Document:

EXHIBIT 10.2

 

SENIOR
SECURED FLOATING RATE

NOTE
PURCHASE AGREEMENT

 

dated as of

June 24, 2003

among

AFFINITY GROUP, INC.,

THE GUARANTORS PARTY HERETO,

THE NOTEHOLDERS PARTY HERETO,

 

and

CANADIAN IMPERIAL BANK OF COMMERCE,

as Syndication Agent,

FLEET NATIONAL BANK,

as Administrative Agent,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Documentation Agent,

and

CIBC WORLD MARKETS CORP. and FLEET
SECURITIES, INC.,

as Co-Lead Arrangers and Joint Bookrunners

 

(Signature Page to Second Amended and
Restated Credit Agreement)

 

 

SENIOR
SECURED FLOATING RATE NOTE PURCHASE AGREEMENT

 

SENIOR SECURED
FLOATING RATE NOTE PURCHASE AGREEMENT dated as of June 24, 2003 among AFFINITY
GROUP, INC., THE GUARANTORS PARTY HERETO, THE NOTEHOLDERS PARTY HERETO,
CANADIAN IMPERIAL BANK OF COMMERCE (“CIBC”), as Syndication Agent, FLEET
NATIONAL BANK, as Administrative Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent. 
This Agreement and the Credit Agreement (as hereinafter defined)
collectively amend and restate in its entirety the Amended and Restated Credit
Agreement dated as of November 13, 1998 among Affinity Group, Inc., the
Guarantors party thereto, the Noteholders party thereto, The Provident Bank, as
Syndication Agent, Bank One, Kentucky, NA, as Documentation Agent, and Fleet
National Bank, as Administrative Agent, as heretofore amended, supplemented or
otherwise modified and in effect on the date hereof immediately before giving
effect to the amendment and restatement contemplated hereby (the “Existing
Credit Agreement”).  Obligations of
the Credit Parties with respect to the Loans and Letters of Credit (as such
terms are defined in the Credit Agreement) constitute “Permitted Indebtedness”
under the Holding Company Notes Indenture (as hereinafter defined), and the
obligations of the Credit Parties with respect to the Term B2 Loans constitute
“Refinancing Indebtedness” under such Indenture.  The Loans and Letters of Credit under the Credit Agreement and
the Term B2 Loans are senior secured pari passu obligations.

The parties hereto agree that the Existing Credit Agreement shall be
amended and restated as of the date hereof (but subject to Section 5.1) in
its entirety as provided in the Credit Agreement and as follows:

 

ARTICLE
I

Definitions

 

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

 

“Acquisition”
means any transaction, or any series of related transactions, consummated after
the date hereof, by which (i) any Credit Party acquires the business of, or all
or substantially all of the assets of, any firm or corporation which is not a
Credit Party, or any division of such firm or corporation, located in a
specific geographic area or areas, whether through purchase of assets, purchase
of stock, merger or otherwise or (ii) any Person that was not theretofore a
Subsidiary of a Credit Party becomes a Subsidiary of a Credit Party.

“Additional Mortgage” has the meaning assigned to such term in
Section 6.13(b)(i).

“Additional Mortgage Policies” has the meaning assigned to such
term in Section 6.13(b)(vi).

“Additional Mortgaged Property” has the meaning assigned to such
term in Section 6.13(b).

“Adjusted Base Rate” means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day

 

(Signature Page to Second Amended and
Restated Credit Agreement)

 

 

plus 1/2 of 1%.  Any change in the Adjusted Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective from and including
the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.

“Adjusted
LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by
(b) the Statutory Reserve Rate.

“Administrative
Agent” means Fleet in its capacity as Administrative Agent for the
Noteholders hereunder, and shall include any successor to the Administrative
Agent appointed pursuant to Section 9.6.

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

“Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.  Notwithstanding the foregoing, (a) no individual shall be an
Affiliate solely by reason of his or her being a director, officer or employee
of any Credit Party and (b) none of the Credit Parties shall be Affiliates.

“Affiliate Subordination Agreement” means the Amended and
Restated Affiliate Subordination Agreement dated as of the Effective Date,
among the Holding Company, the Borrower, the Parent, Stephen Adams and the
Administrative Agent substantially in the form of Exhibit F annexed to
the Credit Agreement, as such agreement may thereafter be amended, supplemented
or otherwise modified from time to time.

“Agent”
means each of the Administrative Agent, the Syndication Agent , and the
Documentation Agent.

“Agreement”
means this Senior Secured Floating Rate Note Purchase Agreement, as amended,
supplemented or otherwise modified from time to time

“Applicable
Percentage” means with respect to any Noteholder in respect of any
indemnity claim under Section 10.3(c) arising out of an action or omission of
the Administrative Agent under this Agreement, the percentage of the total Term
B2 Loan Commitments or Term B2 Loans hereunder represented by the aggregate
amount of such Noteholder’s Term B2 Loan Commitment or Term B2 Loans.

“Applicable
Margin” means (i) 3.00% in the case of Base Rate Loans and (ii) 4.00% in
the case of Eurodollar Loans.

“Approved
Fund” means, with respect to any Noteholder, any fund that invests (in
whole or in part) in commercial loans and is managed, advised or serviced by
such Noteholder or the same investment advisor as such Noteholder or by an
Affiliate of such Noteholder or such investment advisor.

“Assignment
and Acceptance” means an assignment and acceptance entered into by a
Noteholder and an assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent, in
the form of Exhibit I annexed hereto or any other form approved by the
Administrative Agent.

“Base Rate”
when used in reference to any Term B2 Loan or Borrowing, refers to whether such
Term B2 Loan, or the Term B2 Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted Base Rate.

“Basic Documents” means the Loan Documents, the Note Purchase
Documents, the Holding Company Notes Indenture and any related agreement.

 

2

 

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

“Borrower”
means Affinity Group, Inc., a Delaware corporation.

“Borrowing”
means Term B2 Loans of the same Type, made, converted or continued on the same
date and, in the case of Eurodollar Loans, as to which a single Interest Period
is in effect.

“Borrowing
Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.3.

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

“Camping
World” means, collectively, CWI, Inc., a Kentucky corporation and a
Wholly-Owned Subsidiary of the Borrower, and Camping World, Inc, a Kentucky corporation
and a Wholly-Owned Subsidiary of CWI, Inc.

“Capital
Expenditures” means, for any period, (A) the sum for the Credit Parties
(determined on a consolidated basis without duplication in accordance with GAAP
of the aggregate amount of expenditures (including the aggregate amount of
Capital Lease Obligations incurred during such period) made to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) during such period computed in
accordance with GAAP; provided that such term shall not include
any such expenditures in connection with any replacement or repair of Property
affected by a Casualty Event minus (B) any Net Cash Payments from a
Disposition permitted hereunder (other than a Sale-Leaseback Transaction)
reinvested pursuant to Section 2.10(b)(iii) not in excess of the aggregate
amount of Capital Expenditures previously made in respect of assets subject to
such Disposition.  Notwithstanding the
foregoing, the purchase price of any Acquisition shall not be deemed a “Capital
Expenditure” for purposes hereof.

“Capital
Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

“Cash
Equivalents” means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government, (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after such date and having, at
the time of the acquisition thereof, the highest rating obtainable from either
Standard & Poor’s (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”);
(iii) commercial paper maturing no more than one year from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of
deposit or bankers’ acceptances maturing within one year after such date and
issued or accepted by any Noteholder or by any commercial

 

3

 

bank organized under the laws
of the United States of America or any state thereof or the District of
Columbia that (1) is at least “adequately capitalized” (as defined in the
regulations of its primary Federal banking regulator) and (2) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (1) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i)
and (ii) above, (2) has net assets of not less than $500,000,000, and (3) has
the highest rating obtainable from either S&P or Moody’s, or (c) other cash
equivalent investments agreed to from time to time between the Borrower and the
Administrative Agent.

“Cash
Interest Expense” means, for any period, the sum, for the Credit Parties
(determined on a consolidated basis without duplication in accordance with
GAAP) of the following: (a) all interest in respect of Indebtedness actually
paid during such period plus (b) the amount of Restricted Junior
Payments made to the Holding Company pursuant to Section 7.6(a)(i) and
Section 7.6(a)(iii) (excluding the portion of such Restricted Junior Payment in
respect of the Holding Company Notes Refunding on account of principal or
premium) during such period plus (c) the net amounts paid in cash under
Hedging Agreements during such period including, fees, but excluding legal fees
and other similar transaction costs and payments made in cash by reason of the
early termination of Hedging Agreements in effect on the Effective Date plus
(d) all fees, including letter of credit fees and expenses, paid hereunder or
under the Credit Agreement after the Effective Date but excluding all fees,
commissions and expenses (including reimbursement of legal fees and similar
transaction costs) paid on the Effective Date in respect of this Agreement or
the Credit Agreement.  Notwithstanding
anything contained in the foregoing which may be to the contrary, deferred
financing costs or intangible assets which are written off as a consequence of
the repayment and discharge of Indebtedness under the Existing Credit Agreement
shall not be included in Cash Interest Expense.

Notwithstanding the foregoing, if during any period for which Cash
Interest Expense is being determined, any Credit Party shall have consummated any
Acquisition, then, for all purposes of this Agreement with the exception of the
calculation of Excess Cash Flow, any Indebtedness incurred in connection with
such Acquisition shall be deemed to have incurred on a pro-forma basis, as if
such Acquisition had been consummated on the first day of such period and under
the assumption that interest for such period had been equal to the actual
weighted average interest rate in effect for the Revolving Credit Loans and the
Term Loans on the date of such Acquisition.

“Casualty Event” means, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.

“Change in Law” means (a) the adoption of any law, rule or
regulation after Effective Date, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
(whether or not having the force of law) after the Effective Date or (c)
compliance by any Noteholder (or, for purposes of Section 2.14(b), by any
lending office of such Noteholder or by such Noteholder’s holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the Effective Date.

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

“Co-Lead Arrangers” means, collectively, CIBC World Markets
Corp., and Fleet Securities, Inc.

 

4

 

“Collateral” means, collectively, all of the real, personal and
mixed property (including capital stock and other equity interests) in which
Liens are purported to be granted pursuant to the Collateral Documents as
security for all obligations of the Credit Parties hereunder and under the
Credit Agreement.

“Collateral Documents” means the Holding Company Collateral
Documents, the Pledge Agreement, the Security Agreement, the Trademark Security
Agreement, the Mortgages, and all other agreements, instruments or documents
delivered by any Credit Party or Affiliate thereof pursuant to this Agreement,
any of the other Note Purchase Documents, the Credit Agreement or any of the
other Loan Documents in order to grant to the Administrative Agent a Lien on
any real, personal or mixed property of that Credit Party as security for any
of its obligations hereunder and under the Credit Agreement.

“Compliance Certificate” means a certificate signed by a
Financial Officer of the Borrower, in substantially the form of Exhibit G-1
annexed to the Credit Agreement, (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section 7.9
(including a statement of the Consolidated Total Leverage Ratio for purposes of
the definition of Applicable Margin), and, if such certificate is accompanying
the annual financial statements required to be delivered pursuant to
Section 6.1(a), setting forth a reasonably detailed calculation of the
amount of Excess Cash Flow for the Borrower’s most recently completed fiscal
year for the purpose of Section 2.10(b)(iv), and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 4.4 and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate.

“Conforming Leasehold Interest” 
means any Recorded Leasehold Interest as to which the lessor has agreed
in writing for the benefit of the Administrative Agent (which writing has been
delivered to the Administrative Agent), whether under terms of the applicable
lease, under the terms of a Landlord Consent and Estoppel, or otherwise, to the
matters described in the form of Landlord Consent and Estoppel approved by the
Administrative Agent in its reasonable discretion, which interest, if a
subleasehold interest or sub-subleasehold interest, is not subject to any
contrary restrictions contained in a superior lease or sublease.

“Consolidated Fixed Charges Ratio” means, as at any date, the
ratio of (a)
the total of (i) EBITDA for the period of four consecutive fiscal quarters
ending on or most recently ended prior to such date plus (ii) Related
Retail Sale-Leaseback Proceeds but only to the extent that such proceeds are
received by a Credit Party and the Construction Capital Expenditures for the
property which is the subject of the Sale-Leaseback Transaction were made
during such period minus (iii) the aggregate amount of all Non-Financed
Capital Expenditures made during such period plus (iv) any increase in
Deferred Revenues during such period minus (iv) any decrease in Deferred
Revenues during such period, to (b) the sum for the Credit Parties
(determined on a consolidated basis without duplication in accordance with
GAAP) of the following: (i) Cash Interest Expense for such period, plus
(ii) all regularly scheduled payments of principal on any Indebtedness
(including the Term Loans and the principal component of any payments in
respect of Capital Lease Obligations, but excluding any prepayments pursuant to
Section 2.10) for such period plus (iii) the aggregate amount paid, or
required to be paid (without duplication as between fiscal periods), in cash in
respect of income, franchise and other like taxes (excluding real estate taxes)
for such period (to the extent not deducted in determining EBITDA for such

 

5

 

period) plus (iv) Permitted Tax Distributions to the extent paid
in cash during such period plus (v) any payments in respect of deferred
compensation or the Phantom Stock Agreements, in each case, to the extent paid
in cash during such period.

“Consolidated Interest Coverage Ratio” means, as at any date,
the ratio of (a) EBITDA for the period of four consecutive fiscal quarters
ending on or most recently ended prior to such date, to (b) Cash Interest
Expense for such period.

“Consolidated Senior Leverage Ratio” means, as at any date, the
ratio of (a)
Senior Debt minus cash and Cash Equivalents held by the Credit Parties
on such date to the extent to such cash and Cash Equivalents are unrestricted
and available for the payment of the debts of the Credit Parties in an
aggregate amount not in excess of $10,000,000 to (b) EBITDA for the period of
four consecutive fiscal quarters ending on or most recently ended prior to such
date.

