collateral used in the business of the Loan Parties and
their respective Subsidiaries, and will make or cause to be made all
appropriate repairs, renewals and replacements thereof, except for (A) dispositions
of assets permitted hereunder or (B) as would not reasonably, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.  The Loan Parties will and will
cause each of their respective Subsidiaries to maintain complete, accurate and
up-to-date books, records, accounts and other information relating to all
Collateral in such form and in such detail as may be satisfactory to
Administrative Agent.  The Loan Parties
will and will cause their respective Subsidiaries to maintain or cause to be
maintained, with financially sound and reputable insurers, insurance with
respect to their business and properties and the business and properties of
their respective Subsidiaries against loss and damage of the kinds and of such
types, with such insurers, in such amounts, with such limits and deductibles
and otherwise on such terms and conditions as customarily carried or maintained
by companies of established reputation engaged in similar businesses, and will
deliver evidence thereof to Administrative Agent on or prior to the Closing
Date, and thereafter prior to or upon any expiration thereof, evidence of
renewal of such insurance.   If any part of the Collateral lies within a “special
flood hazard area” as defined and specified by the Federal Emergency Management
Agency (or other appropriate Governmental Authority) pursuant to the Flood
Disaster Protection Act of 1973, as amended (the “FDPA”), and Administrative Agent determines that flood
insurance coverage is required to be obtained for such Collateral in order for
Administrative Agent and the Lenders to comply with the FDPA, the Loan Parties
shall obtain and maintain such flood insurance policies as Administrative Agent
reasonably requests so that Administrative Agent and the Lenders shall be
deemed in compliance with the FDPA and shall deliver evidence thereof to
Administrative Agent.  The Loan Parties
will, and will cause their respective Subsidiaries, to name Administrative
Agent, pursuant to endorsements and assignments in form and substance
reasonably satisfactory to Administrative Agent, (i) as a lender loss
payee and mortgagee, if applicable, in the case of casualty insurance with
respect to the Collateral, (ii) as an additional insured in the case of
all liability insurance, and (iii) as an additional insured in the case of
all flood insurance.  Unless Administrative
Agent otherwise agrees, all insurance policies required hereunder shall include
effective waivers by the insurer of subrogation.  Unless Administrative Agent otherwise agrees,
Borrower shall use commercially reasonable efforts to obtain for all insurance
policies endorsements providing that each such

 

22

 

insurance policy is non-cancelable and not subject to material change
as to Administrative Agent except upon 30 days’ (and ten days’ for non-payment
of premiums) prior written notice given by the insurer to Administrative Agent.

 

Administrative Agent shall be entitled, upon reasonable advance notice,
to review and/or receive copies of, the insurance policies of the Loan Parties
and their respective Subsidiaries carried and maintained with respect to the
Loan Parties’ obligations under this Subsection 2.2. Notwithstanding anything
to the contrary herein, no provision of this Subsection 2.2 or any provision of
this Agreement shall impose on Administrative Agent and the Lenders any duty or
obligation to verify the existence or adequacy of the insurance coverage
maintained by the Loan Parties and their respective Subsidiaries, nor shall
Administrative Agent and the Lenders be responsible for any representations or
warranties made by or on behalf of the Loan Parties and their respective
Subsidiaries to any insurance broker, company or underwriter.  Administrative Agent, at its sole option, may
obtain any insurance required hereunder if not provided by the Loan Parties and
in such event, the Loan Parties shall reimburse Administrative Agent upon
demand for the cost thereof.

 

2.3   Inspection. 
The Loan Parties will permit, and will cause each of their respective
Subsidiaries to permit, at the expense of the Loan Parties, any authorized
representatives of the Administrative Agent (together with any authorized
representatives of any Lender that desires to have its authorized
representatives accompany the Administrative Agent’s authorized
representatives) (A) to visit and inspect any of the properties of the
Loan Parties and their respective Subsidiaries, including their financial and
accounting records, and to make copies and take extracts therefrom, and (B) to
discuss their affairs, finances and business with their officers, employees and
certified public accountants, in each case upon reasonable prior notice at such
reasonable times during normal business hours and as often as may be reasonably
requested; provided, that, except during the continuance of an
Event of Default, each visit or inspection by the Administrative Agent in
excess of one visit or inspection during a calendar year shall not be at the
Loan Parties expense but shall be at the sole expense of Administrative Agent
or Lenders; provided, further, that during the continuance of an Event of
Default, the authorized representatives of Administrative Agent and any Lender
may conduct such visits and inspections and engage in such discussions without
notice and as frequently and at such times as they may specify.

 

2.4   Legal Existence, Etc.  Except as otherwise permitted by Subsection
3.6 or 3.7 or as contemplated on Schedule 5.19 of this Agreement, the Loan
Parties will, and will cause their respective Subsidiaries to at all times
preserve and keep in full force and effect their legal existence and good
standing and all rights and franchises (including the Licenses), except as
permitted hereunder as and as would not reasonably be expected to have a
Material Adverse Effect.

 

2.5   Use of Proceeds.  The Loan Parties will use the proceeds of the
Loans, and will cause any of their respective Subsidiaries who receive
(directly or indirectly) proceeds of the Loans to use such proceeds, solely for
the purposes described in the recital paragraphs to this Agreement; provided,
however, the proceeds of any Incremental Term Loan shall be used solely for the
purposes described in the amendment or supplement to this Agreement evidencing
such Incremental Term Loan Facility.  No
part of any Loan will be used (directly or indirectly) to purchase any “margin
stock” as defined in, or otherwise in violation of, the regulations of the
Federal Reserve System.

 

23

 

2.6   Further Assurances; Notices of Acquisition of
Real Property.  The Loan Parties
will, and will cause each of their respective Subsidiaries to, from time to
time, do, execute, authorize and deliver, as the case may be, all such
additional and further acts, documents and instruments as Administrative Agent
or any Lender reasonably requests to consummate the transactions contemplated
hereby and to vest completely in and assure Administrative Agent and the other
Secured Parties of their respective rights under this Agreement, the other Loan
Documents and the Secured Hedge Agreements, including such financing
statements, documents, security agreements and reports to evidence, perfect or
otherwise implement the security for repayment of the Secured Obligations
contemplated by the Loan Documents and the Secured Hedge Agreements.  Borrower will notify Administrative Agent in
each Compliance Certificate delivered pursuant to Subsection 4.4(C) of the
acquisition in fee simple by any Loan Party of any real property with a
purchase price in excess of $1,000,000 or as to which the loss thereof would
have a Material Adverse Effect (a “Material
Owned Property”), the lease or license by any Loan Party after the
date hereof of any real property as to which (i) the annual rentals or
equivalent payments under which exceed $200,000, (ii) the book value of
the assets of the Loan Party located on the leased or licensed location are in
excess of $1,000,000 or (iii) the loss thereof would have a Material
Adverse Effect (a “Material Leased Property”),
and the acquisition by any Loan Party of any material registered intellectual
property, or the opening by any Loan Party of any new deposit, investment or
other accounts.  Each Loan Party,
promptly upon the request of Administrative Agent, will execute and deliver all
such additional documents and instruments as Administrative Agent may
reasonably require with respect to each Material Owned Property and each
Material Leased Property acquired after the date hereof in order to create a
valid and perfected Lien in favor Administrative Agent in such property (including,
upon the request of Administrative Agent, mortgages, leasehold mortgages,
fixture filings, environmental audits, completed environmental questionnaires,
surveys and title insurance policies, as well as mortgagee waivers and landlord
agreements for all real estate leased by any Loan Party that is the chief
executive office of any Loan Party, is where any material books and records
relating to Collateral are kept, or that constitutes Material Leased Property,
and in each case for which Administrative Agent has requested a leasehold
mortgage.  The Administrative Agent may
elect not to request any documents or instruments as contemplated by this Section 2.6
regarding such Material Owned Property or Material Leased Property if it
determines in its sole discretion that the costs to the Loan Parties of
perfecting a security interest or lien in such Material Owned Property or
Material Leased Property exceed the relative benefit afforded the Secured
Parties.  Each Loan Party, promptly upon
the request of Administrative Agent, also will execute and deliver UCC
financing statements (including fixture filings), assignments, control
agreements (but only for accounts with an average daily balance (determined on
a trailing six month basis, counting the actual number of days elapsed)
exceeding $1,000,000 for two consecutive months), and legal opinions as the
Administrative Agent may reasonably request to further create or to evidence a
valid and perfected Lien in favor Administrative Agent in such property.

 

2.7   CoBank Patronage Capital.  So long as CoBank is a Lender hereunder,
Borrower will acquire non-voting participation certificates in CoBank in such
amounts and at such times as CoBank may require in accordance with CoBank’s
Bylaws and Capital Plan (as each may be amended from time to time), except that
the maximum amount of participation certificates that Borrower may be required
to purchase in CoBank in connection with the Loans may not exceed the maximum
amount permitted by the Bylaws and the Capital Plan at the time this Agreement
is

 

24

 

entered into.  The rights and
obligations of the parties with respect to such participation certificates and
any distributions made on account thereof or on account of Borrower’s patronage
with CoBank shall be governed by CoBank’s Bylaws.  CoBank agrees that all Loans that are made by
CoBank and that are retained for its own account and not sold in a
participation shall be entitled to patronage distributions in accordance with
the CoBank’s Bylaws; all Loans that are made by CoBank and are included in a
sale of a participation shall not be entitled to patronage distributions.  CoBank’s Pro Rata Share of the Loans and
other Secured Obligations due to CoBank shall be secured by a statutory first
lien on all equity which Borrower may now own or hereafter acquire in
CoBank.  Such equity shall not, however,
constitute security for the Secured Obligations due to any other Secured
Party.  CoBank shall not be obligated to
set off or otherwise apply such equities to Borrower’s obligations to
CoBank.  In the event of any liquidation,
sale, transfer or other disposition of Collateral that includes Borrower’s
participation certificates in CoBank, whether by foreclosure or otherwise, the
proceeds attributable to such participation certificates shall be equal to the
face value of such participation certificates as reflected in the official
records of CoBank.

 

2.8   Collateral Assignments of Material Contracts.  The Loan Parties shall promptly execute and deliver
to Administrative Agent, for the benefit of Administrative Agent and all
Lenders, all such Collateral Contract Assignments with respect to Material
Contracts as Administrative Agent may request from time to time, such
Collateral Contract Assignments to contain, to the extent obtainable through
the use of reasonably commercial efforts, a consent to the collateral
assignment of the applicable Material Contract satisfactory to Administrative
Agent and containing such other reasonable terms and conditions in light of the
nature of the applicable Material Contract and the parties thereto other than
the Loan Parties and their respective Subsidiaries.

 

2.9   Investment Company Act.  None of the Loan Parties nor any of their
respective Subsidiaries shall be or become an “investment company” as that term
is defined in the Investment Company Act of 1940, as amended.

 

2.10         Payment
of Obligations.  Unless contested in
good faith by appropriate proceedings and then only to the extent reserves
required by GAAP have been set aside therefore, the Loan Parties will, and will
cause each of their respective Subsidiaries to, (A) pay, discharge or
otherwise satisfy at or before maturity all liabilities and obligations as and
when due (subject to any applicable subordination provisions), and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations, except to the extent failure
to do so would not be reasonably likely to have a Material Adverse Effect, and (B) pay
and discharge all taxes, assessments, claims and governmental charges or levies
imposed upon it, upon its income or profits or upon any of its properties,
prior to the date on which penalties would attach thereto or a lien would
attach to any of the properties of the Loan Parties or their respective
Subsidiaries if unpaid unless the same are being contested in good faith and by
appropriate proceedings and then only if and to the extent reserves required by
GAAP have been set aside therefor.

 

2.11         Environmental Laws.  The Loan Parties will, and will at all times
cause each of their respective Subsidiaries to:

 

(A)          Comply in all
material respects with, and ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain

 

25

 

and comply in
all material respects with and maintain, and ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect;

 

(B)           Conduct and complete
all investigations, studies, sampling and testing, and all remedial, removal
and other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the pendency of
such proceedings could not reasonably be expected to have a Material Adverse
Effect; and

 

(C)           Defend, indemnify
and hold harmless Administrative Agent and Lenders, and their respective
employees, Administrative Agent, officers and directors, from and against any
and all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of any Loan Party or any of its respective Subsidiaries or their
respective properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable attorney’s
and consultant’s fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
is determined by a final and nonappealable judgment of a court of competent
jurisdiction to have resulted from the negligence or willful misconduct of the
party seeking indemnification therefor. 
The agreements in this Subsection 2.11 shall survive repayment of the
Obligations and the termination of this Agreement.

 

2.12         Creation
or Acquisition of Subsidiaries.  (A)  Promptly upon (and in any event within thirty
(30) days after) the creation or acquisition of any new Subsidiary by any Loan
Party or any Subsidiary of any Loan Party, each such new Subsidiary will
execute and deliver to Administrative Agent a Joinder Agreement, pursuant to
which such new Subsidiary (i) shall become a party hereto as a Guarantor
and (ii) shall become a party to the Pledge Agreement and shall deliver to
Administrative Agent all such other Security Documents and such legal opinions
as Administrative Agent shall reasonably request, and shall grant to
Administrative Agent a Lien upon and security interest in its Collateral, to
the extent provided in the Security Documents, for the Secured Obligations
(provided that any such new Subsidiary that constitutes a “controlled foreign
corporation” under Section 956 of the IRC shall be excluded from the
requirements of this Subsection 2.12(A)(i)); provided further that no assets of
a foreign Subsidiary that constitutes a controlled foreign corporation under Section 956
of the IRC shall be required to secure the Obligations by pledge or otherwise);
and

 

(B)           Promptly upon (and
in any event within thirty (30) days after (or such later date as the
Administrative Agent shall agree to in writing in its sole discretion)) the
creation or acquisition of a new Subsidiary, all capital stock or other equity
interest in such Subsidiary owned by any Loan Party or any Subsidiary of any
Loan Party will be pledged to Administrative Agent as follows (provided
that any equity interests in any foreign Subsidiary that constitutes a “controlled
foreign corporation” under Section 956 of the IRC which, when aggregated
with all of the other

 

26

 

shares of equity interests in such Subsidiary pledged to Administrative
Agent, would result in more than 65% of the total equity interests entitled to
vote of such Subsidiary being pledged to Administrative Agent, shall not be
pledged; provided further that no assets of a foreign Subsidiary that
constitutes a controlled foreign corporation under Section 956 of the IRC
shall be required to secure the Obligations by pledge or otherwise): (i) if
a Loan Party directly owns any of the capital stock of or other equity interest
in such new Subsidiary, such Loan Party will execute and deliver to
Administrative Agent an amendment or supplement to the Pledge Agreement
pursuant to which all such capital stock or other equity interest shall be
pledged to Administrative Agent, together with the certificates evidencing such
capital stock or other equity interest and undated stock or transfer powers
duly executed in blank and such legal opinions as Administrative Agent may
reasonably request; and (ii) if any of the capital stock of or other
equity interest in such new Subsidiary is owned by another Subsidiary (other
than a foreign subsidiary), to the extent not already covered by the Security
Agreement, such other Subsidiary will execute and deliver to Administrative
Agent an appropriate joinder, amendment or supplement to the Pledge Agreement,
pursuant to which all of the capital stock of or other equity interest in such
new Subsidiary owned by such other Subsidiary shall be pledged to
Administrative Agent, together with the certificates evidencing such capital
stock or other equity interest and undated stock or transfer powers duly
executed in blank and such legal opinions as Administrative Agent may
reasonably request.

 

As promptly as reasonably possible, the Loan Parties and their
respective Subsidiaries will deliver any such other documents, certificates and
opinions (including opinions of local counsel in the jurisdiction of
organization of each such new Subsidiary), in form and substance reasonably
satisfactory to Administrative Agent, as Administrative Agent may reasonably
request in connection therewith and will take such other action as Administrative
Agent may reasonably request to create in favor of Administrative Agent a
perfected security interest on a first-priority basis in the Collateral being
pledged pursuant to the documents described above.

 

The Administrative Agent may elect by written
notice to the Borrower to exempt (i) any new Subsidiary which is not
wholly-owned directly or indirectly by the Loan Parties and/or (ii) any
Loan Party who owns capital stock or other equity interest in such Subsidiary
from the requirements of all or any portion of this Subsection 2.12 if it
determines in its sole discretion that the costs to the Loan Parties of
complying with all or such portion of this Subsection 2.12 exceed the relative
benefit afforded the Secured Parties.

 

2.13         Interest
Rate Protection.  Within 90 days of
the Closing  Date, Borrower shall
have entered into or obtained, and Borrower will thereafter maintain in full
force and effect, Hedge Agreements in form and substance reasonably
satisfactory to Administrative Agent, the effect of which shall be to fix or
limit interest rates payable by Borrower as to at least 33% of the aggregate
principal balance of the Term Loan outstanding on the Closing Date for a period
of not less than two years after the Closing Date.  Borrower will deliver to Administrative
Agent, promptly upon receipt thereof, copies of such Hedge Agreements (and any
supplements or amendments thereto), and promptly upon request therefor, any
other information reasonably requested by Administrative Agent to evidence its
compliance with the provisions of this Subsection 2.13.

 

27

 

2.14         ERISA.

 

With respect to any Plan, other than a Multi-employer Plan, that is
intended to qualify under Section 401(a) of the IRC, the Loan Parties
will apply for and obtain a favorable determination letter within the period
provided by Applicable Law, unless the Plan was adopted by means of a master or
prototype plan that has received a favorable opinion letter from the Internal
Revenue Service upon which the Loan Parties are entitled to rely.

 

2.15         Post-Closing
Letter.

 

The Loan Parties shall take each of the actions specified in the
Post-Closing Letter within the time periods specified therein.

 

SECTION 3

NEGATIVE COVENANTS

 

Each of the Loan Parties hereby covenants and agrees that so long as
this Agreement is in effect and until payment in full of all Obligations (other
than contingent indemnity, expense reimbursement and tax gross-up payments for
which no claim has been asserted), unless Requisite Lenders shall otherwise
give their prior written consent, such Loan Party shall perform and comply, and
shall cause each of its respective Subsidiaries to perform and comply, with all
covenants in this Section 3.

 

3.1   Indebtedness. 
The Loan Parties will not, and will not permit any of their respective
Subsidiaries to, directly or indirectly, create, incur, assume, guaranty or
otherwise become or remain liable with respect to any Indebtedness other than:

 

(A)          the Loans and the
other Obligations;

 

(B)           the Contingent
Obligations permitted by Subsection 3.4;

 

(C)           Indebtedness
incurred in connection with any Hedge Agreement permitted pursuant to
Subsection 3.14;

 

(D)          So long as no Event
of Default exists before or will result after giving effect to such Indebtedness,
Indebtedness incurred by GTT in an aggregate outstanding amount not to exceed
$20,000,000 at any time and Indebtedness incurred by BDC in an aggregate
outstanding amount not to exceed $20,000,000 at any time upon terms and
conditions reasonably acceptable to Administrative Agent; provided, that,
the proceeds of any Indebtedness of BDC incurred pursuant to this Subsection
3.1(D) shall be used solely for the purposes of (i) repurchasing
stock of BDC from its owners other than Borrower or any of its Affiliates, (ii) paying
dividends to Borrower (directly or through one or more wholly-owned
Subsidiaries), or (iii) repaying Indebtedness owed to Borrower;

 

(E)           Indebtedness (i) incurred
by any Subsidiary which is not a Guarantor which is (1) owed to Borrower
or to any Subsidiary of the Borrower which is not a Loan Party and (2) permitted
pursuant to Subsection 3.3(F), (ii) incurred by a Loan Party which is owed
to Borrower or any other Loan Party, or (iii) incurred by any Subsidiary
which is not a Guarantor which is owed to another Subsidiary which is not a
Guarantor, provided that such Indebtedness is not (1) owed to GTT

 

28

 

or any of its
Subsidiaries by BDC or any of its Subsidiaries or (2) owed to BDC or any
of its Subsidiaries by GTT or any of its Subsidiaries;

 

(F)           (i) Indebtedness
of a Person or Indebtedness attaching to the assets of a Person that, in either
case, becomes a Subsidiary (or is a Subsidiary that survives a merger with such
Person) or Indebtedness attaching to assets that are acquired by Borrower or
any Subsidiary, in each case after the Closing Date as the result of a
Permitted Acquisition; provided that

 

(1)           such Indebtedness existed at the time such Person became a
Subsidiary or at the time such assets were acquired and, in each case, was not
created in anticipation thereof, and

 

(2)           such Indebtedness is not guaranteed in any respect by
Borrower or any Subsidiary (other than by any such Person that so becomes a
Subsidiary or is the survivor of a merger with such Person, or any of its
Subsidiaries), and

 

(3)           (a) the equity interests of such Person are pledged
to secure the Secured Obligations to the extent required hereunder, and (b) such
Person otherwise complies with Subsection 2.12, and

 

(4)           (a) after giving pro forma effect to the incurrence
of such Indebtedness and the application of proceeds thereof, Borrower is in
compliance with the covenants set forth in Subsections 4.1 through 4.3 for the
most recently ended test period and (b) except for Indebtedness consisting
of capital lease obligations, purchase money Indebtedness or mortgages or other
Liens on specific assets (x) no portion of such Indebtedness matures prior
to the latest maturity date of any of the Loans, and (y) no portion of
such Indebtedness is issued or guaranteed by a Person that is, or as a result
of such acquisition becomes, a Subsidiary that is not a Guarantor; and

 

(ii)           any modification, replacement, refinancing, refunding,
renewal or extension of any Indebtedness specified in subclause (i) above,
provided that, except to the extent otherwise expressly permitted
hereunder, (1) the principal amount of any such Indebtedness does not
exceed the principal amount thereof outstanding immediately prior to such
modification, replacement, refinancing, refunding, renewal or extension except
by an amount equal to the unpaid accrued interest and premium thereon plus
other reasonable amounts paid and fees and expenses incurred in connection with
such modification, replacement, refinancing, refunding, renewal or extension, (2) the
direct and contingent obligors with respect to such Indebtedness are not
changed and (3) if the Indebtedness being refinanced, or any guarantee
thereof, constituted subordinated indebtedness, then such replacement or
refinancing Indebtedness, or such guarantee, respectively, shall be
subordinated to the Secured Obligations to substantially the same extent;

 

(G)           Indebtedness in
respect of cash management and similar arrangements in the ordinary course of
business;

 

29

 

(H)          Indebtedness arising
from agreements of Borrower or any Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case entered into
in connection with the disposition of any business, assets or stock permitted
hereunder, other than Contingent Obligations incurred by any Person acquiring
all or any portion of such business, assets or equity interests for the purpose
of financing such acquisition, provided that such amount is not Indebtedness
required to be reflected on the balance sheet of the Borrower or any Subsidiary
in accordance with GAAP (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet will not
be deemed to be reflected on such balance sheet for purposes of this proviso);

 

(I)            Indebtedness
representing deferred compensation to employees of the Borrower and the
Subsidiaries incurred in the ordinary course of business; and

 

(J)            Indebtedness under
purchase money security agreements, Capital Leases, and other Indebtedness, the
aggregate principal amount of which shall not exceed $7,500,000 at any one
time.

 

3.2   Liens
and Related Matters.

 

(A)          No Liens.  The Loan Parties will not, and will not
permit any of their respective Subsidiaries to, directly or indirectly, create,
incur, assume or permit to exist any Lien on or with respect to any property or
asset (including any document or instrument with respect to goods or accounts
receivable) of the Loan Parties or their respective Subsidiaries, whether now
owned or hereafter acquired, or any income or profits therefrom, except
Permitted Encumbrances.

 

(B)           No Negative
Pledges. The Loan Parties will not and will not permit their respective
Subsidiaries directly or indirectly to enter into or assume any agreement
(other than the Loan Documents) prohibiting the creation or assumption of any
Lien upon its or their properties or assets, whether now owned or hereafter
acquired, except (i) operating leases, Licenses and Capital Leases and
agreements evidencing purchase money Indebtedness permitted pursuant to
Subsection 3.1(J), in each case which only prohibit Liens upon the assets that
are subject thereto, (ii) customary non-assignment clauses in agreements
entered into in the ordinary course of business, (iii) contracts for the
sale of assets permitted by Subsection 3.7, and (iv) restrictions imposed
by Applicable Law.

 

3.3   Investments. 
The Loan Parties will not, and will not permit any of their respective
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person except:

 

(A)          Investments in Cash
Equivalents;

 

(B)           obligations of or
equities in CoBank, as set forth in Subsection 2.7;

 

(C)           existing Investments
set forth on Schedule 3.3(C) and any extensions, and any
extensions, renewals or reinvestments thereof, so long as the amount of any
such Investment pursuant to this clause (C) is not increased at any time
above the amount of such Investment existing on the date hereof;

 

(D)          Permitted
Acquisitions;

 

(E)           Hedge Agreements
permitted pursuant to Subsection 3.14;

 

30

 

(F)           Investments in
Subsidiaries of the Loan Parties, provided that such advances are
evidenced by written demand promissory notes, such notes contain terms and
provisions reasonable acceptable to Administrative Agent, and such notes have
been delivered to Administrative Agent, provided, however, that (i) the
aggregate amount of Investments by Loan Parties in or to Subsidiaries of the
Loan Parties that are not Guarantors may not exceed $20,000,000 in any calendar
year (net of returned advances during such period) or a cumulative total (net
of returned advances during such period) of $40,000,000  during the term of this Agreement and (ii) such
Investments are not made to or in BDC or any of its Subsidiaries by GTT or any
of its Subsidiaries or to or in GTT or any of its Subsidiaries by BDC or any of
its Subsidiaries;

 

(G)           loans and advances
to officers, directors and employees of Borrower or any of its Subsidiaries (i) for
reasonable and customary business-related travel, entertainment, relocation and
analogous ordinary business purposes (including employee payroll advances), (ii) in
connection with such Person’s purchase of equity interests of Borrower to the
extent that the cash proceeds of such loans and advances are directly or
indirectly contributed to Borrower in cash and (iii) for purposes not
described in the foregoing subclauses (i) and (ii), in an
aggregate principal amount outstanding pursuant to this subclause (iii) not
to exceed $500,000;

 

(H)          Investments received
in connection with the bankruptcy or reorganization of suppliers or customers
and in settlement of delinquent obligations of, and other disputes with,
customers arising in the ordinary course of business or upon foreclosure with
respect to any secured Investment or other transfer of title with respect to
any secured Investment;

 

(I)            Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors and other credits to
suppliers in the ordinary course of business;

 

(J)            Investments in the
ordinary course of business consisting of endorsements for collection or
deposit and customary trade arrangements with customers consistent with past
practices;

 

(K)          advances of payroll
payments to employees in the ordinary course of business;

 

(L)           guarantee
obligations of any Loan Party of leases (other than capital leases) or of other
obligations that do not constitute Indebtedness, in each case entered into in
the ordinary course of business; and

 

(M)         Investments held by a
Person acquired (including by way of merger or consolidation) after the Closing
Date otherwise in accordance with this Subsection 3.3 to the extent that such
Investments were not made in contemplation of or in connection with such acquisition,
merger or consolidation and were in existence on the date of such acquisition,
merger or consolidation.

 

31

 

3.4   Contingent Obligations.  The Loan Parties will not, and will not
permit any of their respective Subsidiaries to, directly or indirectly, create
or become or be liable with respect to any Contingent Obligation except those:

 

(A)          resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business;

 

(B)           arising under
indemnity agreements to title insurers in connection with mortgagee title
insurance policies in favor of Administrative Agent for the benefit of itself
and the other Lenders;

 

(C)           arising with respect
to customary indemnification obligations incurred in connection with Permitted
Acquisitions and permitted Asset Dispositions (provided that such
obligations shall in no event exceed the amount of proceeds received in
connection therewith);

 

(D)          arising in the
ordinary course of business with respect to customary indemnification
obligations incurred in connection with liability insurance coverage;

 

(E)           incurred in the
ordinary course of business with respect to surety and appeal bonds,
performance and return-of-money bonds and other similar obligations not
exceeding at any time outstanding $2,000,000 in aggregate liability;

 

(F)           incurred as a
guaranty of Indebtedness permitted by Subsection 3.1 (provided that such
guaranty obligation shall in no event exceed the amount of such Indebtedness
plus other related costs and expenses of collection as set forth in such
guaranty);

 

(G)           constituting
Investments permitted pursuant to Section 3.3; and

 

(H)          Contingent
Obligations arising under the Loan Documents and under Hedge Agreements.

 

3.5   Restricted Junior Payments.  The Loan Parties will not, and will not
permit their respective Subsidiaries to, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Junior Payment; provided,
however, that (A) any Loan Party may make, declare or pay lawful
cash dividends or distributions to any other Loan Party, (B) any
Subsidiary may make, declare or pay lawful, pro rata cash dividends or
distributions and (C) so long as no Default under Subsections 6.1(A) or
(F) or any Event of Default exists before or will result after giving
effect to such distribution on a pro forma basis, Borrower may, during any
fiscal year commencing with the fiscal year ending December 31, 2008, (i) make,
declare or pay lawful cash dividends or distributions to its shareholders or
redeem capital stock in an aggregate amount which is greater of 50% of (1) Borrower’s
consolidated net income (excluding non-cash extraordinary items, such as the
writedown or writeup of assets) for the immediately preceding fiscal year or (2) Borrower’s
consolidated net income for the current year annualized and (ii) redeem or
repurchase capital stock of Borrower in connection with the termination of an
employee or any other Board approved stock redemption or repurchase plan in an
aggregate amount during each fiscal year not to exceed $250,000.

 

32

 

3.6   Restriction on Fundamental Changes.  The Loan Parties will not, and will not
permit their respective Subsidiaries to, directly or indirectly:  (A) unless and only to the extent
required by law or as would not be reasonably expected to be adverse to the
interests of Lenders, amend, modify or waive any term or provision of its
articles of organization, operating agreement, management agreements, articles
of incorporation, certificates of designations pertaining to preferred stock or
by-laws; or (B) enter into any transaction of merger or consolidation,
except that (i) any Subsidiary of Borrower may be merged with or into
Borrower (provided that Borrower is the surviving entity), (ii) any
Loan Party other than Borrower may merge or consolidate with any other Loan
Party other than Borrower, (iii) any Subsidiary that is not a Loan Party
may merge, dissolve, liquidate, consolidate with or into any Loan Party, provided
that such Loan Party shall be the continuing or surviving corporation, (iv) any
Subsidiary which is not a Loan Party may merge, dissolve, liquidate,
consolidate with or into any other Subsidiary which is not a Loan Party, (v) any
Permitted Acquisition or any permitted Investment or Asset Disposition may be
structured as merger, consolidation or amalgamation; (C) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution), except
in connection with another transaction permitted under clause (B) above;
or (D) acquire by purchase or otherwise all or any substantial part of the
business or assets of any Person or equity interests in any Person (whether by
stock purchase or otherwise) other than pursuant to a Permitted Acquisition; provided
that ten days prior to the effective date of such merger, consolidation,
dissolution, liquidation, or amalgamation in the case of clause (B) or
clause (C), or such acquisition in the case of clause (D), and promptly
following such amendment, modification or waiver in the case of clause (A), the
Borrower shall provide written notice and a copy thereof or the documentation
relating thereto to Administrative Agent.

 

3.7   Disposal of Assets or Subsidiary Stock.  The Loan Parties will not, and will not permit
their respective Subsidiaries to, directly or indirectly, convey, sell
(including, without limitation, pursuant to a sale and leaseback transaction,
except those that would be permitted under Subsection 3.1(J) deeming any
such sale-leaseback to be Indebtedness, subject to documentation reasonably
satisfactory to Administrative Agent), lease (including, without limitation,
pursuant to a lease or sale and leaseback transaction), sublease, transfer or
otherwise dispose of, or grant any Person an option to acquire, in one
transaction or a series of transactions, any of its property, business or
assets, or the capital stock of or other equity interests in any such
Subsidiary, whether now owned or hereafter acquired, except for (A) bona
fide sales or leases of inventory to customers in the ordinary course of
business, dispositions of surplus, worn out or obsolete equipment, and any
conveyance, lease, sublease, transfer or other disposition of assets of any
Loan Party or its Subsidiaries to any Loan Party; (B) fair market value
sales of Cash Equivalents; (C) leasing or subleasing of its property in
the ordinary course of business; (D) any Asset Disposition required by
law; (E) any Asset Disposition of non-core assets of a company acquired
pursuant to a Permitted Acquisition provided that such Asset Disposition occurs
within 18 months of such Permitted Acquisition, and (F) all other Asset
Dispositions if all of the following conditions are met: (i) the aggregate
market value of such assets sold in any fiscal year of Borrower does not exceed
$7,500,000 in the aggregate for the Loan Parties and their respective
Subsidiaries; (ii) the consideration received by the Loan Party or such
Subsidiary is at least equal to the fair market value of such assets; (iii) the
sole consideration received is cash or equipment of comparable value to that
disposed of and that is to be used in the business of the Loan Party or such
Subsidiary; (iv) after giving effect to the Asset Disposition, Borrower,
on a combined and consolidated basis with its Subsidiaries as set forth in Section 4,
is in compliance on a pro forma

 

33

 

basis with the covenants set forth in Section 4 recomputed for the
most recently ended fiscal quarter for which information is available; and (v) no
Default or Event of Default then exists or shall result from the Asset
Disposition.

 

3.8   Transactions with Affiliates.  The Loan Parties will not, and will not
permit their respective Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate or
with any director or officer of the Loan Parties or any Affiliate, except (A) as
set forth on Schedule 3.8 or as permitted pursuant to Subsections 3.3,
3.5, 3.6, 3.7 and 3.9; (B) transactions upon fair and reasonable terms
which (in the case of transactions requiring payments by any Loan Party or its
Subsidiaries in the aggregate in excess of $250,000 in any fiscal year) are
fully disclosed to Lenders and are no less favorable to such Loan Party or such
Subsidiary than would be obtained in a comparable arm’s length transaction with
a Person that is not an Affiliate; (C) transactions among the Loan Parties;
or (D) payment of compensation to directors, officers and employees in the
ordinary course of business for services actually rendered in their capacities
as directors, officers and employees, provided such compensation is
reasonable and comparable with compensation paid by companies of like nature
and similarly situated.

 

3.9   Management Fees.  The Loan Parties will not, and will not
permit their respective Subsidiaries to, directly or indirectly, pay any
management or other similar fees to any Person; except management fees paid (A) to
any Loan Party, or (B) other management or similar fees proposed by
Borrower and reasonably satisfactory to Requisite Lenders.

 

3.10         Conduct
of Business.  The Loan Parties will
not, and will not permit their respective Subsidiaries to, directly or
indirectly, engage in any business other than businesses of owning,
constructing, managing, operating and investing (subject to Subsection 3.3) in
Communications Systems or other businesses related or incidental thereto.

 

3.11         Fiscal
Year.  The Loan Parties will not, and
will not permit their respective Subsidiaries to, change its or their fiscal
year from a fiscal year ending on December 31 of each year.

 

3.12         Modification
of Agreements.  The Loan Parties will
not amend, modify or change, or consent or agree to any amendment, modification
or change to, any of the terms of any Material Contracts, except to the extent
such change, amendment, modification or consent is not materially adverse to
Administrative Agent or any Lender and would not otherwise have a Material
Adverse Effect.

 

3.13         Inconsistent
Agreements.    The Loan Parties will
not, and will not permit their respective Subsidiaries to, enter into any
agreement containing any provision which would (A) be violated or breached
by any borrowing by Borrower hereunder or by the performance by the Loan
Parties or their respective Subsidiaries of any of their obligations hereunder
or under any other Loan Document (other than permitted Capital Leases and
purchase money security agreements)or (B) create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of
such Loan Party or Subsidiary to (i) pay dividends or make other
distributions to its parent or any other applicable Subsidiary of its parent,
or pay any Indebtedness owed to its parent or any

 

34

 

Subsidiary of its parent, (ii) make loans or advances to its
parent or (iii) transfer any of its assets or properties to its parent; in
each case, other than restrictions affecting non-wholly-owned Subsidiaries.

 

3.14         Hedging
Agreements.    The Loan Parties will
not, and will not permit their respective Subsidiaries to, engage in any
speculative transactions or in any transaction involving a Hedging Agreement
except as required by Subsection 2.13 or for the sole purpose of hedging in the
normal course of business.

 

SECTION 4

FINANCIAL COVENANTS AND REPORTING

 

The Loan Parties hereby covenant and agree that so long as this
Agreement is in effect and until payment in full of all Obligations (other than
contingent indemnity, expense reimbursement and tax gross-up payment for which
no claim has been asserted), unless Requisite Lenders shall otherwise give
their prior written consent, the Loan Parties shall perform and comply with,
and shall cause each of their respective Subsidiaries to perform and comply
with, all covenants in this Section 4. For the purposes of this Section 4,
all covenants calculated for Borrower shall be calculated on a consolidated basis
for Borrower and its Subsidiaries.

 

4.1   Total Net Leverage Ratio.  Commencing on the Closing Date, Borrower
shall maintain at all times, measured at each fiscal quarter end, a Total Net
Leverage Ratio of less than or equal to 3.0:1:0; provided, however,
Borrower will have 30 days after the applicable reporting date to cure any
default under this Subsection 4.1 by reducing the Indebtedness of Borrower on a
consolidated basis or increasing the Borrower Pledged Cash and Cash
Equivalents, in either case, solely through an equity issuance.

 

4.2   Total Interest Coverage Ratio.  Commencing on the Closing Date, Borrower
shall maintain at all times, measured at each fiscal quarter end, a Total
Interest Coverage Ratio greater than or equal to 3.5:1.0.

 

4.3   Equity to Assets Ratio.  Commencing on the Closing Date, Borrower
shall maintain at all times, measured at each fiscal quarter end, an Equity to
Assets Ratio greater than or equal to 0.40:1.0.

 

4.4   Financial Statements and Other Reports.  The Loan Parties will maintain, and will
cause their respective Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in conformity with GAAP consistently
applied (it being understood that quarterly financial statements are not
required to have footnote disclosures or reflect year end adjustments).  Borrower will deliver or cause to be
delivered each of the financial statements and other reports described below to
Administrative Agent (and each Lender in the case of the financial statements
and other reports described in Subsections 4.4(A) through (I) and
(K)).

 

(A)          Quarterly
Financials; Other Quarterly Reports.  As soon as available and in any event no
later than the earlier to occur of (i) 10 days after the date that
Borrower is or would be required to file Borrower’s quarterly report with the
Securities and Exchange Commission (the

 

35

 

“SEC”) as part of Borrower’s
periodic reporting (whether or not the Borrower is subject to such reporting
requirements) and (ii) 55 days after the end of the first three fiscal
quarters of each fiscal year of the Borrower, the Borrower will deliver
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, as at the end of such fiscal quarter and the then elapsed portion
of the applicable fiscal year, and the related consolidated and consolidating
statements of income, shareholders’ equity and cash flows for such fiscal
quarter and for the period from the beginning of the then current fiscal year
of the Borrower to the end of such quarter (which requirement shall be deemed
satisfied by the delivery of the Borrower’s quarterly report on Form 10-Q
(or any successor form) for such quarter).

 

(B)           Year-End
Financials.  As soon as available and in any event no
later than the earlier to occur of (i) 10 days after the date that
Borrower is or would be required to file Borrower’s annual report with the SEC
as part of Borrower’s periodic reporting (whether or not the Borrower is
subject to such reporting requirements), and (ii) 100 days after the end
of each fiscal year of Borrower, the Borrower will deliver (a) consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries, as at
the end of such year, and the related consolidated and consolidating statements
of income, shareholders’ equity and cash flows for such fiscal year (which
requirement shall be deemed satisfied by the delivery of the Borrower’s Annual
Report on Form 10-K (or any successor form) for such year) and (b) a
report with respect to the financial statements received pursuant to this
Subsection from PricewaterhouseCoopers LLP or another firm of independent
certified public accountants of recognized national standing selected by the
Borrower and reasonably acceptable to the Administrative Agent, which report
shall be prepared in accordance with Statement of Auditing Standards No. 58
(the “Statement”), as amended,
entitled “Reports on Audited Financial Statements” and such report shall be
without any material qualification or exception as to the scope of such audit
or any “going concern” qualification.

 

(C)           Compliance
Certificates.  Together with each delivery of financial
statements of Borrower and its Subsidiaries pursuant to Subsections 4.4(A) and
(B), Borrower will deliver or cause to be delivered a fully and properly
completed compliance certificate in substantially the same form as Exhibit 4.4(C) (each,
a “Compliance Certificate”) signed
by two of the chief executive officer, the chief financial officer and the
chief accounting officer of Borrower.

 

(D)          Accountants’
Reliance Letter.  Together with each delivery of financial
statements of Borrower and its Subsidiaries pursuant to Subsection 4.4(B),
Borrower will deliver or cause to be delivered a copy of letters addressed to
Borrower’s certified public identifying Lenders as parties that Borrower intend
to rely on such professional services provided to Borrower by such accountants.

 

(E)           Accountants’
Reports.  Promptly upon receipt thereof, Borrower will
deliver or cause to be delivered copies of all significant reports submitted by
Borrower’s firm of certified public accountants in connection with each annual,
interim or special audit or review of any type of the financial statements or
related internal control systems of Borrower made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their services.

 

36

 

(F)           Management
Report.  Together with each delivery of financial
statements of Borrower and its Subsidiaries pursuant to Subsections 4.4(A) and
4.4(B), Borrower will deliver or cause to be delivered (i) if Borrower is
no longer subject to reporting requirements of the Act, reports in scope and
content substantively similar to its present SEC reporting and (ii) quarterly
operational data in scope and content substantially similar to that data now
provided to Borrower’s Board of Directors as its monthly “Dashboard.”  The
information above shall be presented in reasonable detail and shall be
certified by the chief financial officer or chief operating officer of
Borrower, respectively, to the effect that, to his or her knowledge after
reasonable diligence, such information fairly presents the results of
operations and financial condition of Borrower and its Subsidiaries as at the
dates and for the periods indicated.

 

(G)           Budget.  (i)  As soon as
reasonably available, but in any event within 60 days after the first day of
each fiscal year of Borrower, respectively, occurring during the term hereof,
Borrower shall deliver or cause to be delivered operating and capital spending
budgets (the “Budgets”) of
Borrower and its Subsidiaries for such fiscal year, quarter by quarter and (ii) promptly
after becoming aware thereof, Borrower will deliver or cause to be delivered
any material amendment to or deviation from such Budgets.

 

(H)          SEC
Filings and Press Releases.  Promptly upon their becoming available,
Borrower will deliver or cause to be delivered copies of (i) all financial
statements, reports, notices and proxy statements sent or made available by any
Loan Party or any of their respective Subsidiaries to any of their security
holders generally, (ii) all regular and periodic reports and all
registration statements and prospectuses, if any, filed by any Loan Party or
any of their respective Subsidiaries with any securities exchange or with the
SEC or any governmental or private regulatory authority, and (iii) all
material press releases and other statements made available by any Loan Party
or any of their respective Subsidiaries to the public concerning developments
in the business of any such Person.

 

(I)            Events
of Default, Etc.  Promptly upon any executive officer of any
Loan Party obtaining knowledge of any of the following events or conditions,
Borrower shall deliver copies of all notices given or received by any Loan
Party or any of their respective Subsidiaries with respect to any such event or
condition and a certificate of Borrower’s chief executive officer or chief
operating officer of specifying the nature and period of existence of such
event or condition and what action, if any, such Loan Party or such Subsidiary
has taken, is taking and proposes to take with respect thereto:  (i) any Event of Default or Default; or (ii) any
notice that any Person has given to any Loan Party or any of their respective
Subsidiaries or any other action taken with respect to a claimed default or
event or condition of the type referred to in Subsection 6.1(B).

 

(J)            Litigation. 
Promptly upon any officer of any Loan Party obtaining knowledge of (i) the
institution of any action, suit, proceeding, governmental investigation or
arbitration against or affecting any Loan Party or any of their respective
Subsidiaries not previously disclosed by Borrower to Administrative Agent or (ii) any
material development in any action, suit, proceeding, governmental
investigation or arbitration at any time pending against or affecting any Loan
Party or any of their respective Subsidiaries which, in each case, could
reasonably be expected to have a Material Adverse Effect, Borrower will
promptly give notice thereof to Administrative Agent and

 

37

 

provide such other information as may be requested by Administrative
Agent and reasonably available to any Loan Party to enable Administrative Agent
and its counsel to evaluate such matter.

 

(K)          Regulatory
and Other Notices.  Within 30 days after filing, receipt or
becoming aware thereof, Borrower will deliver or cause to be delivered copies
of any filings or communications sent to or notices and other communications
received by any Loan Party or any of their respective Subsidiaries from any
Governmental Authority, including the FCC, any applicable PUC and the SEC,
relating to any noncompliance by any Loan Party or any of their respective
Subsidiaries with any law or with respect to any matter or proceeding the
effect of which could reasonably be expected to have a Material Adverse Effect.

 

(L)           Material
Adverse Effect.  Promptly after becoming aware thereof,
Borrower will give written notice to Administrative Agent and Lenders of any
change in events or changes in facts or circumstances affecting any Loan Party
or any of their respective Subsidiaries which individually or in the aggregate
have had or could reasonably be expected to have a Material Adverse Effect.

 

(M)         Environmental
Notices.    Promptly after becoming aware of any
material violation by any Loan or any of their respective Subsidiaries of
Environmental Laws or promptly upon receipt of any notice that a Governmental
Authority has asserted that any Loan Party or any of their respective
Subsidiaries is not in compliance with Environmental Laws or that its
compliance is being investigated, and, in either case, the same could
reasonably be expect to have a Material Adverse Effect, Borrower will give
notice to Administrative Agent and Lenders thereof and provide such other
information as may be reasonably available to any Loan Party or any of their
respective Subsidiaries to enable Administrative Agent and Lenders to
reasonably evaluate such matter.

 

(N)          ERISA
Events.  Immediately after becoming aware of any ERISA
Event, accompanied by any materials required to be filed with the PBGC with
respect thereto; immediately after any Loan Party’s or any of their respective
Subsidiaries’ receipt of any notice concerning the institution of proceedings
by the PBGC pursuant to Section 4042 of ERISA to involuntarily terminate
any Pension Plan or to appoint a trustee to administer any Pension Plan;
immediately upon the establishment of any Pension Plan not existing at the
Closing Date or the commencement of contributions by any Loan Party or any of
their respective Subsidiaries to any Pension Plan to which any Loan Party or
any of their respective Subsidiaries was not contributing at the Closing Date;
and immediately upon becoming aware of any other event or condition regarding a
Plan or any Loan Party’s or any of their respective Subsidiaries’ or an ERISA
Affiliate’s compliance with ERISA which could reasonably be expected to have a
Material Adverse Effect, Borrower will give notice to Administrative Agent and
Lenders thereof and provide such other information as may be reasonably
available to any Loan Party or any such Subsidiary to enable Administrative
Agent and Lenders to reasonably evaluate such matter.

 

(O)          Other
Information.  With reasonable promptness, Borrower will
deliver such other information and data with respect to any Loan Party or any
of their respective Subsidiaries as from time to time may be reasonably
requested by Administrative Agent or any Lender.

 

38

 

4.5   Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement. 
For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to such terms in conformity
with GAAP.  Except as otherwise expressly
provided, financial statements and other information furnished to
Administrative Agent pursuant to this Agreement shall be prepared in accordance
with GAAP as in effect at the time of such preparation.  In the event of an Accounting Change (as
defined below) that results in a change in any calculations required by Section 4
of this Agreement that would not have resulted had such Accounting Change not
occurred, the parties hereto agree to enter into negotiations in good faith in
order to amend such provisions so as to equitably reflect such Accounting
Change such that the criteria for evaluating compliance with such covenants
shall be the same after such Accounting Change as if such Accounting Change had
not been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with Section 4 of this Agreement
shall be given effect until such provisions are amended to reflect such change
in GAAP.  “Accounting Change” means any change in accounting principles
that is required or permitted hereafter by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto) and
such change is adopted by Borrower and the other Loan Parties with the
agreement of its accoutnants.

 

SECTION 5

REPRESENTATIONS AND WARRANTIES

 

In order to induce Administrative Agent and Lenders to enter into this
Agreement and to make Loans, each of the Loan Parties hereby represents and
warrants to Administrative Agent and each Lender on the Closing Date, the
Closing Date and on the date of each request for a Loan or the issuance of a
Letter of Credit that the following statements are true, correct and complete:

 

5.1   Disclosure. 
The information furnished by or on behalf of the Loan Parties or any of
their respective Subsidiaries contained in this Agreement, the financial
statements referred to in Subsection 5.8 and any other document, certificate,
opinion or written statement furnished to Administrative Agent or any Lender
pursuant to this Agreement or any other Loan Document (other than projections),
taken as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made.  Any
projections provided by or on behalf of the Loan Parties or any of their
respective Subsidiaries have been prepared by management in good faith and
based upon assumptions believed by management to be reasonable at the time the
projections were prepared.

 

5.2   No Material Adverse Effect.  Since December 31, 2007, there has been
no event or change in facts or circumstances affecting the Loan Parties or any
of their respective Subsidiaries which individually or in the aggregate have
had or could reasonably be expected to have a Material Adverse Effect and that
have not been disclosed herein or in the attached Schedules.

 

39

 

5.3   Organization, Powers, Authorization and Good Standing.

 

(A)          Organization
and Powers.  Each of the Loan Parties and their respective
Subsidiaries is a limited liability company, corporation or partnership duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization or incorporation (which jurisdiction is set forth
on Schedule 5.3(A)).  Except as
disclosed on Schedule 5.3(A), each of the Loan Parties and their
respective Subsidiaries has all requisite legal power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted, to enter into each Loan Document to which it is a party and to
carry out its respective obligations with respect thereto.

 

(B)           Authorization;
Binding Obligation.  Each of the Loan Parties and their respective
Subsidiaries has taken all necessary limited liability company, partnership,
corporate and other action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is a party.
This Agreement is, and the other Loan Documents when executed and delivered
will be, the legally valid and binding obligations of the applicable parties
thereto (other than Administrative Agent and Lenders), each enforceable against
each of such parties, as applicable, in accordance with their respective terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debt or relief laws from
time to time in effect which affect the enforcement of creditors’ rights in
general and general principles of equity.

 

(C)           Qualification. 
Each of the Loan Parties and their respective Subsidiaries is duly
qualified and authorized to do business and in good standing in each
jurisdiction where the nature of its business and operations requires such
qualification and authorization, except where the failure to be so qualified,
authorized and in good standing could not reasonably be expected to have a
Material Adverse Effect.  All
jurisdictions in which each Loan Party is qualified and authorized to do
business are set forth on Schedule 5.3(C).

 

5.4   Compliance of Agreement, Loan Documents and
Borrowings with Applicable Law.Except as set forth on Schedule 5.4, the
execution, delivery and performance by the Loan Parties and their respective
Subsidiaries of the Loan Documents to which each such Person is a party, the
borrowings hereunder and the transactions contemplated hereby and thereby do
not and will not, by the passage of time, the giving of notice or otherwise, (A) require
any Governmental Approval or violate any Applicable Law relating to the Loan
Parties or any of their respective Subsidiaries, (B) conflict with, result
in a breach of or constitute a default under the articles of incorporation,
bylaws or other organizational documents of the Loan Parties or any of their
respective Subsidiaries or any Material Contract to which such Person is a
party or by which any of its properties may be bound or any Governmental
Approval relating to such Person or (C) except as required or permitted
under the Loan Documents, result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter acquired
by such Person.

 

5.5   Compliance with Law; Governmental Approvals.  Each of the Loan Parties and their respective
Subsidiaries (A) has, or has the right to use, all material Governmental
Approvals, including the Licenses, required by any Applicable Law for it to
conduct its business, and (B) is in material compliance with each
Governmental Approval, including the Licenses, applicable to it and

 

40

 

in compliance with all other Applicable Laws relating to it or any of
its respective properties the violation of which could reasonably be expected
to have a Material Adverse Effect.

 

5.6   Tax Returns and Payments.  Each of the Loan Parties and their respective
Subsidiaries have duly filed or caused to be filed all federal and all material
state, local and other tax returns required by Applicable Law to be filed, and
has paid, or made adequate provision for the payment of, all federal and all
material state, local and other taxes, assessments and governmental charges or
levies upon it and its property, income, profits and assets which are due and
payable, except where the payment of such tax is being diligently
contested in good faith and adequate reserves therefor have been established in
compliance with GAAP.  The charges,
accruals and reserves on the books of the Loan Parties and their respective
Subsidiaries in respect of federal, state, local and other taxes for all fiscal
years and portions thereof are in the judgment of the Loan Parties adequate,
and neither the Loan Parties nor any of their respective Subsidiaries
anticipates any additional material taxes or assessments for any of such years.

 

5.7   Environmental Matters.  Each of the Loan Parties and their respective
Subsidiaries is in compliance in all material respects with all applicable
Environmental Laws, and there is no contamination in material violation of
applicable Environmental Laws at, under or about such properties or such
operations of the Loan Parties and their respective Subsidiaries which
interfere in any material respect with the continued operation of such
properties or impair in any material respect the fair saleable value thereof or
with such operations, except for any such violations or contamination as could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

 

5.8   Financial Statements.

 

(A)          All financial
statements concerning the Loan Parties and their respective Subsidiaries which
have been furnished to Administrative Agent and Lenders pursuant to this
Agreement have been prepared in accordance with GAAP consistently applied
(except as disclosed therein and, in the case of unaudited financial
statements, except for the absence of notes and for year-end adjustments) and
present fairly in all material respects the financial condition of the Persons
covered thereby as of the date thereof and the results of their operations for
the periods covered thereby and do and will disclose all material liabilities
and Contingent Obligations of any of the Loan Parties or their respective
Subsidiaries as at the dates thereof.

 

(B)           All
Budgets concerning the Loan Parties and their respective Subsidiaries which
have been furnished to Administrative Agent or Lenders were prepared in good
faith by or on behalf of such Loan Party and such Subsidiaries.

 

5.9   Intellectual Property.  Each of the Loan Parties and their respective
Subsidiaries owns, or possesses the right to use all patents, copyrights,
trademarks, trade names, service marks, technology know-how and processes
necessary for the conduct of its business as currently or anticipated to be
conducted (collectively, the “Intellectual
Property Rights”) without infringing upon any validly asserted
rights of others, except for any Intellectual Property Rights the absence of
which could not reasonably be expected to have a Material Adverse Effect.  No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights except to the extent the same would not, individually or in the
aggregate, reasonably be expected to

 

41

 

result in a Material Adverse Effect. 
Neither the Loan Parties nor any of their respective Subsidiaries has
been threatened in writing with any litigation regarding Intellectual Property
Rights that would present a material impediment to the business of any such
Person.

 

5.10         Litigation,
Investigations, Audits, Etc.  Except
as set forth on Schedule 5.10, there is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Loan Parties,
threatened against the Loan Parties or any of their respective Subsidiaries or
any of their respective properties, including the Licenses, in any court or
before any arbitrator of any kind or before or by any Governmental Authority
(including the FCC or any PUC), except such as (A) affect the
telecommunications industry generally, (B) do not call into question the
validity or enforceability of this Agreement or any other Loan Document or any
lien or security interest created hereunder, or (C) individually or
collectively would not reasonably be expected to have a Material Adverse
Effect.  Except as set forth on Schedule
5.10, to the Loan Parties’ knowledge, none of the Loan Parties or any of
their respective Subsidiaries are the subject of any review or audit by the
Internal Revenue Service or any investigation by any Governmental Authority
concerning the violation or possible violation of any law (other than routine
IRS audits).

 

5.11         Employee
Labor Matters.  Except as set forth
on Schedule 5.11, (A) none of the Loan Parties, their respective
Subsidiaries or their respective employees is subject to any collective
bargaining agreement, (B) no petition for certification or union election
is pending with respect to the employees of any such Person and no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any such Person and (C) there are no strikes,
slowdowns, unfair labor practice complaints, work stoppages or controversies
pending or, to the best knowledge of the Loan Parties after due inquiry,
threatened between any such Person and its respective employees, other than
employee grievances arising in the ordinary course of business that would not
(in the case of each of clauses (A), (B) or (C) above) reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

5.12         ERISA Compliance.

 

(A)          Each Plan is in
compliance in all material respects with the applicable provisions of ERISA,
the IRC and other federal or state law except for any noncompliance that would
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.  Each Plan,
other than a Multi-employer Plan, which is intended to qualify under Section 401(a)
of the IRC has received a favorable determination letter from the Internal
Revenue Service or is adopted by means of a master or prototype plan that has
received a favorable opinion letter upon which the Loan Parties are entitled to
rely and to the best knowledge of the Loan Parties, nothing has occurred that
would cause the loss of such qualification. 
The Loan Parties and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the IRC, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the IRC has been made with respect to any Plan.

 

(B)           There are no pending
or, to the best knowledge of the Loan Parties, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan
which has resulted or could reasonably be expected to have a Material Adverse
Effect.  There has been no

 

42

 

prohibited
transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or could reasonably be expected to have
a Material Adverse Effect.

 

(C)           (i) No ERISA
Event has occurred or is reasonably expected to occur; (ii) no Pension Plan
has any unfunded liability; (iii) neither the Loan Parties nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Loan
Parties nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multi-employer Plan; and (v) neither
the Loan Parties nor any ERISA Affiliate has engaged in a transaction that
could subject any Person to Section 4069 or 4212(c) of ERISA.

 

5.13         Communications
Regulatory Matters.

 

(A)          Schedule 5.13(A) sets forth a true and complete
list of the following information for each License issued to or utilized by the
Loan Parties or their respective Subsidiaries: 
the name of the licensee, the type of service, the expiration date and
the geographic area covered by such License.

 

(B)           Other than as set forth
on Schedule 5.13(B), the Licenses are valid and in full force and effect
without conditions except for such conditions as are generally applicable to holders
of such Licenses.  Other than as set forth
on Schedule 5.13(B),
each Loan Party has all requisite power and authority required under the Communications
Act and PUC Laws to hold the Licenses and to own and operate the Communications
Systems.  Other than as set forth on Schedule
5.13(B), the Licenses constitute in all material respects all of the Licenses
necessary for the operation of the Communications Systems in the same manner as
it is presently conducted.  Other than as
set forth on Schedule 5.13(B), no event has occurred and is continuing which
could reasonably be expected to (i) result in the imposition of a material forfeiture
or the suspension, revocation, termination or adverse modification of any such License
or (ii) materially and adversely affect any rights of the Loan Parties or their
respective Subsidiaries thereunder.  Except
as otherwise set forth on Schedule 5.13(B), the Loan Parties have no reason
to believe and have no knowledge that any License will not be renewed in the ordinary
course.  Other than as set forth on Schedule
5.13(B), neither the Loan Parties nor any of their respective Subsidiaries is
a party to any investigation, notice of apparent liability, notice of violation,
order or complaint issued by or before the FCC, PUC or any applicable Governmental
Authority, and there are no proceedings pending by or before the FCC, PUC or any
applicable Governmental Authority which could in any manner threaten or adversely
affect the validity of any License.

 

(C)           All of the material
properties, equipment and systems owned, leased or managed by the Loan Parties
or their respective Subsidiaries are, and (to the best knowledge of the Loan
Parties) all such property, equipment and systems to be acquired or added in
connection with any contemplated system expansion or construction will be, in
good repair, working order and condition (reasonable wear and tear excepted)
and are and will be in compliance with all terms and conditions of the Licenses
and all standards or rules imposed by any Governmental Authority or as imposed
under any agreements with telecommunications companies and customers.

 

43

 

(D)          Each of the Loan
Parties and their respective Subsidiaries has made all material filings which
are required to be filed by it, paid all material franchise, license or other
fees and charges related to the Licenses or which have become due pursuant to
any Governmental Approval in respect of its business and has made appropriate
provision as is required by GAAP for any such fees and charges which have
accrued.

 

5.14         Perfection and Priority.  The Security Agreement is effective to create
in favor of Administrative Agent for the benefit of the Secured Parties, a
legal, valid and enforceable security interest in and Lien on the Collateral
covered thereby (the “Security Agreement
Collateral”) and, when (A) financing statements and other
filings in appropriate form are filed in the appropriate offices and (B) upon
the taking of possession or control by Administrative Agent of the Security
Agreement Collateral with respect to which a security interest may be perfected
only by possession or control (which possession or control shall be given to
Administrative Agent to the extent possession or control by Administrative
Agent is required by each Security Document), the Lien created by the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in the Security
Agreement Collateral (other than such Security Agreement Collateral in which a
security interest cannot be perfected under the UCC as in effect at the
relevant time in the relevant jurisdiction or as to which the steps to effect
such perfection are not required to be taken under the Security Agreement), in
each case subject to no Liens other than Liens permitted hereunder.

 

5.15         Solvency.  Each of the Loan Parties and their respective
Subsidiaries:  (A) owns and will own
assets the present fair saleable value of which are (i) greater than the
total amount of liabilities (including contingent liabilities) of the Loan
Parties and their respective Subsidiaries, and (ii) greater than the
amount that will be required to pay the probable liabilities of its then
existing debts and liabilities as they become absolute and matured considering
all financing alternatives and potential asset sales reasonably available to
such Loan Party or such Subsidiary of a Loan Party; (B) has capital that
is not unreasonably small in relation to its business as presently conducted or
after giving effect to any contemplated transaction; and (C) does not
intend to incur and does not believe that it will incur debts and liabilities
beyond its ability to pay such debts and liabilities as they become due.

 

5.16         Investment
Company Act.  None of the Loan
Parties or any of their respective Subsidiaries is an “investment company” as
that term is defined in the Investment Company Act of 1940, as amended.

 

5.17         Intentionally
omitted.

 

5.18         Title
to Properties.  The Loan Parties and
their respective Subsidiaries have such title or leasehold interest in and to
the real property or interests therein, including easements, licenses and
similar rights in real estate, owned or leased by it as is necessary to the
conduct of its business and valid and legal title or leasehold interest in and
to all of its personal property, including those reflected on the balance
sheets of the Loan Parties delivered as described in Subsection 5.8,
except those which have been disposed of by the Loan Parties subsequent to such
date pursuant to transactions permitted hereunder.

 

5.19         Subsidiaries.  Schedule 5.19 sets forth a complete
and accurate list of all direct or indirect Subsidiaries of the Loan Parties as
of the Closing Date, including for each such Subsidiary

 

44

 

whether such Subsidiary is wholly owned by the applicable Loan Party,
and if not, the percentage ownership of such Loan Party or its Subsidiary in
such Subsidiary.

 

5.20         Transactions
with Affiliates.  No Affiliate of any
Loan Party is a party to any agreement, contract, commitment or transaction
with such Loan Party or has any material interest in any material property used
by such Loan Party, except as permitted by Subsections 3.8 and 3.9.

 

5.21         Patriot
Act.  Each of the Loan Parties and
their respective Subsidiaries is in compliance, in all material respects, with
the (A) Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (B) Uniting And Strengthening
America By Providing Appropriate Tools Required To Intercept And Obstruct
Terrorism (USA Patriot Act of 2001).  No
part of the proceeds of the Loans will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any
improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended.

 

SECTION 6

EVENTS OF DEFAULT AND RIGHTS AND REMEDIES

 

6.1   Event of Default.  “Event of
Default” shall mean the occurrence or existence of any one or more
of the following:

 

(A)          Payment. 
(i) Failure to repay any outstanding principal amount of the Loans
at the time required pursuant to this Agreement or to reimburse any Issuing
Lender when due for any payment made by such Issuing Lender under or with
respect to any Letter of Credit (unless the Issuing Lender is otherwise
reimbursed by a Revolver Loan pursuant to Section 1.1(F)(ii)), or (ii) failure
to pay any interest on any Loan, any other amount due under this Agreement or
any of the other Loan Documents, or any other Secured Obligation, and in the
case of this clause (ii) such failure continues for three Business Days;
or

 

(B)           Default
in Other Agreements.  (i) Failure of any Loan Party or any of
their respective Subsidiaries to pay when due or within any applicable grace
period any principal or interest on Indebtedness (other than the Loans) or any
Contingent Obligation; or (ii) any other breach or default of any Loan
Party or any of their respective Subsidiaries with respect to any Indebtedness
(other than the Loans), the effect of such breach or default (either
individually or in the aggregate with any other breaches or defaults under this
clause (ii)) is to cause or to permit the holder or holders then to cause any
Indebtedness or Contingent Obligation having an aggregate principal amount for
one or more the Loan Parties in excess of $2,500,000 or an aggregate principal
amount for one or more of the Loan Parties and their respective Subsidiaries in
excess of $7,500,000 to become or be declared due prior to its stated maturity;
or

 

(C)           Breach
of Certain Provisions.  Failure of any Loan Party or any of their
respective Subsidiaries to perform or comply with any term or condition
contained in that portion of

 

45

 

Subsection 2.2 relating to such Loan Party’s or its respective
Subsidiaries’ obligation to maintain insurance, Subsection 2.5, Section 3
or Section 4 (excluding Subsection 4.4); or

 

(D)          Breach
of Warranty.  Any representation, warranty, certification
or other statement made by any Loan Party or any of their respective
Subsidiaries in any Loan Document or in any statement or certificate at any
time given by any Loan Party or any of their respective Subsidiaries in writing
pursuant to any Loan Document is false in any material respect on the date made
or deemed made; or

 

(E)           Other
Defaults Under Loan Documents.    Any Loan Party or any of their respective
Subsidiaries breaches or defaults in the performance of or compliance with any
term contained in this Agreement or the other Loan Documents not specifically
covered in Subsection 6.1(A), (B), (C) or (D) and such default is not
remedied or waived within 45 days after receipt by any Loan Party or such other
party of notice from Administrative Agent or Requisite Lenders of such default
(other than occurrences described in other provisions of this Subsection 6.1
for which a different grace or cure period is specified or which constitute
immediate Events of Default); or

 

(F)           Involuntary
Bankruptcy; Appointment of Receiver; Etc. 
(i) A court enters a decree or order for relief with respect to any
Loan Party or any of their respective Subsidiaries in an involuntary case under
the Bankruptcy Code, which decree or order is not stayed or other similar
relief is not granted under any applicable federal or state law within 60 days;
or (ii) the continuance of any of the following events for 60 days unless
dismissed, bonded or discharged:  (1) an
involuntary case is commenced against any Loan Party or any of their respective
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or (2) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Loan Party or any of their
respective Subsidiaries or over all or a substantial part of its property, is
entered; or (3) an interim receiver, trustee or other custodian is
appointed without the consent of any Loan Party or any of their respective
Subsidiaries, for all or a substantial part of the property of any Loan Party
or any of their respective Subsidiaries; or

 

(G)           Voluntary
Bankruptcy; Appointment of Receiver; Etc.  Any Loan Party or any of their respective
Subsidiaries (i) commences a voluntary case under the Bankruptcy Code,
files a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding up or composition for adjustment
of debts of any Loan Party or any of their respective Subsidiaries, or consents
to, or fails to contest in a timely and appropriate manner, the entry of an
order for relief in an involuntary case, the conversion of an involuntary case
to a voluntary case under any such law, or the appointment of or taking
possession by a receiver, trustee or other custodian of all or a substantial
part of the property; or (ii) makes any assignment for the benefit of
creditors; or (iii) the Board of Directors of any Loan Party or any of
their respective Subsidiaries adopts any resolution or otherwise authorizes
action to approve any of the actions referred to in this Subsection 6.1(G); or

 

(H)          Governmental
Liens.  Any Lien, levy or assessment (other than
Permitted Encumbrances) is filed or recorded with respect to or otherwise
imposed upon all or any part of the Collateral or the other assets of any Loan
Party or any of their respective Subsidiaries by the United

 

46

 

States or any other country or any department or instrumentality
thereof or by any state, county, municipality or other Governmental Authority
and remains undischarged, unvacated, unbonded or unstayed for a period of 30
days or in any event later than five Business Days prior to the date of any
proposed sale thereunder; or

 

(I)            Judgment
and Attachments.  Any money judgment, writ or warrant of
attachment or similar process (other than those described in Subsection 6.1(H))
involving an amount in any individual case or in the aggregate for or against
one or more of the Loan Parties in excess of $2,500,000 or for or against one
or more of the Loan Parties and their respective Subsidiaries in excess of
$7,500,000 (in either case not adequately covered by insurance as to which the
insurance company has not denied coverage) is entered or filed against any Loan
Party or any of their respective Subsidiaries and/or any of their respective
assets and remains undischarged, unvacated, unbonded or unstayed for a period of
60 days or in any event later than five Business Days prior to the date of any
proposed sale thereunder; or

 

(J)            Dissolution. 
Any order, judgment or decree is entered against any Loan Party or any
of their respective Subsidiaries decreeing the dissolution or split up of any
Loan Party or any of their respective Subsidiaries and such order remains
undischarged or unstayed for a period in excess of 30 days; or

 

(K)          Solvency. 
Any Loan Party or any of their respective Subsidiaries ceases to be
solvent or any Loan Party or any of their respective Subsidiaries admits in
writing its present or prospective inability to pay its debts as they become
due; or

 

(L)           Injunction. 
Any Loan Party or its respective Subsidiaries are enjoined, restrained
or in any way prevented by the order of any court or any Governmental Authority
from conducting all or any substantial part of the business of the Loan Parties
and their Subsidiaries, taken as a whole, and such order continues for more
than 15 days; or

 

(M)         ERISA;
Pension Plans.  (i) Any Loan Party or any of their
respective Subsidiaries fails to make full payment when due of all amounts
which, under the provisions of any Plans or any applicable provisions of the
IRC, any such Person is required to pay as contributions thereto and such
failure results in or could reasonably be expected to have a Material Adverse
Effect; or (ii) an accumulated funding deficiency occurs or exists,
whether or not waived, with respect to any such Plans; or (iii) any Plan
of any Loan Party or any of their respective Subsidiaries loses its status as a
qualified plan under the IRC and such loss results in or could reasonably be
expected to have a Material Adverse Effect; or

 

(N)          Environmental
Matters.  Any Loan Party or any of their respective
Subsidiaries fails to: (i) obtain or maintain any operating licenses or
permits required by environmental authorities; (ii) begin, continue or
complete any remediation activities as required by any environmental
authorities; (iii) store or dispose of any hazardous materials in
accordance with applicable Environmental Laws; or (iv) comply with any
other Environmental Laws, if in any such case such failure could reasonably be
expected to have a Material Adverse Effect; or

 

47

 

(O)                               Invalidity
of Loan Documents.  Any of the Loan Documents for any reason,
other than a partial or full release in accordance with the terms thereof,
ceases to be in full force and effect or is declared to be null and void, or
any Loan Party or any of their respective Subsidiaries denies that it has any
further liability under any Loan Documents to which it is party, or gives
notice to such effect; or

 

(P)                                 Failure
of Security.  Administrative Agent, for the benefit of
itself, and Lenders, does not have or ceases to have a valid and perfected
first priority security interest (subject to Permitted Encumbrances) in the
Collateral or any substantial portion thereof; or

 

(Q)                               Intentionally
omitted.