“Consolidated Total Leverage Ratio” means, as at any date, the
ratio of (a)
the sum of (i) the Indebtedness of the Credit Parties excluding amounts
described in clauses (d) and (g) of the definition of “Indebtedness”
(determined on a consolidated basis without duplication in accordance with
GAAP), including Subordinated Indebtedness but excluding any amounts held in
escrow with the Administrative Agent or the Paying Agent for the Holding Company
Notes Indenture for the purpose of consummating the Holding Company Notes
Refunding, plus (ii) the Indebtedness of the Holding Company in respect
of the Holding Company Notes or the Holding Company Notes Refinancing
Indebtedness, in each case, on such date minus (iii) cash and Cash
Equivalents held by the Credit Parties on such date to the extent to such cash
and Cash Equivalents are unrestricted and available for the payment of the
debts of the Credit Parties in an aggregate amount not in excess of $10,000,000
to (b)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date.

“Construction Capital Expenditures” means Capital Expenditures
incurred by any Credit Party to acquire property and/or construct improvements
thereon for use as retail outlets or distributions centers excluding the
Capital Expenditures incurred by any Credit Party for leasehold improvements on
any property if the costs for the construction of a structure on such property
(including costs of the common building systems) were not funded with Capital
Expenditures incurred by the Credit Parties.

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

“Credit Agreement” means that certain Amended and Restated
Credit Agreement dated as of the date hereof, among the Borrower, the
Guarantors, the Lenders party thereto, CIBC, as Syndication Agent, Fleet, as
Administrative Agent and General Electric Capital Corporation, as Documentation
Agent, as the same may be amended, supplemented or otherwise modified from time
to time.

“Credit Parties” means the Borrower and its Subsidiaries.

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

“Deferred Revenues” means that portion of subscription and
membership revenues, product and services revenues and publication revenues
carried as a liability by any of the Credit Parties on the balance sheet of
that Person, which will be recognized as revenue on that Person’s statement of
operations in future periods, all as determined in accordance with GAAP.

 

6

 

“Disclosed Matters” means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 4.6.

“Disposition” means any sale, assignment, lease, transfer or
other disposition of any property (whether now owned or hereafter acquired) by
any Credit Party to any other Person excluding (a) the granting of Liens to the
Administrative Agent on behalf of the Noteholders pursuant to the Collateral
Documents, and (b) any sale, assignment, transfer or other disposition of (i)
any property sold or disposed of in the ordinary course of business and on
ordinary business terms, (ii) any property no longer used or useful in the
business of the Credit Parties and (iii) any Collateral under and as defined in
the Collateral Documents pursuant to an exercise of remedies by the
Administrative Agent thereunder.

“Disposition Investment” means, with respect to any Disposition,
any promissory notes or other evidences of indebtedness or Investments received
by any Credit Party in connection with such Disposition.

“Documentation Agent” means General Electric Capital
Corporation, in its capacity as Documentation Agent for the Noteholders
hereunder.

“EBITDA” means, for any period, operating income for the Credit
Parties (determined on a consolidated basis without duplication in accordance
with GAAP) for such period (calculated after deduction for real estate taxes
but before deduction for (a) income, franchise and other like taxes accrued
during such period, interest, depreciation, amortization and other write-offs
of intangible assets such as goodwill and any other non-cash income or charges
accrued for such period (including such charges in respect of Phantom Stock
Accruals) and (except to the extent received or paid in cash by the Credit
Parties) income or loss attributable to equity in Affiliates for such period)
and (b) for the fiscal year ending December 31, 2002 in an aggregate amount not
in excess of $2,300,000, restructuring costs, severance costs and the costs for
the relocation of management, excluding from the calculation of such operating
income any extraordinary and unusual gains or losses during such period and
excluding from the calculation of such operating income the income or loss from
any Casualty Events and Dispositions. 
Notwithstanding the foregoing, any amounts accrued or paid with respect
to any deferred financing costs or tangible assets which are written off as a
result of the repayment and discharge of Indebtedness under the Existing Credit
Agreement shall not be deducted in determining operating income.

Notwithstanding the foregoing, if during any period for which EBITDA is
being determined, any Credit Party shall have consummated any Acquisition and
(if such acquisition is a stock or other equity Acquisition) the company
acquired in such Acquisition becomes a Subsidiary in accordance with the
provisions of Section 6.10(a) then, for all purposes of this Agreement, with
the exception of the calculation of Excess Cash Flow, EBITDA shall be
determined on a pro forma basis as if such Acquisition had been made or
consummated on the first day of such period.

“Effective Date” means the date on which the conditions
specified in Section 5.1 are satisfied (or waived in accordance with the
Intercreditor Agreement).

“Effective Date Mortgage” has the meaning assigned to such term
in Section 5.1(f)(i).

“Effective Date Mortgage Policies” has the meaning assigned to
such term in Section 5.1(f)(vi).

“Effective Date Mortgaged Property” has the meaning assigned to
such term in Section 5.1(f)(i).

“Environmental Laws” means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered

 

7

 

into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
release or threatened release of any Hazardous Material or to health and safety
matters.

“Environmental Liability” means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Credit Party directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Rights” means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders’ or voting trust agreements) for the
issuance or sale of, or securities convertible into, any additional shares of
capital stock of any class, or partnership or other ownership interests of any
type in, such Person.

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

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

“ERISA Event” means (a) any “reportable event”, as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived),
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived, (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan, (d) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan, (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan, (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

“Eurodollar” when used in reference to any Term B2 Loan or
Borrowing, refers to whether such Term B2 Loan, or the Term B2 Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in
Section 8.1.

“Excess Cash Flow” means, for each fiscal year, commencing with
the fiscal year ending December 31, 2003 and for each fiscal year
thereafter, (a) the sum of EBITDA plus Related Retail Sale-Leaseback
Proceeds received in such fiscal year minus (b) the sum of the following
(to the extent not deducted in computing EBITDA) (i) Cash Interest Expense for
such fiscal year

 

8

 

plus (ii) the aggregate amount of all
Non-Financed Capital Expenditures made during such fiscal year, plus
(iii) all regularly scheduled payments, mandatory prepayments and voluntary
prepayments (other than voluntary prepayments in respect of the Revolving
Credit Loans) of principal on any Indebtedness (including the Term Loans and
the principal component of any payments in respect of Capital Lease Obligations
for such fiscal year plus (iv) the aggregate purchase price for
Acquisitions consummated during such fiscal year to the extent paid in cash
during such fiscal year and excluding the amount of such purchase price funded
with purchase money financing other than with the proceeds of the Revolving
Credit Loans or Term Loans plus (v) the aggregate amount paid, or
required to be paid, in cash in respect of income, franchise, and other like
taxes (excluding real estate taxes) for such fiscal year plus (vi) all
Permitted Tax Distributions to the extent paid in cash during such fiscal year plus
(vii) any payments in respect of deferred compensation or the Phantom Stock
Agreements, in each case, to the extent paid in cash during such fiscal year minus
(c) any net increase in Working Capital during such fiscal year plus (d)
any net decrease in Working Capital during such fiscal year.

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

“Excluded Taxes” means, with respect to the Administrative
Agent, any Noteholder, or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income, net worth
or franchise taxes or any like taxes imposed on (or measured by) its net income
or net worth by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Noteholder, in which its applicable lending
office is located or in which it is taxable solely on account of some
connection other than the execution, delivery or performance of this Agreement
or the receipt of income hereunder, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction
in which the Borrower is located and (c) in the case of a Foreign Noteholder
(other than an assignee pursuant to a request by the Borrower under Section
2.18(b)), any withholding tax that is imposed on amounts payable to such
Foreign Noteholder at the time such Foreign Noteholder becomes a party to this
Agreement or is attributable to such Foreign Noteholder’s failure or inability
to comply with Section 2.16(e), except to the extent that such Foreign
Noteholder’s assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.16(a).

“Existing Credit Agreement” has the meaning assigned to such
term in the preamble to this Agreement.

“Facilities” means any and all real property (including, without
limitation all buildings, fixtures or other improvements located thereon) now
or hereafter or heretofore owned, leased, operated or used by any Credit Party
or any of their respective predecessors.

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

“Federal Funds Effective Rate” means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds brokers
of recognized standing selected by the Administrative Agent.

 

9

 

“Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.

“First Priority”  means,
with respect to any Lien purported to be created in any Collateral pursuant to
any Collateral Document, that such Lien is the most senior Lien (other than
Liens permitted pursuant to Section 7.2 to the extent not perfected by filing
of any UCC financing statements) to which such Collateral is subject.

“Fleet” means Fleet National Bank, a national bank.

“Flood Hazard Property” means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.

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

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

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

“Guarantee” means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor’s obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business.  The terms “Guarantee”
and “Guaranteed” used as a verb shall have a correlative meaning.

“Guaranteed Obligations” has the meaning assigned to such term
in Section 3.1.

“Guarantors” means the Subsidiaries of the Borrower.

“Hazardous Materials” means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.

“Hedging Agreement” means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement.

“Holding Company” means Affinity Group Holding, Inc., a Delaware
corporation which holds all the outstanding capital stock of the Borrower.

“Holding Company Collateral Documents” means the Amended and
Restated Nonrecourse Guaranty and Pledge Agreement executed and delivered by
the Holding Company

 

10

 

on the Effective Date substantially in the form of Exhibit A
annexed to the Credit Agreement, as such agreement may be amended, supplemented
or otherwise modified from time to time.

“Holding Company Notes” means the Holding Company’s 11% Senior
Notes due 2007 issued pursuant to the Holding Company Notes Indenture.

“Holding Company Notes Indenture” means the Indenture dated as
of April 2, 1997 between the Holding Company and United States Trust Company of
New York, as Trustee, as supplemented or amended from time to time but
excluding any supplement or amendment which increases the interest rate or any
premium applicable to the Holding Company Notes, increases the principal amount
outstanding of the Holding Company Notes or creates sinking fund or other
principal payment or offer to purchase requirements.

“Holding Company Notes Borrower Refinancing Indebtedness” means
any Indebtedness (other than a Refunding Borrowing) incurred by any Credit
Party (a) to refinance, refund, repurchase, fund a tender offer for, or redeem,
all or any portion of the then-outstanding Holding Company Notes, including the
principal of such Holding Company Notes and any amounts payable with respect
thereto for reasonable fees, expenses and premium and the amount of any accrued
interest thereon, or (b) for any other purpose, as long as such Indebtedness
(i) is unsecured Subordinated Indebtedness, (ii) such Indebtedness has a final
maturity date not earlier than six months after the Term B2 Loan Maturity Date,
(iii) the terms of such Indebtedness do not provide for scheduled principal
payments thereon prior to the maturity date thereof, (iv) after the incurrence
thereof and after taking effect of any prepayments required to be made from the
proceeds thereof under this Agreement and under the Credit Agreement, the
Credit Parties will be in compliance, on a pro forma basis, with the provisions
of Sections 7.9 (b) and (c), and (v) has terms reasonably satisfactory to the
Administrative Agent and the Syndication Agent.

“Holding Company Notes Borrower Refinancing Payment” means the
portion of the Net Cash Payments of any Holding Company Notes Borrower
Refinancing Indebtedness in excess of the amount applied to refinance, refund,
repurchase, fund a tender offer for, or redeem, all or any portion of the
then-outstanding Holding Company Notes, including the outstanding principal
amount of such Holding Company Notes, the amount of any accrued interest
thereon and premium, if any.

“Holding Company Notes Refinancing Indebtedness” means any
Indebtedness incurred by the Holding Company (a) to refinance, refund,
repurchase, fund a tender offer for, or redeem, all or any portion of the
then-outstanding Holding Company Notes, including the principal of such Holding
Company Notes and any amounts payable with respect thereto for reasonable fees,
expenses and premium and the amount of any accrued interest thereon, or (b) for
any other purpose, as long as (i) such Indebtedness is unsecured and not
guaranteed by the Credit Parties, (ii) such Indebtedness has a final maturity
date not earlier than six months after the Term B2 Loan Maturity Date, (iii)
the terms of such Indebtedness do not provide for scheduled principal payments
thereon prior to the maturity date thereof, (iv) after the incurrence of such
Indebtedness and after giving effect to any prepayments required to be made
from the proceeds thereof under this Agreement and under the Credit Agreement,
the Credit Parties will be in compliance, on a pro forma basis, with the
provisions of Sections 7.9 (b) and (c), (v) the per annum rate of interest, or
imputed or accreted interest, with respect to such Indebtedness does not exceed
thirteen percent and (vi) the covenants, events of default and mandatory
prepayment requirements (whether by sinking fund payments, mandatory
redemptions or repurchases or otherwise), of such Indebtedness are not more
restrictive on the Credit Parties than the covenants, events of default and
mandatory prepayment requirements customarily found in notes

 

11

 

of similar issuers issued under Rule 144A, or in a public offering and
not more restrictive on the Credit Parties than the covenants, events of
default and mandatory prepayment requirements set forth in the Holding Company
Notes Indenture, and do not, in any event, impose restrictions such as the
imposition of any financial performance maintenance covenants (such as leverage
or coverage ratios), and to the extent of any debt incurrence test such debt
incurrence test expressly permits the incurrence and refinancing of the
Indebtedness under this Agreement and the Credit Agreement up to an amount
equal to the then current aggregate amount of the loan commitments and
Indebtedness hereunder and thereunder.

“Holding Company Notes Refinancing Payment” means, with respect
to any Holding Company Notes Refinancing Indebtedness, the sum of (a) with
respect to any portion of the Excess Refinancing Amount (as defined below) up
to $50,000,000, 50% of such portion plus (b) with respect to any portion
of the Excess Refinancing Amount in excess of $50,000,000, 100% of such
portion.  For purposes of this
definition “Excess Refinancing Amount” means the difference of (i) the
Net Cash Payments actually received by the Holding Company with respect to any
Holding Company Notes Refinancing Indebtedness minus (ii) the amount
applied to refinance, refund, repurchase, fund a tender offer for, or redeem,
all or any portion of the then-outstanding Holding Company Notes, including the
outstanding principal amount of such Holding Company Notes, the amount of any
accrued interest, and premium, if any.