 

(R)                                Intentionally
omitted.

 

(S)                                 Change
in Control.  A Change of Control occurs; or

 

(T)                                Expropriation. 
Any federal, state or local Government Authority takes any action to
expropriate or condemn all or any substantial portion of the assets of
Borrower, any Loan Party, GTT, BDC, or any other Subsidiaries whose assets,
individually or  in the aggregate,
account for 25% or more of the Borrower’s consolidated EBITDA; or

 

(U)                               FCC
and PUC Matters.

 

Any License necessary for the ownership or operation of the
Communications Systems shall be cancelled, revoked, terminated, rescinded,
annulled, suspended, or modified or shall no longer be in full force and effect
and the result of such action has or would reasonably be expected to have, a
Material Adverse Effect.

 

6.2   Suspension of Loan Commitments.  Upon the occurrence and during the
continuation of any Event of Default, and without limiting any other right or
remedy hereunder, Administrative Agent, upon the request of the Requisite
Lenders, shall declare that all or any portion of the Commitments be
terminated, whereupon the obligations of each Lender to make any Loan and to
issue any Letter of Credit shall immediately terminate.

 

6.3   Acceleration. 
Upon the occurrence of any Event of Default described in the foregoing
Subsections 6.1(F) or 6.1(G), the unpaid principal amount of and accrued
interest and fees on the Loans, all Letter of Credit Liability and all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the obligations of Lenders to make Loans and
issue Letters of Credit shall thereupon terminate.  Upon the occurrence and during the
continuance of any other Event of Default, Administrative Agent may, with the
consent of Requisite Lenders, and, upon written demand by Requisite Lenders,
shall, by written notice to Borrower, declare all or any portion of the Loans,
all or some portion of the Letter of Credit Liability and all or some of the
other Obligations to be, and the same shall forthwith become, immediately due
and payable together with accrued interest thereon, and upon such acceleration
the obligations of Administrative Agent and Lenders to make Loans and issue
Letters of Credit shall thereupon terminate.

 

6.4   Rights of
Collection.  Upon the occurrence and
during the continuation of any Event of Default and at any time thereafter,
unless and until such Event of Default is cured, or waived or

 

48

 

removed by Requisite Lenders, Administrative
Agent may exercise on behalf of the Secured Parties all of their other rights
and remedies under this Agreement, the other Loan Documents and Applicable Law,
in order to satisfy all of the Secured Obligations.

 

6.5   Consents. 
Borrower acknowledges that certain transactions contemplated by this
Agreement and the other Loan Documents and certain actions which may be taken
by Administrative Agent or Lenders in the exercise of their respective rights
under this Agreement and the other Loan Documents may require the consent of a
Governmental Authority.  If
Administrative Agent reasonably determines that the consent of a Governmental
Authority is required in connection with the execution, delivery and
performance of any of the aforesaid Loan Documents or any Loan Documents
delivered to Administrative Agent or Lenders in connection therewith or as a
result of any action which may be taken pursuant thereto, then Borrower, at
Borrower’s cost and expense, agrees to use reasonable best efforts, and to
cause its Subsidiaries to use their best efforts, to secure such consent and to
cooperate with Administrative Agent and Lenders in any action commenced by
Administrative Agent or any Lender to secure such consent.

 

6.6   Intentionally omitted.

 

6.7   Set Off and Sharing of Payments.  In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
during the continuance of any Event of Default, each Lender is hereby
authorized by each Loan Party at any time or from time to time, with reasonably
prompt subsequent notice to such Loan Party (any prior or contemporaneous
notice being hereby expressly waived) to set off and to appropriate and to apply
any and all (A) balances held by such Lender at any of its offices for the
account of such Loan Party or any of its Subsidiaries (regardless of whether
such balances are then due to such Loan Party), and (B) except as provided
in Subsection 8.2(J), other property at any time held or owing by such Lender
to or for the credit or for the account of such Loan Party or any of its
Subsidiaries, against and on account of any of the Obligations; provided,
that no Lender shall exercise any such right without the prior written consent
of Administrative Agent.  Any Lender
exercising a right to set off shall, to the extent the amount of any such set
off exceeds its Pro Rata Share of the amount set off, purchase for cash (and
the other Lenders shall sell) interests in each such other Lender’s Pro Rata
Share of the Obligations as would be necessary to cause such Lender to share
such excess with each other Lender in accordance with their respective Pro Rata
Shares.  Each Loan Party agrees, to the
fullest extent permitted by law, that any Lender may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and upon doing so shall deliver such excess to Administrative Agent for the
benefit of all Lenders in accordance with their Pro Rata Shares; provided,
that CoBank may exercise its rights against any equity of CoBank held by
Borrower without complying with this Subsection 6.7.

 

6.8   Application of Payments.  Subsequent to the acceleration of the Loans
pursuant to Subsection 6.3, all payments received by the Secured Parties on the
Secured Obligations and on the proceeds from the enforcement of the Secured
Obligations shall be applied among Administrative Agent and the other Secured
Parties as follows:  first, to all
Administrative Agent’s, and the other Secured Parties’ fees and expenses then
due and payable; then to all other expenses then due and payable by the Loan
Parties under the Loan Documents; then to all indemnitee obligations then due
and payable by the Loan Parties under the Loan Documents; then to all
commitment and other fees and commissions then due and payable by the Loan
Parties under the Loan Documents; then pro rata to (A) accrued and unpaid
interest on the Loans (pro rata) in accordance with all such amounts due

 

49

 

on the Loans and (B) any scheduled payments (excluding
termination, unwind and similar payments) due to a Secured Party on any Secured
Hedge Agreement (pro rata with all such amounts due); then pro rata to (i) the
principal amount of the Loans (pro rata among all Loans) and (ii) any
termination, unwind and similar payments due to a Secured Party under a Secured
Hedge Agreement (pro rata with all such amounts due); and then to any remaining
amounts due under the Secured Obligations, in that order.  Any remaining monies not applied as provided
in this Subsection 6.8 shall be paid to Borrower or any Person lawfully
entitled thereto.

 

6.9   Adjustments.  If  any  Lender  (a  “Benefited  Lender”)  shall  at  any  time  receive  any  payment  of  all  or  part  of  its  Loans,  or  interest  thereon  in  a  greater  proportion  than  any  such  payment  received  by  any  other  Lender  (other  than  pursuant  to  Subsection  1.12(B)),  if  any,  in  respect  of  such  other  Lender’s  Loans,  or  interest  thereon,  such  Benefited  Lender  shall,  to  the  extent  permitted  by  Applicable  Law,  purchase  for  cash  from  the  other  Lenders  such  portion  of  each  such  other  Lender’s  Loans  as  shall  be  necessary  to  cause  such  Benefited  Lender  to  share  the  excess  payment  or  benefits  ratably  with  each  Lender;  provided,  that  if  all  or  any  portion  of  such  excess  payment  or  benefits  is  thereafter  recovered  from  such  Benefited  Lender,  such  purchase  shall  be  rescinded,  and  the  purchase  price  and  benefits  returned  to  the  extent  of  such  recovery,  but  without  interest.  Each  Loan  Party  agrees  that  each  Lender  so  purchasing  a  portion  of  another  Lender’s  Loans  may  exercise  all  rights  of  payment  (including  rights  of  set-off)  with  respect  to  such  portion  as  fully  as  if  such  Lender  were  the  direct  holder  of  such  portion.  This  Subsection  6.9  shall  not  apply  to  any  action  taken  by  CoBank  with  respect  to  equity  in  it  held  by  Borrower.

 

SECTION 7

CONDITIONS TO LOANS

 

The obligations of Lenders to make Loans are subject to satisfaction of
all of the applicable conditions set forth below (except to the extent that any
of the following conditions constitute actions set forth on the Post-Closing
Letter).

 

7.1   Conditions to Initial Loan.  The obligations of Lenders on or after the
Closing Date to make the initial Loan under either of the Facilities are, in
addition to the conditions precedent specified in Subsection 7.2, subject to
the satisfaction of each of the following conditions:

 

(A)          Executed
Loan Documents.  (i) This Agreement, (ii) the Notes,
(iii) the Security Agreement and (iv) all other documents, financing
statements and instruments contemplated by such agreements (including, without
limitation, landlord waivers and consents), shall have been duly authorized and
executed by the Loan Parties or other Persons party thereto, as applicable, in
form and substance satisfactory to Administrative Agent, and the Loan Parties
or such other Persons, as applicable, shall have delivered sufficient original
counterparts thereof to Administrative Agent for delivery to Lenders.

 

(B)           Control
Agreements.  Administrative Agent shall have received
executed account control agreements with respect to the Loan Parties’ deposit
and securities accounts as shall have been specified by Administrative Agent,
in form and substance satisfactory to Administrative Agent, from the
appropriate depository institutions or other entities holding such deposit
accounts.

 

50

 

(C)                                Closing
Certificates; Opinions.

 

(i)            Officer’s
Certificate.  Administrative Agent
shall have received a certificate from the chief executive officer, chief
operating officer or chief financial officer of Borrower in form and substance
reasonably satisfactory to Administrative Agent, to the effect that, to their
knowledge, all representations and warranties of the Loan Parties contained in
this Agreement and the other Loan Documents are true, correct and complete;
that no Loan Party is in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; that the Loan Parties have satisfied each of the
closing conditions to be satisfied hereby; and calculating the Total Net
Leverage Ratio as of the Closing Date.

 

(ii)           Certificates of
Secretaries of the Loan Parties. 
Administrative Agent shall have received a certificate of the secretary
or assistant secretary of each Loan Party, dated as of the Closing Date, in
form and substance reasonably satisfactory to Administrative Agent, certifying
that attached thereto is a true and complete copy of the articles of
incorporation or organization, as the case may be, of such Person and all
amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation or organization;
that attached thereto is a true and complete copy of the bylaws, partnership
agreement or operating agreement, as the case may be, of such Person as in
effect on the date of such certification; that attached thereto is a true and
complete copy of resolutions or consents duly adopted by the board of
directors, members or managers of such Person, as applicable, authorizing the
borrowings, pledges or guarantees contemplated hereunder, the execution,
delivery and performance of this Agreement, the Security Agreement and the
other Loan Documents, and the granting of the Security Interest; and as to the
incumbency and genuineness of the signature of each officer of such Person
executing Loan Documents.

 

(iii)          Certificates of
Good Standing.  Administrative Agent
shall have received certificates as of a recent date of the good standing of
each Loan Party under the laws of its respective jurisdiction of incorporation
or organization, and such other jurisdictions as are requested by
Administrative Agent.

 

(iv)          Opinions of
Counsel.  Administrative Agent shall
have received favorable opinions of counsel to the Loan Parties addressed to
Administrative Agent and Lenders, dated as of the Closing Date, with respect to
the Loan Parties, covering such matters as may be reasonably requested by
Administrative Agent, including, without limitation, the Loan Documents, the
Security Interest, due authorization and other corporate matters and regulatory
matters (including the Licenses) and which are reasonably satisfactory in form
and substance to Administrative Agent.

 

(D)                               Collateral.

 

(i)            Collateral Pledge.  The Loan Parties shall have effectively and
validly pledged and perfected the Collateral contemplated by the Security
Documents.

 

(ii)           Filings and
Recordings. All filings and recordings (including, without limitation, all
mortgages, fixture filings and transmitting utility filings) that are necessary
to perfect

 

51

 

the Security
Interest in the Collateral described in the Security Documents shall have been
filed or recorded in all appropriate locations and Administrative Agent shall
have received evidence satisfactory to Administrative Agent that such Security
Interest constitutes a valid and perfected first priority Lien therein.

 

(iii)          Lien Searches.  The Loan Parties shall have delivered to
Administrative Agent the results of a Lien search of all filings made against
each of the Loan Parties under the Uniform Commercial Code (and local tax and
judgment filing offices) as in effect in any jurisdiction in which any of its
respective assets are located, indicating, among other things, that the Loan
Parties’ assets and the ownership interests of the Loan Parties are free and
clear of any Lien, except for Permitted Encumbrances.

 

(iv)          Insurance.  Administrative Agent shall have received
certificates of insurance in the form required under Subsection 2.2 and the
Security Documents and otherwise in form and substance reasonably satisfactory
to Administrative Agent.

 

(E)                                 Consents.

 

(i)            Governmental and
Third Party Approvals.  The Loan
Parties shall have obtained and delivered to Administrative Agent all material
and necessary approvals, authorizations and consents, if any, of all Persons,
Governmental Authorities, including the FCC and all applicable PUCs, and courts
having jurisdiction with respect to the execution and delivery of this
Agreement, the other Loan Documents, the granting of the Security Interest, and
all such approvals shall be in form and substance reasonably satisfactory to
Administrative Agent.

 

(ii)           Permits and
Licenses.  Administrative Agent shall
have received copies of all material permits and licenses, including the
Licenses, required under Applicable Laws for the conduct of the Loan Parties’
and their respective Subsidiaries’ businesses.

 

(iii)          No Injunction,
Etc.  No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before, nor any adverse ruling received from, any Governmental Authority to
enjoin, restrain or prohibit, or to obtain substantial damages in respect of,
or which is related to or arises out of this Agreement or the other Loan
Documents or the consummation of the transactions contemplated hereby or
thereby, or which, as determined by Administrative Agent in its reasonable
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.

 

(F)                                 Fees,
Expenses, Taxes, Etc.  There shall
have been paid by Borrower to Administrative Agent the fees set forth or
referenced in Subsection 1.4 and any other accrued and unpaid fees or
commissions due hereunder (including legal fees and expenses), and to any other
Person such amount as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of any of the Loan
Documents.

 

52

 

(G)                                Miscellaneous.

 

(i)            Proceedings and
Documents.  All opinions,
certificates and other instruments and all proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably satisfactory in
form and substance to Administrative Agent. 
Administrative Agent shall have received copies of all other instruments
and other evidence as Administrative Agent may request, in form and substance
reasonably satisfactory to Administrative Agent, with respect to the
transactions contemplated by this Agreement and the taking of all actions in
connection therewith.

 

(ii)           Litigation,
Investigations, Audits, Etc.  There
shall be no action, suit, proceeding or investigation pending against, or, to
the knowledge of any Loan Party, threatened against any Loan Party, any of its
respective Subsidiaries or any of its respective properties, including the Licenses,
in any court or before any arbitrator of any kind or before or by any
Governmental Authority (including the FCC and any applicable PUC), except such
as affect the telecommunications industry generally, that could reasonably be
expected to have a Material Adverse Effect.

 

7.2   Conditions to All Loans.  The several obligations of Lenders to make
Loans, including the initial Loan, and of any Issuing Lender to issue Letters
of Credit, on any date (each such date, a “Funding
Date”) are subject to the further conditions precedent set forth
below:

 

(A)                              Administrative
Agent shall have received, in accordance with the provisions of
Subsection 1.3, a Notice of Borrowing requesting an advance of a Loan, or,
in accordance with the provisions of Section 1.1(F)(iv),a notice
requesting the issuance of a Letter of Credit.

 

(B)                                The
representations and warranties contained in Section 5 of this Agreement
and elsewhere herein and in the Loan Documents shall be (and each request by
Borrower for a Loan or the issuance of a Letter of Credit shall constitute a
representation and warranty by the Loan Parties that such representations and
warranties are) true, correct and complete in all material respects on and as
of such Funding Date to the same extent as though made on and as of that date,
except for any representation or warranty limited by its terms to a specific
date and taking into account any amendments to the Schedules or Exhibits as a
result of any disclosures made in writing by Borrower to Administrative Agent
after the Closing Date which disclosures are reasonably acceptable to
Administrative Agent.

 

(C)                                No
event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated that would constitute an Event of
Default or a Default.

 

(D)                               No
order, judgment or decree of any court, arbitrator or Governmental Authority
shall purport to enjoin or restrain any Lender from making any Loan or an
Issuing Lender from Issuing any Letter of Credit.

 

(E)                                 Since
Closing Date, there shall not have occurred any event or condition that has had
or could reasonably be expected to have a Material Adverse Effect.

 

53

 

SECTION 8

ASSIGNMENT AND PARTICIPATION

 

8.1   Assignments
and Participations in Loans and Notes.

 

(A)  General.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of Subsection 8.1(B), (ii) by
way of participation in accordance with the provisions of Subsection 8.1(D), or
(iii) by way of pledge or assignment of a security interest subject to the
restrictions of Subsection 8.1(E) (and any other attempted assignment or
transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in Subsection 8.1(D) and, to the extent expressly
contemplated hereby, the Related Parties of each of Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason
of this Agreement.  In the event of an
assignment pursuant to this Subsection 8.1, if a new Note is requested by the
Person to which interests are to be assigned, Borrower shall, upon surrender of
the assigning Lender’s Note, issue a new Note to reflect the interests of the
assigning Lender and the Person to which interests are to be assigned.  Notwithstanding anything contained in this
Agreement to the contrary, so long as the Requisite Lenders shall remain
capable of making LIBOR Loans, no Person shall become a “Lender” hereunder
unless such Person shall also be capable of making LIBOR Loans.

 

(B)   Assignments by the
Lenders.  Any Lender may at any time
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Loan Commitments and
the Loans at the time owing to it); provided that any such assignment shall be
subject to the following conditions:

 

(i)                                     Minimum
Amounts.

 

(1)                                  in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Loan Commitment and the Loans at the time owing to it or in the case
of an assignment to another Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and

 

(2)                                  in
any case not described in Subsection 8.1(B)(i)(1), the aggregate amount of the
Loan Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the applicable Loan Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to Administrative Agent or, if an “Effective
Date” is specified in the Assignment and Assumption, as of the Effective Date)
shall not be less than $5,000,000 unless each of Administrative Agent and, so
long as no Event of Default has occurred and is continuing, Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).

 

54

 

(ii)           Proportionate
Amounts.  Each partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement with respect to the Loan
or the Loan Commitment assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Facilities on a non-pro rata basis.

 

(iii)          Required
Consents.  No consent shall be
required for any assignment except to the extent required by of Subsection
8.1(B)(i)(2) and, in addition:

 

(1)           the
consent of Borrower (such consent not to be unreasonably withheld or delayed)
shall be required unless (a) an Event of Default has occurred and is
continuing at the time of such assignment or (b) such assignment is to a
Lender, an Affiliate of a Lender or an Approved Fund; and

 

(2)           the
consent of Administrative Agent (such consent not to be unreasonably withheld
or delayed) shall be required for assignments in respect of a Facility if such
assignment is to a Person that is not a Lender with a Loan Commitment in
respect of such Facility, an Affiliate of such Lender or an Approved Fund with
respect to such Lender.

 

(iv)          Assignment
and Assumption.  The parties to each
assignment shall execute and deliver to Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500, and the
assignee, if it is not a Lender, shall deliver to Administrative Agent an
Administrative Questionnaire.

 

(v)           No
Assignment to the Borrower.  No such
assignment shall be made to Borrower or any of Borrower’s Affiliates or
Subsidiaries.

 

(vi)          No
Assignment to Natural Persons.  No
such assignment shall be made to a natural person.

 

Subject to acceptance and recording thereof by Administrative Agent
pursuant to Subsection 8.1(C), from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Subsections 1.4(D), 1.11, 1.13,
1.14, 9.1, 9.14 and 9.15 with respect to facts and circumstances occurring
prior to the effective date of such assignment. 
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Subsection 8.1(B) shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Subsection
8.1(D).

 

55

 

(C)   Register.  Administrative Agent, acting solely for this
purpose as an agent of Borrower, shall maintain at one of its offices in
Denver, Colorado a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Loan Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries
in the Register shall be conclusive absent manifest error, and Borrower,
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement absent manifest error, notwithstanding notice to
the contrary.  The Register shall be
available for inspection by Borrower and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.

 

(D)  Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Loan Commitment and/or the Loans owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) Borrower,
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.  CoBank reserves the
right to assign or sell participations in all or any part of its Pro Rata Share
of each Loan Commitment on a non-patronage basis.

 

Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in Subsection 9.2 relating to amendments requiring unanimous consent
of the Lenders that affects such Participant. 
The Borrower agrees that each Participant shall be entitled to the benefits
of Subsections 1.11 and 1.13  to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to Subsection 8.1(B).  To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Subsection 6.7 as though it were a Lender, provided such
Participant agrees to be subject to Subsection 6.7 as though it were a Lender.

 

Any institutions chartered under the Farm
Credit System that (i) has purchased a participation in a minimum amount
of $5,000,000, (ii) if Administrative Agent is other than CoBank, has been
designated by written notice from the selling Lender to Administrative Agent as
being entitled to be accorded the right of a voting participant, and (iii) receives
the prior written consent of Administrative Agent (such consent being required
only if Administrative Agent is other than CoBank) and of Borrower (such
consent being required only if an Event of Default then exists and is
continuing and only as to members not disclosed to Borrower on or prior to the
Closing Date as being a Participant as of the Closing Date) to become a voting
Participant, shall be entitled to vote, and the voting rights of the selling
Lender shall be correspondingly reduced, on a dollar-for-dollar basis, as if
such participant were a Lender, on any matter requiring or allowing a Lender to
provide

 

56

 

or withhold its consent, or to otherwise vote on any proposed action to
which the Lender selling such participation is entitled to vote.

 

(E)   Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

8.2   Administrative Agent.

 

(A)          Appointment. 
Each Lender hereby irrevocably appoints and authorizes CoBank, as
Administrative Agent and as Arranger; to act as Administrative Agent or
Arranger hereunder and under any other Loan Document with such powers as are
specifically delegated to such Person by the terms of this Agreement and any
other Loan Document, together with such other powers as are reasonably
incidental thereto. Administrative Agent is authorized and empowered to amend,
modify or waive any provisions of this Agreement or the other Loan Documents on
behalf of Lenders, subject to the requirement that the consent of certain
Lenders or all Lenders, as appropriate, be obtained in certain instances as
provided in Subsections 8.3 and 9.2. 
CoBank hereby agrees to act as Administrative Agent on the express
conditions contained in this Subsection 8.2. 
Other than the applicable provisions of Subsections 8.2(E) and
8.2(H), the provisions of this Subsection 8.2 are solely for the benefit
of Administrative Agent and Lenders, and the Loan Parties shall have no rights
as a third party beneficiary of any of the provisions hereof.  In performing its functions and duties under
this Agreement, Administrative Agent shall act solely as Administrative Agent
or Arranger, as applicable, of Lenders and Administrative Agent shall assume or
be deemed to have assumed no obligation toward or relationship of agency or
trust with or for any Loan Party or their respective Affiliates.  Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents or
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact that it selects with reasonable care.

 

(B)           Nature
of Duties.  The duties of Administrative Agent shall be
mechanical and administrative in nature. 
Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender.  Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose
upon Administrative Agent any obligations in respect of this Agreement or any
of the Loan Documents except as expressly set forth herein or therein.  Each Lender expressly acknowledges that none
of Administrative Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates have made any representation or
warranty to it and that no act by Administrative Agent or any such Person
hereafter taken, including any review of the affairs of the Loan Parties, shall
be deemed to constitute any representation or warranty by Administrative Agent
to any Lender.  Each Lender represents to
Administrative Agent that (i) it has, independently and without reliance
upon Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of the Loan Parties and made its own
decision to enter into this Agreement and extend credit to Borrower hereunder,
and (ii) it will, independently and without reliance upon Administrative
Agent or any other Lender and based 

 

57

 

on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action hereunder and under the other Loan Documents and to
make such investigation as it deems necessary to inform itself as to the business,
prospects, operations, properties, financial and other condition and
creditworthiness of the Loan Parties. 
Administrative Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto (other than as expressly required
herein).  If Administrative Agent seeks
the consent or approval of any Lenders to the taking or refraining from taking
of any action hereunder, then Administrative Agent shall send notice thereof to
each Lender.  Administrative Agent shall
promptly notify each Lender any time that Requisite Lenders have instructed
Administrative Agent to act or refrain from acting pursuant hereto.

 

(C)           Rights,
Exculpation, Etc.    Each of Administrative Agent, their respective
Affiliates and any of their or their Affiliates’ respective officers,
directors, employees, Administrative Agent or attorneys-in-fact shall not be
liable to any Lender for any action taken or omitted by them hereunder or under
any of the Loan Documents, or in connection herewith or therewith, except that
each such entity shall be liable with respect to its own gross negligence, bad
faith or willful misconduct. 
Administrative Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith and if any such apportionment
or distribution is subsequently determined to have been made in error, the sole
recourse of any Lender to whom payment was due but not made shall be to recover
from other Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to
such Lender any such erroneous payments received by them). In performing its
functions and duties hereunder, Administrative Agent shall exercise the same
care which it would in dealing with loans for its own account, but
Administrative Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any of the Loan Documents or the transactions
contemplated thereby, or for the financial condition of the Loan Parties.  Administrative Agent may at any time request
instructions from Lenders with respect to any actions or approvals which by the
terms of this Agreement or of any of the Loan Documents Administrative Agent is
permitted or required to take or to grant, and if such instructions are
promptly requested, Administrative Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents (i) if such
action or omission would, in the reasonable opinion of Administrative Agent,
violate any Applicable Law or any provision of this Agreement or any other Loan
Document, or (ii) until it shall have received such instructions from
Requisite Lenders or all of Lenders, as applicable.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Administrative Agent as a
result of Administrative Agent acting or refraining from acting under this
Agreement, the Notes, or any of the other Loan Documents in accordance with the
instructions of Requisite Lenders, except in connection with its own gross
negligence, bad faith or willful misconduct.

 

(D)          Reliance.   
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, telecopy or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or

 

58

 

made by the proper Person, and with respect to all matters pertaining
to this Agreement or any of the Loan Documents and its duties hereunder or
thereunder, upon advice of counsel selected by it in connection with the
preparation, negotiation, execution, delivery, administration, amendment,
modification, waiver or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents.

 

(E)           Indemnification. 
Lenders will reimburse and indemnify Administrative Agent and its
Affiliates and its and its Affiliates’ officers, directors, employees, agents,
and attorneys-in-fact (collectively, “Representatives”),
on demand (to the extent not actually reimbursed by the Loan Parties, but
without limiting the obligations of the Loan Parties under this Agreement) for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys’ fees and expenses), advances or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against
Administrative Agent or its Representatives (i) in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by Administrative Agent or its Representatives under this Agreement
or any of the Loan Documents, and (ii) in connection with the preparation,
negotiation, execution, delivery, administration, amendment, modification,
waiver or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement or any of the other Loan Documents in proportion to each Lender’s
Pro Rata Share; provided, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements resulting from Administrative
Agent’s or its Representatives’ gross negligence, bad faith or willful
misconduct.  If any indemnity furnished
to Administrative Agent or its Representatives for any purpose shall, in the
opinion of Administrative Agent, be insufficient or become impaired,
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.  The obligations of Lenders
under this Subsection 8.2(E) shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

(F)           Administrative
Agent, Syndication Agent and Documentation Agent Individually. 
With respect to its obligations under the Loan Commitments, the Loans
made by it, and the Notes issued to it, each of Administrative Agent, any
syndication agent, any documentation agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender.  The terms “Lenders”
or “Requisite Lenders” or any
similar terms shall, unless the context clearly otherwise indicates, include
each of Administrative Agent, any syndication agent and any documentation agent
in its individual capacity as a Lender or as one of the Requisite Lenders.  Each of Administrative Agent, any syndication
agent and any documentation agent may lend money to, and generally engage in
any kind of banking, trust or other business with, Loan Parties as if it were
not acting as Administrative Agent, syndication agent or documentation agent
pursuant hereto.

 

(G)           Notice
of Default.    Administrative Agent shall not be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of the Loan Parties or any of their
respective Subsidiaries, or the existence or possible existence of any Default
or

 

59

 

Event of Default.  Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default unless Administrative Agent shall have received
written notice from a Loan Party or a Lender 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
Administrative Agent receives such a notice, Administrative Agent will give
notice thereof to Lenders as soon as reasonably practicable; provided,
that if any such notice has also been furnished to Lenders, Administrative
Agent shall have no obligation to notify Lenders with respect thereto.  Administrative Agent shall (subject to this
Subsection 8.2) take such action with respect to such Default or Event of
Default as shall reasonably be directed by Requisite Lenders; provided, further,
that, unless and until Administrative Agent shall have received such directions,
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 and in the best interests of Lenders.

 

(H)                               Successor
Administrative Agent.

 

(i)            Resignation.  Administrative Agent may resign from the
performance of all of its agency functions and duties hereunder at any time by
giving at least 30 Business Days’ prior written notice to Borrower and
Lenders.  Such resignation shall take
effect upon the acceptance by a successor Administrative Agent of appointment
pursuant to clause (ii) below or as otherwise provided below.

 

(ii)           Appointment of
Successor.  Upon any such notice of
resignation pursuant to clause (i) above, Requisite Lenders shall (and if
no Event of Default shall have occurred and be continuing, upon receipt of
Borrower’s prior consent, which shall not be unreasonably withheld), appoint a
successor Administrative Agent from among Lenders or another financial
institution.  If a successor
Administrative Agent shall not have been so appointed within the 30 Business
Day period referred to in Subsection 8.2(H)(i) above, the retiring
Administrative Agent, upon notice to (and, so long as no Event of Default then
exists and is continuing, the consent of) Borrower, shall then appoint a
successor Administrative Agent from among Lenders who shall serve as
Administrative Agent until such time, if any, as Requisite Lenders, upon
receipt of Borrower’s prior written consent (if required under the first
sentence of this paragraph), which shall not be unreasonably withheld, appoint
a successor Administrative Agent as provided above.

 

(iii)          Successor
Administrative Agent.  Upon the
acceptance of any appointment as Administrative Agent under the Loan Documents
by a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative Agent’s resignation as
Administrative Agent under the Loan Documents, the provisions of this
Subsection 8.2 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under the Loan Documents.

 

(I)                                    Collateral
Matters.

 

(i)            Release of
Collateral. Lenders hereby irrevocably authorize Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by

 

60

 

Administrative
Agent upon any property covered by the Security Documents (1) upon
termination of the Loan Commitments and payment in cash and satisfaction of all
Obligations (other than indemnification or expense reimbursement Obligations
not then due and payable); (2) constituting property being sold or
disposed of in compliance with the provisions of this Agreement if Borrower
certifies to Administrative Agent in writing that the sale or disposition is
made in compliance with the provisions of this Agreement and the other Loan
Documents (and Administrative Agent may rely in good faith conclusively on any
such certificate, without further inquiry); (3) constituting property
leased to a Loan Party under a lease which has expired or been terminated in a
transaction permitted under this Agreement or is about to expire and which has
not been, and is not intended by such Loan Party to be, renewed or extended; or
(4) owned by a Guarantor upon release of such Guarantor from its
obligations under any Loan Document if such Person ceases to be a Guarantor as
a result of a transaction permitted hereunder. 
In addition, Administrative Agent, with the consent of Requisite Lenders,
may release or compromise any Collateral and the proceeds thereof constituting
less than all or substantially all of the Collateral.

 

(ii)           Confirmation of
Authority; Execution of Releases. 
Without in any manner limiting Administrative Agent’s authority to act
without any specific or further authorization or consent by Lenders (as set
forth in Subsection 8.2(I)(i)), each Lender agrees to confirm in writing, upon
request by Administrative Agent or Borrower, the authority to release any
property covered by the Security Documents conferred upon Administrative Agent
under clauses (2) through (4) of the first sentence of Subsection
8.2(I)(i).  Upon receipt by
Administrative Agent of confirmation from each Lender of its authority to
release or compromise any particular item or types of property covered by the
Security Documents under Subsection 8.2(I)(i), and upon at least ten Business
Days’ prior written request by Borrower, Administrative Agent shall (and is
hereby irrevocably authorized by Lenders to) execute such documents as may be
necessary to evidence the release or compromise of the Liens granted to
Administrative Agent, for the benefit of Administrative Agent and Lenders, upon
such Collateral, provided that (1) Administrative Agent shall not
be required to execute any such document on terms which, in Administrative
Agent’s opinion, would expose Administrative Agent to liability or create any
obligation or entail any consequence other than the release or compromise of
such Liens without recourse or warranty, and (2) such release or
compromise shall not in any manner discharge, affect or impair the Secured
Obligations or any Liens upon (or obligations of the Loan Parties, in respect
of) all interests retained by the Loan Parties in the Collateral, including
proceeds of any sale or other disposition of any Collateral, all of which shall
continue to constitute part of the property covered by the Security Documents.

 

(iii)          Absence of Duty.  Administrative Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property
covered by the Security Documents exists or is owned by the Loan Parties, or is
cared for, protected or insured or has been encumbered or that the Liens
granted to Administrative Agent have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise at all or in any particular manner or under any duty
of care, disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Administrative Agent in this
Agreement or in any other Loan Document, it being understood and agreed that in
respect of the property covered by the Security Documents or any act, omission
or event related thereto, Administrative Agent may act in any manner it may
deem appropriate, in its discretion, given Administrative Agent’s own interest
in property covered by the Security Documents, as one of

 

61

 

Lenders and as
Administrative Agent, provided that Administrative Agent shall act in
conformance with Subsection 8.2 and exercise the same care which it would in
dealing with loans for its own account and shall be liable for its and its
Representatives’ gross negligence, bad faith or willful misconduct.

 

(J)            Agency
for Perfection; Enforcement of Security by Administrative Agent. 
Administrative Agent and each Lender hereby appoint each other Lender as
agent for the purpose of perfecting Administrative Agent’s security interest in
assets which, in accordance with Article 9 of the Uniform Commercial Code
in any applicable jurisdiction, can be perfected only by possession or
control.  Should any Lender (other than
Administrative Agent) obtain possession of any such Collateral, such Lender
shall notify Administrative Agent thereof, and, promptly upon Administrative
Agent’s request therefor, shall deliver such Collateral (or control thereof) to
Administrative Agent or in accordance with Administrative Agent’s instructions
without affecting any Lender’s rights of set-off.  Each Lender agrees that it will not have any
right individually to enforce or seek to enforce any Security Document or to
realize upon any collateral security for the Loans, it being understood and
agreed that such rights and remedies may be exercised only by Administrative
Agent.