“Holding Company Notes Refunding” means the repurchase on the
open market, tender offer for, or the redemption pursuant to Article III of the
Holding Company Notes Indenture, by the Holding Company of up to $30,000,000 in
aggregate principal amount of Holding Company Notes currently outstanding and
any amounts payable with respect thereto for reasonable fees, expenses and
premium and the amount of any accrued interest thereon.

“Indebtedness” means, for any Person: without duplication (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, advance, the issuance and sale of debt securities or the sale
of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or acquisition price of
Property or services (other than Phantom Stock Accruals), other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts are
payable within 120 days of the date the respective goods are delivered or the
respective services are rendered; (c) Capital Lease Obligations of such Person;
(d) obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
the account of such Person; (e) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (f) Indebtedness of others Guaranteed by such
Person; and (g) obligations under Hedging Agreements (and for purposes hereof,
the amount of Indebtedness under a Hedging Agreement shall be deemed to be
equal to the aggregate maximum contingent amount or potential liability under
such Hedging Agreement).  The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

 

12

 

“Indemnified Taxes” means all Taxes other than (a) Excluded
Taxes and Other Taxes and (b) amounts constituting penalties or interest
imposed with respect to Excluded Taxes or Other Taxes.

“Intercreditor Agreement” means the Senior Intercreditor and
Agency Agreement dated as of the date hereof among the Administrative Agent,
the Lenders (as defined in the Credit Agreement), the Noteholders and the
Credit Parties.

“Interest Election Request” means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.6.

“Interest Payment Date” means (a) with respect to any Base Rate
Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan, the last
Business Day of the Interest Period applicable to the Borrowing of which such
Term B2 Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months’ duration, each Business Day prior to
the last day of such Interest Period that would have been the last day of the
Interest Period for such Eurodollar Loan had successive three month Interest
Periods been applicable to such Eurodollar Loan.

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

(x)
[Reserved],

(y)
no Interest Period for any Term Loan may commence before and end after any
Quarterly Date unless, after giving effect thereto, the aggregate principal
amount of the Term B2 Loans having Interest Periods that end after such
Quarterly Date shall be equal to or less than the aggregate principal amount of
the Term B2 Loans scheduled to be outstanding after giving effect to the
payments of principal required to be made on such Quarterly Date, and

(z)
notwithstanding the foregoing clauses (x) and (y), no Interest Period shall
have a duration of less than one month and, if the Interest Period for any
Eurodollar Loan would otherwise be a shorter period, such Term B2 Loan shall not
be available hereunder as a Eurodollar Loan for such period.

“Investment” means, for any Person: (a) the acquisition (whether
for cash, Property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including, without limitation, any “short sale” or any sale of any securities
at a time when such securities are not owned by the Person entering into such
short sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, or for the benefit of, any other Person (including the
purchase of Property from another Person subject to an

 

13

 

understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension of
credit having a term not exceeding 180 days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
or (c) the entering into of any Guarantee of, or other contingent obligation
with respect to, Indebtedness or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or extended to
such Person.  Notwithstanding the
foregoing, Capital Expenditures and Acquisitions shall not be deemed “Investments”
for purposes hereof.

“IP Collateral”  means,
collectively, the Collateral under the Trademark Security Agreement.

 “KEYSOP Plan” means the
AGI Holding Corp. Key Employee Security Plan for the benefit of key employees
of the Credit Parties.

“Landlord Consent and Estoppel” means, with respect to any
Leasehold Property, a letter, certificate or other instrument in writing from
the lessor under the related lease, in such form as may be approved by the
Administrative Agent in its sole discretion.

“Leasehold Property” means any leasehold interest of any Credit
Party as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Dow Jones Markets Page 3750 (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, as the rate for U.S. dollar deposits
with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any
reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing
for such Interest Period shall be the rate at which U.S. dollar deposits of
$5,000,000, and for a maturity comparable to such Interest Period, are offered
by the principal London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.

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

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

“Material Adverse Effect” means a material adverse effect on (a)
the business, assets (including intangible assets), operations or condition
(financial or otherwise), of the Credit Parties taken as a whole, (b) the
ability of any Credit Party to perform any of its obligations under this
Agreement, the Credit Agreement or the other Facility Documents or (c) the
rights of or benefits available to the Administrative Agent and the Noteholders
under this Agreement and the other Facility Documents.

 

14

 

“Material Indebtedness” means Indebtedness (other than the
Revolving Credit Loans, Term Loans, and the letters of credit issued in
accordance with the Credit Agreement), or obligations in respect of one or more
Hedging Agreements, of any one or more of the Credit Parties in an aggregate
principal amount exceeding $1,000,000. 
For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of any Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.

“Material Leasehold Property” means a Leasehold Property which
(a) is a retail or super store or distribution center or (b) has been
reasonably determined by the Administrative Agent to be of material value as
Collateral or of material importance to the operations of the Credit Parties
after weighing the value of such property as additional Collateral against the
costs and expenses associated with satisfying the requirements of Section 6.13.

“Mortgage” means (i) a security instrument (whether designated
as a deed of trust or a mortgage, leasehold mortgage, collateral assignment of
leases and rents or by any similar title) executed and delivered by any Credit
Party in such form as may be approved by the Administrative Agent in its sole
discretion, in each case with such changes thereto as may be recommended by
Administrative Agent’s local counsel based on local laws or customary local
practices, (ii) or at Administrative Agent’s option, in the case of an
Additional Mortgaged Property, an amendment to an existing Mortgage, in form
satisfactory to Administrative Agent, adding such Additional Mortgaged Property
to the Real Property Assets encumbered by such existing Mortgage, in either
case as such security instrument or amendment may be amended, supplemented or
otherwise modified from time to time.  “Mortgages”
means all such instruments, including Effective Date Mortgages and any
Additional Mortgages, collectively.

“Mortgaged Property” means an Effective Date Mortgaged Property
or an Additional Mortgaged Property.

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

“Net Cash Payments” means,

(i)            with respect to any Casualty Event,
the aggregate amount of proceeds of insurance, condemnation awards and other
compensation received by any Credit Party in respect of such Casualty Event net
of (A) reasonable expenses incurred by any Credit Party in connection therewith
and (B) contractually required repayments of Indebtedness to the extent secured
by a Lien on such property and any income and transfer taxes payable by any
Credit Party in respect of such Casualty Event;

(ii)           with respect to any Disposition, the
aggregate amount of all cash payments received by any Credit Party directly or
indirectly in connection with such Disposition, whether at the time of such
Disposition or after such Disposition under deferred payment arrangements or
Investments entered into or received in connection with such Disposition
(including, without limitation, Disposition Investments); provided that

(A)          Net Cash Payments shall be net of (I)
the amount of any legal, title, transfer and recording tax expenses,
commissions and other fees and expenses payable by any Credit Party in
connection with such Disposition and (II) any Federal, state and local income
or other taxes estimated to be payable by any Credit Party as a result of such
Disposition, but only to the extent that such

 

15

 

estimated taxes are in fact paid to the relevant Federal, state or
local governmental authority within twelve months of the date of such Disposition;
and

(B)           Net Cash Payments shall be net of any
repayments by any Credit Party of Indebtedness to the extent that (I) such
Indebtedness is secured by a Lien on the property that is the subject of such
Disposition and (II) the transferee of (or holder of a Lien on) such property
requires that such Indebtedness be repaid as a condition to the purchase of
such property; and

(iii)          with respect to any offering of debt
or equity securities, the aggregate amount of all cash proceeds received by any
Credit Party (or the Holding Company with respect to any Holding Company Notes
Refinancing Indebtedness) therefrom less all legal, underwriting and similar
fees and expenses incurred in connection therewith.

“Non-Financed Capital Expenditures” means, for any period, all
Capital Expenditures made during such period that have not been funded with the
proceeds of purchase money financing (including, without limitations, capital
leases) other than the proceeds of Revolving Credit Loans or Term Loans.

“Noteholder” means, (a) initially, a Noteholder that has
purchased a Term B2 Note on the Effective Date, and (b) thereafter, the
Noteholders from time to time holding Term B2 Notes after giving effect to any
assignments thereof permitted by Section 10.4, other than any such Person that
ceases to be a party hereto pursuant to any such assignment.

“Note Purchase Documents” means this Agreement, the Term B2
Notes, the Collateral Documents, the Affiliate Subordination Agreement, the
Intercreditor Agreement, and any other instruments or documents delivered or to
be delivered by any Credit Party or Affiliate thereof from time to time
pursuant to this Agreement.

“Other Taxes” means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement and the other
Note Purchase Documents, provided that there shall be excluded from
“Other Taxes” all Excluded Taxes.

“Parent” means AGI Holding Corp., a Delaware corporation which
holds all the outstanding capital stock of the Holding Company.

“Paying Agent” shall have the meaning set forth in the Holding
Company Notes Indenture.

“Permitted Cash Flow Distribution” means that portion of Excess
Cash Flow in any fiscal year permitted to be distributed to the Holding Company
pursuant to Section 7.6(b).

“Permitted Investments” means:

(a)           direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition
thereof;

(b)           investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from Standard
and Poor’s Ratings Service or from Moody’s Investors Service, Inc.;

(c)           investments in certificates of
deposit, banker’s acceptances and time deposits maturing within 180 days from
the date of acquisition thereof issued or

 

16

 

guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000; and

(d)           fully collateralized repurchase
agreements with a term of not more than 30 days for securities described in
clause (a) above and entered into with a financial institution satisfying the
criteria described in clause (c) above.

“Permitted Tax Distributions” means, for so long as the Borrower
is an “S corporation” or a substantially similar pass-through entity for
federal income tax purposes, distributions to the Holding Company (or any
successor entity or other entity that owns, directly or indirectly, all of the
outstanding common stock of the Borrower) in respect of any fiscal year equal
to the amount based on reasonable estimates, of federal, state and local income
taxes that the Borrower would be required to pay with respect to such fiscal
year calculated as if, for such fiscal year, the Borrower were treated as a “C
corporation” domiciled in the State of California rather than as an “S
corporation”, and assuming further, solely for the purpose of the tax
calculation herein, that any and all amounts paid or payable as interest on the
Holding Company Notes are paid or payable by the Borrower.

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

“Phantom Stock Accruals” means the amounts shown as liabilities
in the Borrower’s general ledger account captions “Deferred Phantom
Compensation” to the extent (i) such general ledger account is kept and
adjusted in the ordinary course of business and in accordance with GAAP and the
Borrower’s past practices, and (ii) such deferred compensation is payable under
“phantom stock agreements” between a Credit Party and key employees of such
Credit Party entered into in the ordinary course of business and in accordance
with the Borrower’s practices prior to the effective date thereof, in
substantially the form of the phantom stock agreements in existence on the
Effective Date, or in such other form as shall be approved by the Administrative
Agent.

“Phantom Stock Agreements” means the phantom stock agreements
referred to in the definition of Phantom Stock Accruals and described in Schedule 4.14
annexed to the Credit Agreement.

“Plan” means any employee benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pledge Agreement” means the Amended and Restated Pledge
Agreement executed and delivered by all of the Credit Parties on the Effective
Date and thereafter in accordance with Section 6.10, substantially in the form
of Exhibit B annexed to the Credit Agreement, as such agreement may be
amended, supplemented or otherwise modified from time to time.

“Post-Default Rate” means, for Base Rate Loans, a rate per annum
equal to the Adjusted Base Rate plus the Applicable Margin plus
2%, and, for Eurodollar Loans, a rate per annum equal to the Adjusted LIBO Rate
plus the Applicable Margin plus 2%.

“Prime Rate” means the rate of interest per annum publicly
announced from time to time by Fleet National Bank, as its prime rate in effect
at its principal office in Boston, Massachusetts;

 

17

 

each change in the Prime Rate shall be effective from and including the
date such change is publicly announced as being effective.

“Property” means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.

“PTO” means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the
opinion of the Administrative Agent, desirable in order to create or perfect
Liens on any IP Collateral.

“Quarterly Dates” means the last Business Day of each fiscal
quarter of the Credit Parties, the first of which shall be the first such day
after the Effective Date of this Agreement.

“Real Estate Holdings” has the meaning assigned to such term in
Section 5.1(o).

“Real Property Asset” means, at any time of determination, any
fee ownership or leasehold interest then owned by any Credit Party in any real
property.

“Recorded Leasehold Interest” means a Leasehold Property with
respect to which a Recorded Document (as hereinafter defined) has been recorded
in all places necessary or desirable, in the Administrative Agent’s reasonable
judgment, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property.  For purposes of this definition, the term “Recorded
Document” means, with respect to any Leasehold Property, (a) the lease evidencing
such Leasehold Property or a memorandum thereof, executed and acknowledged by
the owner of the affected real property, as lessor, or (b) if such Leasehold
Property was acquired or subleased from the holder of a Recorded Leasehold
Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to the Administrative Agent.

“Register” has the meaning assigned to such term in Section
10.4(d).

“Reimbursement Obligation” has the meaning assigned to such term
in Section 2.4(e).

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

“Related Retail Sale-Leaseback Proceeds” means the proceeds
received after the Effective Date by the Credit Parties (net of all
transactional and related expenses) in any Sale-Leaseback Transaction involving
a Camping World retail outlet or distribution center (excluding any retail
outlet or distribution center if the costs for the construction of a structure
on such property (including costs of the common building systems) were not
funded with Capital Expenditures incurred by the Credit Parties) acquired or
constructed by any such party after the Effective Date by the Credit Parties,
but only to the extent proceeds do not exceed the aggregate amount of Capital
Expenditures incurred for the purpose of building out such store.

“Rental Obligations” 
means the maximum fixed rentals paid or payable by a lessee under any
Operating Lease during a specified period, excluding amounts paid or payable on
account of maintenance, utilities, ordinary repairs, insurance, taxes,
assessments and other similar charges, whether or not designated as rental or
additional rental.

“Required Senior Lenders” has the meaning ascribed thereto in
the Intercreditor Agreement.

“Required Term Loan Lenders” has the meaning ascribed thereto in
the Intercreditor Agreement.

“Restricted Junior Payment” means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of any Credit Party now or hereafter

 

18

 

outstanding, except a dividend payable solely in shares of that class
of stock to the holders of that class, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock of any Credit Party now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of any Credit Party now or hereafter outstanding,
and (iv) any payment or prepayment of principal of, premium, if any, or
interest on, or redemption purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Subordinated Indebtedness.

“Revolving Credit Loans” has the meaning assigned to such term
in the Credit Agreement.

“Sale-Leaseback Transactions” means any sales or transfers of
any real or tangible personal property owned by any Person in order to lease
such property for substantially the same purpose as the property being sold or
transferred; provided that such sale or transfer is at fair market value
and such lease is at fair rental value.

“Sarbanes-Oxley Act” has the meaning assigned to such term in
Section 6.1(a).

“Security Agreement” means the Amended and Restated Security
Agreement executed and delivered by all of the Credit Parties on the Effective
Date and thereafter in accordance with Section 6.10, substantially in the form
of Exhibit C annexed to the Credit Agreement, as such agreement may be
amended, supplemented or otherwise modified from time to time.

“Senior Debt” means the Indebtedness of the Credit Parties as
described in clauses (a), (b), and (c) of the definition of “Indebtedness”
(determined on a consolidated basis without duplication in accordance with
GAAP), excluding any Subordinated Indebtedness.

“Senior Loans” has the meaning assigned to such term in the
Intercreditor Agreement.

“Special Counsel” means Palmer & Dodge LLP, in its capacity
as special counsel to Fleet, as Administrative Agent and CIBC as Syndication
Agent.

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

“Subordinated Indebtedness” means any Indebtedness of any Credit
Party which matures in its entirety later than the Senior Loans and by its
terms (or by the terms of the instrument under which it is outstanding and to
which appropriate reference is made in the instrument evidencing such
Subordinated Indebtedness) is made subordinate and junior in right of payment
to the Senior Loans and to such Credit Party’s other obligations to the
Noteholders hereunder by provisions reasonably satisfactory in form and
substance to the Administrative Agent, the Syndication Agent and Special
Counsel.

“Subsidiary” means, with respect to any Person (the “parent”)
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of

 

19

 

which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.  References herein to “Subsidiaries”
shall, unless the context requires otherwise, be deemed to be references to
Subsidiaries of the Borrower.

“Swing Loans” has the meaning assigned to such term in the
Credit Agreement.

“Syndication Agent” means Canadian Imperial Bank of Commerce, in
its capacity as Syndication Agent for the Noteholders hereunder.

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

“Term B1 Loan” has the meaning assigned to such term in the
Credit Agreement.

“Term B2 Loan” has the meaning assigned to such term in Section
2.1(b).

“Term B2 Loan Commitment” means, with respect to each
Noteholder, the agreement of such Noteholder to purchase a Term B2 Note from
the Borrower on the Effective Date.  The
amount of each Noteholder’s Term B2 Loan Commitment is set forth on Schedule
2.1.  The aggregate original amount
of the Term B2 Loan Commitments is $100,000,000.

“Term B2 Loan Maturity Date” means June 24, 2009.

“Term B2 Notes” has the meaning assigned to such term in Section
2.1(b).

“Term Loans” means, collectively, the Term B1 Loans and the Term
B2 Loans.  The aggregate original amount
of the Term Loans, assuming the Holding Company Notes Refunding has been
consummated, is $140,000,000.

“Test Date” has the meaning assigned to such term in Section 2.
7(a).

“Title Company” means, collectively, Lawyer’s Title Insurance
Corporation, and one or more other title insurance companies reasonably
satisfactory to the Administrative Agent.

“Trademark Security Agreement” means the Amended and Restated
Trademark Security Agreement executed and delivered by all of Credit Parties on
the Effective Date and thereafter in accordance with Section 6.10,
substantially in the form of Exhibit D annexed to the Credit Agreement,
as such agreement may be amended, supplemented or otherwise modified from time
to time.

“Transactions” means (a) with respect to the Borrower, the
execution, delivery and performance by the Borrower of the Facility Documents
to which it is a party, the borrowing of Revolving Credit Loans. Term B1 Loans
and the Term B2 Loans and the use of the proceeds thereof, and the issuance of
letters of credit under the Credit Agreement and (b) with respect to any Credit
Party (other than the Borrower), the execution, delivery and performance by
such Credit Party of the Facility Documents to which it is a party.

“Type” when used in reference to any Term B2 Loan or Borrowing,
refers to whether the rate of interest on such Term B2 Loan, or on the Term B2
Loans comprising such Borrowing, is determined by reference to the Adjusted
LIBO Rate or the Adjusted Base Rate.

“UCC” means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.

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

 

20

 

“Wholly Owned Subsidiary” means, with respect to any Person at
any date, any corporation, limited liability company, partnership, association
or other entity of which securities or other ownership interests representing
100% of the equity or ordinary voting power (other than directors’ qualifying
shares) or, in the case of a partnership, 100% of the general partnership
interests are, as of such date, directly or indirectly owned, controlled or
held by such Person or one or more Wholly Owned Subsidiaries of such Person or
by such Person and one or more Wholly Owned Subsidiaries of such Person.

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

“Working Capital” means, at any date, the difference between the
aggregate current assets and the aggregate current liabilities (excluding
current maturities of long term Indebtedness and the current portion of
Deferred Revenues) of the Credit Parties at such date (determined on a
consolidated basis without duplication in accordance with GAAP.)

 

1.2 Classification of Loans and Borrowings. 
For purposes of this Agreement, Term B2 Loans may be classified and
referred to by Type (e.g., a “Base Rate Loan” or a “Eurodollar
Loan”).  In similar fashion, Borrowings
may be classified and referred to by Type.

 

1.3
Terms Generally. 
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. 
Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed
to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and
effect as the word “shall”.  Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement (except that
references to Exhibits and Schedules shall be, where appropriate, references to
Exhibits and Schedules to the Credit Agreement) and (e) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. 
References in Articles VI and VII in respect of the affirmative and
negative covenants to be performed by the Credit Parties shall be interpreted
to mean, with respect to Article VI, that the Borrower will, and will cause
each of its Subsidiaries to comply with such covenant, and, with respect to
Article VII, that the Borrower will not, and will not permit any of its
Subsidiaries to, violate such covenant.

 

1.4 Accounting Terms; GAAP.  Except as
otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change 

 

21

 

occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Senior Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.

 

ARTICLE
II

The Credits

 

2.1           Commitments.

 

(a)           [Reserved].

 

(b)           Term B2 Notes.  The Borrower will authorize the issue of its
senior secured floating rate term notes in an aggregate principal amount equal
to the Term B2 Loan Commitments (all such notes, whether initially issued or
issued in exchange or substitution for, any such note, in each case in accordance
with this Agreement, collectively, the “Term B2 Notes”).  Subject to the terms and conditions set
forth herein, on the Effective Date, the Borrower agrees to issue to each
Noteholder and in consideration for such issuance, each Noteholder agrees to
advance to the Borrower an amount equal to such Noteholder’s Term B2 Loan
Commitment (such advance shall be deemed to be a Borrowing hereunder and shall
be referred to herein as a “Term B2 Loan”); provided that the Term B2
Loans made on the Effective Date shall not exceed an aggregate amount equal to
the total amount of the Term B2 Loan Commitments.  The principal amounts of Term B2 Loans which have been repaid or
prepaid may not be reborrowed.

 

2.2           Loans and Borrowings.

 

(a)           Each Term B2 Loan shall be made as part
of a Borrowing made by the Noteholders ratably in accordance with their
respective Term B2 Loan Commitments. 
The failure of any Noteholder to make any Term B2 Loan required to be
made by it shall not relieve any other Noteholder of its obligations hereunder;
provided
that the Term B2 Loan Commitments of the Noteholders are several and no
Noteholder shall be responsible for any other Noteholder’s failure to make Term
B2 Loans as required.

 

(b)           Subject to Section 2.13, each
Borrowing shall be comprised entirely of Base Rate Loans or Eurodollar Loans as
the Borrower may request in accordance herewith.  Each Noteholder at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Noteholder to make
such Term B2 Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Term B2 Loan in
accordance with the terms of this Agreement.

 

(c)           At the commencement of each Interest
Period for a Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount at least equal to $500,000 or any greater multiple of $100,000.  At the time that each Base Rate
Borrowing  is made, such Borrowing shall

 

22

 

be in an aggregate amount that is at least equal to
$100,000 or any greater multiple of $100,000. 
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of [ten] Eurodollar
Borrowings outstanding.

 

2.3           Requests for Borrowings.

 

(a)           To request the only Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (i)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Boston,
Massachusetts time, three Business Days before the date of the proposed
Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower.

 

(b)           Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.2:

 

(i)            the
aggregate amount of such Borrowing;

 

(ii)           the
date of such Borrowing, which shall be a Business Day;

 

(iii)          whether
such Borrowing is to be a Base Rate Borrowing or a Eurodollar Borrowing;

 

(iv)          in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

 

(v)           the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.5.

 

If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be a Base Rate Borrowing.  If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. 
Promptly following receipt of a Borrowing Request in accordance with
this Section 2.3, the Administrative Agent shall advise each Noteholder of the
details thereof and of the amount of such Noteholder’s Term B2 Loan to be made
as part of the requested Borrowing.

(c)           Unless otherwise consented to by the
Administrative Agent in its sole discretion, prior to ten Business Days after
the Effective Date, no Interest Period of more than one month may be elected.

 

2.4           [Reserved].

 

2.5           Funding of Borrowings.

 

(a)           Each Noteholder shall make each Term
B2 Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, Boston, Massachusetts
time, to the account of the Administrative Agent most recently designated by it
for such purpose by notice to the Noteholders. 
The Administrative Agent will

 

23

 

make such Term B2 Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in Boston, Massachusetts and
designated by the Borrower in the applicable Borrowing Request.

 

(b)           Unless the Administrative Agent shall
have received notice from a Noteholder prior to the proposed date of any
Borrowing  that such Noteholder will not
make available to the Administrative Agent such Noteholder’s share of such
Borrowing, the Administrative Agent may assume that such Noteholder has made
such share available on such date in accordance with paragraph (a) of this
Section 2.5 and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount.  In
such event, if a Noteholder has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Noteholder
and the Borrower severally agree to pay to the Administrative Agent forthwith
on demand such corresponding amount with interest thereon, for each day from
and including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.  If such Noteholder pays
such amount to the Administrative Agent, then such amount shall constitute such
Noteholder’s Term B2 Loan included in such Borrowing.

 

2.6           Interest Elections.

 

(a)           Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request.  Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section 2.6.  The Borrower may elect different options for
continuations and conversions with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Noteholders holding the Term B2 Loans comprising such Borrowing, and
the Term B2 Loans comprising each such portion shall be considered a separate
Borrowing.

 

(b)           To make an election pursuant to this
Section 2.6, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.3 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such
election.  Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.

 

(c)           Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.2:

 

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

 

24

 

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

 

(iii)          whether
the resulting Borrowing is to be a Base Rate Borrowing or a Eurodollar
Borrowing; and

 

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

 

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

 

(d)           Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each
Noteholder of the details thereof and of such Noteholder’s portion of each
resulting Borrowing.

 

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

 

2.7           Termination of Commitments.  Unless previously terminated, the Term B2
Loan Commitments shall terminate if and to the extent that the Term B2 Loans
have not been made on or prior to the Effective Date.

 

2.8           [Reserved].

 

2.9           Repayment of Term B2 Loans.

 

(a)           [Reserved].

 

(b)           The Borrower hereby unconditionally
promises to pay on each Quarterly Date, commencing with the first such date
occurring after the Effective Date, to the Administrative Agent for the account
of the Noteholders quarterly principal payments in an aggregate amount equal to
$250,000.  To the extent not previously
paid, all Term B2 Loans shall be due and payable on the Term B2 Loan Maturity
Date.

 

Notwithstanding the
foregoing, if on any Test Date, the maturity date for any then-outstanding
Holding Company Notes is scheduled to occur within six months after the Test
Date then the Term B2 Loans shall be paid in full on the Test Date.

 

25

 

(c)           Each Noteholder shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Noteholder resulting from each Term B2
Loan made by such Noteholder, including the amounts of principal and interest
payable and paid to such Noteholder from time to time hereunder.

 

(d)           The Administrative Agent shall
maintain accounts in which it shall record (i) the amount of each Term B2 Loan
made hereunder and the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Noteholder hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Noteholders and
each Noteholder’s share thereof.

 

(e)           The entries made in the accounts
maintained pursuant to paragraph (c) or (d) of this Section 2.9 shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein; provided
that the failure of any Noteholder or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Term B2 Loans in accordance with the terms of this
Agreement.

 

(f)            [Reserved].

 

2.10         Prepayment of Term B2 Loans.

 

(a)           Optional Prepayments.  The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, without
premium or penalty (other than Eurodollar Loan breakage costs as provided in
Section 2.15), subject to prior notice in accordance with paragraph (d) of this
Section 2.10; provided that each prepayment in respect
of the Term Loans shall be in an amount that is at least equal to $1,000,000 or
any greater multiple of $500,000.  Each
optional prepayment of Term B2 Loans shall be applied to reduce all remaining
unpaid installments thereof in inverse order of maturity.