 

(K)          Dissemination
of Information.  Administrative Agent will use its best
efforts (except where otherwise provided herein) to provide Lenders with any
information received by Administrative Agent from the Loan Parties which is
required to be provided to a Lender hereunder or which is otherwise requested
by any Lender, provided that Administrative Agent shall not be liable to
Lenders for any failure to do so, except to the extent that such failure is
attributable to Administrative Agent’s or its Representatives’ gross
negligence, bad faith or willful misconduct.

 

8.3   Amendments, Consents and
Waivers for Certain Actions.

 

Except as
otherwise provided in this Agreement (including this Subsection 8.3 and
Subsection 9.2), any Assignment and Assumption or any other Loan Document, the
consent of Requisite Lenders and Borrower will be required to amend, modify,
terminate, or waive any provision of this Agreement or any of the other Loan
Documents (other than any Secured Hedge Agreement, which may only be amended,
modified or terminated, or any provision thereof waived, in accordance with the
terms thereof).

 

8.4   Disbursement of Funds.  Administrative Agent shall advise each Lender
by telephone or telecopy of the amount of such Lender’s Pro Rata Share of any
Loan requested by Borrower no later than 11:00 a.m. (Denver, Colorado
time) at least two Business Days immediately preceding the Funding Date
applicable thereto (in the case of LIBOR Loans), otherwise on the Business Day
immediately preceding the Funding Date applicable thereto, and each such Lender
shall pay Administrative Agent such Lender’s Pro Rata Share of such requested
Loan, in same day funds, by wire transfer to Administrative Agent’s account by
no later than 1:00 p.m. (Denver, Colorado time) on such Funding Date.  If any Lender fails to pay the amount of its
Pro Rata Share forthwith upon Administrative Agent’s demand, Administrative
Agent shall promptly notify Borrower, and Administrative Agent shall disburse
to Borrower, by wire transfer of immediately available funds, that portion of
such Loan as to which Administrative Agent has received funds.  In such event, Administrative Agent may, on
behalf of any Lender not timely paying Administrative Agent,

 

62

 

disburse funds to Borrower for Loans requested, subject to the
provisions of Subsection 8.5(B).  Each
such Lender shall reimburse Administrative Agent on demand for all funds
disbursed on its behalf by Administrative Agent.  Nothing in this Subsection 8.4 or elsewhere
in this Agreement or the other Loan Documents, including the provisions of
Subsection 8.5, shall be deemed to require Administrative Agent (or any other
Lender) to advance funds on behalf of any Lender or to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
that Administrative Agent or Borrower may have against any Lender as a result
of any default by such Lender hereunder.

 

8.5   Disbursements of Advances; Payments.

 

(A)                              Pro Rata Treatment;
Application.  Upon receipt by Administrative Agent of each
payment from Borrower hereunder, other than as described in the succeeding
sentence, Administrative Agent shall promptly credit each Lender’s account with
its Pro Rata Share of such payment in accordance with such Lender’s Pro Rata
Share and shall promptly wire advice of the amount of such credit to each
Lender.  Each payment to Administrative
Agent of its fees shall be made in like manner, but for the account of
Administrative Agent.

 

(B)                                Availability
of Lender’s Pro Rata Share.

 

(i)            Unless
Administrative Agent has been notified by a Lender prior to a Funding Date of
such Lender’s intention not to fund its Pro Rata Share of the Loan amount
requested by Borrower, and Administrative Agent has given notice pursuant to
Subsection 8.4, Administrative Agent may assume that such Lender will make such
amount available to Administrative Agent on the Funding Date.  If such amount is not, in fact, made
available to Administrative Agent by such Lender when due, and Administrative
Agent disburses funds to Borrower on behalf of such Lender, Administrative
Agent will be entitled to recover such amount on demand from Borrower, without
set-off, counterclaim or deduction of any kind, with interest thereon at the
rate per annum then applicable to such Loan.

 

(ii)           Nothing contained
in this Subsection 8.5(B) will be deemed to relieve a Lender of its
obligation to fulfill its commitments or to prejudice any rights Administrative
Agent or Borrower may have against such Lender as a result of a default by such
Lender under this Agreement.

 

(iii)          Without limiting
the generality of the foregoing, each Lender shall be obligated to fund its Pro
Rata Share of any Revolving Loan made after any Event of Default or
acceleration of the Obligations with respect to any draw on a Letter of Credit.

 

(C)                                Return
of Payments.

 

(i)            If Administrative
Agent pays an amount to a Lender under this Agreement in the belief or expectation
that a related payment has been or will be received by Administrative Agent
from Borrower and such related payment is not received by Administrative Agent,
then Administrative Agent will be entitled to recover such amount from such
Lender without set-off, counterclaim or deduction of any kind.

 

63

 

(ii)           If Administrative
Agent determines at any time that any amount received by Administrative Agent
under this Agreement must be returned to Borrower or paid to any other Person
pursuant to any solvency law or otherwise, then, notwithstanding any other term
or condition of this Agreement, Administrative Agent will not be required to
distribute any portion thereof to any Lender. 
In addition, each Lender will repay to Administrative Agent on demand
any portion of such amount that Administrative Agent has distributed to such
Lender, together with interest at such rate, if any, as Administrative Agent is
required to pay to Borrower or such other Person, without set-off, counterclaim
or deduction of any kind.

 

SECTION 9

MISCELLANEOUS

 

9.1   Indemnities. 
Each Loan Party agrees to indemnify, pay, and hold Administrative Agent
and each Lender and their respective Affiliates and the respective officers,
directors, employees, agents, and attorneys of Administrative Agent, each
Lender and their respective Affiliates (the “Indemnitees”)
harmless from and against any and all liabilities, obligations, losses
(including reasonable fees of attorneys and consultants), damages, penalties,
actions, judgments, suits and claims of any kind or nature whatsoever that may
be imposed on, incurred by, or asserted against the Indemnitee as a result of
Administrative Agent and each Lender being a party to this Agreement or
otherwise in connection with this Agreement, any of the other Loan Documents or
any of the transactions contemplated hereby or thereby; provided, that (A) in
the absence of a conflict of interest, the Loan Parties shall only be required
to pay the fees and expenses of one law firm for Administrative Agent and the
Lenders (in addition to the expenses of local and special counsel for
Administrative Agent and the Lenders) and (B) the Loan Parties shall have
no obligation to an Indemnitee hereunder with respect to liabilities arising
from the gross negligence, willful misconduct of, or breach of any Loan
Document by, that Indemnitee, in each such case as determined by a final non
appealable judgment of a court of competent jurisdiction.  This Subsection 9.1 and all indemnification provisions
contained within any other Loan Document shall survive the termination of this
Agreement.

 

9.2   Amendments and Waivers.  Except as otherwise provided herein, no
amendment, modification, termination or waiver of any provision of this
Agreement, the Notes or any of the other Loan Documents, or consent to any
departure by Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by Borrower and Requisite Lenders (or
Administrative Agent, if expressly set forth herein, in any Note or in any
other Loan Document); provided, that, notwithstanding any other
provision of this Agreement to the contrary and except, with respect to an
assignee or assignor hereunder, to the extent permitted by any applicable
Assignment and Assumption, no amendment, modification, termination or waiver
shall, unless in writing and signed by all Lenders affected thereby (which in
the cases of clauses (D), (E), (F), (G) and (H) shall be all
Lenders), do any of the following: (A) increase any Lender’s Pro Rata
Share of any Loan Commitment or change a pro rata payment of any Lender; (B) reduce
the principal of, rate of interest on or fees payable with respect to any Loan
(other than indirectly by reason of an amendment to a defined terms); (C) extend
the Revolver Expiration Date or the Term Loan Maturity Date or extend any other
scheduled date on which any Obligation is to be paid (other than the date of
any prepayment); (D) change the percentage of Lenders which shall be
required for Lenders or any of

 

64

 

them to take any action hereunder; (E) release or subordinate
Administrative Agent’s Lien on all or substantially all of the Collateral
(except if the release or subordination of such Collateral is permitted under
and effected in accordance with this Agreement or any other Loan Document) or
any material guaranty of the Obligations (except to the extent expressly
contemplated thereby); (F) amend or waive this Subsection 9.2 or the
definitions of the terms used in this Subsection 9.2 insofar as the definitions
affect the substance of this Subsection 9.2; (G) amend or waive Subsection
6.2 or the priority of payments set forth in Section 6.8; or (H) consent
to the assignment, delegation or other transfer by any Loan Party of any of its
rights and obligations under any Loan Document; and provided, further,
that no amendment, modification, termination or waiver affecting the rights or
duties of Administrative Agent under any Loan Document shall in any event be
effective, unless in writing and signed by Administrative Agent, in addition to
Lenders required hereinabove to take such action.  Each amendment, modification, termination or
waiver shall be effective only in the specific instance and for the specific
purpose for which it was given.  No
amendment, modification, termination or waiver shall be required for
Administrative Agent to take additional Collateral pursuant to any Loan
Document.  No notice to or demand on any
Loan Party or any other Person in any case shall entitle such Loan Party or
such Person to any other or further notice or demand in similar or other
circumstances.  Any amendment,
modification, termination, waiver or consent effected in accordance with this
Subsection 9.2 shall be binding upon each holder of the Notes at the time
outstanding, each future holder of the Notes, and, if signed by Borrower, upon
all the Loan Parties.

 

In connection with any proposed amendment, modification, waiver or
termination (a “Proposed Change”)
requiring the consent of all Lenders or each affected Lender, if the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is required but not
obtained being referred to as a “Non-Consenting
Lender”), then so long as the Administrative Agent is not a
Non-Consenting Lender, at Borrower’s request (and at Borrower’s sole cost and
expense) Administrative Agent, or a Person reasonably acceptable to
Administrative Agent (the “Substitute Lender”),
shall have the right with Administrative Agent’s consent (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Administrative Agent’s
request, sell and assign to Administrative Agent or such Person, all of the
Loan Commitments and/or Loans of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest and fees and other amounts due or outstanding to such
Non-Consenting Lender through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment and Assumption.  Upon execution of any Assignment and
Assumption Agreement pursuant to this Subsection 9.2, the Substitute Lender
shall be entitled to vote on any pending waiver, amendment or consent in lieu
of the Non-Consenting Lender replaced by such Substitute Lender.

 

Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Loan Commitment of such Lender may not be increased
or extended without the consent of such Lender (it being understood that any
Loan Commitments or Loans held or deemed held by any Defaulting Lender shall be
excluded from a vote of the Lenders hereunder requiring any consent of the
Lenders).

 

65

 

9.3   Notices. 
Any required notice or other communication shall be in writing addressed
to the respective party as set forth below and may be personally delivered,
telecopied, sent by overnight courier service or U.S. mail and shall be deemed
to have been given: (A) if delivered in person, when delivered; (B) if
delivered by telecopy, on the date of transmission if transmitted on a Business
Day before 2:00 p.m. (Denver, Colorado time) and otherwise on the Business
Day next succeeding the date of transmission; (C) if delivered by
overnight courier, two Business Days after delivery to the courier properly
addressed; or (D) if delivered by U.S. mail, four Business Days after
deposit with postage prepaid and proper address.

 

Notices shall be addressed as follows:

 

If to Borrower or 

any other Loan Party:

 

Atlantic Tele-Network, Inc.

10 Derby Square

Salem, MA 01970

Attn: 
Michael Prior

Fax No.: 
978-744-3951

 

With a copy
to:                                                             Edwards
Angell Palmer & Dodge LLP

111 Huntington Avenue

Boston, MA 02199

Attn: 
John D. Casais

Fax No.:  617.227.4420

 

If to a Lender or Administrative Agent:  To the address set forth on the signature page hereto
or in the applicable Assignment and Assumption.

 

9.4   Failure or Indulgence Not Waiver; Remedies
Cumulative.  No failure or delay on
the part of Administrative Agent or any Lender to exercise, nor any partial exercise
of, any power, right or privilege hereunder or under any other Loan Documents
shall impair such power, right, or privilege or be construed to be a waiver of
any Default or Event of Default.  All
rights and remedies existing hereunder or under any other Loan Document are
cumulative to and not exclusive of any rights or remedies otherwise available.

 

9.5   Marshaling; Payments Set Aside.  Neither Administrative Agent nor any Lender
shall be under any obligation to marshal any assets in payment of any or all of
the Secured Obligations.  To the extent
that Borrower or any other Person makes payment(s) or Administrative Agent
enforces its Liens or Administrative Agent or any Lender exercises its right of
set-off, and such payment(s) or the proceeds of such enforcement or
set-off is subsequently invalidated, declared to be fraudulent or preferential,
set aside, or required to be repaid by anyone (whether by demand, litigation,
settlement or otherwise), then to the extent of such recovery, the Secured
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or set-off had
not occurred.

 

66

 

9.6   Severability. 
The invalidity, illegality, or unenforceability in any jurisdiction of
any provision under the Loan Documents shall not affect or impair the remaining
provisions in the Loan Documents or any such invalid, unenforceable or illegal
provision in any jurisdiction in which it is not invalid, unenforceable or
illegal.

 

9.7   Lenders’ Obligations Several; Independent Nature
of Lenders’ Rights.  The obligation
of each Lender hereunder is several and not joint and no Lender shall be
responsible for the obligation or commitment of any other Lender
hereunder.  In the event that any Lender
at any time should fail to make a Loan as herein provided, Lenders, or any of
them, at their sole option, may make the Loan that was to have been made by the
Lender so failing to make such Loan. 
Nothing contained in any Loan Document and no action taken by
Administrative Agent or any Lender pursuant hereto or thereto shall be deemed
to constitute Lenders to be a partnership, an association, a joint venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt.

 

9.8   Headings. 
Section and Subsection headings are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purposes or be given substantive effect.

 

9.9   Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
COLORADO, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT REQUIRE OR PERMIT
APPLICATION OF THE LAWS OF ANY OTHER STATE OR JURISDICTION.

 

9.10 Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, except that none of the Loan Parties may assign their
respective rights or obligations hereunder without the written consent of all
Lenders.

 

9.11 No Fiduciary Relationship.  No provision in the Loan Documents and no
course of dealing between the parties shall be deemed to create any fiduciary
duty owing to the Loan Parties or their respective Subsidiaries or Affiliates
by Administrative Agent or any Lender.

 

9.12 Construction.   
Administrative Agent, each Lender and Borrower acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review the Loan Documents with its legal counsel and
that the Loan Documents shall be constructed as if jointly drafted by
Administrative Agent, each Lender and Borrower.

 

9.13 Confidentiality.  Administrative Agent and Lenders agree to
hold any confidential information sufficiently identified as being confidential
or proprietary that they may receive from or on behalf of the Loan Parties or
any of their Subsidiaries pursuant to this Agreement in confidence, except for
disclosure: (A) on a confidential basis to directors, officers, employees,
Administrative Agent or legal counsel, independent public accountants and other
professional advisors of Administrative Agent or Lenders or their respective
Affiliates; (B) to regulatory officials having jurisdiction over
Administrative Agent or Lenders or their Affiliates; (C) as required by
Applicable

 

67

 

Law or legal process; or (D) in connection with any legal
proceeding between or among Administrative Agent or Lenders or their Affiliates
and the Loan Parties, their Subsidiaries or their respective Affiliates (provided
that, in the event Administrative Agent or Lenders or their Affiliates are so
required to disclose such confidential information pursuant to clause (C) of
this Subsection 9.13, Administrative Agent or Lenders shall promptly
notify Borrower (unless legally prohibited from so doing), so that Borrower or
any of its Subsidiaries may seek, at its sole cost and expense, a protective
order or other appropriate remedy); and (E) to another Person in
connection with a disposition or proposed disposition to that Person of all or
part of that Lender’s interests hereunder or a participation interest in its
Pro Rata Share, provided that such disclosure is made subject to an
appropriate confidentiality agreement on terms substantially similar to this
Subsection 9.13. For purposes of the foregoing, “confidential information”
shall mean all information respecting the Loan Parties, their Subsidiaries or
their respective Affiliates, other than (i) information previously filed
by Borrower or its Affiliates or Subsidiaries with any Governmental Authority
and available to the public or otherwise made available to third parties on a
non-confidential basis, (ii) information previously published in any
public medium from a source other than, directly or indirectly, Administrative
Agent or Lenders in violation of this Subsection 9.13 and (iii) information
obtained by Administrative Agent or Lenders from a source independent of
Borrower or its Subsidiaries.

 

9.14 Consent to Jurisdiction and Service of Process.

 

(A)  EACH OF THE LOAN PARTIES, ADMINISTRATIVE AGENT AND
LENDERS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL COURT OR STATE COURT IN THE STATE OF COLORADO, HAVING
SUBJECT MATTER JURISDICTION OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS.  EACH OF
THE LOAN PARTIES, ADMINISTRATIVE AGENT AND LENDERS HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT, PERSONAL JURISDICTION OF ANY SUCH COURT OR THAT SUCH
COURT IS AN INCONVENIENT FORUM.  NOTHING
HEREIN SHALL LIMIT THE RIGHT OF ANY PARTY HERETO TO BRING PROCEEDINGS AGAINST
ANY OTHER PARTY HERETO IN THE COURTS OF ANY OTHER JURISDICTION.

 

(B)  EACH OF THE LOAN PARTIES, ADMINISTRATIVE AGENT AND
LENDERS HEREBY AGREES THAT SERVICE OF THE SUMMONS AND COMPLAINT AND ALL OTHER
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, A COPY OF
SUCH PROCESS TO A LOAN PARTY, ADMINISTRATIVE AGENT OR A LENDER AT THE ADDRESS
TO WHICH NOTICES TO SUCH LOAN PARTY, ADMINISTRATIVE AGENT OR SUCH LENDERS ARE
THEN TO BE SENT PURSUANT TO SUBSECTION 9.3 AND THAT PERSONAL SERVICE OF
PROCESS SHALL NOT BE REQUIRED.  NOTHING
HEREIN SHALL BE CONSTRUED TO PROHIBIT SERVICE OF PROCESS BY ANY OTHER METHOD
PERMITTED BY LAW.

 

68

 

9.15    Waiver of Jury Trial.  EACH OF THE LOAN PARTIES, ADMINISTRATIVE
AGENT AND LENDERS HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF
THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS BETWEEN OR AMONG THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION AND ANY RELATIONSHIP THAT IS BEING
ESTABLISHED AMONG ANY OF THEM.  THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH OF THE LOAN PARTIES, ADMINISTRATIVE
AGENT AND LENDERS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER
IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. 
EACH OF THE LOAN PARTIES, ADMINISTRATIVE AGENT AND LENDERS FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. 
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.  EACH OF THE LOAN PARTIES, ADMINISTRATIVE
AGENT AND LENDERS ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND
WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ADMINISTRATIVE AGENT AND EACH
LENDER.

 

9.16    Survival of Warranties and Certain Agreements.  All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement, the making of the Loans, the issuance of the Letters of Credit and
the execution and delivery of the Notes. 
Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Loan Parties  set  forth  in  Subsections  1.4(D),  1.11,  1.14,  9.1,  9.9,  9.14  and  9.15  and  the  agreements  of  Lenders  set  forth  in  Subsection  8.2(E)  (together  with  any  other  Sections  and  Subsections  stated  herein  to  so  survive)  shall  survive  the  payment  of  the  Loans  and  the  Letter  of  Credit  Liabilities  and  the  termination  of  this  Agreement.

 

9.17    Entire Agreement.  This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether oral or written, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto.

 

9.18    Counterparts; Effectiveness.  This Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in

 

69

 

separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all of which counterparts together shall
constitute but one and the same instrument. 
This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

 

9.19    Patriot Act. 
The Lenders notify the Loan Parties and their respective Subsidiaries
that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Patriot Act”), they are required to obtain,
verify and record information that identifies each of Borrower and its
Subsidiaries, which information includes the name and address of such entity
and other information that will allow the Lenders to identify such in
accordance with the Patriot Act.  Each of
the Loan Parties and their respective Subsidiaries shall provide to the extent
commercially reasonable, such information and take such other actions as are
reasonably requested by the Lenders in order to assist the Lenders in
maintaining compliance with the Patriot Act.

 

9.20    Guaranty of Secured
Obligations by Guarantors.

 

(A)               The
Guaranty.  In order to induce the
Lenders to enter into this Agreement and to extend credit hereunder and in
recognition of the direct benefits to be received by Guarantors from the extensions
of credit hereunder, each Guarantor hereby agrees with Administrative Agent and
the Secured Parties as follows:  each
Guarantor hereby unconditionally and irrevocably jointly and severally
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, by acceleration or otherwise, to
Administrative Agent and the other Secured Parties of any and all Secured
Obligations.  If any or all of the
Secured Obligations becomes due and payable hereunder, each Guarantor
unconditionally promises to pay such indebtedness to Administrative Agent and
the other Secured Parties, on order, or demand, together with any and all
reasonable expenses which may be incurred by Administrative Agent and the other
Secured Parties in collecting any of the Secured Obligations.

 

Notwithstanding any provision to the contrary
contained herein or in any other of the Loan Documents, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each such Guarantor hereunder shall be limited to the maximum
amount that is permissible under Applicable Law (whether federal or state and
including, without limitation, the Bankruptcy Code).

 

Each Guarantor’s maximum obligations
hereunder (the “Maximum Guarantor Liability”)
in any case or proceeding referred to below (but only in such a case or
proceeding) shall not be in excess of:

 

(i)        in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code on or within two years from
the date on which any of the Secured Obligations are incurred, the maximum
amount that would not otherwise cause the obligations of such Guarantor under
this Subsection 9.20 (or any other obligations of such Guarantor to
Administrative Agent, the Lenders and any other Person holding any of the
Secured Obligations) to be avoidable or unenforceable against such Guarantor
under (A)

 

70

 

Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such
case or proceeding by virtue of Section 544 of the Bankruptcy Code; or

 

(ii)       in a case or proceeding commenced by or
against such Guarantor under the Bankruptcy Code subsequent to two years from
the date on which any of the Secured Obligations of such Guarantor are
incurred, the maximum amount that would not otherwise cause the obligations of
such Guarantor under this Subsection 9.20 (or any other obligations of such
Guarantor to Administrative Agent, Lenders and any other Person holding any of
the Secured Obligations) to be avoidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance act or
statute applied in any such case or proceeding by virtue of Section 544 of
the Bankruptcy Code;

 

(iii)      in a case or proceeding commenced by or
against such Guarantor under any law, statute or regulation other than the
Bankruptcy Code relating to dissolution, liquidation, conservatorship,
bankruptcy, moratorium, readjustment of debt, compromise, rearrangement,
receivership, insolvency, reorganization or similar debtor relief from time to
time in effect affecting the rights of creditors generally (collectively, “Other Debtor Relief Law”), the maximum
amount that would not otherwise cause the obligations of such Guarantor under
this Subsection 9.20 (or any other obligations of such Guarantor to
Administrative Agent, the Lenders and any other Person holding any of the
Secured Obligations) to be avoidable or unenforceable against such Guarantor
under such Other Debtor Relief Law, including, without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such case or
proceeding.  (The substantive state or
federal laws under which the possible avoidance or unenforceability of the
obligations of such Guarantor under this Subsection 9.20 (or any other
obligations of Guarantor to Administrative Agent, the Lenders and any other
Person holding any of the Secured Obligations) shall be determined in any such
case or proceeding shall hereinafter be referred to as the “Avoidance Provisions”.)

 

To the extent set forth above, but only to the extent that the
obligations of such Guarantor under this Subsection 9.20, or the transfers made
by such Guarantor under the Security Documents to which it is a party, would
otherwise be subject to avoidance under any Avoidance Provisions if such
Guarantor is not deemed to have received valuable consideration, fair value,
fair consideration or reasonably equivalent value for such transfers or
obligations, or if such transfers or obligations of such Guarantor under this
Subsection 9.20 would render such Guarantor insolvent, or leave such Guarantor
with an unreasonably small capital or unreasonably small assets to conduct its
business, or cause such Guarantor to have incurred debts (or to have intended
to have incurred debts) beyond its ability to pay such debts as they mature, in
each case as of the time any of the obligations of such Guarantor are deemed to
have been incurred and transfers made under such Avoidance Provisions, then
such obligations shall be reduced to that amount which, after giving effect
thereto, would not cause the obligations of such Guarantor under this
Subsection 9.20 (or any other obligations of such Guarantor to Administrative
Agent, the Lenders or any other Person holding any of the Secured Obligations),
as so reduced, to be subject to avoidance under such Avoidance Provisions.  This paragraph is intended solely to preserve
the rights hereunder of Administrative Agent, the Lenders

 

71

 

and any other Person holding any of the Secured Obligations to the
maximum extent that would not cause the obligations of such Guarantor under
this Subsection 9.20 to be subject to avoidance under any Avoidance Provisions,
and neither such Guarantor nor any other Person shall have any right, defense,
offset, or claim under this paragraph as against Administrative Agent, the
Lenders or any other Person holding any of the Secured Obligations that would
not otherwise be available to such Person under the Avoidance Provisions.

 

Each Guarantor agrees that the obligations of
such Guarantor under this Subsection 9.20 may at any time and from time to time
exceed the Maximum Guarantor Liability, without impairing the guaranty or any
provision contained herein or affecting the rights and remedies of
Administrative Agent and the Lenders hereunder.

 

(B)           Bankruptcy.  Additionally, each of Guarantors
unconditionally and irrevocably guarantees jointly and severally the payment of
any and all Secured Obligations whether or not due or payable upon the
occurrence of any of the events specified in Subsection 6.1(F) or (G) and
unconditionally promises to pay such Secured Obligations on demand.  Each of the Guarantors further agrees that to
the extent that Borrower or any Guarantor shall make a payment or a transfer of
an interest in any property to Administrative Agent or any Lender, which
payment or transfer or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, or otherwise is avoided, and/or required to
be repaid to Borrower or any Guarantor, the estate of Borrower or any
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.

 

(C)           Nature
of Liability.  The liability of each
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the Secured Obligations whether executed by any such Guarantor, any
other guarantor or by any other party, and no Guarantor’s liability hereunder
shall be affected or impaired by (i) any direction as to application of
payment by Borrower or by any other party, or (ii) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Secured Obligations, or (iii) any payment on or reduction
of any such other guaranty or undertaking, or (iv) any dissolution,
termination or increase, decrease or change in personnel by Borrower or other
guarantor, or (v) any payment made to a Secured Party on the Secured
Obligations which such Secured Party repays Borrower or another guarantor
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each of Guarantors waives, to
the fullest extent permitted by Applicable Law, any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

 

(D)          Independent
Obligation.  The obligations of each
Guarantor hereunder are independent of the obligations of any other guarantor
or Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
guarantor or Borrower and whether or not any other Guarantor or Borrower is
joined in any such action or actions.

 

(E)           Authorization.  Each of Guarantors authorizes each Secured Party
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and

 

72

 

without affecting or impairing its liability hereunder, from time to
time to (i)  change the terms of the Secured Obligations or any part
thereof, with the consent of Borrower, (ii) take and hold security from
any other guarantor or any other party for the payment of this guaranty or the
Secured Obligations and exchange, enforce waive and release any such security,
and apply such security and direct the order or manner of sale thereof as
Administrative Agent and Lenders in their discretion may determine and (iii) release
or substitute any one or more endorsers, guarantors, Borrower or other
obligors.

 

(F)           Reliance.  It is not necessary for Administrative Agent
or the Lenders to inquire into the capacity or powers of Borrower or any
Guarantor or the officers, directors, members, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.

 

(G)           Waiver.

 

(i)            Each
of the Guarantors waives any right (except as shall be required by applicable
statute and cannot be waived) to require any Secured Party to (1) proceed
against Borrower, any other guarantor or any other party, (2) proceed
against or exhaust any security held from Borrower, any other guarantor or any
other party, or (3) pursue any other remedy in such Secured Party’s power
whatsoever.  Each of the Guarantors
waives any defense based on or arising out of any defense, other than payment
in full of the Secured Obligations, based on or arising out of the disability
of Borrower, any other guarantor or any other party, or the unenforceability of
the indebtedness or any part thereof from any cause, or the cessation from any
cause of the liability of Borrower other than payment in full of the
indebtedness.  Any Secured Party may, at
its election, foreclose on any security held by it by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by and conducted in accordance
with Applicable Law), or exercise any other right or remedy any Secured Party
may have against Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the indebtedness has been paid.  Each of the Guarantors waives any defense
arising out of any such election by each of Agent and each of the Lenders, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors against
Borrower or any other party or any security.

 

(ii)           Each
of the Guarantors waives, to the fullest extent permitted by Applicable Law,
all presentments, demands for performance, protests and notices, including,
without limitation, notices of nonperformance, notice of protest, notices of
dishonor, notices of acceptance of this guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness.  Each of the Guarantor assumes all
responsibility for being and keeping itself informed of Borrower’s financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the obligations and the nature, scope and extent of the risks
which such Guarantor assumes and incurs hereunder, and agrees that none of the
Secured Parties shall have any duty to advise such Guarantor of information
known to it regarding such circumstances or risks.

 

73

 

(iii)          Each
of the Guarantors hereby agrees it will not exercise, and irrevocably
subordinates to the prior payment in full and in cash of the Secured
Obligations (other than contingent indemnity, expense reimbursement and tax
gross-up payment for which no claim has been asserted), any rights of
subrogation which it may at any time otherwise have as a result of the guaranties
provided in this Subsection 9.20 (whether contractual, under Section 509
of the U.S. Bankruptcy Code, or otherwise) to the claims of any Secured Party
against Borrower or any other guarantor of the Secured Obligations
(collectively, the “Other Parties”)
and all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this guaranty. 
Each of the Guarantors hereby further agrees until the Secured
Obligations have been paid in full (other than contingent indemnity, expense
reimbursement and tax gross-up payment for which no claim has been asserted)
and all Loan Commitments terminated not to exercise any right to enforce any
other remedy which any Secured Party now have or may hereafter have against any
Other Party, any endorser or any other guarantor of all or any part of the
Secured Obligations and any benefit of, and any right to participate in, any
security or collateral given to or for the benefit of any Secured Party to
secure payment of the Secured Obligations or any Other Party.

 

(H)          Limitation on
Enforcement.  Administrative Agent
and Secured Parties agree that the guaranties provided in this Subsection 9.20
may be enforced only by the action of Administrative Agent acting upon the
instructions of the Requisite Lenders and that no Secured Party shall have any
right individually to seek to enforce or to enforce any such guaranty, it being
understood and agreed that such rights and remedies may be exercised by
Administrative Agent for the benefit of the Secured Parties under the terms of
this Agreement.

 

(I)            Confirmation of
Payment.  Administrative Agent and
the Lenders will, upon request after payment of the indebtedness and
obligations which are the subject of the guaranties provided in this Subsection
9.20 and termination of the Loan Commitments, confirm to Borrower, any
Guarantor or any other Person that the such Secured Obligations have been paid
and the commitments relating thereto terminated, subject to the provisions of
Subsection 9.20(B).

 

(J)            Subordination of
Intercompany Debt.  Any Indebtedness of Borrower or any Guarantor
now or hereafter held by any Guarantor (a “Subordinated
Intercompany Lender”) is hereby subordinated in right of payment to
the Secured Obligations, and any such Indebtedness collected or received by a
Subordinated Intercompany Lender following the occurrence of any Event of
Default shall be held in trust for Administrative Agent on behalf of Secured
Parties and shall forthwith be paid over to Administrative Agent for the
benefit of Secured Party to be credited and applied against the Secured
Obligations but without affecting, impairing or limiting in any manner the
liability of the Subordinated Intercompany Lender under any other provision
hereof.

 

9.21    FCC and PUC Compliance.

 

  Notwithstanding anything to the
contrary in this Agreement and the other Loan Documents, no party hereto or
thereto shall take any action under this Agreement or the other Loan Documents
that would constitute or result in an assignment of any License, or a change of
control of any

 

74

 

Loan Party or Subsidiary directly or indirectly holding a License, to
the extent that such assignment or change of control would require the prior
approval by the FCC under the Communications Act and/or any applicable PUC
under the PUC Laws without first obtaining such required approval.

 

SECTION 10

DEFINITIONS

 

10.1    Certain Defined Terms.  The terms defined below are used in this
Agreement as so defined.  Terms defined
in the preamble and recitals to this Agreement are used in this Agreement as so
defined.

 

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

 

“Adjustment Date” means
each date which is the fifth Business Day after the receipt by Administrative
Agent of each Compliance Certificate and related quarterly financial statements
delivered by Borrower pursuant to Subsection 4.4(C) and, in the case a
decrease in an applicable margin is warranted, a written notice from Borrower
to decrease such margin.

 

“Administrative Agent”
means CoBank in its capacity as Administrative Agent for Lenders under this
Agreement and each of the other Loan Documents and any successor in such
capacity appointed pursuant to Subsection 8.2.

 

“Affiliate” means, (A) with
respect to Borrower or any of its Subsidiaries, any Person: (i) directly
or indirectly controlling, controlled by, or under common control with such
Person; (ii) directly or indirectly owning or holding 10% or more of any
equity interest in Borrower or any Subsidiary of Borrower; or (iii) 10% or
more of whose voting stock or other equity interest is directly or indirectly
owned or held by Borrower or any Subsidiary of Borrower, excluding for purposes
of this clause (A) Affiliates which are also Borrower, (B) with
respect to Administrative Agent and Lenders hereunder, any Person which
controls or is controlled by or is under common control with such Person and (C) with
respect to Affiliates of Administrative Agent, any Person which controls or is
controlled by or is under common control with such Person.  For purposes of this definition, “control”
(including with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”) means the possession directly or indirectly of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise.

 

“Agreement” means this
Credit Agreement (including all schedules and exhibits hereto), as amended,
modified, supplemented, extended and restated from time to time as permitted
herein.

 

“Applicable Law” means, in
respect of any Person, all provisions of constitutions, statutes, rules,
regulations and orders of governmental bodies or regulatory agencies applicable
to such Person, including the Licenses, the Communications Act, PUC Laws and
all Environmental Laws, and all orders, decisions, judgments and decrees of all
courts and arbitrators in proceedings or actions to which the Person in
question is a party or by which it is bound.

 

75

 

“Approved Fund” means any
Fund that is administered or managed by (A) a Lender, (B) an
Affiliate of a Lender or (C an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” means CoBank in
its capacity as Arranger for Lenders under this Agreement and each of the other
Loan Documents and any successor in such capacity appointed pursuant to
Subsection 8.2.

 

“Asset Disposition” means
the disposition, whether by sale, lease, transfer, loss, damage, destruction,
condemnation or otherwise, by any Loan Party or any of their Subsidiaries of
any of the following:  (A) any of
the capital stock or the ownership interests of any of its Subsidiaries, or (B) any
or all of its assets, other than (i) bona fide sales of inventory to
customers for fair value in the ordinary course of business, (ii) dispositions
of obsolete equipment not used or useful in the business of any Loan Party or
any of their Subsidiaries, and (iii) sales of Cash Equivalents for fair
value.

 

“Assignment and Assumption”
means an agreement among Administrative Agent, a Lender and such Lender’s
assignee regarding their respective rights and obligations with respect to
assignments of the Loans, the Loan Commitment, the Facilities and other
interests under this Agreement and the other Loan Documents in the form
attached hereto as Exhibit 10.1(A).