 

(b)           Mandatory Prepayments.  Subject to the provisions of subsection (c)
below, the Borrower shall make prepayments of the Term B2 Loans hereunder as
follows:

 

(i)            Casualty
Events.  Upon the date 90 days
following the receipt by any Credit Party of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any property of any Credit Party (or upon such earlier date as such
Credit Party, as the case may be, shall have determined not to repair or
replace the property affected by such Casualty Event), the Borrower shall
prepay the Term B2 Loans, in an aggregate amount equal to 100% of the Net Cash
Payments from such Casualty Event not theretofore applied or committed to be
applied to the repair or replacement of such property (it being understood that
if Net Cash Payments committed to be applied are not in fact applied within
twelve months of the respective Casualty Event, then such proceeds shall be
applied to the prepayment of Term B2 Loans as provided in this clause (i) at
the expiration of such twelve-month period), such prepayment and
reduction to be effected in each case in the manner and to the extent specified
in Section 2.10(c).

 

26

 

(ii)           Offering
of Debt or Equity.  Without limiting
the obligation of the Borrower to obtain the consent of the Required Senior
Lenders to any incurrence of Indebtedness or sale of securities not otherwise
permitted hereunder, the Borrower agrees, on or prior to the closing of any
sale of debt or equity securities (other than debt incurred pursuant to the
Credit Agreement) by any Credit Party after the Effective Date, to deliver to
the Administrative Agent a statement certified by a Financial Officer of the
Borrower, in form and detail reasonably satisfactory to the Administrative
Agent, of the estimated amount of the Net Cash Payments of such sale of
securities that will (on the date of such sale of securities) be received by
any Credit Party (or in the case of Holding Company Notes Refinancing
Indebtedness, by the Holding Company) in cash and the Borrower will prepay the
Term B2 Loans hereunder, upon the date of such sale of securities, in an
aggregate amount equal to (x) in the case of a sale of equity securities, 50%
of the actual amount of the Net Cash Payments of such sale of equity securities
received by any Credit Party in an aggregate amount in excess of $10,000,000 in
any fiscal year, and (y) in the case of the incurrence of Indebtedness (other
than Indebtedness incurred under Section 7.1(e)), 100% of the actual amount of
the Net Cash Payments of such incurrence of Indebtedness received by any Credit
Party (or in the case of Holding Company Notes Refinancing Indebtedness, by the
Holding Company), in each case, such prepayment to be effected in each case in
the manner and to the extent specified in Section 2.10(c); provided
that, notwithstanding the foregoing, (q) in the event any Credit Party receives
Net Cash Payments from the incurrence of Holding Company Notes Borrower
Refinancing Indebtedness, the amount of the Term B2 Loans required to be prepaid
pursuant to this Section 2.10(b)(ii) shall be equal to the Holding Company
Notes Borrower Refinancing Payment and (r) in the event the Holding Company
receives Net Cash Payments from the incurrence of Holding Company Notes
Refinancing Indebtedness, the amount of the Term B2 Loans required to be
prepaid pursuant to this Section 2.10(b)(ii) shall be equal to the Holding
Company Notes Refinancing Payment.

 

(iii)          Sale
of Assets.  Without limiting the
obligation of the Borrower to obtain the consent of the Required Senior Lenders
to any Disposition not otherwise permitted hereunder, the Borrower agrees, on
or prior to the occurrence of any Disposition (other than a Sale-Leaseback
Transaction) by any Credit Party, to deliver to the Administrative Agent a
statement certified by a Financial Officer of the Borrower, in form and detail
reasonably satisfactory to the Administrative Agent, of the estimated amount of
the Net Cash Payments of such Disposition that will (on the date of such
Disposition) be received by any Credit Party in cash, indicating on such
certificate, whether the Borrower intends to reinvest such Net Cash Payments or
will be prepaying the Term B2 Loans, as hereinafter provided, and the Borrower
will be obligated to either (A) reinvest such Net Cash Payments within 180 days
after receipt (or, if within such 180 day period the Borrower or any Credit
Party enters into contracts related to the reinvestment of such Net Cash
Payments, such longer period not to exceed 365 days after the original date of
receipt of such Net Cash Payments as is contemplated by such contracts) into
assets used in a line of business permitted hereunder or (B) prepay the Term B2
Loans hereunder as follows:

 

(x)            upon the date of such Disposition,
or on the date (the “Reinvestment Date”) which is 180 days after such
date (or such longer

 

27

 

period not to exceed 365 days as contemplated by contracts related to
the reinvestment of such Net Cash Payments) if the Borrower had indicated on
the certificate delivered as hereinabove required that it intended to reinvest
the Net Cash Payments of such Disposition, in an aggregate amount equal to 100%
of the amount of such Net Cash Payments, to the extent received by any Credit
Party in cash on the date of such Disposition or, if applicable, the
Reinvestment Date to the extent of any Net Cash Payments not so reinvested; and

(y)           thereafter, quarterly, on the date of
the delivery by the Borrower to the Administrative Agent pursuant to
Section 6.1 of the financial statements for any quarterly fiscal period or
fiscal year, to the extent any Credit Party shall receive Net Cash Payments
during the quarterly fiscal period ending on the date of such financial
statements in cash under deferred payment arrangements or Disposition
Investments entered into or received in connection with any Disposition, an
amount equal to (A) 100% of the aggregate amount of such Net Cash Payments minus
(B) any transaction expenses associated with Dispositions and not previously
deducted in the determination of Net Cash Payments plus (or minus,
as the case may be) (C) any other adjustment received or paid by any Credit
Party pursuant to the respective agreements giving rise to Dispositions and not
previously taken into account in the determination of the Net Cash Payments; provided
that if prior to the date upon which the Borrower would otherwise be required
to make a prepayment under this clause (y) with respect to any quarterly fiscal
period the aggregate amount of such Net Cash Payments (after giving effect to
the adjustments provided for in this clause (y)) shall exceed $4,000,000, then
the Borrower shall within three Business Days make a prepayment under this
clause (y) in an amount equal to such required prepayment.

Prepayments of Term B2 Loans shall be
effected in each case in the manner and to the extent specified in Section
2.10(c); provided
that if at the time of any such Disposition an Event of Default
shall have occurred and be continuing, the Credit Parties shall not have the
right to reinvest any Net Cash Payments and shall instead prepay the Term B2
Loans by 100% of the amount of Net Cash Payments received from such
Disposition.

Anything herein to the contrary notwithstanding, the Borrower shall not
be required to make any prepayment pursuant to this clause (iii) with respect
to the first $10,000,000 of Net Cash Payments from any Disposition which are
not reinvested pursuant to this clause (iii).

 

(iv)          Excess
Cash Flow.  Not later than the date
90 days after the end of each fiscal year of the Borrower for which Excess Cash
Flow exceeds $1,000,000 commencing with the fiscal year ending
December 31, 2003, the Borrower shall prepay the Term B2 Loans in an
amount equal to (A) 75% of Excess Cash Flow if the Consolidated Total Leverage
Ratio (in each case pursuant to this clause (iv), as reported on the
Compliance Certificate delivered with the financial statements required by
Section 6.1(a) for such fiscal year) is greater than or equal to 4.00 to
1.00 for such fiscal

 

28

 

year,
or (B) 50% of Excess Cash Flow if the Consolidated Total Leverage Ratio is
greater than 3.00 to 1.00 but less than 4.00 to 1.00, with respect to such
fiscal year.

 

(c)           Application. In the event of
any mandatory prepayment of Term B2 Loans pursuant to subsections (b)(i)
through (b)(iv) of this Section 2.10, the proceeds of such prepayment shall be
applied as follows:

 

(i)            first,
to the extent that a repayment of Swing Loans shall at such time be required pursuant
to Section 2.9(a), to the repayment of Swing Loans, but only to such extent;

 

(ii)           second,
to the extent that Revolving Credit Exposure (as defined in the Credit
Agreement) shall at such time exceed the total Revolving Credit Commitments (as
defined in the Credit Agreement), to the repayment of Revolving Credit Loans
equal in amount to such excess;

 

(iii)          third,
to the prepayment of the Term Loans, ratably in accordance with the
then-outstanding aggregate amounts thereof, such prepayments to be applied to
remaining unpaid installments of the Term Loans pro rata in inverse order of
maturity; and

 

(iv)          fourth,
after prepayment in full of the Term Loans, to the repayment of Revolving
Credit Loans (and to provide cover for LC Exposure (as defined in the Credit
Agreement) (and to an equal reduction of the Revolving Credit Commitments in
the case of prepayments pursuant to subsections (b)(i) and (b)(iii) of this
Section 2.10).

 

(d)           Notification of Prepayments.  The Borrower shall notify the Administrative
Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m.,
Boston, Massachusetts time, three Business Days before the date of prepayment
or (ii) in the case of prepayment of a Base Rate Borrowing, not later than
11:00 a.m., Boston, Massachusetts time, one Business Day before the date of
prepayment.  Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid.  Each partial prepayment of any Borrowing under paragraph (a) of
this Section 2.10 shall be in an amount that would be permitted in the case of
an advance of a Borrowing of the same Type as provided in Section 2.2.

 

(e)           Prepayments Accompanied by
Interest and other Payments. 
Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12 and any compensation required by Section 2.15.

 

2.11         Fees.

 

(a)           [Reserved].

 

(b)           [Reserved].

 

29

 

(c)           The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed in writing between the Borrower and the
Administrative Agent.

 

(d)           All fees payable hereunder shall be
paid on the dates due, in immediately available funds.  Fees paid shall not be refundable under any
circumstances, absent manifest error in the determination thereof.

 

2.12         Interest.

 

(a)           The Term B2 Loans comprising each Base
Rate Borrowing shall bear interest at a rate per annum equal to the Adjusted
Base Rate plus the Applicable Margin.

 

(b)           The Term B2 Loans comprising each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Margin.

 

(c)           Notwithstanding the foregoing, (i)
all amounts which are not paid when due shall bear interest until paid in full
at the Post-Default Rate and (ii) during the period when any Event of Default
shall have occurred and be continuing for a period of 30 or more days (and the
Administrative Agent, acting on the instructions of the Required Senior
Lenders, shall have notified the Borrower that the Post-Default Rate shall
apply), the principal of all Term B2 Loans hereunder shall bear interest, after
as well as before judgment, at the Post-Default Rate.

 

(d)           Accrued interest on the Term B2 Loans
shall be payable in arrears on each Interest Payment Date for the Term B2 Loan;
provided
that (i) interest accrued at the Post-Default Rate shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Term B2 Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Term B2 Loan shall be payable on the effective date of
such conversion, (iv) [Reserved] and (v) all accrued interest on the Term B2
Loans shall be payable on the maturity date thereof.

 

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

 

(f)            In no contingency or event
whatsoever shall the aggregate of all amounts deemed interest hereunder or
under any promissory note and charged or collected pursuant to the terms of
this Agreement or pursuant to such note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final determination,
deem applicable hereto.  In the event
that such a court determines that the Noteholders have charged or received
interest hereunder in excess of the highest applicable rate, the Noteholders
shall promptly refund

 

30

 

such excess interest to the Borrower and such rate
shall automatically be reduced to the maximum rate permitted by such law.

 

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

 

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

 

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

 

then the Administrative Agent shall give notice thereof to the Borrower
and the affected Noteholders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the
Borrower and such Noteholders that the circumstances giving rise to such notice
no longer exist, (i) any Interest Election Request that requests the conversion
of any such Borrowing to, or continuation of any such Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as a Base Rate
Borrowing.

 

2.14         Increased Costs.

 

(a)           If any Change in Law shall:

 

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

 

(ii)           impose
on any Noteholder or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Noteholder or participation
therein;

 

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

 

(b)           If any Noteholder reasonably
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Noteholder’s capital or
on the capital of such Noteholder’s holding company, if any, as a consequence
of this Agreement or the Term B2 Loans made by such Noteholder, to a level
below that which such Noteholder or such Noteholder’s holding company could
have achieved

 

31

 

but for such Change in Law (taking into consideration
such Noteholder’s policies and the policies of such Noteholder’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Noteholder such additional amount or amounts as will
compensate such Noteholder or such Noteholder’s holding company, for any such
reduction suffered.

 

(c)           A certificate of a Noteholder setting
forth the amount or amounts necessary to compensate such Noteholder or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.14 shall be delivered to the Borrower and shall be conclusive so
long as it reflects a reasonable basis for the calculation of the amounts set
forth therein and does not contain any manifest error.  The Borrower shall pay such Noteholder the
amount shown as due on any such certificate within 10 days after receipt
thereof.

 

(d)           Failure or delay on the part of any
Noteholder to demand compensation pursuant to this Section 2.14 shall not
constitute a waiver of such Noteholder’s right to demand such compensation; provided
that the Borrower shall not be required to compensate a Noteholder pursuant to
this Section 2.14 for any increased costs or reductions incurred more than six
months prior to the date that such Noteholder notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Noteholder’s intention to claim compensation therefor; provided  further
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof.

 

2.15         Break Funding Payments.

 

(a)           In the event of (i) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (ii)
the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (iii) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice is permitted to be
revocable and is revoked in accordance herewith) or (iv) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.18,
then, in any such event, the Borrower shall compensate each Noteholder for the
loss, cost and expense attributable to such event.

 

(b)           In the case of a Eurodollar Loan, the
loss to any Noteholder attributable to any such event shall be deemed to
include an amount determined by such Noteholder to be equal to the excess, if
any, of

 

(i)            the
amount of interest that such Noteholder would pay for a deposit equal to the
principal amount of such Eurodollar Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Eurodollar Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Interest Period that would
have resulted from such borrowing, conversion or continuation) if the interest
rate payable on such deposit were equal to the Adjusted LIBO Rate for such
Interest Period,

 

32

 

over

 

(ii)           the
amount of interest that such Noteholder would earn on such principal amount for
such period if such Noteholder were to invest such principal amount for such
period at the interest rate that would be bid by such Noteholder (or an
affiliate of such Noteholder) for U.S. dollar deposits from other banks in the
eurodollar market at the commencement of such period.

 

(c)           A certificate of any Noteholder
setting forth any amount or amounts that such Noteholder is entitled to receive
pursuant to this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error.  The
Borrower shall pay such Noteholder the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

2.16         Taxes.

 

(a)           Any and all payments by or on account
of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.16) the
Administrative Agent or any Noteholder receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.

 

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

 

(c)           The Borrower shall indemnify the
Administrative Agent and each Noteholder within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.16) paid or payable by the
Administrative Agent or such Noteholder (and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto during the period
prior to the Borrower making the payment demanded under this paragraph (c)),
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such
payment or liability delivered to the Borrower by a Noteholder or by the
Administrative Agent on its own behalf or on behalf of a Noteholder shall be
conclusive absent manifest error.

 

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

 

(e)           Any Foreign Noteholder that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any

 

33

 

treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate.

 

2.17         Payments Generally: Pro Rata Treatment; Sharing of
Set-Offs.

 

(a)           The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
under Section 2.14, 2.15 or 2.16, or otherwise) prior to 12:00 noon,
Boston, Massachusetts time, on the date when due, in immediately available
funds, without set-off or counterclaim. 
Any amounts received after such time on any date may, in the discretion
of the Administrative Agent, be deemed to have been received on the next
succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the
Administrative Agent at such of its offices in Boston, Massachusetts as shall
be notified to the relevant parties from time to time except that payments
pursuant to Sections 2.14, 2.15, 2.16 and 10.3 shall be made directly to the
Persons entitled thereto.  The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof, and the Borrower shall have no liability in the event timely
or correct distribution of such payments is not so made.  If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall
be made in U.S. dollars.

 

(b)           Except to the extent otherwise
provided herein: (i) the Borrowing of Term B2 Loans from the Noteholders under
Section 2.1 shall be made from the Noteholders, pro rata according to the
amounts of their respective Term B2 Loan Commitments; (ii) Eurodollar Loans
having the same Interest Period shall be allocated pro rata among the
Noteholders according to the amounts of their Term B2 Loan Commitments (in the
case of the making of Term B2 Loans) or their respective Term B2 Loans (in the
case of conversions and continuations of Eurodollar Loans); (iii) each payment
or prepayment by the Borrower of principal of Term B2 Loans shall be made for
account of the Noteholders pro rata in accordance with the respective
unpaid principal amounts of the Term B2 Loans held by such Noteholders; and
(iv) each payment by the Borrower of interest on Term B2 Loans shall be made
for the account of the Noteholders pro rata in accordance with the amounts of
interest on the Term B2 Loans then due and payable to such Noteholders; provided that
all payments and prepayments in respect of principal and interest on any of the
Term Loans shall be made for account of the holders of the Term B1 Loans and
the Noteholders pro rata in accordance with the then outstanding principal
amount of the Term Loans.

 

(c)           [Reserved].

 

(d)           Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment
is due to the Administrative Agent for the account of the Noteholders entitled
thereto (the “Applicable Recipient”) hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower

 

34

 

has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the
Applicable Recipient the amount due.  In
such event, if the Borrower has not in fact made such payment, then each
Applicable Recipient severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Applicable Recipient with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the Federal Funds Effective Rate.

 

(c)           If any Noteholder shall fail to make
any payment required to be made by it pursuant to Section 2.4(d), 2.4(e),
2.5(b), 2.8(d)(i) or (ii) or 2.17(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such
Noteholder to satisfy such Noteholder’s obligations under such Section until
all such unsatisfied obligations are fully paid.

 

2.18         Mitigation Obligations; Replacement of Noteholders.

 

(a)           If any Noteholder requests
compensation under Section 2.14, or if the Borrower is required to pay any
additional amount to any Noteholder or any Governmental Authority for the
account of any Noteholder pursuant to Section 2.16, then such Noteholder shall
use reasonable efforts to designate a different lending office for funding or
booking its Term B2 Loans hereunder or to assign its rights and obligations,
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Noteholder, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in
the future and (ii) would not subject such Noteholder to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such Noteholder.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Noteholder in connection with any
such designation or assignment.

 

(b)           If any Noteholder requests
compensation under Section 2.14, or if the Borrower is required to pay any
additional amount to any Noteholder or any Governmental Authority for the
account of any Noteholder pursuant to Section 2.16, or if any Noteholder
defaults in its obligation to fund Term B2 Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Noteholder and the
Administrative Agent, require such Noteholder to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in Section 10.4),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Noteholder,
if a Noteholder accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent, which consents
shall not unreasonably be withheld or delayed, (ii) such Noteholder shall have
received payment of an amount equal to the outstanding principal of its Term B2
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a claim
for compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such compensation
or payments.  A Noteholder shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such

 

35

 

Noteholder or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.

 

36

 

ARTICLE
III

Guarantee by Guarantors

 

3.1           The Guarantee.  Each Guarantor hereby jointly and severally guarantees to each
Noteholder and the Administrative Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Term B2
Loans made by the Noteholders to the Borrower, and all other amounts from time
to time owing to the Noteholders or the Administrative Agent by the Borrower
hereunder or under any other Note Purchase Document, and all obligations of the
Borrower to any Noteholder under any Hedging Agreement or arising from or
related to cash management services, in each case strictly in accordance with
the terms thereof (such obligations being herein collectively called the “Guaranteed
Obligations”).  Each Guarantor
hereby further agrees that if the Borrower shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, each Guarantor will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be promptly
paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.

 

3.2           Obligations Unconditional.  The obligations of each Guarantor under
Section 3.1 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the
other Note Purchase Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 3.2 that the obligations of the Guarantors hereunder shall be absolute
and unconditional under any and all circumstances.  Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Guarantors hereunder which shall remain absolute
and unconditional as described above:

 

(i)            at
any time or from time to time, without notice to such Guarantors, the time for
any performance of or compliance with any of the Guaranteed Obligations shall
be extended, or such performance or compliance shall be waived;

 

(ii)           any
of the acts mentioned in any of the provisions hereof or of the other Note
Purchase Documents or any other agreement or instrument referred to herein or
therein shall be done or omitted;

 

(iii)          the
maturity of any of the Guaranteed Obligations shall be accelerated, or any of
the Guaranteed Obligations shall be modified, supplemented or amended in any
respect, or any right hereunder or under the other Note Purchase Documents or
any other agreement or instrument referred to herein or therein shall be

 

37

 

waived
or any other guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise dealt
with; or

 

(iv)          any
lien or security interest granted to, or in favor of, the Administrative Agent
or any Noteholder or Noteholders as security for any of the Guaranteed
Obligations shall fail to be perfected.

 

The Guarantors hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Noteholder exhaust any right, power or remedy or
proceed against the Borrower hereunder or under the other Note Purchase
Documents or any other agreement or instrument referred to herein or therein,
or against any other Person under any other guarantee of, or security for, any
of the Guaranteed Obligations.

 

3.3           Reinstatement.  The obligations of each Guarantor under this Article III shall be
automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each of the Guarantors agrees that it will
indemnify the Administrative Agent and each Noteholder on demand for all
reasonable costs and expenses (including fees and expenses of counsel) incurred
by the Administrative Agent or any Noteholder in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

 

3.4           Subrogation.  Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under the Federal Bankruptcy Code of
1978, as amended) or otherwise by reason of any payment by it pursuant to the provisions
of this Article III and further agrees with the Borrower for the benefit of
each of its creditors (including each Noteholder and the Administrative Agent)
that any such payment by it shall constitute a contribution of capital by such
Guarantor to the Borrower.

 

3.5           Remedies. 
Each Guarantor agrees that, as between such Guarantor and the
Noteholders, the obligations of the Borrower hereunder may be declared to be
forthwith due and payable as provided in Section 8.1 or Section 2.4(i), as
applicable (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 8.1 or Section 2.4(i), as
applicable) for purposes of Section 3.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against the Borrower and that, in
the event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by the Borrower) shall forthwith become due and payable by such
Guarantor for purposes of Section 3.1.

 

3.6           Instrument for the Payment of Money.  Each Guarantor hereby acknowledges that the
guarantee in this Article III constitutes an instrument for the payment of
money, and

 

38

 

consents and agrees that any Noteholder or the
Administrative Agent, at its sole option, in the event of a dispute by the
Guarantors in the payment of any moneys due hereunder, shall have the right to
summary judgment or such other expedited procedure as may be available for a
suit on a note or other instrument for the payment of money.

 

3.7           Continuing Guarantee.  The guarantee in this Article III is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

 

3.8           Rights of Contribution.  The Guarantors hereby agree, as between
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any Guaranteed
Obligations, each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor’s Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts
and liabilities of such Excess Funding Guarantor) of the Excess Payment (as
defined below) in respect of such Guaranteed Obligations.  The payment obligation of a Guarantor to any
Excess Funding Guarantor under this Section 3.8 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Guarantor under the other provisions of this Article III and such Excess
Funding Guarantor shall not exercise any right or remedy with respect to such
excess until payment and satisfaction in full of all of such obligations.

 

For purposes of this Section 3.8, (i) “Excess Funding Guarantor”
means, in respect of any Guaranteed Obligations, a Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii) “Excess
Payment” means, in respect of any Guaranteed Obligations, the amount paid
by an Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) “Pro Rata Share” means, for any Guarantor, the
ratio (expressed as a percentage) of (x) the amount by which the aggregate
present fair saleable value of all properties of such Guarantor (excluding any
shares of stock of, or ownership interest in, any other Guarantor) exceeds the
amount of all the debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder and any obligations of any other
Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by
which the aggregate fair saleable value of all properties of all of the Credit
Parties exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder and under the
other Note Purchase Documents) of all of the Credit Parties, determined (A)
with respect to any Guarantor that is a party hereto on the Effective Date, as
of the Effective Date, and (B) with respect to any other Guarantor, as of the
date such Guarantor becomes a Guarantor hereunder.

 

3.9           General Limitation on Guarantee Obligations.  In any action or proceeding involving any
state or non-U.S. corporate law, or any state or Federal or non-U.S.
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 3.1
would otherwise, taking into account the provisions of Section 3.8, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section
3.1, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by such Guarantor,
any Noteholder, the Administrative

 

39

 

Agent or any other Person, be automatically limited
and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.

 

ARTICLE
IV

Representations and Warranties

 

Each of the Credit Parties represents and warrants to the Noteholders
and the Administrative Agent, as to itself and each other Credit Party, that:

 

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

 

4.2           Authorization; Enforceability.  The Transactions are within the corporate
power of each Credit Party and have been duly authorized by all necessary
corporate and, if required, stockholder action on the part of such Credit
Party.  This Agreement, the Collateral
Documents, and the other Note Purchase Documents have been duly authorized,
executed and delivered by each Credit Party that is a party thereto and
constitute legal, valid and binding obligations of such Credit Party,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

 

4.3           Governmental Approvals; No Conflicts.  The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by,
any Governmental Authority, (b) will not violate any applicable law, policy or
regulation or the charter, by-laws or other organizational documents of
any Credit Party or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon any Credit Party, or any of its assets, or give rise to
a right thereunder to require any payment to be made by any Credit Party, and
(d) except for the Liens created by the Collateral Documents, will not result
in the creation or imposition of any Lien on any asset of the Credit Parties.

 

4.4           Financial Condition; No Material Adverse Change.

 

(a)           The Borrower has heretofore delivered
to the Noteholders the following financial statements:

 

(i)            the
audited consolidated balance sheet and statements of earnings (loss),
stockholders’ deficit and cash flows of the Holding Company and its
Subsidiaries as of and for the fiscal year ended December 31, 2002, accompanied
by an opinion of Ernst & Young LLP, independent public accountants; and

 

40

 

(ii)           the
unaudited consolidated and consolidating statements of income, retained
earnings and cash flows of the Credit Parties for the month most recently ended
and for which monthly financial statements are available and for the period
ending as of the end of such month, and the related consolidated and
consolidating balance sheets of the Credit Parties as at the end of such
period, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding period in the
preceding fiscal year (except that, in the case of balance sheets, such
comparison shall be to the last day of the prior fiscal year).

 

Such financial statements present fairly, in all material respects, the
respective actual consolidated financial position and results of operations and
cash flows of the respective entities as of such respective dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of such unaudited statements.

 

(b)           Since December 31, 2002, there
has been no change in the business, assets, liabilities, operations or
financial condition, of the Credit Parties which would reasonably be expected
to have a Material Adverse Effect.

 

(c)           None of the Credit Parties has on the
Effective Date any contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments in each case that are material, except as referred to
or reflected or provided for in the balance sheets as at December 31, 2002
referred to above or as otherwise expressly provided in this Agreement or the
financial statements described in this Section 4.4.

 

4.5           Properties.

 

(a)           Each of the Credit Parties has good
and marketable title to, or valid, subsisting and enforceable leasehold
interests in, all its real and personal property material to its business.

 

(b)           Each of the Credit Parties owns, or
is licensed to use, all trademarks, service marks, tradenames, copyrights,
patents and other intellectual property (“Proprietary Rights”) material
to its business, and the use thereof by the Credit Parties does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.  All
registered trademarks, service marks, copyrights and patents, together with the
domain names, web sites, and web site registrations which are owned by or
licensed to any Credit Party, are listed on Schedule 4.5 annexed to the
Credit Agreement (collectively “Registered Rights”).  Except as set forth on Schedule 4.5
annexed to the Credit Agreement, all of the Registered Rights have been duly
registered in, filed in or issued by the PTO, a domain name registrar or other
corresponding offices of other jurisdictions as identified on such schedule,
and have been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States or in
each such other jurisdiction, as applicable, except where the failure to so
register, file, maintain or renew would not reasonably be expected to result in
a Material Adverse Effect.

 

41

 

(c)           As of the Effective Date, Schedule
4.5 annexed to the Credit Agreement contains a true, accurate and complete
list of (i) all owned Real Property Assets and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each Real
Property Asset of any Credit Party, regardless of whether such Credit Party is
the landlord or tenant (whether directly or as an assignee or successor in
interest) under such lease, sublease or assignment.  Expect as specified in Schedule 4.5 annexed to the Credit
Agreement, each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and the Borrower has no knowledge of any
default that has occurred and is continuing thereunder, and each such agreement
constitutes the legal, valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.