 

“Available Revolver Loan Commitment”
means, at any time, the Revolver Loan Commitment, as it may have been reduced
pursuant to this Agreement, minus the sum of (A) aggregate
principal balance of all Revolver Loans plus (B) the aggregate
Letter of Credit Liability then outstanding hereunder.

 

“Bankruptcy Code” means
Title 11 of the United States Code entitled “Bankruptcy,” as amended from time
to time, or any applicable bankruptcy, insolvency or other similar federal or
state law now or hereafter in effect and all rules and regulations
promulgated thereunder.

 

“Base Rate” means a
variable rate of interest per annum equal, on any day, to the higher of (A) the
Prime Rate or (B) the sum of (i) the Federal Funds Rate plus (ii) 0.50%.

 

“Base Rate Loans” means
Loans (or portions thereof as permitted hereunder) accruing interest at rate
determined by reference to the Base Rate.

 

“Base Rate Margin” means
the applicable percent per annum determined in accordance with Subsection
1.2(B).

 

“BDC” means Bermuda
Digital Communications, LTD., a Bermuda entity.

 

“Business Day” means (A) for
all purposes other than as covered by clause (B) below, any day excluding
Saturday, Sunday and any day which is a legal holiday under the laws of the
States of Colorado, Georgia or Massachusetts or is a day on which banking
institutions located in such jurisdictions are closed or which the Federal
Reserve Banks are closed, and (ii) with respect to all notices,
determinations,  fundings  and  payments  in  connection  with  LIBOR  Loans,  any  day  that  is  a  Business  Day  described  in  clause  (A)  above  and  that  is  also  a  day  for  trading  by  and  between  banks  in  U.S.  dollar  deposits  in  the  applicable  interbank  LIBOR  market.

 

76

 

“Calculation Period” means
each period commencing on each Adjustment Date and ending on the day preceding
each subsequent Adjustment Date.

 

“Capital Lease” means any
lease of real or personal property which is required to be capitalized under
GAAP or which is treated as an operating lease under regulations applicable to
Borrower and its Subsidiaries but which otherwise would be required to be
capitalized under GAAP.

 

“Cash Equivalents”
means:  (A) marketable direct
obligations issued or unconditionally guarantied by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States of if not so backed, then having a rating of at
least A+ from Standard & Poor’s Rating Service and at least A1 from
Moody’s Investors Service, Inc., in each case maturing within two years
from the date of acquisition thereof; (B) commercial paper maturing no
more than one year from the date issued and, at the time of acquisition, having
a rating of at least A-1 from Standard & Poor’s Rating Service or at
least P-1 from Moody’s Investors Service, Inc.; (C) certificates of
deposit or bankers’ acceptances maturing within one year from the date of
issuance thereof issued by, or overnight reverse repurchase agreements from,
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia having combined capital and
surplus of not less than $500,000,000; (D) time deposits maturing no more
than 30 days from the date of creation thereof with commercial banks having
membership in the Federal Deposit Insurance Corporation in amounts at any one
such institution not exceeding the lesser of $100,000 or the maximum amount of
insurance applicable to the aggregate amount of the Loan Party’s deposits at
such institution; and (E) Investments in CoBank or other Investments satisfactory
to Administrative Agent.

 

“Change of Control” means:
(A) a report on Schedule 13D shall be filed with the Securities and
Exchange Commission pursuant to Section 13(d) of the Act disclosing
that any person other than Borrower or any employee benefit plan sponsored by
Borrower, is the beneficial owner (as the term is defined in Rule 13d-3
under the Act) directly or indirectly, of 30% or more of the total voting power
represented by Borrower’s then outstanding voting securities (calculated as
provided in paragraph (d) of Rule 13d-3 under the Act in the case of
rights to acquire voting securities); or (B) any person, other than
Borrower or any employee benefit plan sponsored by Borrower, shall purchase
shares pursuant to a tender offer or exchange offer to acquire any voting
securities of Borrower (or securities convertible into such voting securities)
for cash, securities or any other consideration, provided that after
consummation of the offer, the person in question is the beneficial owner
directly or indirectly, of 30% or more of the total voting power represented by
Borrower’s then outstanding voting securities (all as calculated under clause
(A)); or (C) the occurrence of (i) any consolidation or merger of
Borrower in which Borrower is not the continuing or surviving corporation
(other than a merger of Borrower in which holders of more than 51% of the
outstanding common shares of Borrower immediately prior to the merger have the
same proportionate ownership of common shares of the surviving corporation
immediately after the merger as immediately before or a merger effected
pursuant to Section 251(g) of the Delaware General Corporation Law),
or pursuant to which common shares of Borrower will be converted into cash,
securities or other property, or (ii) any sale, lease exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all the assets of Borrower; or (D) there shall have been a
change in the composition of the Board of Directors of Borrower at any time
during any consecutive twenty-four month period such that “continuing directors”
cease for any reason to constitute at least a majority of the Board.

 

77

 

For purposes of this clause, “continuing directors” means those members
of the Board who either were directors at the beginning of such consecutive
twenty-four month period or were elected by or on the nomination or
recommendation of at least a  majority of
the then-existing “continuing directors.” 
Notwithstanding the foregoing, no “Change of Control” shall have
occurred or be deemed to be continuing, during such time as Cornelius B. Prior, Jr.,
his spouse or his lineal descendents, directly or in trust for their benefit,
shall have voting control of (1) 50% or more of the outstanding shares
entitled to vote, or (2) 35% or more of the outstanding shares entitled to
vote at a time when no other shareholders described in (A) or (B) above
owns in the aggregate 35% or more of the outstanding shares entitled to vote.

 

“Closing Date” means September 10,
2008.

 

“Collateral” means,
collectively:  (A) all “Collateral”
as defined in the Security Documents; (B) all real property and interests
in real property mortgaged pursuant to the Security Documents; and (C) any
property or interest provided in addition to or in substitution for any of the
foregoing.

 

“Collateral Contract Assignments”
means, collectively, all collateral assignments of Material Contracts, in form
and content approved by Administrative Agent, executed by a Loan Party or any
of its Subsidiaries in favor of Administrative Agent, for the benefit of itself
and Lenders, as required pursuant to Subsection 2.8, as amended, modified,
supplemented, extended and restated from time to time.

 

“Communications
Act” means the Communications Act of 1934, as amended and any
similar or successor federal statute, and the rules and regulations of the
FCC thereunder, all as the same may be in effect from time to time.

 

“Communications
System” means a system or business providing voice, data or video
transport, connection or monitoring services, through any means or medium, and
the provision of marketing, management, technical and financial (including call
rating) or other services to companies providing such transport, connection or
monitoring services or constructing, creating, developing or marketing
communications-related network equipment, software and other devices for use in
the business described above.

 

“Contingent Obligation,”
as applied to any Person, means any direct or indirect liability of that
Person:  (A)with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid, performed or discharged, or that
the holders of such liability will be protected (in whole or in part) against
loss with respect thereto; (B) with respect to any letter of credit issued
for the account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings; or (C) under any foreign exchange contract,
currency swap agreement, interest rate swap agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising
from fluctuations in currency values or interest rates.  Contingent Obligations shall also include (i) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (ii) the
obligation to make take-or-pay or similar payments if required

 

78

 

regardless of nonperformance by any other party or parties to an
agreement, and (iii) any liability of such Person for the obligations of
another through any agreement to purchase, repurchase or otherwise acquire such
obligation or any property constituting security therefor, to provide funds for
the payment or discharge of such obligation or to maintain the solvency,
financial condition or any balance sheet item or level of income of
another.  The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum
amount so guaranteed.

 

“Default” means a
condition or event that, after notice or lapse of time or both, would
constitute an Event of Default if that condition or event were not cured or
removed within any applicable grace or cure period.

 

“Defaulting Lender” means
any Lender that (a) has failed to fund any portion of the Loans required
to be funded by it hereunder within one Business Day of the date required to be
funded by it hereunder, (b) has otherwise failed to pay over to
Administrative Agent or any other Lender any other amount required to be paid
by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.

 

“EBITDA”
means (A)  the result of (i) sum of (1) net income or deficit,
as the case may be, excluding gains or losses on the sale of assets and
extraordinary (non-recurring, one-time) gains and losses, (2) total
interest expense (including non-cash interest), (3) depreciation and
amortization expense, (4) income taxes, (5) certain one time items
and/or adjustments associated with any acquisition to be agreed upon by
Administrative Agent in its reasonable discretion , (6) losses from the
disposal or impairment of property and equipment and other long-term assets,
including, goodwill, intangibles and spectrum, (7) cash dividends from
unconsolidated subsidiaries and joint ventures, and (8) any other non-cash
expenses, charges, losses, or infrequent, unusual or extraordinary items
reducing net income for such period to the extent such non-cash items do not
represent a cash item in any future period minus (ii) to the extent
included in calculating net income or deficit, the sum of (1) interest
income, (2) non-cash dividends and patronage income, (3) equity in
earnings from unconsolidated subsidiaries and joint ventures, and (4) any
aggregate net gains arising from the sale, exchange, or other disposition of
fixed assets, investments, securities, intangibles, and spectrum, and (B) will
be measured for the then most recently completed four fiscal quarters, adjusted
to give effect to any acquisition, sale or other disposition, directly or
through a subsidiary, of any business (or any portion thereof) during the
period of calculation as if such acquisition, sale or other disposition
occurred on the first day of such period of calculation.  For the purposes of calculating EBITDA for
any period in connection with any determination of the Total Net Leverage Ratio
or any other financial ratio, if at any time during such period Borrower or any
Subsidiary shall have made any Material Acquisition or Material Disposition,
the EBITDA for such period shall be calculated on a Pro forma Basis to give
effect to such Material Acquisition or Material Disposition.  As used in this definition, “Material
Acquisition” means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the
payment of consideration by Borrower and its Subsidiaries in excess of $1,000,000;
and “Material Disposition” means any disposition of property or series of
related dispositions of property that yields gross proceeds to Borrower and its
Subsidiaries in excess of $1,000,000.

 

79

 

“Environmental Laws” means all applicable federal, state or
local laws, statutes, rules, regulations or ordinances, codes, common law,
consent agreements, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder relating to public health, safety
or the pollution or protection of the environment, including those relating to
releases, discharges, emissions, spills, leaching, or disposals of hazardous
substances (including petroleum, crude oil or any fraction or derivative
thereof, or other hydrocarbons) to air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde, to the treatment,
storage, disposal or management of hazardous substances (including petroleum,
crude oil or any fraction or derivative thereof, or other hydrocarbons),
pollutants or contaminants, to exposure to toxic, hazardous or other
controlled, prohibited, or regulated substances, including, without limitation,
any such provisions under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.    § 9601 et  seq.),
and the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. §
6901 et  seq.).

 

“Equity” means the result
of consolidated total assets minus consolidated total liabilities.

 

“Equity to Assets Ratio”
means the ratio derived by dividing (A) Equity by (B) consolidated
total assets.

 

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

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated)
which is a member of a controlled group or under common control with any Loan
Party within the meaning of Section 414(b) or (c) of the IRC
(and Sections 414(m) and (o) of the IRC for purposes of provisions
relating to Section 412 of the IRC).

 

“ERISA Event” means, with
respect to any Loan Party, any ERISA Affiliate or any Pension Plan, the
occurrence of any of the following: (A) a Reportable Event; (B) a
withdrawal by a substantial employer (as defined in Section 4001(a)(12) of
ERISA) subject to Section 4063 of ERISA; (C) a cessation of
operations which is treated as a withdrawal under Section 4062(e) of
ERISA; (D) a complete or partial withdrawal under Section 4203 or
4205 of ERISA from a Multi-employer Plan; (E) a notification that a
Multi-employer Plan is in reorganization under Section 4242 of ERISA; (F) the
filing of a notice of intent to terminate a Pension Plan under 4041 of ERISA; (G) the
treatment of an amendment of a Pension Plan as a termination under 4041 of
ERISA; (H) the termination of a Multi-employer Plan under Section 4041A
of ERISA; (I) the commencement of proceedings by the PBGC to terminate a
Pension Plan under 4042 of ERISA; (J) an event or condition which could
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, a
Pension Plan; or (K) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007
of ERISA.

 

80

 

“Excluded Taxes” means (A) any
taxes imposed on (or measured by) net income (including branch profits taxes)
of a Lender or Administrative Agent, or any franchise or similar taxes imposed
in lieu thereof, by any Governmental Authority or taxing authority by the
jurisdiction under the laws of which such Lender or Administrative Agent is
organized or any jurisdiction in which such Lender or Administrative Agent is a
resident, has an office, conducts business or has another connection and (B) in
the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender (i) under law in effect at the time such
Foreign Lender becomes a party to this Agreement (or designates a new office),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new office (or assignment), to
receive additional amounts from Borrower with respect to such withholding tax
pursuant to Subsection 1.13(A) or (ii) that is attributable to such
Foreign Lender’s failure to comply with Subsection 1.13(B).

 

“Facility” or “Facilities” means one or more of the
Revolver Facility, the Term Loan Facility and the Incremental Term Loan
Facilities, if and when applicable.

 

“FCC” means the Federal
Communications Commission, or any other similar or successor agency of the
federal government administering the Communications Act.

 

“Federal Funds Rate”
means, for any day, the rate of interest per annum (rounded upward, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day and (ii) if no such rate is so published on the
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to Administrative Agent on such day on such transactions as
determined by Administrative Agent.

 

“Fund” means any Person
(other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

 

“GAAP” means generally
accepted accounting principles as set forth in statements from Auditing
Standards No. 69 as amended, entitled “The Meaning of ‘Present Fairly in
Conformance with Generally Accepted Accounting Principles in the Independent
Auditors Reports’” issued by the Auditing Standards Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.

 

“Governmental Approvals”
means all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all Governmental Authorities,
including all Licenses.

 

“Governmental Authority”
means any nation (including Guyana), province, or state or any political
subdivision of any of the foregoing, and any government or any Person
exercising

 

81

 

executive, legislative, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity exercising such
functions owned or controlled, through stock or capital ownership or otherwise,
by any of the foregoing, including the FCC and any PUC.

 

“GTT” means Guyana
Telephone & Telegraph Co., Ltd..

 

“Hedge Agreements” mean
interest rate, currency or cross-currency rate swap agreements, and other similar
agreements entered into by Borrower or any other Loan Party in the ordinary
course of business (and not for speculative purposes) for the principal purpose
of protecting Borrower or any other Loan Party against fluctuations in interest
rates or currency exchange rates.

 

“Indebtedness” as applied
to any Person, means without duplication: (A) all indebtedness for
borrowed money; (B) that portion of obligations with respect to Capital
Leases or other capitalized agreements that is properly classified as a
liability on a balance sheet in conformity with GAAP; (C) notes payable
and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money; (D) any obligation owed for
all or any part of the deferred purchase price of property or services, except
trade payables arising in the ordinary course of business and outstanding not
more than 90 days after such obligation is due (unless thereafter contested in
good faith); (E) all obligations created or arising under any conditional
sale or other title retention agreement; (F) all indebtedness secured by
any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, but only to the extent of the
fair value of such property or asset; (G) all obligations of such Person
under take-or-pay or similar arrangements or under commodities agreements; (H) the
net termination obligations of such Person under any Hedge Agreement,
calculated as of any date as if such agreement or arrangement were terminated
as of such date; (I) the maximum amount of all standby letters of credit
issued or bankers’ acceptance facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed); (J) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product; (K) with respect to the Indebtedness
of any partnership or unincorporated joint venture in which such Person is a
general partner or joint venturer, the least of (i) such Indebtedness, (ii) such
Person’s actual liability for such Indebtedness or (iii) such Person’s
investment in such partnership or joint venture; (L) obligations with
respect to principal under Contingent Obligations for the repayment of money or
the deferred purchase price of property, whether or not then due and payable
(calculated as the maximum amount of such principal); (M) obligations with
respect to stated amounts of Letters of Credit; and (N) obligations under
partnership, organizational or other agreements to fund capital contributions
or other equity calls with respect to any Person or investment, or to redeem,
repurchase or otherwise make payments in respect to capital stock or other
securities of such Person.

 

“Interest Period” shall
mean any LIBOR Interest Period.

 

“Investment” means (A) any
direct or indirect purchase or other acquisition by any Loan Party or any of
their respective Subsidiaries of any beneficial interest in, including stock,
partnership interest or other equity securities of, any other Person; and (B) any
direct or indirect loan, advance, transfer, guarantee, assumption of liability
or other obligation or liability, or capital contribution by any Loan Party or
any of their respective Subsidiaries to any other Person, including all
indebtedness

 

82

 

and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business.  The amount of any
Investment shall be the original cost of such Investment plus the cost
of all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.

 

“IRC” means the Internal
Revenue Code of 1986, as amended from time to time, and all rules and
regulations promulgated thereunder.

 

“Issuing Lender”
means each Person so designated in the introductory paragraph of this
Agreement, or any other Lender designated from time to time by Administrative
Agent with the approval of Borrower, in such Lender’s capacity as an issuer of
Letters of Credit hereunder.

 

“Joinder Agreement”
means a Joinder Agreement substantially in the form of Exhibit 2.12
and delivered by an additional Subsidiary of any Loan Party in accordance with
the provisions of Subsection 2.12.

 

“Lender” or “Lenders” means one or more of the banks or
other financial institutions identified as Lenders in the first paragraph of
this Agreement and their successors and permitted assigns pursuant to
Subsection 8.1.

 

“Letter of Credit
Liability” means, as to each Letter of Credit, all
reimbursement obligations of Borrower to the issuer of the Letter of Credit
consisting of (A) the amount available to be drawn or which may become
available to be drawn; (B) all amounts which have been paid and made
available by the Issuing Lender to the extent not reimbursed by Borrower,
whether by the making of a Revolver Loan or otherwise; and (C) all accrued
and unpaid interest, fees and expenses with respect thereto.  In the case of any Letter of Credit that is
issued in a currency other than United Stated Dollars, the corresponding Letter
of Credit Liability shall be determined in United States Dollars based on the
currency exchange rate from time to time applicable to the issuer of such
Letter of Credit.

 

“LIBOR” means for each
applicable Interest Period, a fixed annual rate equal to: (A) the rate of
interest determined by Administrative Agent at which deposits in U.S. dollars
for the relevant LIBOR Interest Period are offered based on information
presented by the Reuters Screen LIBOR01 page as quoted by the British
Bankers Association as of 11:00 a.m. (London time) on the day which is two
Business Days prior to the first day of such Interest Period, provided,
that in the event British Bankers Association ceases to provide such quotations
(as determined by Administrative Agent), then Administrative Agent will notify
Borrower and Administrative Agent and Borrower will agree upon a substitute
basis for obtaining such quotations, divided by (B) a number equal
to 1.0 minus the aggregate (but without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on the day
which is two Business Days prior to the beginning of such Interest Period for
Eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of such Board) which are required to be maintained by a member
bank of the Federal Reserve System (including, without limitation, basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System or other Governmental

 

83

 

Authority having jurisdiction with respect thereto, as now and from
time to time in effect); such rate to be rounded upward to the next whole
multiple of 0.01 percent.

 

“LIBOR Loans” means Loans
(or portions thereof as permitted hereunder) accruing interest at rates
determined by reference to the LIBOR.

 

“LIBOR
Margin” means the applicable percent per annum determined in
accordance with Subsection 1.2(B).

 

“Licenses” means any cable
television franchise or any landline telephone, cellular telephone, microwave,
personal communications or other telecommunications or similar license,
authorization, registration, certificate, waiver, certificate of compliance,
franchise, approval, material filing, exemption, order, or permit, whether for
the acquisition, construction or operation of any Communications System, or to
otherwise provide the services related to any Communications System, granted or
issued by the FCC or any applicable PUC or other Governmental Authority
(including in Guyana).

 

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

 

“Loan” or “Loans” means an advance or advances under
any of the Loan Commitments.

 

“Loan Commitment” or “Loan Commitments” means one or more of the
Revolver Loan Commitment, the Term Loan Commitment and the Incremental Term
Loan Commitments, if and when applicable, as any such commitment is reduced
from time to time as provided in this Agreement, and, in the case of any
Incremental Term Loan Commitment, as provided in the amendment or supplement to
this Agreement establishing such Incremental Term Loan Facility.

 

“Loan Documents” means,
collectively, this Agreement, the Revolver Notes, the Term Loan Notes, the
Security Documents, the Post-Closing Letter, any guaranty and all other
instruments, documents and agreements executed and delivered concurrently
herewith or at any time hereafter to or for the benefit of Administrative Agent
or the Lenders in connection with the Loans and other transactions contemplated
by this Agreement, all as amended, modified, supplemented, extended or restated
from time to time.

 

“Material Adverse Effect”
means (A) a material adverse effect upon the business, result of
operations, or financial condition of the Loan Parties or their respective
Subsidiaries, taken as a whole, or (B) the impairment of any Liens in
favor of Administrative Agent, of the ability of the Loan Parties, taken as a
whole, to perform their obligations under the Loan Documents or of
Administrative Agent or any Lender to enforce any material provision of any
Loan Document or collect any of the Obligations.  In determining whether any individual event
could reasonably be expected to have a Material Adverse Effect, notwithstanding
that such event does not of itself have such effect, a Material Adverse Effect
shall be deemed to have occurred if the cumulative effect of

 

84

 

such event and all other then existing events could reasonably be
expected to have a Material Adverse Effect.

 

“Material Contracts” means
(A) any contract or any other agreement, written or oral, of any Loan
Party or any of their respective Subsidiaries involving monetary liability of
or to any such Person in an aggregate amount in excess of $1,000,000  per annum and (B) any other contract
or agreement, written or oral, of any Loan Party or any of their respective
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.

 

“Multi-employer
Plan” means a Multi-employer plan as defined in Section 4001(a)(3) of
ERISA to which any Loan Party or any ERISA Affiliate makes, is making, made, or
was at any time during the current year or the immediately preceding six (6) years
obligated to make contributions.

 

“Net Proceeds” means cash
proceeds received by any Loan Party or any of their respective Subsidiaries
from any Asset Disposition, debt or equity issuance (including insurance
proceeds, awards of condemnation, and payments under notes or other debt
securities received in connection with any Asset Disposition), net of (A) the
reasonable costs of such sale, lease, transfer, issuance or other disposition
(including taxes attributable to such sale, lease, transfer or issuance) and (B) amounts
applied to repayment of permitted Indebtedness (other than the Obligations)
secured by a Lien on the asset or property disposed and (C) for
Subsidiaries not wholly-owned by a Loan Party, the percentage equal to the
ownership interests of Persons other than the such Loan Party (by way of
example, if a Loan Party owns a Subsidiary 95%, who in turn owns another
Subsidiary 80%, and an Asset Disposition occurs at the other Subsidiary, only
76% (95% of 80%) of the proceeds thereof that would otherwise have constituted
Net Proceeds will constitute Net Proceeds).

 

“Note” or “Notes” means one or more of the Revolver
Notes, the Term Loan Notes and any notes evidencing any Incremental Term Loan
Facility as provided in the amendment or supplement to this Agreement
establishing such Incremental Term Loan Facility.

 

“Obligations” means all
obligations, liabilities and indebtedness of every nature of Borrower and all
other Loan Parties under the Loan Documents from time to time owed to Administrative
Agent, any Lender or any Indemnitee, including the principal amount of all
debts, claims and indebtedness, accrued and unpaid interest and all fees, costs
and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now or from time to time hereafter owing, due or
payable, or any combination thereof, whether before or after the filing of a
proceeding under the Bankruptcy Code (whether or not allowed in such
proceeding) by or against any Loan Party or any of their respective
Subsidiaries.

 

“PBGC” means the Pension
Benefit Guaranty Corporation or any Person succeeding to the functions thereof.

 

“Pension Plan” means a
pension plan (as defined in Section 3(2) of ERISA) subject to Title
IV of ERISA which any Loan Party or an ERISA Affiliate sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions or, in the
case of a Multi-employer Plan, has made contributions at any time during the
current year or the immediately preceding six plan years.

 

85

 

“Permitted Acquisition”
means the acquisition, by merger or otherwise, by any Loan Party or any
Subsidiary of a Loan Party of assets or equity interests, provided, that
(A) such acquisition and all transactions related thereto shall be
consummated in accordance with Applicable Law, (B) after giving effect to
such acquisition, no Default or Event of Default shall have occurred and be
continuing, (C) such assets or equity interests are held in or by Borrower,
an existing Loan Party or a new Subsidiary that complies with Subsection 2.12, (D) the
assets or business acquired are related to the telecommunications industry, (E) the
aggregate consideration (including in the calculation thereof the amount of any
assumed Indebtedness) of all Permitted Acquisitions of the assets or equity
interests of competitive local exchange carriers, long distance carriers, or
assets located in or equity assets of a business organized or principally
operated in a developing nation (or any combination of the foregoing), shall
not exceed 17.5% of Borrower’s EBITDA for the period of four fiscal quarters
most recently ended adjusted on a Pro forma Basis to give effect to such
transaction, and (F) Borrower shall be in compliance on a Pro forma Basis
after giving effect to such acquisition (including any Indebtedness assumed or
permitted to exist or incurred pursuant to Subsection 3.1(F)), with the
covenants set forth in Subsections 4.1, 4.2 and 4.3 for the most recently ended
test period under such Subsections as if such acquisition had occurred on the
first day of such test period.

 

“Permitted Encumbrances”
means the following:

 

(A)  Liens for taxes, assessments
or other governmental charges not yet due and payable or Liens for taxes, assessments
or other governmental charges due and payable if the same are being diligently
contested in good faith and by appropriate proceedings and then only if and to
the extent that adequate reserves therefor are maintained on the books of the
Loan Parties and their respective Subsidiaries, as applicable, in accordance
with GAAP;

 

(B)   statutory Liens of
landlords, carriers, warehousemen, mechanics, materialmen and other similar
liens imposed by law, which are incurred in the ordinary course of business for
sums not more than 60 days delinquent or which are being diligently contested
in good faith; provided that a reserve or other appropriate provision shall
have been made therefor and in any event the aggregate amount of liabilities
secured by such Liens is less than $100,000;

 

(C)   Liens incurred or deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security (other
than any Lien imposed by the Employee Retirement Income Security Act of 1974 or
any rule or regulation promulgated thereunder), or to secure the
performance of tenders, statutory obligations, surety, stay, customs and appeal
bonds, bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money) in the amount and to the extent permitted by
Subsection 3.4;

 

(D)  deposits, in an aggregate
amount not to exceed $100,000, made in the ordinary course of business to
secure liability to insurance carriers;

 

(E)   any attachment or judgment
Lien which, individually or when aggregated, does not constitute an Event of
Default under Subsection 6.1(I) (whether individually or when aggregated
with other such Liens);

 

86

 

(F)   easements, rights of way,
restrictions and other similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of any Loan Party or
any of their respective Subsidiaries or materially adversely affecting the
value of any Collateral;

 

(G)   Liens in favor of
Administrative Agent, for the benefit of itself and Lenders;

 

(H)  Liens in favor of CoBank as
set forth in Subsection 2.7;

 

(I)    Liens securing purchase
money security agreements and Capital Leases permitted under Subsection 3.1(J),
provided that such Liens do not encumber any property other than the items
purchased with the proceeds of such Indebtedness or leased pursuant to such
Indebtedness (and the proceeds of such property) and such liens do not secure
any amounts other than amounts necessary to purchase or lease such items;

 

(J)    Liens existing on the
assets of any Person that becomes a Subsidiary (or is a Subsidiary that
survives a merger with such Person), or existing on assets acquired, pursuant
to a Permitted Acquisition to the extent the Liens on such assets secure
Indebtedness permitted by Section 3.1(F) or other obligations
permitted by this Agreement; provided that such Liens attach at all times
only to the same assets to which such Liens attached (and after-acquired
property that is affixed or incorporated into the property covered by such
Lien), and secure only the same Indebtedness or obligations that such Liens
secured, immediately prior to such Permitted Acquisition and any modification,
replacement, refinancing, refunding, renewal or extension thereof permitted by Section 3.1(F);

 

(K)  Liens (i) of a
collecting bank arising under Section 4-210 of the Uniform Commercial Code
on items in the course of collection, (ii) attaching to commodity trading
accounts or other commodities brokerage accounts incurred in the ordinary
course of business; and (iii) in favor of a banking institution arising as
a matter of law encumbering deposits (including the right of set-off);

 

(L)   Liens (i) on cash
advances in favor of the seller of any property to be acquired in an Investment
permitted hereunder to be applied against the purchase price for such
Investment, and (ii) consisting of an agreement to sell, transfer, lease
or otherwise dispose of any property in a transaction permitted hereunder, in
each case, solely to the extent such Investment or sale, disposition, transfer
or lease, as the case may be, would have been permitted on the date of the
creation of such Lien;

 

(M) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for sale
or purchase of goods entered into by Borrower or any of its Subsidiaries in the
ordinary course of business permitted by this Agreement;

 

(N)  Liens that are contractual
rights of set-off (i) relating to the establishment of depository
relations with banks not given in connection with the issuance of Indebtedness
or (ii) relating to purchase orders and other agreements entered into with
customers of Borrower or any Subsidiary in the ordinary course of business; and

 

87

 

(O)  Liens solely on any cash
earnest money deposits made by Borrower or any of its Subsidiaries in
connection with any letter of intent or purchase agreement arising in
connection with a transaction which if consummated would constitute a Permitted
Acquisition.

 

(P)   The security interest of Borrower in the
ownership interest of Sovernet Holding Company in ION HoldCo, LLC by and through
that certain Membership Pledge Agreement given by RLEC Holding Company LLC and
Sovernet Holding Company in favor of Borrower, dated as of August 14,
2008, securing that certain Limited Recourse Guaranty, also dated as of August 14,
2008.

 

“Person” means and
includes natural persons, corporations, limited liability companies, limited
partnerships, limited liability partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).

 

“Plan”
means an employee benefit plan (as defined in Section 3(3) of ERISA)
which any Loan Party or any of their ERISA Affiliates sponsor or maintain or to
which any Loan Party or any of their ERISA Affiliates make, is making, or is
obligated to make contributions and includes any Pension Plan.

 

“Post-Closing
Letter” means that certain letter agreement, dated as of even date
herewith, executed by the Borrower and addressed to the Administrative Agent,
in form and content approved by Administrative Agent, as such letter agreement
may be amended, modified, supplemented, extended and restated from time to time

 

“Prime Rate” means, a
variable rate of interest per annum equal, on any day, to the rate of interest
published on such day in the Eastern Edition of The Wall Street Journal as the average prime lending rate
for 75% of the United States’ 30 largest commercial banks, or if the Eastern
Edition of The Wall Street Journal
or such rate is not published on such day, such rate as last published in the
Eastern Edition of The Wall Street Journal.  In the event the Eastern Edition of The Wall Street Journal ceases to publish
such rate or an equivalent, the term “Prime Rate” shall be determined by
reference to such other regularly published prime rate based upon any averaging
of such 30 banks, as Administrative Agent shall determine, or if no such
published average prime rate is available, then the term “Prime Rate” shall
mean a variable rate of interest per annum as determined by Administrative
Agent equal to the highest of the “prime rate,” “reference rate,” “base rate”
or other similar rate announced from time to time by Bank of America, N.A. and
Citibank as selected by Administrative Agent (with the understanding that any
such rate may merely be a reference rate and may not necessarily represent the
lowest or best rate actually charged to any customer by such bank).  Any change in Prime Rate shall be automatic,
without the necessity of notice provided to Borrower or any other Loan Party.

 

“Pro forma Basis”
means, for purposes of calculating compliance with any test or financial
covenant under this Agreement for any period, that the applicable Permitted
Acquisition or Asset Disposition (and all other Permitted Acquisitions or Asset
Dispositions that have been

 

88

 

consummated during the applicable period), or the applicable Material
Acquisition or Material Disposition, and the following transactions in
connection therewith shall be deemed to have occurred as of the first day of
the applicable period of measurement in such test or covenant:  (a) income statement items (whether
positive or negative) attributable to the property or Person subject to such
Permitted Acquisition, Asset Disposition, Material Acquisition or Material
Disposition, (i) in the case of an Asset Disposition or Material
Disposition shall be excluded, and (ii) in the case of a Permitted
Acquisition or Material Acquisition, shall be included, (b) any retirement
of Indebtedness, and (c) any Indebtedness incurred or assumed by the
Borrower or any of its Subsidiaries in connection therewith and if such
Indebtedness has a floating or formula rate, shall have an implied rate of
interest for the applicable period for purposes of this definition determined
by utilizing the rate which is or would be in effect with respect to such
Indebtedness as at the relevant date of determination; provided that the
foregoing pro forma adjustments may be applied to any such test or financial
covenant solely to the extent that such adjustments are consistent with the
definition of EBITDA and give effect to events (including operating expense
reductions) that are (x) attributable to such transaction, (y) expected
to have a continuing impact on the Borrower and its Subsidiaries and (z) factually
supportable in a manner reasonably satisfactory to Administrative Agent (provided,
further, that pro forma effect shall only be given to operating expense
reductions or similar anticipated benefits from any Permitted Acquisition,
Asset Disposition, Material Acquisition or Material Disposition to the extent
that such adjustments and the bases therefor are set forth in reasonable detail
in a certificate of the chief financial officer of Borrower delivered to the Administrative
Agent and dated the relevant date of determination and which certifies that all
necessary steps for the realization thereof have been taken or Borrower
reasonably anticipates that all necessary steps for the realization thereof
will be taken within one year following such date of determination).

 

“Pro Rata Share” means (i) with
respect to matters relating to a particular Loan Commitment, the percentage
obtained by dividing (a) the commitment of a Lender under such Loan
Commitment by (b)  such Loan Commitment and (ii) with respect to all
other matters, the percentage obtained by dividing (a) the Total Lender
Loan Commitments of Lender by (b) the aggregate Total Lender Loan
Commitments of Lender, in either case as such percentage may be adjusted by
assignments permitted pursuant to Subsection 8.1; provided, however,
if any Loan Commitment is terminated pursuant to the terms hereof, in lieu of
commitments, the calculation of clauses (i) and (ii) above, as they
relate to or include such Loan Commitment, shall be based on the aggregate
amount of Lender’s outstanding loans related to such Loan Commitment
and the aggregate amount of all outstanding loans related to such Loan
Commitment.

 

“PUC” means any state,
provincial or other local public utility commission or similar regulatory
agency or body, including the Guyanan Public Utilities Commission, that
exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Communications System (and its related
facilities) or over Persons who own, construct or operate a Communications
System, in each case by reason of the nature or type of the business subject to
regulation and not pursuant to laws and regulations of general applicability to
Persons conducting business in any such jurisdiction.

 

“PUC Laws” means all
relevant rules, regulations, and published policies of, and all laws
administered by, any PUC asserting jurisdiction over any Loan Party or its
Subsidiaries.

 

89

 

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

 

“Reportable
Event” means any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the 30
day notice requirement under ERISA has been waived in regulations issued by the
PBGC.

 

“Requisite Lenders” means
at least two Lenders (to the extent more than one Lender holds any Loan
Commitment) who have in the aggregate Pro Rata Shares greater than 50%.