 

4.6           Litigation and Environmental Matters.

 

(a)           There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of any of the Credit Parties, threatened against
or affecting the Credit Parties (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined,
could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Basic Documents, the Transactions or the Holding Company Notes
Refunding.

 

(b)           Except for the Disclosed Matters and
except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Credit Parties (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or any inquiry, allegation, notice or
other communication from any Governmental Authority concerning its compliance
with any Environmental Law or (iv) knows of any basis for any Environmental
Liability.

 

(c)           Since the date of this Agreement,
there has been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.

 

4.7           Compliance with Laws and Agreements.  Each of the Credit Parties is in compliance
with all laws, regulations, policies and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

4.8           Investment and Holding Company Status.  No Credit Party nor any of their respective
Subsidiaries is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (b) a
“holding company” as defined

 

42

 

in, or subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended or (c) a “bank holding company” as
defined in, or subject to regulation under, the Bank Holding Company Act of
1956, as amended.

 

4.9           Taxes. 
Each of the Credit Parties and their respective Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which such Credit Party has set aside on its books adequate
reserves with respect thereto in accordance with GAAP or (b) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect.

 

4.10         ERISA. 
No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect.  The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $100,000 the fair market value of
the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 87) did not, as of
the date of the most recent financial statements reflecting such amounts,
exceed by more than $100,000 the fair market value of the assets of all such
underfunded Plans.  No Credit Party has
a present intention to terminate any Plan.

 

4.11         Disclosure.  As of the Effective Date to the Credit Parties have disclosed to
each Noteholder and the Administrative Agent, all agreements, instruments and
corporate or other restrictions to which any Credit Party is subject, and all
other matters known to any Credit Party, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.  The senior management structure of the
Borrower is as set forth on Schedule 4.11 annexed to the Credit
Agreement.  The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Credit Parties to the Administrative Agent or any Noteholder in
connection with the negotiation, preparation or delivery of this Agreement and
the other Note Purchase Documents or included herein or therein or delivered
pursuant hereto or thereto, when taken as a whole do not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which
they were made, not misleading.  All
written information furnished after the date hereof by the Credit Parties to
the Administrative Agent and the Noteholders in connection with this Agreement
and the transactions contemplated hereby will be true, complete and accurate in
every material respect, or (in the case of projections) based on reasonable
estimates, on the date as of which such information is stated or
certified.  There is no fact known to
the Borrower that could reasonably be expected to have a Material Adverse
Effect that has not been disclosed herein or in a report, financial statement,
exhibit, schedule, disclosure letter or other writing furnished to the
Noteholders for use in connection with the transactions contemplated hereby or
thereby.

 

4.12         Capitalization.  As of the Effective Date, the capital structure and ownership of
the Borrower are correctly described in Schedule 4.12.  The authorized, issued and outstanding

 

43

 

capital stock of the Borrower consists, on the
Effective Date, of the common stock described on Schedule 4.12, all of
which is duly and validly issued and outstanding, fully paid and
nonassessable.  Except as set forth in Schedule
4.12  and with respect to the
Phantom Stock Agreements, as of the Effective Date, (x) there are no
outstanding Equity Rights with respect to the Borrower and (y) there are no
outstanding obligations of any Credit Party to repurchase, redeem, or otherwise
acquire any shares of capital stock of any Credit Party nor are there any
outstanding obligations of the any Credit Party to make payments to any Person,
such as “phantom stock” payments, where the amount thereof is calculated with
reference to the fair market value or equity value of the any Credit Party.

 

4.13         Subsidiaries.

 

(a)           Set forth in Schedule 4.13 is
a complete and correct list of all of the Subsidiaries of the Credit Parties as
of the Effective Date together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding
ownership interests in such Subsidiary and (iii) the nature of the ownership
interests held by each such Person and the percentage of ownership of such
Subsidiary represented by such ownership interests.  Except as disclosed in Schedule 4.13, (x) each Credit
Party and its respective Subsidiaries owns, free and clear of Liens (other than
Liens created pursuant to the Collateral Documents), and has the unencumbered
right to vote, all outstanding ownership interests in each Person shown to be
held by it in Schedule 4.13, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (z) there are no outstanding Equity Rights
with respect to such Person.

 

(b)           Except as set forth in Schedule
4.13, as of the date of this Agreement, none of the Subsidiaries of the
Borrower is subject to any indenture, agreement, instrument or other
arrangement containing any provision of the type described in Section 7.8,
other than any such provision the effect of which has been unconditionally,
irrevocably and permanently waived.

 

4.14         Material Indebtedness, Liens and Agreements.

 

(a)           Schedule 4.14 hereto is a
complete and correct list, as of the date of this Agreement, of all Material
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, any Credit Party the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $1,000,000, and the
aggregate principal or face amount outstanding or that may become outstanding
with respect thereto is correctly described in Schedule 4.14.

 

(b)           Schedule 4.14 hereto is a
complete and correct list, as of the date of this Agreement, of each Lien
securing Indebtedness of any Person the aggregate principal or face amount of
which equals or exceeds (or may equal or exceed) $100,000 and covering any
property of the Credit Parties, and the aggregate Indebtedness secured (or
which may be secured) by each such Lien and the Property covered by each such
Lien is correctly described in Schedule 4.14.

 

44

 

(c)           Schedule 4.14 hereto is a
complete and correct list, as of the date of this Agreement, of each contract
and arrangement to which any Credit Party is a party for which breach,
nonperformance, cancellation or failure to renew would have a Material Adverse
Effect.

 

(d)           Schedule 4.14 hereto is a
complete and correct list, as of the date of this Agreement, of each Phantom
Stock Agreement and each other contract and arrangement between  any Credit Party and its senior managers.

 

True and complete copies of each agreement listed on the appropriate
part of Schedule 4.14 have been delivered to the Administrative
Agent, together with all amendments, waivers and other modifications
thereto.  All such agreements are valid,
subsisting, in full force and effect, are currently binding and will continue
to be binding upon each Credit Party that is a party thereto and, to the best
knowledge of the Credit Parties, binding upon the other parties thereto in
accordance with their terms.  The Credit
Parties are not in default under any such agreements.

 

4.15         Holding Company Notes Indenture. The
Holding Company Notes Indenture is in full force and effect, without amendment
(other than the Supplemental Indentures described in the definition
thereof).  All obligations of the Credit
Parties hereunder and under the other Note Purchase Documents and obligations
of the Holding Company under the Holding Company Collateral Documents are
permitted to be incurred under the Holding Company Notes Indenture.

 

4.16         Federal Reserve Regulations.  No Credit Party nor any of its Subsidiaries
is engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying margin stock (as
defined in Regulation U of the Board). 
The value of all margin stock owned by the Borrower does not constitute
more than 25% of the value of the assets of the Borrower.

 

4.17         Burdensome Restrictions.  No Credit Party is a party to or otherwise
bound by any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter, corporate or partnership
restriction which would foreseeably have a Material Adverse Effect.

 

4.18         Force Majeure.  Since the date of the most recent financial statements referred
to in Section 4.4(a)(i) to the Effective Date, the business, properties
and other assets of the Credit Parties have not been materially and adversely
affected in any way as the result of any fire or other casualty, strike,
lockout or other labor trouble, embargo, sabotage, confiscation, contamination,
riot, civil disturbance, activity of armed forces or act of God.

 

4.19         Labor and Employment Matters.

 

(a)           As of the date of this Agreement,
except as set forth on Schedule 4.19, (A) no employee of any Credit
Party is represented by a labor union, no labor union has been certified or
recognized as a representative of any such employee; (B) there are no pending
or, to the Borrower’s knowledge, threatened representation campaigns, elections
or proceedings; (C) no Credit Party has any knowledge of any strikes, slowdowns
or work stoppages of any kind, or threats thereof; and (D) no Credit Party has
engaged in, admitted committing or been held to

 

45

 

have committed any unfair labor practice, in each case
except where such occurrence would not reasonably be expected to have a
Material Adverse Effect.

 

(b)           As of the date of this Agreement, Schedule
4.19 sets forth all material employment contracts for members of senior management
of the Credit Parties under which any Credit Party thereof has any obligations
to provide compensation or remuneration of any kind (other than obligations to
make current wage or salary payments that are terminable at will without
notice).

 

(c)           Except as set forth on Schedule 4.19,
each Credit Party has at all times complied in all material respects, and are
in material compliance with, all applicable laws, rules and regulations
respecting employment, wages, hours, compensation, benefits, and payment and
withholding of taxes in connection with employment, except where the failure to
so comply would not reasonably be expected to have a Material Adverse Effect.

 

(d)           Except as set forth on Schedule 4.19,
except as could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the Credit Parties have at all times
complied with, and are in compliance with, all applicable laws, rules and
regulations respecting occupational health and safety, whether now existing or
subsequently amended or enacted, including the Occupational Safety & Health
Act of 1970, 29 U.S.C. Section 651 et seq. and the state analogies
thereto, all as amended or superseded from time to time, and any common law
doctrine relating to worker health and safety.

 

ARTICLE
V

Conditions

 

5.1           Effective Date.  The obligations of the Noteholders to make Term B2 Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with the Intercreditor
Agreement):

 

(a)           Counterparts of Agreement.  The Administrative Agent shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)           Notes.  The Administrative Agent shall have received
for each Noteholder, a duly completed and executed Term B2 Note.

 

(c)           Corporate Structure.  The corporate organizational structure,
capital structure and ownership of the Credit Parties, shall be as set forth on
Schedules 4.12 and 4.13 annexed to the Credit Agreement.

 

(d)           Corporate Matters.  The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or Special Counsel
may reasonably request relating to the organization, existence and good
standing of each Credit Party, the authorization of the Transactions and any
other legal matters relating to the Credit Parties, this

 

46

 

Agreement, the other Note Purchase Documents or the
Transactions, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.

 

(e)           Security Interests in Personal and
Mixed Property.  To the extent not
otherwise satisfied pursuant to Section 5.1(f), the Administrative Agent shall
have received evidence satisfactory to it that the Credit Parties shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments,
and made or caused to be made all such filings and recordings (other than the
filing or recording of items described in clauses (iii), (iv) and (v) below)
that may be necessary or, in the opinion of the Administrative Agent, desirable
in order to create in favor of the Administrative Agent, for the benefit of the
Noteholders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property
Collateral. Such actions shall include, without limitation, the following:

 

(i)            Collateral
Documents.  Delivery to the
Administrative Agent of all the Collateral Documents, duly executed by the
applicable Credit Party (or, in the case of the Holding Company Collateral
Documents, the Holding Company), together with accurate and complete schedules
to all such Collateral Documents;

 

(ii)           Stock
Certificates and Instruments.  To
the extent not previously delivered to the Administrative Agent in connection
with the Existing Credit Agreement, delivery to the Administrative Agent of (A)
certificates (which certificates shall be accompanied by irrevocable undated
stock powers, duly endorsed in blank and otherwise satisfactory in form and
substance to the Administrative Agent) representing all capital stock pledged
pursuant to the Pledge Agreement (or, in the case of the Holding Company, the
Holding Company Collateral Documents) and (B) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to the
Administrative Agent) evidencing any Collateral;

 

(iii)          Lien
Searches and UCC Termination Statements. 
Delivery to the Administrative Agent of (A) the results of a recent
search, by a Person satisfactory to the Administrative Agent, of all effective
UCC financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed property
of any Credit Party, together with copies of all such filings disclosed by such
search, and (B) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to terminate
any effective UCC financing statements or fixture filings disclosed in such
search (other than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of this
Agreement);

 

(iv)          UCC
Financing Statements and Fixture Filings. 
Delivery to the Administrative Agent of UCC financing statements (or,
where applicable, amendments to existing UCC financing statements filed against
the Credit Parties in favor of the Administrative Agent) and, where
appropriate, fixture filings (or, where applicable, amendments to existing
fixture filings filed against the Credit Parties in favor of the Administrative
Agent), with respect to all personal and mixed property Collateral of such
Credit Party, for filing in all jurisdictions as may be necessary or, in the
opinion of the 

 

47

 

Administrative
Agent, desirable to perfect the security interests created in such Collateral
pursuant to the Collateral Documents (or maintain the continued perfection of
the security interest in such Collateral granted to the Administrative Agent in
connection with the Existing Credit Agreement);

 

(v)           PTO
Cover Sheets, Etc.  Delivery to the
Administrative Agent of all cover sheets or other documents or instruments
required to be filed with the PTO in order to create or perfect Liens in
respect of any new IP Collateral;

 

(vi)          Perfection
Certificates.  Delivery to the
Administrative Agent by each Credit Party of a perfection certificate dated the
Effective Date substantially in the form of Schedule I to the form of
Security Agreement annexed to the Credit Agreement duly executed by a Financial
Officer of the Borrower;

 

(vii)         Opinions
of Local Counsel.  Delivery to the
Administrative Agent of an opinion of counsel (which counsel shall be
reasonably satisfactory to the Administrative Agent) under the laws of each
jurisdiction in which any Credit Party is organized or any property or mixed
property Collateral is located with respect to the creation and perfection (or
if applicable, the continuation of the attachment and perfection) of the
security interests in favor of the Administrative Agent in such Collateral and
such other matters governed by the laws of such jurisdiction regarding such security
interests as the Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to the Administrative Agent.