 

“Restricted Junior Payment”
means:  (A) any dividend or other
distribution, direct or indirect, on account of any equity interest in any Loan
Party or any of its respective Subsidiaries, including any ownership interest
and any shares of any class of stock or other equity interest of any Loan Party
or any of its respective Subsidiaries now or hereafter outstanding, except a
dividend payable solely in shares of a class of stock or other equity interest
to the holders of that class; (B) any redemption, repurchase, conversion,
exchange, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any equity interest in any Loan
Party or any of its respective Subsidiaries, including any ownership interest
and any shares of any class of stock of any Loan Party or any of its respective
Subsidiaries now or hereafter outstanding; (C) any payment or prepayment
of interest on, principal of, premium, if any, redemption, conversion,
exchange, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Indebtedness subject to subordination provisions for the
benefit of Administrative Agent and Lenders; and (D) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any equity interest in any Loan Party or any of its
respective Subsidiaries, including any ownership interest and shares of any
class of stock of any Loan Party or any of its respective Subsidiaries now or
hereafter outstanding.

 

“Revolver Expiration Date”
means the earlier of (A) the acceleration of the Obligations pursuant to
Subsection 6.3 or (B) September 10, 2014.

 

“Revolver Facility” means
the revolver loan facility extended to Borrower pursuant to Subsection 1.1(A).

 

“Revolver Loan Commitment”
means, initially $75,000,000, as such amount is reduced from time to time as
provided in this Agreement.

 

“Revolver Loans” means an
advance or advances under the Revolver Loan Commitment.

 

“Revolver Note” or “Revolver Notes” means one or more of the
Notes of Borrower substantially in the form of 

Exhibit 10.1(B), or any combination thereof, and any replacements,
reinstatements, renewals or extension of any such notes, in whole or in part.

 

“Security Agreement” means
the pledge and security agreement, dated as of even date herewith, executed by
the Loan Parties in favor of Administrative Agent, for the benefit of itself
and Lenders, in form and content approved by Administrative Agent, pursuant to
which Loan Parties

 

90

 

have pledged, as security for the Secured Obligations, on a first
priority basis, substantially all personal property of the Loan Parties
including, without limitation, stock in their respective Subsidiaries, that
they now own or may hereafter acquire, as such agreement may be amended,
modified, supplemented, extended and restated from time to time.

 

“Security Documents”
means, collectively, all instruments, documents and agreements executed by or
on behalf of the Loan Parties to provide collateral security with respect to
the Secured Obligations, including, without limitation, any Security Agreement,
any Collateral Contract Assignments and all instruments, documents and
agreements executed pursuant to the terms of the foregoing, in such case, as
amended, modified, supplemented, extended and restated from time to time.

 

“Secured
Hedge Agreement” means any Hedge Agreement between the Borrower or
any other Loan Party and any Lender or Affiliate of any Lender (or Person that
was a Lender or Affiliate of any Lender at the time such Hedge Agreement was
entered into).

 

“Security Interest” means
all Liens in favor of Administrative Agent, for the benefit of itself, and the
other Secured Parties, created hereunder or under any of the Security Documents
to secure the Secured Obligations.

 

“Secured
Obligation” means (i) the Obligations and (ii) all
obligations of the Borrower or any other Loan Party under any Secured Hedge
Agreement.

 

“Secured
Party” means Administrative Agent, any Lender, any Affiliate of a
Lender that is a party to a Secured Hedge Agreement that executes and delivers
to Administrative Agent a letter agreement in form and substance acceptable to
Administrative Agent pursuant to which such Affiliate appoints Administrative
Agent as its agent under the applicable Security Documents, and any Indemnitee.

 

“Subsidiary” means, with
respect to any Person, any corporation, partnership, association or other
business entity of which more than 50% of the total voting power of shares of
stock (or equivalent ownership or controlling interest) entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof.

 

“Term Loan”
means the Loan under the Term Loan Commitment.

 

“Term Loan
Commitment” means $75,000,000.

 

“Term Loan
Facility” means the term loan credit facility extended to Borrower
pursuant to Subsection 1.1(B).

 

“Term Loan
Maturity Date” means the earlier of (A) the acceleration of the
Obligations pursuant to Subsection 6.3 or (B) September 10, 2015.

 

91

 

“Term Loan Note” or “Term Loan Notes” means one or more of the
notes of Borrower substantially in the form of Exhibit 10.1(C), or
any combination thereof, and any replacements, restatements, renewals or
extensions of any such notes, in whole or in part.

 

“Total Interest Coverage Ratio”
means, as of the date of calculation, the ratio derived by dividing (A) EBITDA
by (B) cash interest expense, each for the then most recently completed
four fiscal quarters.

 

“Total Lender Loan Commitment”
means the aggregate commitments of any Lender with respect to the Loan
Commitments.

 

“Total
Net  Leverage  Ratio”  means,  as  of  the  date  of  calculation,  the  ratio  derived  by  dividing  (A)  the  result  of  (i)  Indebtedness  (other  than  as  described  in  clause  (H)  of  the  definition  of  Indebtedness  and,  to  the  extent  related  to  or  supporting  the  Indebtedness  described  in  clause  (H)  of  such  definition,  as  described  in  clauses  (K),  (L),  (M),  and  (N)  of  the  definition  of  Indebtedness)  minus  (ii)  unrestricted  cash  and  Cash  Equivalents  as  determined  by  GAAP  by  (B)  EBITDA  for  the  most  recently  completed  four  fiscal  quarters.

 

10.2         Other
Definitional Provisions.  References
to “Sections,” “Subsections,” “Exhibits” and “Schedules” shall be to Sections,
Subsections, Exhibits and Schedules, respectively, of this Agreement unless
otherwise specifically provided.  Any of
the terms defined in Subsection 10.1 may, unless the context otherwise requires,
be used in the singular or the plural depending on the reference.  In this Agreement, “hereof,” “herein,” “hereto,”
“hereunder” and the like mean and refer to this Agreement as a whole and not
merely to the specific section, paragraph or clause in which the respective
word appears; words importing any gender include the other gender; references
to “writing” include printing, typing, lithography and other means of
reproducing words in a tangible visible form; the words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation”;
references to agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other modifications thereto,
but only to the extent such amendments, assignments and other modifications are
not prohibited by the terms of this Agreement or any other Loan Document;
references to Persons include their respective permitted successors and assigns
or, in the case of governmental Persons, Persons succeeding to the relevant functions
of such Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.

 

[Signatures
follow on the next page.]

 

92

 

Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.

 

	
   

  	
  ATLANTIC
  TELE-NETWORK, INC.,

  
	
   

  	
  as
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Justin D. Benincasa

  
	
   

  	
  Justin
  D. Benincasa

  
	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  GUARANTORS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMMNET
  WIRELESS, LLC

  
	
   

  	
  COMMNET
  ILLINOIS, LLC

  
	
   

  	
  COMMNET
  FOUR CORNERS, LLC

  
	
   

  	
  COMMNET
  MIDWEST, LLC

  
	
   

  	
  COMMNET
  OF ARIZONA, L.L.C.

  
	
   

  	
  GILA
  COUNTY WIRELESS, LLC

  
	
   

  	
  MOCELCO,
  LLC

  
	
   

  	
  EXCOMM,
  L.L.C.

  
	
   

  	
  SOVERNET
  HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Justin D. Benincasa

  
	
   

  	
  Justin
  D. Benincasa

  
	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
  SOVERNET,
  INC.

  
	
   

  	
  NATIONAL
  MOBILE COMMUNICATIONS

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Justin D. Benincasa

  
	
   

  	
  Justin
  D. Benincasa

  
	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
  SAL
  SPECTRUM LLC

  
	
   

  	
  By:
  Atlantic Tele-Network, Inc., Its Sole 

  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Justin D. Benincasa

  
	
   

  	
  Justin
  D. Benincasa

  
	
   

  	
  Chief
  Financial Officer

  

 

[Signatures continued on following page]

 

 

[Signatures continued from previous page]

 

	
   

  	
  CHOICE
  COMMUNICATIONS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    /s/
  Justin D. Benincasa

  
	
   

  	
  Justin
  D. Benincasa

  
	
   

  	
  Manager

  

 

[Signatures continued on following page]

 

 

[Signatures continued from previous page]

 

	
  Commitment to make Revolver Loans: $46,500,000.00

  	
  COBANK, ACB, as
  Administrative Agent, Arranger, an Issuing Bank and a Lender

  
	
   

  	
   

  
	
  Pro Rata Share of Revolver Loan Commitment: 62.000000000%

  	
   

  
	
   

  	
   

  
	
  Commitment to make the Term Loan: $66,500,000.00

  	
  By:

  	
    /s/ John Cole

  
	
   

  	
   

  	
    John Cole

  
	
   

  	
   

  	
    Vice President

  
	
   

  	
   

  
	
  Pro Rata Share of the Term Loan: 88.6666666667%

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
  Total Lender Loan Commitment: $113,000,000.00

  	
   

  	
  CoBank, ACB

  
	
   

  	
   

  	
  900 Circle 75 Parkway

  
	
   

  	
   

  	
  Suite 1400

  
	
  Pro Rata Share of the Revolver Loan Commitment and Term Loan Commitment:
  75.333333334%

  	
   

  	
  Atlanta, Georgia 30339-5946

  Attn: Communications and

  Energy Banking Group

  Fax No.: (770) 618-3202

  
	
   

  	
   

  	
   

  
	
   

  	
  With copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CoBank, ACB

  
	
   

  	
   

  	
  5500 S. Quebec Street

  
	
   

  	
   

  	
  Greenwood Village, CO 80111

  
	
   

  	
   

  	
  Attn: Communications and Energy

  
	
   

  	
   

  	
  Banking Group

  
	
   

  	
   

  	
  Fax No.: (303) 224-2718

  
				

 

[Signatures continued on following page]

 

 

[Signatures continued from previous page]

 

	
  Commitment to make Revolver Loans: $20,000,000.00

  	
  BANCO POPULAR DE PUERTO 

  
	
   

  	
  RICO, as a Lender

  
	
   

  	
   

  
	
  Pro Rata Share of Revolver Loan Commitment: 26.666666667%

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Valentino I. McBean

  
	
  Commitment to make the Term Loan: $0.00

  	
  Name: Valentino I. McBean

  
	
   

  	
  Title: Sr. Vice President and Regional 

  
	
   

  	
   Manager

  
	
  Pro Rata Share of the Term Loan: 0.000000000%

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
  Total Lender Loan Commitment: $20,000,000.00

  	
   

  	
  Banco Popular de Puerto Rico

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Pro Rata Share of the Revolver Loan Commitment and Term

  	
   

  	
   

  
	
  Loan Commitment: 13.333333333%

  	
   

  	
   

  
	
   

  	
   

  	
  Attn:

  	
   

  
	
   

  	
   

  	
  Fax No.:

  	
   

  
						

 

 

[Signatures continued from previous page]

 

	
  Commitment to make Revolver Loans: $4,750,000.00

  	
  BROWN BROTHERS HARRIMAN & 

  CO., as a Lender

  
	
   

  	
   

  
	
  Pro Rata Share of Revolver Loan Commitment: 6.333333333%

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ John H. Wert, Jr.

  
	
  Commitment to make the Term Loan: $4,750,000.00

  	
  Name: John H. Wert, Jr.

  
	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  
	
  Pro Rata Share of the Term Loan: 6.333333333%

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  Brown Brothers Harriman & Co.

  
	
  Total Lender Loan Commitment: $9,500,000.00

  	
   

  	
  1531 Walnut Street

  
	
   

  	
   

  	
  Philadelphia, PA 19102

  
	
   

  	
   

  	
  Attn: Scott Meves

  
	
   

  	
   

  	
  Fax No.: (215) 864-3989

  
	
  Pro Rata Share of the Revolver Loan Commitment and Term Loan Commitment:
  6.333333333%

  	
   

  
				

 

 

[Signatures continued from previous page]

 

	
  Commitment to make Revolver Loans: $3,750,000.00

  	
  RAYMOND JAMES BANK, FSB,
  as a 

  Lender

  
	
   

  	
   

  
	
  Pro Rata Share of Revolver Loan Commitment: 5.000000000%

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Joseph A. Ciccolini

  
	
  Commitment to make the Term Loan: $3,750,000.00

  	
  Name: Joseph A. Ciccolini

  
	
   

  	
  Title: Vice President – Senior Corporate 

  Banker

  
	
   

  	
   

  
	
  Pro Rata Share of the Term Loan: 5.000000000%

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Lender Loan Commitment: $7,500,000.00

  	
   

  	
  Raymond James Bank, FSB

  
	
   

  	
   

  	
  710 Carillon Parkway

  
	
   

  	
   

  	
  St. Petersburg, FL 33716

  
	
  Pro Rata Share of the Revolver Loan Commitment and Term Loan Commitment:
  5.000000000%

  	
   

  	
  Attn: Joseph Ciccolini

  
	
   

  	
  Fax No.: (727) 567-8830

  
	
   

  	
  Email: RJBank-LoanOpsCorp@

  
	
   

  	
   

  	
    RaymondJames.com (preferred)Exhibit 10.1

 

	
  

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AIR COMMERCIAL REAL ESTATE ASSOCIATION

  	
   

  
	
  STANDARD INDUSTRIAL/COMMERCIAL

  	
   

  
	
  MULTI-TENANT LEASE - GROSS

  	
   

  

 

1.             Basic Provisions (“Basic Provisions”).

 

1.1           Parties: This Lease (“Lease”),
dated for reference purposes only July 21, 2008, is made by and
between CC & E, LLC (“Lessor”) and
ISI Detention Contracting
Group, Inc., a
California corporation (“Lessee”), (collectively the “Parties”,
or individually a “Party”).

 

1.2(a)       Premises: That certain portion of the Project (as
defined below), including all improvements therein or to be provided by Lessor under
the terms of this Lease, commonly known by the street address of 577 and 583 N.
Batavia Street, located in the City of Orange, County of Orange, State of California,
with zip code 92868, as outlined on Exhibit A attached hereto (“Premises”) and generally described as (describe briefly
the nature of the Premises): an approximately 29,709 square foot portion of an approximately 72,200 square foot multi-tenant industrial property. In addition to Lessee’s rights to use and
occupy the Premises as hereinafter specified, Lessee shall have non-exclusive
rights to any utility raceways of the building containing the Premises (“Building”) and to the Common Areas (as defined in
Paragraph 2.7 below), but shall not have any rights to the roof, or exterior
walls of the Building or to any other buildings in the Project. The Premises,
the Building, the Common Areas, the land upon which they are located, along
with all other buildings and improvements thereon, are herein collectively
referred to as the “Project.” (See
also Paragraph 2)

 

1.2(b)      Parking: 29 unreserved vehicle parking spaces. (See
also Paragraph 2.6)

 

1.3           Term: 2 years and --- months (“Original
Term”) commencing September 1, 2008 (“Commencement
Date”) and ending August 31, 2010 (“Expiration
Date”). (See also Paragraph 3)

 

1.4           Early Possession: N/A
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)

 

1.5           Base Rent: $16,934.00 per month (“Base
Rent”), payable on the1st
day of each month commencing September 1, 2008. (See also Paragraph 4)

 

o If this box is checked, there are provisions
in this Lease for the Base Rent to be adjusted.

 

1.6           Lessee’s Share of Common Area
Operating Expenses: forty-one percent (41%) (“Lessee’s Share”).  Lessee’s Share has been calculated by
dividing the approximate square footage of the Premises by the approximate
square footage of the Project. In the event that that size of the Premises
and/or the Project are modified during the term of this Lease, Lessor shall
recalculate Lessee’s Share to reflect such modification.

 

1.7           Base Rent and Other Monies Paid
Upon Execution:

 

(a)           Base Rent: $0.00 for the period Base Rent shall be paid when due (see paragraph 51.01).

 

(b)           Common Area Operating Expenses: $0.00 for the period                                                       .

 

(c)           Security Deposit:
$16,934.00 (“Security Deposit”). (See also
Paragraph 5 and
51.01)

 

(d)           Other: $N/A for                                                                                                                          .

 

(e)           Total Due Upon Execution of this
Lease: $0.00.

 

1.8           Agreed Use:  Metal
working and related storage and office use. (See also Paragraph 6)

 

1.9           Insuring Party. Lessor is the “Insuring
Party”. (See also Paragraph 8)

 

1.10         Real Estate Brokers: (See also Paragraph 15)

 

(a) Representation: The following real estate brokers (the “Brokers”) and brokerage relationships exist in this
transaction (check applicable boxes):

 

	
  x Lee & Associates®-Newport Beach, Inc.

  	
  represents
  Lessor exclusively (“Lessor’s Broker”);

  
	
  o

  	
  represents
  Lessee exclusively (“Lessee’s Broker”);
  or

  
	
  o

  	
  represents
  both Lessor and Lessee (“Dual Agency”).

  

 

(b) Payment to Brokers: Upon execution
and delivery of this Lease by both Parties, Lessor shall pay to the Brokers

the brokerage fee agreed to in a separate written agreement (or if there
is no such agreement, the sum of  --- or --- % of
the total Base Rent for the brokerage services rendered by the Brokers).

 

1.11         Guarantor. The obligations of the Lessee under this
Lease are to be guaranteed by Argyle
Security, Inc.

(“Guarantor”). (See also Paragraph 37)

 

1.12         Attachments. Attached hereto are the following, all of
which constitute a part of this Lease:

 

x an Addendum consisting of Paragraphs 50 through
52;

x a site plan depicting the Premises; (Exhibit A)

o a site plan depicting the Project;

o a current set of the Rules and
Regulations for the Project;

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  ©1998
  - AIR COMMERCIAL REAL ESTATE ASSOCIATION

  	
   

  	
  FORM MTG-4-5/05E   

  

 

1

 

o a current set of the Rules and
Regulations adopted by the owners’ association;

o a Work Letter;

o other (specify):

 

	
  .

  

 

2.             Premises.

 

2.1           Letting. Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises,
for the term, at the rental, and upon all of the terms, covenants and
conditions set forth in this Lease. Unless otherwise provided herein, any
statement of size set forth in this Lease, or that may have been used in calculating Rent, is an
approximation which the Parties agree is reasonable and any payments based
thereon are not subject to revision whether or not the actual size is more or
less. NOTE: Lessee is advised to verify the actual size
prior to executing this Lease.

 

2.2           Condition. Lessor
shall deliver that portion of the Premises contained within the Building (“Unit”) to Lessee broom clean and free of debris on the
Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee and
in effect within thirty days following the Start Date, warrants that the
existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating
and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all other such elements in the Unit,
other than those constructed by Lessee, shall be in good operating condition on
said date, that the structural
elements of the roof, bearing walls and foundation of the Unit shall be free of
material defects, and that the Unit does not contain hazardous levels of any
mold or fungi defined as toxic under applicable state or federal law. If a
non-compliance with such warranty exists as of the Start Date, or if one of
such systems or elements should malfunction or fail within the appropriate
warranty period, Lessor shall, as Lessor’s sole obligation with respect to such
matter, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, malfunction or failure, rectify same at Lessor’s
expense. The warranty periods shall be as follows: (i) 6 months as to the
HVAC systems, and (ii) 30 days as to the remaining systems and other
elements of the Unit. If Lessee does not give Lessor the required notice within
the appropriate warranty period, correction of any such non-compliance,
malfunction or failure shall be the obligation of Lessee at Lessee’s sole cost
and expense (except for the repairs to the fire sprinkler systems, roof,
foundations, and/or bearing walls - see Paragraph 7).

 

2.3           Compliance. Lessor
warrants that to the best of its knowledge the improvements on the Premises and
the Common Areas comply with the building codes that were in effect at the time
that each such improvement, or portion thereof, was constructed, and also with
all applicable laws, covenants or restrictions of record, regulations, and
ordinances in effect on the Start Date (“Applicable Requirements”).
Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or
any similar laws as a result of Lessee’s use (see Paragraph 49), or to any Alterations
or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by
Lessee. NOTE: Lessee is responsible for determining
whether or not the Applicable Requirements, and especially the zoning are
appropriate for Lessee’s intended
use, and acknowledges that past uses of the Premises may no longer be allowed. If
the Premises do not comply with said warranty, Lessor shall, except as
otherwise provided, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non-compliance,
rectify the same at Lessor’s expense. If Lessee does not give Lessor written
notice of a non-compliance with this warranty within 6 months following the
Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee’s sole cost and expense. If
the Applicable Requirements are hereafter changed so as to require during the
term of this Lease the construction of an addition to or an alteration of the
Unit, Premises and/or Building, the remediation of any Hazardous Substance, or
the reinforcement or other physical modification of the Unit, Premises and/or
Building (“Capital Expenditure”), Lessor and
Lessee shall allocate the cost of such work as follows:

 

(a) Subject to Paragraph
2.3(c) below, if such Capital Expenditures are required as a result of the
specific and unique use of the Premises by Lessee as compared with uses by
tenants in general, Lessee shall be fully responsible for the cost thereof,
provided, however, that if such Capital Expenditure is required during the last
2 years of this Lease and the cost thereof exceeds 6 months’ Base Rent, Lessee
may instead terminate this Lease unless Lessor notifies Lessee, in writing,
within 10 days after receipt of Lessee’s termination notice that Lessor has
elected to pay the difference between the actual cost thereof and the amount
equal to 6 months’ Base Rent. If Lessee elects termination, Lessee shall
immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure.

 

(b) If such Capital
Expenditure is not the result of the specific and unique use of the Premises by
Lessee (such as, governmentally mandated seismic modifications), then Lessor
and Lessee shall allocate the obligation to pay for the portion of such costs
reasonably attributable to the Premises pursuant to the formula set out in
Paragraph 7.1(d); provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof,
Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee
unless Lessee notifies Lessor, in writing, within 10 days after receipt of
Lessor’s termination notice that Lessee will pay for such Capital Expenditure.
If Lessor does not elect to terminate, and fails to tender its share of any
such Capital Expenditure, Lessee may advance such funds and deduct same, with
Interest, from Rent until Lessor’s share of such costs have been fully paid. If
Lessee is unable to finance Lessor’s share, or if the balance of the Rent due
and payable for the remainder of this Lease is not sufficient to fully
reimburse Lessee on an offset basis, Lessee shall have the right to terminate
this Lease upon 30 days written notice to Lessor.

 

(c) Notwithstanding the
above, the provisions concerning Capital Expenditures are intended to apply
only to non-voluntary, unexpected, and new Applicable Requirements. If the
Capital Expenditures are instead triggered by Lessee as a result of an actual
or proposed change in use, change in intensity of use, or modification to the
Premises then, and in that event, Lessee shall either: (i) immediately
cease such changed use or intensity of use and/or take such other steps as may
be necessary to eliminate the requirement for such Capital Expenditure, or
(ii) complete such Capital Expenditure at its own expense. Lessee shall
not have any right to terminate this Lease.

 

                2.4           Acknowledgements. Lessee acknowledges that: (a) it has been
advised by Lessor and/or Brokers to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance
with Applicable Requirements and the Americans with Disabilities Act), and
their suitability for Lessee’s intended use, (b) Lessee has made such
investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessor’s agents, nor Brokers have made
any oral or written representations or warranties with respect to said matters other than as set forth in
this Lease. In addition, Lessor acknowledges that: (i) Brokers have made
no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability
of all proposed tenants.

 

2.5           Lessee as Prior
Owner/Occupant. The  warranties made by Lessor in Paragraph 2 shall
be of no force or effect if immediately prior to the Start Date Lessee was the
owner or occupant of the Premises. In such event, Lessee shall be responsible
for any necessary corrective work. (See paragraph 51.02)

 

2.6           Vehicle Parking. Lessee
shall be entitled to use the
number of Parking Spaces specified in Paragraph 1.2(b) on those portions
of the Common Areas designated from time to time by Lessor for parking. Lessee
shall not use more parking spaces than said number. Said parking

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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2

 

spaces shall be used
for parking by vehicles no larger than full-size passenger automobiles or
pick-up trucks, herein called “Permitted Size Vehicles.” Lessor may regulate the loading and unloading
of vehicles by adopting Rules and
Regulations as provided in Paragraph 2.9. No vehicles other than Permitted
Size Vehicles may be parked in the Common Area without the prior written
permission of Lessor. In addition:

 

(a)           Lessee
shall not permit or allow any vehicles that belong to or are controlled by
Lessee or Lessee’s employees, suppliers, shippers, customers, contractors or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Lessor for such activities.

 

(b)           Lessee shall not service or store any vehicles in the Common Areas.

 

(c)           If Lessee permits or allows
any of the prohibited activities described in this Paragraph 2.6, then Lessor shall
have the right, without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the  cost to Lessee, which cost shall be immediately payable upon demand
by Lessor.

 

2.7           Common Areas - Definition. The term “Common Areas” is defined as all areas and
facilities outside the Premises and within the exterior  boundary line of the Project and interior
utility raceways and installations within the Unit that are provided and
designated by the Lessor from time to time for the general non-exclusive use of
Lessor, Lessee and other tenants of the Project and their respective employees,
suppliers, shippers, customers,
contractors and invitees, including parking areas, loading and unloading areas,
trash areas, roadways, walkways, driveways and landscaped areas.

 

2.8           Common Areas - Lessee’s Rights. Lessor grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the
non-exclusive right to use, in common with others entitled to such
use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Lessor under the terms hereof or under the terms of any rules and regulations
or restrictions governing the use of the Project. Under no circumstances shall
the right herein granted to use the Common Areas be deemed to include the right to store any property,
temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent
of Lessor or Lessor’s designated agent, which consent may be revoked at any
time. In the event that any unauthorized storage shall occur, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

 

2.9           Common Areas - Rules and Regulations. Lessor or such other person(s) as Lessor may appoint shall have the exclusive
control and management of the Common Areas and shall
have the right, from time to time, to establish, modify, amend and enforce
reasonable rules and regulations (“Rules and
Regulations”) for the management, safety, care, and cleanliness of
the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other
occupants or tenants of the Building and the Project and their invitees. Lessee
agrees to abide by and conform to all such Rules and Regulations,
and shall use its best efforts to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform. Lessor shall not
be responsible to Lessee for the non-compliance with said Rules and Regulations
by other tenants of the Project.

 

2.10         Common Areas - Changes. Lessor shall have the right, in Lessor’s sole discretion,
from time to time:

 

(a)           To make changes to the Common
Areas, including, without limitation, changes in the location, size, shape and
number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility
raceways;

 

(b)           To close temporarily any of
the Common Areas for maintenance purposes so long as reasonable access to the
Premises remains available;

 

(c)           To designate other land
outside the boundaries of the Project to be a part of the Common Areas;

 

(d)           To add additional buildings and improvements to the Common Areas;

 

(e)           To use the Common Areas while
engaged in making additional improvements, repairs or alterations to the
Project, or any portion thereof; and

 

(f)            To do and
perform such other acts and make such other changes in, to or with respect to
the Common Areas and Project as Lessor may, in the exercise of sound business
judgment, deem to be appropriate.

 

3.             Term.

 

3.1           Term. The Commencement Date,
Expiration Date and Original Term of this Lease are as specified in Paragraph
1.3.

 

3.2           Early Possession.  If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base
Rent shall be abated for the
period of such early possession. All other terms of this Lease (including but
not limited to the obligations to pay Lessee’s Share of Common Area Operating
Expenses, Real Property Taxes and insurance premiums and to maintain the
Premises) shall be in effect during such period. Any such early possession
shall not affect the Expiration Date.

 

                3.3           Delay In Possession. Lessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises to Lessee
by the Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or change the
Expiration Date. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until Lessor
delivers possession of the Premises and any period of rent abatement that
Lessee would otherwise have enjoyed shall run from the date of the
delivery of possession and continue
for a period equal to what Lessee would otherwise have enjoyed, but minus any
days of delay caused by the acts or omissions of Lessee. If possession is not
delivered within 60 days after the Commencement Date, Lessee may, at its
option, by notice in writing within 10 days after the end of such 60 day
period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If
such written notice is not received by Lessor within said 10 day period,
Lessee’s right to cancel shall terminate. Except as otherwise provided,
if possession is not tendered to Lessee by the Start Date and Lessee does not
terminate this Lease, as aforesaid, any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession
and continue for a period equal to what
Lessee would otherwise have enjoyed under the terms hereof, but minus any days
of delay caused by the acts or omissions of Lessee. If possession of the
Premises is not delivered within 4 months after the Commencement Date, this
Lease shall terminate unless other
agreements are reached between Lessor and Lessee, in writing.

 

3.4           Lessee Compliance. Lessor shall not be required
to tender possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such
evidence, Lessee shall be required to perform all of its obligations under this
Lease from and after the Start
Date, including the payment of Rent, notwithstanding Lessor’s election to
withhold possession pending receipt of such evidence of insurance. Further, if
Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such
conditions are satisfied.

 

4.           Rent.

 

4.1.          Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the
Security Deposit) are deemed to be rent (“Rent”).

 

4.2           Common Area Operating
Expenses. Lessee shall pay to Lessor during the term hereof, in addition to
the Base Rent, Lessee’s Share (as specified in Paragraph 1.6) of all Common
Area Operating Expenses, as hereinafter defined, during each calendar year of the term of this
Lease, in accordance with the following provisions:

 

(a)           “Common Area Operating Expenses” are defined, for purposes of
this Lease, as all costs incurred by Lessor
relating to the ownership and operation of the
Project, including, but not limited to, the following:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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3

 

(i)            The
operation, repair and maintenance, in neat, clean, good order and condition,
but not the replacement (see subparagraph (e)), of the following:

 

(aa)         The Common Areas and Common Area improvements, including parking
areas, loading and unloading areas, trash
areas, roadways, parkways, walkways, driveways, landscaped areas, bumpers,
irrigation systems, Common Area lighting facilities, fences and gates,
elevators, roofs, and roof drainage systems.

 

(bb)         Exterior signs and any tenant directories.

 

(cc)         Any fire sprinkler systems.

 

(ii)                           The cost of water, gas, electricity and
telephone to service the Common Areas and any utilities not separately metered.

 

(iii)                          Trash disposal, pest control services,
property management, security services, owner’s association dues and fees, the
cost to repaint the exterior of any structures and the cost of any environmental
inspections.

 

(iv)                          Reserves set aside for maintenance and
repair of Common Areas and Common Area equipment.

 

(v)                           Any increase above the Base Real Property
Taxes (as defined in Paragraph 10).

 

(vi)                          Any “Insurance Cost Increase” (as defined
in Paragraph 8).

 

(vii)                         Any deductible portion of an insured loss
concerning the Building or the Common Areas.

 

(viii)                        Auditors’, accountants’ and attorneys’
fees and costs related to the operation, maintenance, repair and replacement of
the Project.

 

(ix)                           The cost of any capital improvement to
the Building or the Project not covered under the provisions of Paragraph 2.3
provided; however, that Lessor shall allocate the cost of any such capital
improvement over a 12 year period and Lessee shall not be required to pay more
than Lessee’s Share of 1/144th of the cost of such capital improvement in any
given month.

 

(x)                            Any other services to be provided by
Lessor that are stated elsewhere in this Lease to be a Common Area Operating
Expense.

 

(b)           Any Common Area Operating Expenses and Real
Property Taxes that are specifically attributable to the Unit, the Building or
to any other building in the Project or to the operation, repair and
maintenance thereof, shall be allocated entirely to such Unit, Building, or
other building. However, any Common Area Operating Expenses and Real Property
Taxes that are not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall be
equitably allocated by Lessor to all buildings in the Project.

 

(c)           The inclusion of the
improvements, facilities and services set forth in Subparagraph
4.2(a) shall not be deemed to impose an obligation
upon Lessor to either have said improvements or facilities or to provide those
services unless the Project already has the same, Lessor already provides the
services, or Lessor has agreed elsewhere in this Lease to provide the same or
some of them.

 

(d)           Lessee’s Share of Common Area Operating Expenses is
payable monthly on the same day as the Base Rent is due hereunder. The amount
of such payments shall be based on Lessor’s estimate of the annual Common Area
Operating Expenses. Within 60 days after written request (but not more than
once each year) Lessor shall deliver to Lessee a reasonably detailed statement
showing Lessee’s Share of the actual Common Area Operating Expenses incurred
during the preceding year. If Lessee’s payments during such year exceed
Lessee’s Share, Lessor shall credit the amount of such over-payment against
Lessee’s future payments. If Lessee’s payments during such year were less than
Lessee’s Share, Lessee shall pay to Lessor the amount of the deficiency within
10 days after delivery by Lessor to Lessee of the statement.

 

(e)           Except as provided in
paragraph 4.2(a)(viii), Common Area Operating Expenses shall not include the
cost of replacing equipment or
capital components such as the roof, foundations, exterior walls or Common Area
capital improvements, such as the parking lot paving, elevators, fences that
have a useful life for accounting purposes of 5 years or more.

 

(f)            Common Area Operating
Expenses shall not include any expenses paid by any tenant directly to third
parties, or as to which Lessor is
otherwise reimbursed by any third party, other tenant, or insurance proceeds.

 

4.3           Payment. Lessee shall
cause payment of Rent to be received by Lessor in lawful money of the United
States, without offset or deduction (except as specifically permitted in this
Lease), on or before the day on which it is due. All monetary amounts shall be
rounded to the nearest whole dollar. In the event that any statement or invoice
prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver
and Lessee shall be obligated to pay the amount set forth in this Lease. Rent
for any period during the term hereof which is for less than one full calendar
month shall be prorated based upon the actual number of days of said month.
Payment of Rent shall be made to Lessor at its address stated herein or to such
other persons or place as Lessor may from time to time designate in writing.
Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor’s rights to the
balance of such Rent, regardless of Lessor’s endorsement of any check so
stating. In the event that any check, draft, or other instrument of payment
given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to
Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option,
may require all future Rent be paid by cashier’s check. Payments will be
applied first to accrued late charges and attorney’s fees, second to accrued
interest, then to Base Rent and Common Area Operating Expenses, and any
remaining amount to any other outstanding charges or costs.

 

5.             Security Deposit. Lessee shall deposit with Lessor upon
execution hereof the Security Deposit as security for Lessee’s faithful
performance of its obligations under this Lease. If Lessee fails to pay Rent,
or otherwise Defaults under this Lease, Lessor may use, apply or retain all or
any portion of said Security Deposit for the payment of
any amount due Lessor or to reimburse or compensate Lessor for any liability,
expense, loss or damage which Lessor may suffer or incur by reason thereof. If
Lessor uses or applies all or any portion of the Security Deposit, Lessee shall
within 10 days after written request therefor deposit monies with Lessor
sufficient to restore said Security Deposit to the full amount required by this
Lease. If the Base Rent increases during the term of this Lease, Lessee shall,
upon written request from Lessor, deposit additional monies with Lessor so that
the total amount of the Security Deposit shall at all times bear the same
proportion to the increased Base Rent as the initial Security Deposit bore to the
initial Base Rent. Should the Agreed Use be amended to accommodate a material
change in the business of Lessee or to accommodate a sublessee or assignee,
Lessor shall have the right to increase the Security Deposit to the extent
necessary, in Lessor’s reasonable judgment, to account for any increased wear
and tear that the Premises may suffer as a result thereof. If a change in
control of Lessee occurs during this Lease and following such change the
financial condition of Lessee is, in Lessor’s reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with Lessor as shall
be sufficient to cause the Security Deposit to be at a commercially reasonable
level based on such change in financial condition. Lessor shall not be required
to keep the Security Deposit separate from its general accounts. Within 14 days
after the expiration or termination of this Lease, if Lessor elects to apply
the Security Deposit only to unpaid Rent, and otherwise within 30 days after
the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor
shall return that portion of the Security Deposit not used or applied by
Lessor. No part of the Security Deposit shall be considered to be held in
trust, to bear interest or to be prepayment for any monies to be paid by Lessee
under this Lease.

 

6.           Use.

 

6.1           Use. Lessee shall use
and occupy the Premises only for the Agreed Use, or any other legal use which
is reasonably comparable thereto, and for no other purpose. Lessee shall not
use or permit the use of the Premises in a manner that is unlawful, creates
damage, waste or a nuisance, or that disturbs occupants of or causes damage to
neighboring premises or properties. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds,
fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent
to any written request for a modification of the Agreed Use, so long as the
same will not impair the structural integrity of the Building or the mechanical
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electrical systems therein,
and/or is not significantly more burdensome to the Project. If Lessor elects to
withhold consent, Lessor shall within 7 days after such request give written
notification of same, which notice shall include an explanation of Lessor’s
objections to the change in the Agreed Use.

 

6.2           Hazardous Substances.

 

(a)           Reportable Uses Require
Consent. The term “Hazardous Substance”
as used in this Lease shall mean any product, substance,
or waste whose presence, use, manufacture, disposal, transportation, or
release, either by itself or in combination with other materials expected to be
on the Premises, is either: (i) potentially injurious to the public
health, safety or welfare, the environment or the Premises, (ii) regulated
or monitored by any governmental authority, or (iii) a basis for potential
liability of Lessor to any governmental agency or third party under any
applicable statute or common law theory. Hazardous Substances shall include,
but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or
any products, by-products or fractions thereof. Lessee shall not engage in any
activity in or on the Premises which constitutes a Reportable Use of Hazardous
Substances without the express prior written consent of Lessor and timely
compliance (at Lessee’s expense) with all Applicable Requirements. “Reportable Use” shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation,
possession, storage, use, transportation, or disposal of a Hazardous Substance
that requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any governmental
authority, and/or (iii) the presence at the Premises of a Hazardous
Substance with respect to which any Applicable Requirements requires that a
notice be given to persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may use any ordinary and
customary materials reasonably required to be used in the normal course of the
Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.)
and common household cleaning materials, so long as such use is in compliance
with all Applicable Requirements, is not a Reportable Use, and does not expose
the Premises or neighboring property to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional
assurances as Lessor reasonably deems necessary to protect itself, the public,
the Premises and/or the environment against damage, contamination, injury
and/or liability, including, but not limited to, the installation (and removal
on or before Lease expiration or termination) of protective modifications (such
as concrete encasements) and/or increasing the Security Deposit.

 

(b)           Duty to Inform Lessor. If Lessee knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor, and provide
Lessor with a copy of any report, notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance.

 

(c)           Lessee Remediation. Lessee shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee’s expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by Lessee, or
pertaining to or involving any Hazardous Substance brought onto the Premises
during the term of this Lease, by or for Lessee, or any third party.

 

(d)           Lessee Indemnification. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys’ and consultants’ fees arising out
of or involving any Hazardous Substance brought onto the Premises by or for
Lessee, or any third party (provided, however, that Lessee shall have no
liability under this Lease with respect to underground migration of any
Hazardous Substance under the Premises from areas outside of the Project not
caused or contributed to by Lessee). Lessee’s obligations shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of
such agreement.

 

(e)           Lessor Indemnification. Lessor and its successors and assigns
shall indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which suffered as a direct result of Hazardous Substances on
the Premises prior to Lessee taking possession or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s
obligations, as and when required by the Applicable Requirements, shall
include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease.

 

(f)            Investigations and Remediations. Lessor shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to Lessee taking possession, unless such
remediation measure is required as a result of Lessee’s use (including
“Alterations”, as defined in paragraph 7.3(a) below) of the Premises, in
which event Lessee shall be responsible for such payment. Lessee shall cooperate
fully in any such activities at the request of Lessor, including allowing
Lessor and Lessor’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor’s investigative and remedial
responsibilities.

 

(g)           Lessor Termination Option. If a Hazardous Substance Condition (see
Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is
legally responsible therefor (in which case Lessee shall make the investigation
and remediation thereof required by the Applicable Requirements and this Lease
shall continue in full force and effect, but subject to Lessor’s rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either
(i) investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible at Lessor’s expense, in which event
this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds 12 times the then monthly
Base Rent or $100,000, whichever is greater, give written notice to Lessee,
within 30 days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of
the date 60 days following the date of such notice. In the event Lessor elects
to give a termination notice, Lessee may, within 10 days thereafter, give
written notice to Lessor of Lessee’s commitment to pay the amount
by which the cost
of the remediation of such Hazardous Substance Condition exceeds an amount
equal to 12 times the then monthly Base Rent or $100,000, whichever is greater.
Lessee shall provide Lessor with said funds or satisfactory assurance thereof
within 30 days following such commitment. In such event, this Lease shall
continue in full force and effect, and Lessor shall proceed to make such
remediation as soon as reasonably possible after the required funds are
available. If Lessee does not give such notice and provide the required funds
or assurance thereof within the time provided, this Lease shall terminate as of
the date specified in Lessor’s notice of termination.

 

6.3           Lessee’s Compliance with Applicable Requirements. Except as
otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a
timely manner, materially comply with all Applicable Requirements, the
requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants which relate in any manner to such Requirements,
without regard to whether said Requirements are now in effect or become
effective after the Start Date. Lessee shall, within 10 days after receipt of
Lessor’s written request, provide Lessor with copies of all permits and other
documents, and other information evidencing Lessee’s compliance with any Applicable Requirements specified
by Lessor, and shall immediately upon receipt, notify Lessor in writing (with
copies of any documents involved) of any threatened or actual claim, notice,
citation, warning, complaint or report pertaining to or involving the failure
of Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water
damage to the Premises and any suspected seepage, pooling, dampness or other
condition conducive to the production of mold; or (ii) any mustiness or
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that might indicate the
presence of mold in the Premises.

 

6.4           Inspection; Compliance. Lessor and Lessor’s
“Lender” (as defined in Paragraph
30) and consultants shall have the right to enter into Premises at any time, in
the case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease. The cost of any such inspections shall be paid by Lessor,
unless a violation of Applicable Requirements, or a Hazardous Substance
condition (see Paragraph 9.1) is found to exist or be imminent, or the inspection is requested or ordered by a governmental
authority. In such case, Lessee shall upon request
reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to
the violation or contamination. In addition, Lessee shall provide copies of all
relevant material safety data sheets (MSDS) to Lessor within 10 days of the receipt of
written request therefor.

 

7.             Maintenance;
Repairs; Utility Installations; Trade Fixtures and Alterations.

 

7.1           Lessee’s Obligations.

 

(a)  In General.  Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee’s sole expense, keep the Premises,
Utility Installations (intended for Lessee’s exclusive use, no matter where
located), and Alterations in good order, condition and repair (whether or not
the portion of the Premises requiring repairs, or the means of repairing the
same, are reasonably or readily accessible to Lessee, and whether or not the
need for such repairs occurs as a result of Lessee’s use, any prior use, the
elements or the age of such portion of the Premises), including, but not
limited to, all equipment or facilities, such as plumbing, HVAC equipment,
electrical, lighting facilities, boilers, pressure vessels,
fixtures, interior walls, interior surfaces of exterior walls, ceilings,
floors, windows, doors, plate glass, and skylights but excluding any items
which are the responsibility of Lessor pursuant to
Paragraph 7.2. Lessee, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required by
Paragraph 7.1(b) below. Lessee’s obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair.

 

(b)  Service
Contracts. Lessee shall, at Lessee’s sole expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for, and
with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, (iii) clarifiers, and (iv) any other equipment, if reasonably required by
Lessor. However, Lessor reserves the right, upon notice to Lessee, to procure
and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.

 

(c)  Failure to Perform. If Lessee fails to
perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon
the Premises after 10 days’ prior
written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put
the Premises in good order, condition and repair, and Lessee shall promptly pay
to Lessor a sum equal to 115% of the cost thereof.

 

(d)  Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7
below, and without relieving Lessee of liability resulting from Lessee’s
failure to exercise and perform good maintenance practices, if an item
described in Paragraph 7.1(b) cannot be repaired other than at a cost
which is in excess of 50% of the cost of replacing such item, then such item
shall be replaced by Lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only be
obligated to pay, each month during the remainder
of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator
of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay interest on the unamortized balance but may prepay its obligation at
any time.

 

7.2           Lessor’s Obligations. Subject to the
provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area
Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant
to Paragraph 4.2, shall keep in
good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system,
Common Area fire alarm and/or smoke detection systems, fire hydrants, parking
lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems
serving the Common Areas and all parts thereof, as well as providing the
services for which there is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not be
obligated to paint the exterior or interior surfaces of exterior walls nor
shall Lessor be obligated to maintain, repair or replace windows, doors or
plate glass of the Premises. Lessee expressly waives the benefit of any statute
now or hereafter in effect to the extent it is inconsistent with the terms of
this Lease.

 

7.3           Utility Installations; Trade
Fixtures; Alterations.

 

(a)  Definitions.
The term “Utility Installations” refers to all floor and window coverings, air
and/or vacuum lines, power panels, electrical distribution, security and fire
protection systems, communication cabling, lighting fixtures, HVAC equipment,
plumbing, and fencing in or on the Premises. The term “Trade Fixtures” shall mean Lessee’s
machinery and equipment that can be removed without doing material damage to
the Premises. The term “Alterations”
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations”
are defined as Alterations and/or Utility Installations made by Lessee that are
not yet owned by Lessor pursuant to Paragraph 7.4(a).

 

                                (b)  Consent. Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor’s prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor,
as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the
electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month’s
Base Rent in the aggregate or a sum equal to one month’s Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee’s:
(i) acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and specifications prior
to commencement of the work, and (iii) compliance with all conditions of
said permits and other Applicable Requirements in a prompt and expeditious
manner. Any Alterations or Utility Installations shall be performed in a
workmanlike manner with good and sufficient materials. Lessee shall promptly
upon completion furnish Lessor with as-built plans and specifications. For work
which costs an amount in excess of one month’s Base Rent, Lessor may condition
its consent upon Lessee providing a lien and completion bond in an amount equal
to 150% of the estimated cost of such Alteration or Utility Installation and/or
upon Lessee’s posting an additional Security Deposit with Lessor.

 

(c)  Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at
or for use on the Premises, which claims are or may be secured by any
mechanic’s or materialmen’s lien against the Premises or any interest therein. Lessee shall give
Lessor not less than 10 days notice prior to the commencement of any work in,
on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense defend and
protect itself, Lessor and the Premises against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor
shall require, Lessee shall furnish a surety bond in an amount equal to 150% of
the amount of such contested lien,
claim or demand, indemnifying Lessor against liability for the same. If Lessor
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Lessee shall pay Lessor’s attorneys’
fees and costs.

 

7.4           Ownership; Removal; Surrender; and Restoration.

 

(a)  Ownership.
Subject to Lessor’s right to require removal or elect ownership as hereinafter
provided, all Alterations and Utility Installations made by Lessee shall be the
property of Lessee, but considered a part of the Premises. Lessor may, at any
time, elect in writing to be the owner of all or any specified part of the
Lessee Owned Alterations and Utility Installations. Unless otherwise instructed
per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the Premises.

 

(b)  Removal.
By delivery to Lessee of written notice from Lessor not earlier than 90 and not
later than 30 days prior to the end of the term of this Lease, Lessor may
require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent.

 

(c)  Surrender; Restoration. Lessee
shall surrender the Premises by the Expiration Date or any earlier termination
date, with all of the improvements, parts and surfaces thereof broom clean and
free of debris, and in good operating order, condition and state of repair,
ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any
damage or deterioration that would have been prevented by good maintenance
practice. Notwithstanding the foregoing, if this Lease is for 12 months or
less, then Lessee shall surrender the Premises in the same condition as
delivered to Lessee on the Start Date with NO allowance for ordinary wear and
tear. Lessee shall repair any damage occasioned by the installation,
maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or
Utility Installations, furnishings, and equipment as well as the removal of any
storage tank installed by or for Lessee. Lessee shall also completely remove
from the Premises any and all Hazardous Substances brought onto the Premises by
or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Premises) even if
such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. Any personal property of Lessee not removed on or
before the Expiration Date or any earlier termination date shall be deemed to
have been abandoned by Lessee and may be disposed of or retained by
Lessor as Lessor may desire. The failure by Lessee to timely vacate the
Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below.

 

8.             Insurance; Indemnity.

 

8.1           Payment of Premium Increases.

 

(a)           As used herein, the term “Insurance
Cost Increase” is defined as any increase in the actual cost of the
insurance applicable to the Building and/or the Project and required to be
carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), (“Required Insurance”), over and above the
Base Premium, as hereinafter defined, calculated on an annual basis. Insurance
Cost Increase shall include, but not be limited to, requirements of the holder
of a mortgage or deed of trust covering the Premises, Building and/or Project,
increased valuation of the Premises, Building and/or Project, and/or a general
premium rate increase. The term Insurance Cost Increase shall not, however,
include any premium increases resulting from the nature of the occupancy of any
other tenant of the Building. If the parties insert a dollar amount in
Paragraph 1.9, such amount shall be considered the “Base Premium.” The
Base Premium  shall be the
annual premium applicable to the 12 month period immediately preceding the
Start Date. If, however, the Project was not insured for the entirety of such
12 month period, then the Base Premium shall be the lowest annual premium
reasonably obtainable for the Required Insurance as of the Start Date, assuming
the most nominal use possible of the Building. In no event, however, shall
Lessee be responsible for any portion of the premium cost attributable to
liability insurance coverage in excess of $2,000,000 procured under Paragraph
8.2(b).

 

(b)           Lessee shall pay any Insurance Cost Increase
to Lessor pursuant to Paragraph 4.2. Premiums for policy periods commencing
prior to, or extending beyond, the term of this Lease shall be prorated to
coincide with the corresponding Start Date or Expiration Date.

 

8.2           Liability Insurance.

 

(a)  Carried by Lessee. Lessee shall obtain and keep in force a
Commercial General Liability policy of insurance protecting Lessee and Lessor
as an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount
not less than $1,000,000 per occurrence with an annual aggregate of not less
than $2,000,000. Lessee shall add Lessor as an additional insured by means of an endorsement at least as
broad as the Insurance Service Organization’s “Additional Insured-Managers or
Lessors of Premises” Endorsement and coverage
shall also be extended to include damage caused by heat, smoke or fumes from a
hostile fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an
“insured contract” for the
performance of Lessee’s indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder. Lessee shall provide an endorsement on its
liability policy(ies) which provides that its insurance shall be primary to and
not contributory with any similar Insurance carried by Lessor, whose insurance shall be considered excess insurance
only.

 

(b)  Carried by
Lessor. Lessor shall maintain liability insurance as described in
Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to
be maintained by Lessee. Lessee shall not be named as an additional insured
therein.

 

8.3           Property Insurance - Building, Improvements and Rental Value.

 

(a)  Building and Improvements.  Lessor shall obtain and keep in force a policy
or policies of insurance in the name of Lessor, with loss payable to Lessor,
any ground-lessor, and to any Lender insuring loss or damage to the Premises.
The amount of such insurance shall be equal to the full insurable replacement
cost of the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee’s personal property shall be insured
by Lessee under Paragraph 8.4. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender), including coverage for debris removal and the
enforcement of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase
in the
annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to
where the Premises are located. If such insurance coverage has a deductible
clause, the deductible amount shall not exceed $1,000 per occurrence.

 

(b)  Rental
Value. Lessor shall also obtain and keep in force a policy or
policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days (“Rental Value insurance”). Said
insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent otherwise
payable by Lessee, for the next 12 month period.

 

(c)  Adjacent Premises. Lessee shall pay for any
increase in the premiums for the property insurance of the Building and for the
Common Areas or other buildings in the Project if said increase is caused by Lessee’s acts, omissions, use or occupancy of
the Premises.

 

(d)  Lessee’s Improvements.  Since Lessor is the Insuring Party, Lessor
shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor under the terms of this Lease.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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8.4           Lessee’s
Property; Business Interruption Insurance.

 

(a)  Property Damage. Lessee shall obtain and maintain insurance
coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.

 

(b)  Business Interruption. Lessee shall obtain and maintain loss
of income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured
against by prudent lessees in the business of Lessee or attributable to prevention
of access to the Premises as a result of such perils.

 

(c)  No Representation of Adequate Coverage.
Lessor makes no representation that the limits or forms of coverage of
insurance specified herein are adequate to cover Lessee’s property, business
operations or obligations under this Lease.

 

8.5           Insurance Policies. Insurance required herein shall be by
companies duly licensed or admitted to transact business in the state where
the Premises are located, and maintaining during the policy term a “General Policyholders
Rating” of at least A-, VI, as set forth in the most current issue of “Best’s
Insurance Guide”, or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior written notice
to Lessor. Lessee shall, at least 10 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or “insurance binders”
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or the length
of the remaining term of this Lease, whichever is less. If either Party shall
fail to procure and maintain the insurance required to be carried by it, the
other Party may, but shall not be required to, procure and maintain the same.

 

8.6           Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other,
and waive their entire right to recover damages against the other, for loss of
or damage to its property arising out of or incident to the perils required to
be insured against herein. The effect of such releases and waivers is not limited
by the amount of insurance carried or required, or by any deductibles
applicable hereto. The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may have
against Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.

 

8.7           Indemnity. Except for Lessor’s gross negligence or
willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought
against Lessor by  reason of any of the foregoing
matters, Lessee shall upon notice defend the same at Lessee’s expense by
counsel reasonably satisfactory to Lessor and Lessor shall cooperate with
Lessee in such defense. Lessor need not have first paid any such claim in order
to be defended or indemnified.

 

8.8           Exemption of Lessor and its
Agents from Liability.
Notwithstanding the negligence or breach of this Lease by Lessor or its agents,
neither Lessor nor its agents shall be liable under any circumstances for:
(i) injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee’s employees, contractors, invitees, customers, or
any other person in or about the Premises, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, indoor
air quality, the presence of mold or from the breakage, leakage, obstruction or
other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or
lighting fixtures, or from any other cause, whether the said injury or damage
results from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places, (ii) any damages arising from
any act or neglect of any other tenant of Lessor or from the failure of Lessor
or its agents to enforce the provisions of any other lease in the Project, or
(iii) injury to Lessee’s business or for any loss of income or profit
therefrom. Instead, it is intended that Lessee’s sole recourse in the event of
such damages or injury be to file a claim on the insurance policy(ies) that
Lessee is required to maintain pursuant to the provisions of paragraph 8.

 

8.9           Failure to Provide Insurance. Lessee acknowledges that any failure on its
part to obtain or maintain the insurance required herein will expose Lessor to
risks and potentially cause Lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any requirement for notice to Lessee,
by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by
reason of Lessee’s failure to maintain the required insurance. Such increase in
Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach
with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of
its obligation to maintain the insurance specified in this Lease.

 

9.             Damage or Destruction.

 

9.1           Definitions.

 

(a)  “Premises Partial Damage” shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 3 months or less
from the date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage shall
not include damage to windows, doors, and/or other similar items which Lessee
has the responsibility to repair or replace pursuant to the provisions of
Paragraph 7.1.

 

(b)  “Premises Total Destruction” shall mean damage or
destruction to the Improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which cannot
reasonably be repaired in 3 months or less from the date of the damage or
destruction and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent.
Lessor shall notify Lessee in writing within 30 days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.

 

(c)  “Insured Loss”  shall mean damage or destruction to
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which was caused by an event required to be
covered by the insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.

 

(d)  “Replacement Cost”  shall
mean the cost to repair or rebuild the improvements owned by Lessor at the time
of the occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by the operation of
Applicable Requirements, and without deduction for depreciation.

 

(e)  “Hazardous
Substance Condition”  shall mean the occurrence or discovery of
a condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises which
requires repair, remediation, or restoration.

 

9.2           Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor’s expense,
repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations
and Utility Installations) as soon as reasonably possible

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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and
this Lease shall continue in full force and effect; provided, however, that
Lessee shall, at Lessor’s election, make the repair of any damage or
destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or
the insurance proceeds are not sufficient to effect such repair, the Insuring
Party shall promptly contribute the shortage in proceeds as and when required
to complete said repairs. In the event, however, such shortage was due to the
fact that, by reason of the unique nature of the improvements, full replacement
cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fully restore the unique aspects
of the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within 10 days following receipt of written notice
of such shortage and request therefor. If Lessor receives said funds or
adequate assurance
thereof within said 10 day
period, the party responsible for making the repairs shall complete them as
soon as reasonably possible and this Lease shall remain in full force and effect.
If such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (i) make such
restoration and repair as is commercially reasonable with Lessor paying any
shortage in proceeds, in which case this Lease shall remain in full force and
effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall
not be entitled to reimbursement of any funds contributed by Lessee to repair
any such damage or destruction. Premises Partial Damage due to flood or
earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be
made available for the repairs if made by either Party.

 

9.3           Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless
caused by a negligent or willful act of Lessee (in which event Lessee shall
make the repairs at Lessee’s expense), Lessor may either: (i) repair such
damage as soon as reasonably possible at Lessor’s expense, in which event this
Lease shall continue in full force and effect, or (ii) terminate this
Lease by giving written notice to Lessee within 30 days after receipt by Lessor
of knowledge of the occurrence of such damage. Such termination shall be
effective 60 days following the date of such notice. In the event Lessor elects
to terminate this Lease, Lessee shall have the right within 10 days after
receipt of the termination notice to give written notice to Lessor of Lessee’s
commitment to pay for the repair of such damage without reimbursement from
Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance
thereof within 30 days after making such commitment. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to make such
repairs as soon as reasonably possible after the required funds are available.
If Lessee does not make the required commitment, this Lease shall terminate as
of the date specified in the termination notice.

 

9.4           Total Destruction.
Notwithstanding any other provision hereof, if a Premises Total Destruction
occurs, this Lease shall terminate 60 days following such Destruction. If the
damage or destruction was caused by the gross negligence or willful misconduct
of Lessee, Lessor shall have the right to recover Lessor’s damages from Lessee,
except as provided in Paragraph 8.6.

 

9.5           Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage
for which the cost to repair exceeds one month’s Base Rent, whether or not an
Insured Loss, Lessor may terminate this Lease effective 60 days following the
date of occurrence of such damage by giving a written termination notice to
Lessee within 30 days after the date of occurrence of such damage.
Notwithstanding the foregoing, if Lessee
at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such
option and (b) providing Lessor with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is 10 days after Lessee’s receipt of
Lessor’s written notice purporting to terminate this Lease, or (ii) the
day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Lessor shall,
at Lessor’s commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If
Lessee fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee’s option shall be extinguished.

 

9.6           Abatement of Rent; Lessee’s Remedies.

 

(a)  Abatement.
In the event of Premises Partial Damage or Premises Total Destruction or a
Hazardous Substance Condition for which Lessee is not responsible under this
Lease, the Rent payable by Lessee for the period required for the repair,
remediation or restoration of such damage shall be abated in proportion to the
degree to which Lessee’s use of the Premises is impaired, but not to exceed the
proceeds received from the Rental Value insurance. All other obligations of
Lessee hereunder shall be performed by Lessee, and Lessor shall have no
liability for any such damage, destruction, remediation, repair or restoration
except as provided herein.

 

(b)  Remedies.
If Lessor shall be obligated to repair or restore the Premises and does not
commence, in a substantial and meaningful way, such repair or restoration
within 90 days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s
election to terminate this Lease on a date not less than 60 days following the
giving of such notice. If Lessee gives such notice and such repair or
restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. “Commence” shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

 

9.7           Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or
Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent
and any other advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee’s Security Deposit as has not
been, or is not then required to be, used by Lessor.

 

9.8           Waive Statutes.
Lessor and Lessee agree that the terms of this Lease shall govern the effect of
any damage to or destruction of the Premises with respect to the termination of
this Lease and hereby waive the provisions of any present or future statute to
the extent inconsistent herewith.

 

10.           Real Property Taxes.

 

10.1         Definitions.

 

                                (a)  “Real Property Taxes.” As used herein, the term “Real Property Taxes” shall include any form of assessment;
real estate, general, special, ordinary or extraordinary, or rental levy or tax
(other than inheritance, personal income or estate taxes); improvement bond;
and/or license fee imposed upon or levied against any legal or equitable
interest of Lessor in the Project, Lessor’s right to other income therefrom,
and/or Lessor’s business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with reference to the
Project address and where the proceeds so generated are to be applied by the
city, county or other local taxing authority of a jurisdiction within which the
Project is located. The term “Real Property Taxes” shall also include any tax,
fee, levy, assessment or charge, or any increase therein: (i) imposed by
reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Project, (ii) a change in the
improvements thereon, and/or
(iii) levied or assessed on machinery or equipment provided by Lessor to
Lessee pursuant to this Lease.

 

(b)  “Base Real
Property Taxes.” As used herein, the term “Base Real
Property Taxes” shall be the amount of Real Property Taxes, which
are assessed against the Premises, Building, Project or Common Areas in the
calendar year during which the Lease is executed. In calculating Real Property
Taxes for any calendar year, the Real Property Taxes for any real estate tax
year shall be included in the calculation of Real Property Taxes for such
calendar year based upon the number of days which such calendar year and tax
year have in common.

 

10.2         Payment of Taxes.
Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real
Property Taxes applicable to the Project, and said payments shall be included
in the calculation of Common Area Operating Expenses in accordance with the
provisions of Paragraph 4.2.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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10.3         Additional Improvements. Common Area
Operating Expenses shall not include Real Property Taxes specified in the tax assessor’s
records and work sheets as being caused by additional improvements placed upon
the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the
time Common Area Operating
Expenses are payable under Paragraph 4.2, the entirety of any increase in Real
Property Taxes if assessed solely by reason of Alterations, Trade Fixtures or
Utility Installations placed upon the Premises by Lessee or at Lessee’s request
or by reason of any alterations or improvements to the Premises made by Lessor
subsequent to the execution of this Lease by the Parties.

 

10.4         Joint Assessment. If the Building is not separately assessed,
Real Property Taxes allocated to the Building shall be an equitable proportion
of the Real Property Taxes for all of the
land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations assigned in the
assessor’s work sheets or such other information as may be reasonably
available. Lessor’s reasonable
determination thereof, in good faith, shall be conclusive.

 

10.5         Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied
upon Lessee Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Lessee contained in the
Premises. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all other personal property to be assessed and billed separately from the real property of
Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real property, Lessee shall pay Lessor the
taxes attributable to Lessee’s property within 10 days after receipt of a
written statement setting forth the taxes applicable to Lessee’s property.

 

11.           Utilities and Services. Lessee shall pay
for all water, gas, heat, light, power, telephone, trash disposal and other
utilities and services supplied
to the Premises, together with any taxes thereon. Notwithstanding the
provisions of Paragraph 4.2, if at any time in Lessor’s sole judgment, Lessor
determines that Lessee is using a disproportionate amount of water,
electricity or other commonly metered utilities, or that Lessee is generating
such a large volume of trash as to require an increase in the size of the trash
receptacle and/or an increase in the number of times per month that it is emptied, then Lessor may increase Lessee’s
Base Rent by an amount equal to such increased costs. There shall be no
abatement of Rent and Lessor shall not be liable in any respect whatsoever for
the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to riot, strike, labor dispute, breakdown, accident, repair or other cause
beyond Lessor’s reasonable control or in cooperation with governmental request
or directions.

 

12.           Assignment and Subletting.

 

12.1         Lessor’s Consent Required.

 

(a)  Lessee
shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, “assign or assignment”) or sublet all or
any part of Lessee’s interest in this Lease or in the Premises without Lessor’s
prior written consent.

 

(b)  Unless Lessee is a corporation and its stock is publicly
traded on a national stock exchange, a change in the control of Lessee shall
constitute an assignment requiring
consent. The transfer, on a cumulative basis, of 25% or more of the voting control
of Lessee shall constitute a change in control for this purpose.

 

(c)  The
involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or
otherwise), whether or not a formal assignment or hypothecation of this Lease
or Lessee’s assets occurs, which results
or
will result in a reduction of the
Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was
represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or
transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lessor may withhold its consent. “Net Worth of Lessee” shall mean the net worth of Lessee (excluding
any guarantors) established under generally accepted accounting
principles.

 

(d)  An
assignment or subletting without consent shall, at Lessor’s option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment
or subletting as a noncurable Breach, Lessor may either: (i) terminate
this Lease, or (ii) upon 30 days written notice, increase the monthly Base
Rent to 110% of the Base Rent then in effect. Further, in the event of such
Breach and rental adjustment, (i) the purchase price of any option to
purchase the Premises held by Lessee shall be subject to similar adjustment to
110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall
be increased to 110% of the scheduled adjusted rent.

 

(e)  Lessee’s
remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory
damages and/or injunctive relief.

 

(f)  Lessor
may reasonably withhold consent to a proposed assignment or subletting if
Lessee is in Default at the time consent is requested.

 

(g)  Notwithstanding the foregoing, allowing a diminimus portion of
the Premises, ie. 20 square feet or less, to be used by a third party vendor in
connection with the installation of a vending machine or payphone shall not constitute
a subletting.

 

12.2         Terms and Conditions
Applicable to Assignment and Subletting.

 

(a)  Regardless of Lessor’s consent, no assignment
or subletting shall: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release
Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other
obligations to be performed by Lessee.

 

(b)  Lessor
may accept Rent or performance of Lessee’s obligations from any person other
than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor’s right to exercise its remedies for
Lessee’s Default or Breach.

 

(c)  Lessor’s consent to any assignment or
subletting shall not constitute a consent to any subsequent assignment or
subletting.

 

(d)  In the event of any Default or Breach by
Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone
else responsible for the performance of Lessee’s obligations under this Lease,
including any assignee or sublessee, without first exhausting Lessor’s remedies
against any
other person or entity responsible therefore to Lessor, or any security held by
Lessor.

 

(e)  Each
request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor’s determination as to the financial
and operational responsibility and appropriateness of the proposed assignee or
sublessee, including but not limited to the
intended
use and/or required modification
of the Premises, if any, together with a fee of $500 as consideration for
Lessor’s considering and processing said request. Lessee agrees to
provide Lessor with such other or additional information and/or documentation
as may be reasonably requested. (See also Paragraph 36)

 

(f)  Any assignee of, or sublessee
under, this Lease shall, by reason of accepting such assignment, entering into
such sublease, or entering into possession of the Premises or
any portion thereof, be deemed to have assumed and agreed to conform and comply
with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during
the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent
with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.

 

(g)  Lessor’s consent to any assignment or subletting shall not
transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease
unless such transfer is specifically consented to by Lessor in writing. (See
Paragraph 39.2)

 

12.3         Additional Terms and
Conditions Applicable to Subletting. The following terms and conditions shall
apply to any subletting by Lessee
of all or any part of the Premises and shall be deemed included in all subleases under this
Lease whether or not expressly incorporated
therein:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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(a)  Lessee hereby assigns and transfers to Lessor
all of Lessee’s interest in all Rent payable on any sublease, and Lessor may
collect such Rent and apply same toward Lessee’s obligations under this Lease;
provided, however, that until a Breach shall occur in the performance of
Lessee’s obligations, Lessee may collect said Rent. In the event that the
amount collected by Lessor exceeds Lessee’s then outstanding
obligations any such excess shall be refunded to Lessee. Lessor shall not, by
reason of the foregoing or any assignment of such sublease, nor by reason of
the collection of Rent, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee’s obligations to such
sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt
of a written notice from Lessor stating that a Breach exists in the performance
of Lessee’s obligations under this Lease, to pay to Lessor all Rent due and to
become due under the sublease. Sublessee shall rely upon any such notice from
Lessor and shall pay all Rents to Lessor without any obligation or right to
inquire as to whether such Breach exists, notwithstanding any claim from Lessee
to the contrary.

 

(b)  In the event of a Breach by Lessee, Lessor
may, at its option, require sublessee to attorn to Lessor, in which event
Lessor shall undertake the obligations of the sublessor under such sublease
from the time of the exercise of said option to the expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents
or security deposit paid by such sublessee to such sublessor or for any prior
Defaults or Breaches of such sublessor.

 

(c)  Any matter requiring the consent of the
sublessor under a sublease shall also require the consent of Lessor.

 

(d)  No sublessee shall further assign or sublet
all or any part of the Premises without Lessor’s prior written consent.

 

(e)
 Lessor shall deliver a copy of any
notice of Default or Breach by Lessee to the sublessee, who shall have the
right to cure the Default of Lessee within the grace period, if any, specified
in such notice. The sublessee shall have a right of reimbursement and offset
from and against Lessee for any such Defaults cured by the sublessee.

 

13.                                 Default; Breach; Remedies.

 

13.1                           Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the
terms, covenants, conditions or Rules and Regulations under this Lease. A
“Breach” is defined as the occurrence of one or more of the following Defaults,
and the failure of Lessee to cure such Default within any applicable grace
period:

 

(a)                                  The abandonment of
the Premises; or the vacating of the Premises without providing a commercially
reasonable level of security, or where the coverage of the
property insurance described in Paragraph 8.3 is jeopardized as a result
thereof, or without providing reasonable assurances to minimize potential
vandalism.

 

(b)                                 The failure of Lessee to make any payment of
Rent or any Security Deposit required to be made by Lessee hereunder, whether
to Lessor or to a third party, when due, to provide reasonable evidence of
insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where
such failure continues for a period of 3 business days following written notice
to Lessee.

 

(c)                                  The commission of
waste, act or acts constituting
public or private nuisance, and/or an illegal activity on the Premises by
Lessee, where such actions continue for a period of 3 business days following
written notice to Lessee.

 

(d)                                 The failure by Lessee to provide (i) reasonable
written evidence of compliance with Applicable Requirements, (ii) the service
contracts, (iii) the rescission of an unauthorized assignment or
subletting, (iv) an Estoppel Certificate, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any
document requested under Paragraph 41, (viii) material data safety sheets
(MSDS), or (ix) any other documentation or information which Lessor may
reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee.

 

(e)                                  A Default by Lessee as to the terms,
covenants, conditions or provisions of this Lease, or of the rules adopted
under Paragraph 2.9 hereof, other than those described in
subparagraphs 13.1(a), (b), (c) or (d), above, where such Default
continues for a period of 30 days after written notice; provided, however, that
if the nature of Lessee’s Default is such that more than 30 days are reasonably
required for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.

 

(f)                                    The occurrence of any of the following
events: (i) the making of any general arrangement or assignment for the
benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or
any successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within 60 days); (ii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee’s assets
located at the Premises or of Lessee’s interest in this Lease, where possession
is not restored to Lessee within 30 days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest
in this Lease, where such seizure is not discharged within 30 days; provided,
however, in the event that any provision of this subparagraph is contrary to
any applicable law, such provision shall be of no force or effect, and not
affect the validity of the remaining provisions.

 

(g)                                 The discovery that any financial statement of Lessee or of any Guarantor given to Lessor
was materially false.

 

(ii)                                  If the performance of Lessee’s
obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the
termination of a Guarantor’s liability with respect to
this Lease other than in accordance with the terms of such guaranty, (iii) a
Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a
Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of
its guaranty obligation on an anticipatory basis, and Lessee’s failure, within
60 days following written notice of any such event, to provide written
alternative assurance or security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the Guarantors that existed at the time of execution of this Lease.

 

13.2                           Remedies. If Lessee fails to perform any of its
affirmative duties or obligations, within 10 days after written notice (or in
case of an emergency, without notice), Lessor may, at its option, perform such
duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to
115% of the costs and expenses incurred by Lessor in such performance upon
receipt of an invoice therefor. In the event of a Breach, Lessor may, with or
without further notice or demand, and without limiting Lessor in the exercise
of any right or remedy which Lessor may have by reason of such Breach:

 

(a)  Terminate Lessee’s right to
possession of the Premises by any lawful means, in which case this Lease shall
terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent
which had been earned at the time of termination; (ii) the worth at the
time of award of the amount by which the unpaid rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided; (iii) the
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that the Lessee proves could be reasonably avoided; and (iv) any
other amount necessary to compensate Lessor for all the detriment proximately
caused by the Lessee’s
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited
to the cost of recovering possession of the Premises, expenses of reletting, including
necessary renovation and alteration of the Premises, reasonable attorneys’
fees, and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexpired term of this Lease. The worth at the time
of award of the amount referred to in provision (iii) of the immediately
preceding sentence shall be computed by discounting such amount at the discount
rate of the Federal Reserve Bank of the District within which the Premises are
located at the time of award plus one percent. Efforts by Lessor to mitigate
damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the
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in such proceeding any unpaid Rent and damages
as are recoverable therein, or Lessor may reserve the right to recover all or
any part thereof in a separate suit.
If a notice
and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform
or quit given to Lessee under the unlawful detainer statute shall also
constitute the notice required by Paragraph 13.1. In such case, the applicable
grace period required by Paragraph 13.1 and the unlawful detainer statute shall
run concurrently,
and the failure of Lessee to cure the Default within the greater of the two
such grace periods shall constitute both an unlawful detainer and a Breach of
this Lease entitling Lessor to the remedies provided for in this Lease and/or
by said statute.

 

(b)  Continue the Lease and Lessee’s right to
possession and recover the Rent as it becomes due, in which event Lessee may
sublet or assign, subject only to reasonable limitations. Acts of maintenance,
efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to
possession.

 

(c)  Pursue any other remedy now or hereafter
available under the laws or judicial decisions of the state wherein the Premises
are located. The expiration or termination of this Lease and/or the termination
of Lessee’s right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing
during the term hereof or by reason of Lessee’s occupancy of the Premises.

 

13.3                           Inducement Recapture. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee’s entering into
this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions”, shall be deemed conditioned upon
Lessee’s full and faithful performance of all of the terms, covenants and
conditions of this Lease. Upon Breach of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
paragraph shall not be deemed a waiver by Lessor of the provisions of this
paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.

 

13.4                           Late Charges. Lessee hereby acknowledges that late payment
by Lessee of Rent will cause Lessor to incur costs not contemplated
by this Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any
Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall immediately pay to Lessor a one-time late charge equal to
10% of each such overdue amount or $100, whichever is greater. The parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of such late payment. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee’s Default
or Breach with respect to such overdue amount, nor prevent the exercise of any
of the other rights and remedies granted hereunder. In the event that a late
charge is payable hereunder, whether or not collected, for 3 consecutive
installments of Base Rent, then notwithstanding any provision of this Lease to
the contrary, Base Rent shall, at Lessor’s option, become due and payable
quarterly in advance.

 

13.5                           Interest. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor, when due as to scheduled
payments (such as Base Rent) or within 30 days following the date on which it
was due for non-scheduled payment, shall bear Interest from the date when due,
as to scheduled payments, or the 31st day after it was due as to non-scheduled
payments. The interest (“Interest”)
charged shall be computed at the rate of 10% per annum but shall not exceed the
maximum rate allowed by law. Interest is payable in addition to the potential
late charge provided for in Paragraph 13.4.

 

13.6                           Breach by Lessor.

 

(a)  Notice of Breach.
Lessor shall not be deemed in breach of this Lease unless Lessor fails within a
reasonable time to perform an obligation required to be performed by Lessor.
For purposes of this Paragraph, a reasonable time shall in no event be less
than 30 days after receipt by Lessor, and any Lender whose name and address
shall have been furnished Lessee in writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed; provided,
however, that if the nature of Lessor’s obligation is such that more than 30
days are reasonably required for its performance, then Lessor shall not be in
breach if performance is commenced within such 30 day period and thereafter
diligently pursued to completion.

 

(b)  Performance by Lessee on
Behalf of Lessor. In the event that neither Lessor nor Lender cures
said breach within 30 days after receipt of said notice, or if having commenced
said cure they do not diligently pursue it to completion, then Lessee may elect
to cure said breach at Lessee’s expense and offset from Rent the actual and
reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to the greater of one month’s Base Rent or the
Security Deposit, reserving Lessee’s right to reimbursement from Lessor for any
such expense in excess of such offset. Lessee shall document the cost of said
cure and supply said documentation to Lessor.

 

14.                                 Condemnation.
If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this Lease shall terminate as to the part
taken as of the date the condemning authority takes title or possession, whichever first
occurs. If more than 10% of the floor area of the Unit, or more than 25% of
Lessee’s Reserved Parking Spaces, is taken by Condemnation, Lessee may, at
Lessee’s option, to be exercised in writing within 10 days after Lessor shall have
given Lessee written notice of such taking (or in the absence of such notice,
within 10 days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning authority takes such
possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion
of the Premises remaining, except that the Base Rent shall be reduced in
proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in
value of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation for
Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures,
without regard to whether or not this Lease is terminated pursuant to the
provisions of this Paragraph. All Alterations and Utility Installations made to
the Premises by Lessee, for purposes of Condemnation only, shall be considered
the property of the Lessee and Lessee shall be entitled to any and all
compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to the
Premises caused by such Condemnation.

 

15.                                 Brokerage
Fees.

 

                15.1                           Additional
Commission. In addition to the payments owed pursuant to Paragraph
1.10 above, and unless Lessor and the Brokers otherwise
agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if
Lessee acquires from Lessor any rights to the Premises or other premises owned
by Lessor and located within the Project, (c) if Lessee remains in
possession of the Premises, with the consent of Lessor, after the expiration of
this Lease, or (d) if Base Rent is increased, whether by agreement or
operation of an escalation clause herein, then, Lessor
shall pay Brokers a fee in accordance with the schedule of the Brokers in
effect at the time of the execution of this Lease.

 

15.2                           Assumption of Obligations. Any buyer or transferee of
Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be
third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31.
If Lessor fails to pay to Brokers any amounts due as and for brokerage fees
pertaining to this Lease when due, then such amounts shall accrue interest. In
addition, if Lessor fails to pay any amounts to Lessee’s Broker when due,
Lessee’s Broker may send written notice to Lessor and Lessee of such failure
and if Lessor fails to pay such amounts within 10 days after said notice,
Lessee shall pay said monies to its Broker and offset such amounts against
Rent. In addition, Lessee’s Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor
and Lessor’s Broker for the limited purpose of collecting any brokerage fee
owed.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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15.3                           Representations and
Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant
to the other that it has had no
dealings with any person, firm, broker or finder (other than the Brokers, if
any) in connection with this Lease, and that no one other than said named Brokers is entitled to any commission or finder’s fee in
connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for
compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any
dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred
with respect thereto.

 

16.                                 Estoppel Certificates.

 

(a)  Each
Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a
statement in writing in form similar to the then most current “Estoppel Certificate” form published by
the AIR Commercial Real Estate Association, plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party.

 

(b)  If the Responding Party shall fail to execute
or deliver the Estoppel Certificate within such 10 day period, the Requesting
Party may execute an Estoppel
Certificate stating that: (i) the Lease is in full force and effect without
modification except as may be represented by the Requesting Party,
(ii) there are no uncured defaults in the Requesting Party’s performance,
and (iii) if Lessor is the Requesting Party, not more than one month’s
rent has been paid in advance. Prospective purchasers and encumbrancers may
rely upon the Requesting Party’s Estoppel Certificate, and the Responding Party
shall be estopped from denying the truth of the facts contained in said
Certificate.

 

(c)  If Lessor desires to
finance, refinance, or sell the Premises, or any part thereof, Lessee and all
Guarantors shall deliver to any
potential lender or purchaser designated by Lessor such financial statements as may
be reasonably required by such
lender or purchaser, including but not limited to Lessee’s financial statements
for the past 3 years. All such financial statements shall be received by Lessor
and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth.

 

17.                                 Definition of Lessor. The term “Lessor” as used herein shall mean the owner or owners
at the time in question of the fee title to the Premises, or, if this is a
sublease, of the Lessee’s interest in the prior lease. In the event of a transfer of
Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or
assignee (in cash or by credit) any unused Security Deposit held by Lessor.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants
under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants
in this Lease to be performed by the Lessor shall be binding only upon the
Lessor as hereinabove defined.

 

18.                                 Severability. The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

 

19.                                 Days. Unless otherwise specifically indicated to the
contrary, the word “days” as used in this Lease
shall mean and refer to calendar days.

 

20.                                 Limitation on Liability. The obligations of
Lessor under this Lease shall not constitute personal obligations of Lessor, or
its partners, members,
directors, officers or shareholders, and
Lessee shall look to the Premises, and to no other assets of Lessor, for the
satisfaction of any liability of
Lessor with respect to this Lease, and shall not seek recourse against Lessor’s
partners, members, directors, officers or shareholders, or any of their
personal assets for such satisfaction.

 

21.                                 Time of Essence. Time is of the
essence with respect to the performance of all obligations to be performed or
observed by the Parties under this Lease.

 

22.                                 No Prior or Other Agreements;
Broker Disclaimer. This Lease contains all agreements between the Parties with respect to
any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers that
it has made, and is relying solely upon, its own investigation as to the
nature, quality, character and financial responsibility of the other Party to
this Lease and as to the use, nature, quality and character of the Premises.
Brokers have no responsibility with respect thereto or with respect to any
default or breach hereof by either Party. The liability (including court costs
and attorneys’ fees), of any Broker with respect to negotiation, execution,
delivery or performance by either Lessor or Lessee under this Lease or any
amendment or modification hereto shall be limited to an amount up to the fee
received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be applicable to any
gross negligence or willful misconduct of such Broker.

 

23.                                 Notices.

 

23.1                           Notice Requirements. All notices required or permitted by this
Lease or applicable law shall be in writing and may be delivered in person (by
hand or by courier) or may be sent
by regular, certified or registered mail or U.S. Postal Service Express Mail,
with postage prepaid, or by facsimile transmission, and shall be deemed
sufficiently given if served in a manner specified in this Paragraph 23. The
addresses noted adjacent to a Party’s signature on this Lease shall be that
Party’s address for delivery or mailing of notices. Either Party may by written
notice to the other specify a different address for notice, except that upon
Lessee’s taking possession of the Premises, the Premises shall constitute
Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

 

23.2                           Date of Notice. Any notice sent by registered or certified
mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark
thereon. If sent by regular mail the notice shall be deemed given 72 hours
after the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given 24 hours after delivery of
the same to the Postal Service or courier. Notices transmitted by facsimile
transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered
via delivery or mail. If notice is received on a Saturday, Sunday or legal
holiday, it shall be deemed received on the next business day.

 

24.                                 Waivers. No waiver by Lessor of the Default or Breach
of any term, covenant or condition hereof by Lessee, shall be deemed a waiver
of any other term, covenant or condition hereof, or of any subsequent Default
or Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor’s consent to, or approval of, any act shall not be deemed to
render unnecessary the obtaining of Lessor’s consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an
estoppel to enforce the provision or provisions of this Lease requiring such consent.
The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee.
Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of
such payment.

 

25.                                 Disclosures Regarding The
Nature of a Real Estate Agency Relationship.

 

(a)                                  When entering into a discussion with a real estate agent regarding a real estate transaction, a
Lessor or Lessee should from the outset understand what type of agency
relationship or representation it has with the agent or agents in the
transaction. Lessor and Lessee acknowledge
being advised by the Brokers in this transaction, as follows:

 

(i)                                     Lessor’s Agent. A Lessor’s agent under a listing agreement with
the Lessor acts as the agent for the Lessor only. A Lessor’s agent or subagent has the
following affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the
Lessor. To
the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in performance of the agent’s duties.

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated
to reveal to either Party any confidential information obtained from the other
Party which does not involve the affirmative duties
set forth above.

 

(ii)                                  Lessee’s Agent. An agent can agree to act as agent for the
Lessee only. In these situations, the agent is not the Lessor’s agent, even if
by agreement the agent may receive compensation for services rendered, either
in full or in part from the Lessor. An agent acting only for a Lessee has the  following affirmative obligations. To
the Lessee: A fiduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a.
Diligent exercise of reasonable skills and care in performance of the agent’s
duties. b. A duty of honest and fair dealing and good faith. c. A duty to
disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties.
An agent is not obligated to reveal to either Party any confidential
information obtained from the other Party which does not involve the
affirmative duties set forth above.

 

(iii)          Agent Representing Both Lessor and Lessee.
A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of
both the Lessor and the Lessee in a transaction, but only with the knowledge
and consent of both the Lessor and the Lessee. In a dual agency situation, the
agent has the following affirmative obligations to both the Lessor and the
Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in
the dealings with either Lessor or the Lessee. b. Other duties to the Lessor
and the Lessee as stated above in subparagraphs (i) or (ii). In
representing both Lessor and Lessee, the agent may not without the express
permission of the respective Party, disclose to the other Party that the Lessor
will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties
of the agent in a real estate transaction do not relieve a Lessor or Lessee
from the responsibility to protect their own interests. Lessor and Lessee
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate. If legal or tax advice is desired,
consult a competent professional.

 

(b)                                 Brokers have no responsibility with respect to
any default or breach hereof by either Party. The Parties agree that no lawsuit
or other legal proceeding involving any breach of duty, error or omission
relating to this Lease may be brought against Broker more than one year after
the Start Date and that the liability (including court costs and attorneys’
fees), of any Broker with respect to any such lawsuit and/or legal proceeding
shall not exceed the fee received by such Broker pursuant to this Lease;
provided, however, that the foregoing limitation on each Broker’s liability
shall not be applicable to any gross negligence or willful misconduct of such
Broker.

 

(c)                                  Buyer and Seller agree
to identify to Brokers as
“Confidential”  any
communication or information given Brokers that is considered by such Party to be confidential.

 

26.                                 No Right To Holdover. Lessee has no right to retain possession
of the Premises or any part thereof beyond the expiration or termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as
consent by Lessor to any holding over by Lessee.

 

27.                                 Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in equity.

 

28.                                 Covenants and
Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In
construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever
required by the context, the singular shall include the plural and vice versa.
This Lease shall not be construed as if prepared by one of the Parties, but
rather according to its fair meaning as a whole, as if both Parties had
prepared it.

 

29.                                 Binding Effect; Choice
of Law. This
Lease shall be binding upon the parties, their personal representatives,
successors and assigns and be governed by the laws of the
State in which the Premises are located. Any litigation between the Parties
hereto concerning this Lease shall be initiated in the county in which the
Premises are located.

 

30.                                    Subordination; Attornment;
Non-Disturbance.

 

30.1                           Subordination. This Lease and any Option granted hereby
shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or
security device (collectively, “Security Device”),
now or hereafter placed upon the Premises, to any and all advances made on the
security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Security Devices (in this Lease
together referred to as “Lender”) shall
have no liability or obligation to perform any of the obligations of Lessor
under this Lease. Any Lender may elect to have this Lease and/or any Option
granted hereby superior to the lien of its Security Device by giving
written notice thereof to Lessee, whereupon this Lease and such Options shall
be deemed prior to such Security Device, notwithstanding the relative dates of
the documentation or recordation thereof.

 

30.2                           Attornment. In the event that Lessor transfers title to the Premises, or the
Premises are acquired by another upon the foreclosure or termination of a Security Devise to
which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance
provisions of Paragraph 30.3, attorn to such new owner, and upon request, enter
into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of the new owner, this Lease will automatically become a new lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be
relieved of any further obligations hereunder and such new owner shall assume
all of Lessor’s obligations, except that such new owner shall not: (a) be
liable for any act or omission of any prior lessor or with respect to events
occurring prior to acquisition of ownership; (b) be subject to any offsets
or defenses which Lessee might have against any prior lessor, (c) be bound
by prepayment of more than one month’s rent, or (d) be liable for the
return of any security deposit paid to any prior lessor.

 

                30.3                           Non-Disturbance. With respect
to Security Devices entered into by Lessor after the execution of this Lease,
Lessee’s subordination
of this Lease shall be subject to receiving a commercially reasonable
non-disturbance agreement (a “Non-Disturbance Agreement”)
from the Lender which Non-Disturbance Agreement provides that Lessee’s
possession of the Premises, and this Lease, including any options to extend the
term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises. Further, within 60 days after
the execution of this Lease, Lessor shall use its commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the holder of any
pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.

 

30.4                           Self-Executing. The agreements contained in this Paragraph
30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor
or a Lender in connection with a sale, financing or refinancing  of the
Premises, Lessee and Lessor shall execute such further writings as may be
reasonably required to separately document any subordination, attornment and/or
Non-Disturbance Agreement provided for herein.

 

31.                                 Attorneys’ Fees. If any Party or Broker brings an action or
proceeding involving the Premises whether founded in tort, contract or equity,
or to declare
rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall
be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term, “Prevailing
Party” shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement,
judgment, or the abandonment by the other Party or Broker of its claim or
defense. The attorneys’ fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys’ fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys’ fees,
costs and expenses incurred in the preparation and service of notices of

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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14

 

Default
and consultations in connection therewith, whether or not a legal action is
subsequently commenced in connection with such Default or resulting Breach
($200 is a reasonable minimum per occurrence for such services and
consultation).

 

32.                                 Lessor’s Access; Showing Premises; Repairs. Showing
Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times after reasonable prior notice for
the purpose of showing the same to prospective purchasers, lenders, or tenants,
and making such alterations, repairs, improvements or additions to the Premises
as Lessor may deem necessary or desirable
and the erecting, using and maintaining of utilities, services, pipes and
conduits through the Premises and/or other
premises as long as there is no material adverse effect on Lessee’s use of the
Premises. All such activities shall be without abatement of rent or liability
to Lessee.

 

33.                                 Auctions. Lessee shall not conduct, nor permit to
be conducted, any auction upon the Premises without Lessor’s prior written
consent. Lessor shall not be obligated to exercise any standard of
reasonableness in determining whether to permit an auction.

 

34.                                 Signs. Lessor may place on the Premises
ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the
last 6 months of the term hereof. Except for ordinary “For Sublease” signs
which may be placed only on the Premises, Lessee shall not place any sign upon
the Project without Lessor’s prior written consent. All signs must comply with
all Applicable Requirements.

 

35.                                 Termination; Merger. Unless specifically stated otherwise in
writing by Lessor, the voluntary or other surrender of this Lease by Lessee,
the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor’s election to have such event constitute the
termination of such interest.

 

36.                                 Consents. Except as otherwise provided herein,
wherever in this Lease the consent of a Party is required to an act by or for
the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor’s actual reasonable costs and expenses (including
but not limited to architects’, attorneys’, engineers’ and other consultants’
fees) incurred in the consideration of, or response to, a request by Lessee for
any Lessor consent, including but not limited to consents to an assignment, a subletting or
the presence or use of a Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lessor’s consent
to any act, assignment or subletting shall not constitute an acknowledgment
that no Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to the
particular matter for which consent is being given. In the event that either
Party disagrees with any determination made by the other hereunder and
reasonably requests the reasons for such determination, the determining party
shall furnish its reasons in writing and in reasonable detail within 10
business days following such request.

 

37.                                 Guarantor.

 

37.1                           Execution. The Guarantors, if any, shall each execute a
guaranty in the form most recently published by the AIR Commercial Real Estate Association,.

 

37.2                           Default. It shall constitute a Default of the Lessee
if any Guarantor fails or refuses, upon request to provide: (a) evidence
of the execution of the guaranty, including the authority of the party signing
on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements,
(c) an Estoppel Certificate, or (d) written confirmation that the
guaranty is still in effect.

 

38.                                 Quiet Possession. Subject to payment by Lessee of the Rent
and performance of all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.

 

39.                                 Options. If Lessee is granted an option, as
defined below, then the following provisions shall apply.

 

39.1                           Definition.  “Option” shall
mean: (a) the right to extend the term of or renew this Lease or to extend
or renew any lease that Lessee has on
other property of Lessor; (b) the right of first refusal or first offer to
lease either the Premises or other property of Lessor; (c) the right to
purchase or the right of first refusal to purchase the Premises or other
property of Lessor.

 

39.2                           Options Personal To Original Lessee. Any Option granted to
Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other
than said original Lessee and only while the original Lessee is in full
possession of the Premises and, if requested by Lessor, with Lessee certifying
that Lessee has no intention of thereafter assigning or subletting.

 

39.3                           Multiple Options. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have
been validly exercised.

 

39.4                           Effect of Default on Options.

 

(a)  Lessee
shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default is cured, (ii) during the period of time any Rent is unpaid
(without regard to whether notice thereof is given Lessee), (iii) during the
time Lessee is in Breach of this Lease, or (iv) in the event that Lessee
has been given 3 or more notices of separate Default, whether or not the
Defaults are cured, during the 12 month period immediately preceding the
exercise of the Option.

 

(b)  The period of time within which an Option may
be exercised shall not be extended or enlarged by reason of Lessee’s inability
to exercise an Option because of the provisions of Paragraph 39.4(a).

 

(c)  An
Option shall terminate and be of no further force or effect, notwithstanding
Lessee’s due and timely exercise of the Option, if, after such exercise and
prior to the commencement of the extended term or completion of the purchase, (i) Lessee
fails to pay Rent for a period of 30 days after such Rent becomes due (without
any necessity of Lessor to give notice thereof), or (ii) if Lessee commits
a Breach of this Lease.

 

40.                                 Security Measures. Lessee hereby acknowledges that the Rent
payable to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to
provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts of
third parties.

 

41.                                 Reservations. Lessor reserves the right: (i) to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor
deems necessary, (ii) to cause the
recordation of parcel maps and
restrictions, and (iii) to create and/or install new utility raceways, so
long as such easements, rights, dedications, maps, restrictions, and utility
raceways do not unreasonably interfere with the use of the Premises by Lessee.
Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate such rights.

 

42.                                 Performance Under Protest. If at any time a dispute shall arise as
to any amount or sum of money to be paid by one Party to the other under the provisions hereof, the Party against
whom the obligation to pay the money is asserted shall have the right to make
payment “under protest” and such payment shall not be regarded as a voluntary
payment and there shall survive the right on the part of said Party to
institute suit for recovery of such sum. If it shall be adjudged that there was
no legal obligation on the part of said Party to pay such sum or any part
thereof, said Party shall be entitled to recover such sum or so much thereof as
it was not legally required to pay. A Party who does not initiate suit for the
recovery of sums paid “under protest” within 6 months shall be deemed to have
waived its right to protest such payment.

 

43.                                 Authority.;
Multiple Parties; Execution.

 

(a)  If
either Party hereto is a corporation, trust, limited liability company,
partnership, or similar entity, each individual executing this

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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15

 

Lease
on behalf of such entity represents and warrants that he or she is duly
authorized to execute and deliver this Lease on its behalf. Each Party shall,
within 30 days after request, deliver to the other Party satisfactory evidence
of such authority.

 

(b)  If
this Lease is executed by more than one person or entity as “Lessee”, each such
person or entity shall be jointly and severally liable hereunder. It is agreed
that any one of the named Lessees shall be empowered to execute any amendment
to this Lease, or other document ancillary thereto and bind all of the named
Lessees, and Lessor may rely on the
same as if all of the named Lessees had
executed such document.

 

(c)  This
Lease may be executed by the Parties in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and the same
instrument.

 

44.                                 Conflict. Any conflict
between the printed provisions of this Lease and the typewritten or handwritten
provisions shall be controlled by the typewritten or handwritten
provisions.

 

45.                                 Offer. Preparation of
this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer
to lease to the other Party. This Lease is not intended to
be binding until executed and delivered by all Parties hereto.

 

46.                                 Amendments. This Lease may
be modified only
in writing, signed by the Parties in interest at the time of the modification.
As long as they do
not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary
modifications to this Lease as may be reasonably required by a Lender in
connection with the obtaining of normal financing or refinancing of the Premises.

 

47.                                 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF
THIS AGREEMENT.

 

48.                                      Mediation and Arbitration of Disputes. An  Addendum
requiring the Mediation and/or the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease o
is x  is
not attached to this Lease.

 

49.                                 Americans with
Disabilities Act. Since compliance with the Americans with Disabilities
Act (ADA) is dependent upon Lessee’s specific use of the Premises,
Lessor makes no warranty or representation as to whether or not the Premises
comply with ADA or any similar legislation. In the event that Lessee’s use of
the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees
to make any such necessary modifications and/or additions at Lessee’s expense.

 

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE
AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS
LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND
LESSEE WITH RESPECT TO THE PREMISES.

 

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION
TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

 

1.                                      SEEK
ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

 

2.                                      RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION
SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS
SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE
CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH
DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.

 

WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN
CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO
COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.

 

The
parties hereto have executed this Lease at the place and on the dates specified
above their respective signatures.

 

	
  Executed
  at:

  	
     Orange, CA

  	
   

  	
  Executed:

  	
     Orange, CA

  
	
  On:

  	
      9-3-08

  	
   

  	
  On:

  	
     8-22-08

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By
  LESSOR:

  	
   

  	
  By
  LESSEE:

  
	
  CC &
  E, LLC

  	
   

  	
  ISI Detention Contracting Group, Inc.,

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Todd Essenmacher

  	
   

  	
  By:

  	
  /s/
  Michael Peterson

  
	
  Name
  Printed:

  	
  Todd
  Essenmacher

  	
   

  	
  Name
  Printed:

  	
  Michael Peterson

  
	
  Title:

  	
  Managing
  member

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name
  Printed:

  	
   

  	
   

  	
  Name
  Printed:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  601
  N. Batavia

  	
   

  	
  Address:

  	
  12903
  Delivery Drive

  
	
  Orange,
  CA 92868

  	
   

  	
  San
  Antonio, TX 78247

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
  (

  	
  714

  	
  )

  	
  627-2165

  	
   

  	
  Telephone:

  	
  (

  	
  210

  	
  )

  	
  495-5245

  
	
  Facsimile:

  	
  (

  	
  714

  	
  )

  	
  627-2144

  	
   

  	
  Facsimile:

  	
  (

  	
  210

  	
  )

  	
  495-5613

  
	
  Federal
  ID No.

  	
   

  	
   

  	
  Federal
  ID No.

  	
   

  
																																							

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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  INITIALS

  

 

16

 

	
  BROKER:

  	
   

  	
  BROKER:

  
	
   

  	
   

  	
   

  
	
  Lee
  & Associates®-Newport Beach, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Att:

  	
  Chris
  Coyte /John Martin

  	
   

  	
  Att:

  	
   

  
	
  Title:

  	
  Senior
  Vice President/Associate

  	
   

  	
  Title:

  	
   

  
	
  Address:

  	
  3991
  MacArthur Blvd. , Suite 100

  	
   

  	
  Address:

  	
   

  
	
  Newport
  Beach, CA 92660

  	
   

  	
   

  
	
  Telephone:

  	
  (949)
  724-1000

  	
   

  	
  Telephone:

  	
  (

  	
   

  	
  )

  	
   

  
	
  Facsimile:

  	
  (949)
  833-0608

  	
   

  	
  Facsimile:

  	
  (

  	
   

  	
  )

  	
   

  
	
  Federal
  ID No.

  	
   

  	
   

  	
  Federal
  ID No.

  	
   

  
																				

 

These
forms are often modified to meet changing requirements of law and needs of the
Industry. Always write or call to make sure you are utilizing the most current form: AIR COMMERCIAL REAL
ESTATE ASSOCIATION, 700 South Flower Street, Suite 600, Los Angeles, CA
90017. (213) 687-8777.

 

(c)Copyright 1998 By AIR Commercial Real Estate
Association.

All rights reserved.

 

No part of these
works may be reproduced in
any form without permission In writing.

 

MARTIN/ISI-GROSS
LEASE #2

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
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17

 

ADDENDUM TO THAT CERTAIN LEASE DATED JULY 21, 2008

BY AND BETWEEN

C C & E, LLC (“LESSOR”) AND

ISI DETENTION CONTRACTING GROUP, INC., A CALIFORNIA

CORPORATION (“LESSEE”)

FOR THAT REAL PROPERTY COMMONLY KNOWN AS

577 NORTH BATAVIA STREET, ORANGE, CA AND

583 NORTH BATAVIA STREET, ORANGE, CA (“PREMISES”)

 

51.01 – Previous Lease

 

Lessor
and Lessee have previously entered into a lease for 577 North Batavia Street,
Orange CA dated March 14, 2005 and amended by the parties on February 14,
2006, June 20, 2006, May 4, 2007, and January 1, 2008. As of the
Commencement Date of this Lease, the Previous Lease and amendments shall be of
no further force or effect, except those provisions intended to survive its
expiration.

 

Pursuant to the Previous Lease,
Lessor holds a security deposit in the amount of $28,576.00. As of the
Commencement Date of this Lease, the sum of $16,934.00 of the security deposit
from the Previous Lease shall be credited to this Lease as Security Deposit.

 

The remaining security deposit
balance of $11,642.00 shall be applied as partial payment of Base Rent for
September 2008. On or before September 1, 2008, Lessee shall pay
Lessor the sum of $5,292.00 representing the remaining balance of Base Rent for
September 2008.

 

51.02 – Paragraph 2.5 (Continued)

 

The provisions of this Paragraph
2.5 apply to the 577 North Batavia Street portion of the Premises as Lessee,
immediately prior to the Start Date, was the occupant of that portion of the
Premises.

 

51.03 - Conflict

 

In the event of any conflict
between the Lease and this Addendum, the terms of this Addendum shall control.

 

IN WITNESS WHEREOF, Lessor and Lessee have executed this
Addendum concurrently with the Lease of even date herewith.

 

	
  “LESSOR”

  	
  C C & E, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd Essenmacher

  
	
   

  	
  Its:

  	
  Managing Member

  
	
   

  	
  Dated:

  	
  9-5-08

  
	
   

  	
   

  
	
   

  	
   

  
	
  “LESSEE”

  	
  ISI
  Detention Contracting Group, Inc.,

  
	
   

  	
  A California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Peterson

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
  Dated:

  	
  8-22-08

  
						

 

 

Paragraph 52

 

CONSULT YOUR ATTORNEY

 

All
negotiations and agreements are merged within the above-referenced lease
agreement, and there are no oral agreements or implied covenants by the owner,
employees, or agents thereof. The party(ies) acknowledge that this agreement
may have been filled in by Lee & Associates, Newport Beach, Inc.
(hereinafter “Broker”), for submission by you to your attorney for approval.
Therefore, all parties are advised and encouraged by  Broker to
contact their attorneys as to any questions that may exist prior to the
execution of same.

 

Any
financial statements, information, reports, materials, etc., provided to Broker
and submitted by Broker to Lessor and/or Lessee, are so provided without any
independent investigation by Broker. Broker assumes no responsibility for the
accuracy of same. Any verification, credit check, etc., is the sole
responsibility of the owner.

 

No
warranties, recommendations, or representations are made by Broker as to the
accuracy, the legal sufficiency, legal effect, or tax consequences of the
above.

 

SALE/LEASE -AMERICANS WITH DISABILITIES ACT

AND HAZARDOUS MATERIALS DISCLOSURE

 

The
United States Congress has enacted the Americans with Disabilities Act. Among
other things, this act is intended to make many business establishments equally
accessible to persons with a variety of disabilities; modifications to real
property may be required. State and local laws may also mandate changes. The
real estate brokers in this transaction are not qualified to advise you as to
what, if any, changes may be required now or in the future. Owners and tenants
should consult the attorneys and qualified design professionals of their choice
for information regarding these matters. Real estate brokers cannot determine
which attorney or design professionals have the appropriate expertise in this
area.

 

Various
construction materials may contain items that have been or may in the future be
determined to be  hazardous (toxic) or undesirable
and that may need to be specifically treated/handled or removed. For example,
some transformers and other electrical components contain PCBs, and asbestos
has been used in components such as fire-proofing, heating and cooling systems,
air duct insulation, spray-on and tile acoustical materials, linoleum, floor
tiles, roofing, dry wall and plaster. Due to prior or current uses of the
Property or in the area, the Property may have hazardous or undesirable metals,
minerals, chemicals, hydrocarbons, or biological or radioactive items
(including electric and magnetic fields in soils, water, building components,
above or below or elsewhere in areas that may or may not be accessible or
noticeable). Such items may leak or otherwise be released. Real estate agents
have no expertise in the detection or correction of hazardous or undesirable
items. Expert inspections are necessary. Current or future laws may require
clean-up by past, present and/or future owners and/or operators. It is the
responsibility of the Seller/Lessor and Buyer/Tenant to retain qualified
experts to detect and correct such matters and to consult with legal counsel of
their choice to determine what provisions, if any, they may wish to include in
transaction documents regarding the Property.

 

To
the best of Seller/Lessor’s knowledge, Seller/Lessor has attached to this
Disclosure copies of all existing surveys and reports known to Seller/Lessor
regarding asbestos and other hazardous materials and undesirable substances
related to the Property. Sellers/Lessors are required under California Health
and Safety Code Section 25915 et seq. to disclose reports and surveys
regarding asbestos to certain persons, including their employees, contractors,
co-owners, purchasers and tenants. Buyers/Tenants have similar disclosure
obligations. Sellers/Lessors and Buyers/Tenants have additional hazardous materials
disclosure responsibilities to each other under California Health and Safety
Code Section 25359.7 and other California laws. Consult your attorney
regarding this matter. Lee & Associates is not qualified to assist you
in this matter or provide you with other legal or tax advice.

 

	
  ACKNOWLEDGED:

  	
   

  
	
   

  	
   

  
	
  LESSOR:

  	
  LESSEE:

  
	
  CC & E, LLC

  	
  ISI Detention Contracting Group, Inc., 

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Todd Essenmacher

  	
  By:

  	
  /s/ Michael Peterson

  
	
   

  	
   

  
	
  Date:

  	
  9-5-08

  	
  Date:

  	
  8-22-08

  
						

 

 

EXHIBIT “A”

577 and 583 E. Batavia

 

 

	
  Initials

  	
   

  	
   

  	
  Initials:

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