 

(f)            Effective Date Mortgages;
Effective Date Mortgage Policies; Etc. The Administrative Agent shall have
received from each Credit Party:

 

(i)            Effective
Date Mortgages.  Fully executed and
notarized Mortgages or, if applicable, amendments to existing mortgages (each a
“Effective Date Mortgage” and, collectively, the “Effective Date
Mortgages”), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in Schedule
4.5 (and so identified thereon) annexed to the Credit Agreement (each a “Effective
Date Mortgaged Property” and, collectively, the “Effective Date
Mortgaged Properties”);

 

(ii)           Recorded
Leasehold Interests.  In the case of
each Real Property Asset listed in clause (ii) of Schedule 4.5 annexed
to the Credit Agreement, copies of all leases between any Credit Party and any landlord
or tenant;

 

(iii)          Landlord
Consents and Estoppels.  In the case
of each Real Property Asset listed in clause (ii) of Schedule 4.5, a
Landlord Consent and Estoppel with respect thereto and where required by the
terms of any lease, the consent of the mortgagee, ground lessor or other party;

 

(iv)          Matters
Relating to Flood Hazard Properties. 
(A) Evidence reasonably acceptable to the Administrative Agent as to
whether any Effective Date Mortgaged Property is a Flood Hazard Property and
(B) if there are any such Flood Hazard Properties, evidence that the applicable
Credit Party has obtained flood insurance

 

48

 

with
respect to each Flood Hazard Property in amounts approved by the Administrative
Agent, or evidence acceptable to the Administrative Agent that such insurance
is not available;

 

(v)           Environmental
Indemnity.  A hazardous materials
indemnity agreement, substantially in the form of Exhibit E annexed to
the Credit Agreement, with respect to the indemnification of the Administrative
Agent and the Noteholders for any liabilities that may be imposed on or
incurred by any of them as a result of any Hazardous Materials;

 

(vi)          Title
Insurance.  (A) ALTA mortgagee title
insurance policies or unconditional commitments therefor and title updates and
endorsements (the “Effective Date Mortgage Policies”) issued by the
Title Company with respect to the Effective Date Mortgaged Properties listed (and
marked with an asterisk) in Schedule 4.5  annexed to the Credit Agreement, in amounts not less than the
respective amounts designated therein with respect to any particular Effective
Date Mortgaged Properties, insuring fee simple title to, or a valid leasehold
interest in, each such Effective Date Mortgaged Property vested in such Credit
Party and assuring the Administrative Agent that the applicable Effective Date
Mortgages create valid and enforceable First Priority mortgage Liens on the
respective Effective Date Mortgaged Properties encumbered thereby, subject only
to a standard exceptions as may be reasonably acceptable by the Administrative
Agent, which Effective Date Mortgage Policies (I) shall include all
endorsements for matters reasonably requested by the Administrative Agent and
(II) shall provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent; and (B) evidence
satisfactory to the Administrative Agent that such Credit Party has (I)
delivered to the Title Company all certificates and affidavits required by the
Title Company in connection with the issuance of the Effective Date Mortgage
Policies and (II) paid to the Title Company or to the appropriate Governmental
Authorities all expenses and premiums of the Title Company in connection with
the issuance of the Effective Date Mortgage Policies and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Effective Date Mortgages in the appropriate real
estate records;

 

(vii)         Title
Reports.  With respect to each
Effective Date Mortgaged Property listed (and marked with an asterisk)
in Schedule 4.5 annexed to the Credit Agreement, a title report issued
by the Title Company with respect thereto, dated not more than 30 days prior to
the Effective Date and satisfactory in form and substance to the Administrative
Agent;

 

(viii)        Copies
of Documents Relating to Title Exceptions. 
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Effective Date Mortgage Policies or in the title
reports delivered pursuant to Section 5.1(f)(vii); and

 

(ix)           Opinions
of Local Counsel.  An opinion of
counsel (which counsel shall be reasonably satisfactory to the Administrative
Agent) in each state in which a Effective Date Mortgaged Property is located
with respect to the enforceability of the

 

49

 

form(s)
of Effective Date Mortgages to be recorded in such state and such other matters
as the Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to the Administrative Agent.

 

(g)           Environmental Reports and
Certificates.  The Administrative
Agent shall have received reports or, if applicable, updates of reports and
other information, in form, scope and substance satisfactory to the
Administrative Agent, regarding environmental matters relating to the
Facilities, which reports shall include a Phase I environmental assessment for
each of the Facilities listed in clause (i) of Schedule 4.5 (and so
identified thereon) annexed to the Credit Agreement which conforms to the ASTM
Standard Practice for Environmental Site Assessments: Phase I Environmental
Site Assessment Process E 1527-94 and a transaction screen for each of the
Facilities listed in clause (ii) of Schedule 4.5 (and so
identified thereon) annexed to the Credit Agreement which conforms to the ASTM
Standard Practice for Environmental Site Assessments:  Transaction Screen Process E 1528-96.  Such reports shall be conducted by one or more environmental
consulting firms reasonably satisfactory to the Administrative Agent. With
respect to the Facilities located in multi-tenant office buildings for which no
such reports shall be provided the Credit Parties will provide a certificate,
satisfactory in form and substance to the Administrative Agent, certifying that
there has been no release of hazardous substances at such Facilities and that
the Credit Parties have complied with Environmental Laws in connection with
such Facilities.

 

(h)           Evidence of Insurance.  The Administrative Agent shall have received
a certificate from the Credit Parties’ insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
Section 6.5 is in full force and effect and that the Administrative Agent on
behalf of the Noteholders has been named as additional insured and loss payee
thereunder to the extent required under Section 6.5.

 

(i)            Management; Employment Contracts.  The senior management structure of the
Borrower and its Subsidiaries shall be as set forth on Schedule 4.11,
and the Administrative Agent shall have received copies of, and shall be
satisfied with the form and substance of (i) any and all employment contracts
with and senior management of the Borrower and its Subsidiaries, (ii) any and
all shareholders agreement among any of the shareholders of the Borrower and
its Subsidiaries, and (iii) any stock option plans, phantom stock incentive
programs and similar arrangements provided by the Borrower and its Subsidiaries
to any Person.

 

(j)            Credit Agreement Documentation.  The parties thereto shall have executed and
delivered the Credit Agreement and the other Loan Documents, all in form and
substance satisfactory to the Administrative Agent.

 

(k)           Intercreditor Agreement.  The Administrative Agent shall have received
from each party to the Intercreditor Agreement either (i) a counterpart of the
Intercreditor Agreement signed on behalf of such party, or (ii) evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of the Intercreditor Agreement) that
such party has signed a counterpart of the Intercreditor Agreement.

 

(l)            Necessary Governmental
Authorizations and Consents.  The
Borrower shall have obtained all permits, licenses, authorizations or consents
from all Governmental

 

50

 

Authorities and all consents of other Persons with
respect to Material Indebtedness, Liens and agreements listed on Schedule
4.14 (and so identified thereon) annexed to the Credit Agreement, in each
case that are necessary or advisable in connection with the transactions
contemplated by this Agreement, and the continued operation of the business
conducted by the Borrower and its Subsidiaries, and each of the foregoing shall
be in full force and effect, in each case other than those the failure to
obtain or maintain which, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.  No action, request for stay, petition for
review or rehearing, reconsideration or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable Governmental
Authority to take action to set aside its consent on its own motion shall have
expired.

 

(m)          Compliance Certificate;
Consolidated Total Leverage Ratio. 
The Administrative Agent shall have received a Compliance Certificate of
a Financial Officer of the Borrower, in form and detail satisfactory to the
Administrative Agent, certifying (i) as to the Credit Parties’ Effective Date
compliance with the financial covenants set forth in Section 7.9, (ii) that the
Consolidated Total Leverage Ratio does not exceed 4.3 to 1 and (iii) that the
Consolidated Senior Leverage Ratio (on a pro forma basis after giving effect to
the Holding Company Notes Refunding) does not exceed 2.5 to 1.

 

(n)           Borrowing Request.  The Administrative Agent shall have received
a Borrowing Request in respect of the Borrowing to be made on the Effective
Date.

 

(o)           Solvency Assurances.  The Administrative Agent shall have received
a certificate from a Financial Officer of the Borrower to the effect that, as
of the Effective Date and after giving effect to the Term B2 Loans hereunder
and to the other Transactions:

 

(i)            the
aggregate value of all properties of the Credit Parties at their present fair
saleable value (i.e., the amount that may be realized within a reasonable
time, considered to be six months to one year, either through collection or
sale at the regular market value, conceiving the latter as the amount that
could be obtained for the property in question within such period by a capable
and diligent businessman from an interested buyer who is willing to purchase
under ordinary selling conditions), exceed the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of the Credit Parties,

 

(ii)           the
Credit Parties will not, on a consolidated basis, have an unreasonably small
capital with which to conduct their business operations as heretofore conducted
and

 

(iii)          the
Credit Parties will have, on a consolidated basis, sufficient cash flow to
enable them to pay their debts as they mature.

 

Such certificate shall include a statement to the effect that the
financial projections and underlying assumptions contained in such analysis
are, fair and reasonable and accurately computed.

 

(p)           Financial Officer Certificate.  The Administrative Agent shall have received
a certificate, dated the Effective Date and signed by the President, a Vice
President or a

 

51

 

Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section
5.3.

 

(q)           Certificate on Holding Company
Notes Indenture.  The Administrative
Agent shall have received a certificate, dated the Effective Date and signed by
the President, a Vice President or a Financial Officer of the Borrower,
certifying that the Obligations of the Credit Parties with respect to the
Revolving Credit Loans, Term B1 Loans and Letters of Credit, in each case,
pursuant to the Credit Agreement, are permitted to be incurred and secured by
the assets of the Credit Parties as “Permitted Indebtedness” under the Holding
Company Notes Indenture, and that the obligations of the Credit Parties with
respect to the Term B2 Loans are permitted to be incurred and secured by the
assets of the Credit Parties as “Refinancing Indebtedness” under the Holding
Company Notes Indenture and demonstrating in reasonable detail the basis for
such certification.

 

(r)            No Material Adverse Effect.  There shall have occurred no Material
Adverse Effect (in the reasonable opinion of the Administrative Agent) since
December 31, 2002 with respect to the Credit Parties.

 

(s)           Opinion of Counsel to Credit
Parties.  The Administrative Agent
shall have received a favorable written opinion (addressed to the
Administrative Agent and the Noteholders and dated the Effective Date) of
Kaplan, Strangis and Kaplan, P.A., counsel to the Credit Parties, substantially
in the form of Exhibit H annexed to the Credit Agreement and
covering such matters relating to the Credit Parties, this Agreement, the other
Note Purchase Documents or the Transactions as the Required Senior Lenders
shall request (and each Credit Party hereby requests such counsel to deliver
such opinion).

 

(t)            Affiliate Subordination Agreement.  Each of the parties to the Affiliate Subordination
Agreement shall have executed and delivered to the Administrative Agent, its
counterpart of the Affiliate Subordination Agreement.

 

(u)           Fees and Expenses.  The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

 

(v)           Other Documents.  The Administrative Agent shall have received
such other documents as the Administrative Agent or any Noteholder or Special
Counsel shall have reasonably requested.

 

The Administrative Agent shall notify the Borrower and the Noteholders
of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the
obligations of the Noteholders to make Term B2 Loans, hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or
waived pursuant to Section 10.2) at or prior to 12:00 p.m., Boston, Massachusetts
time, on June 25, 2003 (and, in the event such conditions are not so satisfied
or waived, the Term B2 Loan Commitments shall terminate at such time).

 

52

 

ARTICLE
VI

Affirmative Covenants

 

Until all of the Term B2 Loan Commitments have expired or been
terminated and the principal of and interest on each Term B2 Loan and all fees
payable hereunder shall have been paid in full, each of the Credit Parties
covenants and agrees with the Noteholders that:

 

6.1           Financial Statements and Other Information.  The Credit Parties will furnish to the
Administrative Agent and each Noteholder:

 

(a)           as soon as available, but in any
event no later than the earlier of (x) 90 days after the end of each fiscal
year of the Credit Parties and (y) the date the Holding Company’s financial
statements of the type referred to in clause (i) below are required to be filed
with the Securities and Exchange Commission:

 

(i)            consolidated
and consolidating statements of income, retained earnings and cash flows of the
Credit Parties for such fiscal year and the related consolidated and
consolidating balance sheets of the Credit Parties as at the end of such fiscal
year, setting forth in each case in comparative form the corresponding consolidated
and consolidating figures for the preceding fiscal year,

 

(ii)           an
opinion of independent certified public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) stating
that said consolidated financial statements referred to in the preceding clause
(i) fairly present the consolidated financial condition and results of
operations of the Credit Parties as at the end of, and for, such fiscal year in
accordance with GAAP, and a statement of such accountants to the effect that,
in making the examination necessary for their opinion, nothing came to their
attention that caused them to believe that the Borrower was not in compliance
with Section 7.9, insofar as such Section relates to accounting matters,

 

(iii)          a
certificate of a Financial Officer of the Borrower stating that said
consolidating financial statements referred to in the preceding clause (i)
fairly present the respective individual unconsolidated financial condition and
results of operations of the Credit Parties, in each case in accordance GAAP
consistently applied, as at the end of, and for, such fiscal year, and

 

(iv)          to
the extent that the Borrower is at such time subject to an obligation to file
with the Securities and Exchange Commission the certifications required
pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”) and the applicable rules under the Exchange Act and otherwise in
accordance with the requirements of the Sarbanes-Oxley Act and the Exchange
Act, certifications of each of the chief executive officer and chief financial
officer of the Borrower substantially similar in form and substance to such
required certifications, including a certification that (A) said
consolidated financial statements referred to in the

 

53

 

preceding
clause (i) do not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading, and
(B) such consolidated financial statements fairly present in all material
respects the financial condition, results of operations and cash flows of the
Credit Parties on a consolidated basis as of and for the periods presented in
accordance with GAAP consistently applied;

 

(b)           as soon as available but in any event
no later than the earlier of (x) 45 days after the end of each of the first
three fiscal quarters of the Credit Parties and (y) the date the Holding
Company’s financial statements of the type referred to in clause (i) below are
required to be filed with the Securities and Exchange Commission:

 

(i)            consolidated
and consolidating statements of income, retained earnings and cash flows of the
Credit Parties for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related consolidated
and consolidating balance sheets of the Credit Parties as at the end of such
period, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding period in Credit
Parties’ strategic plan for such period and for the corresponding period in the
preceding fiscal year (except that, in the case of balance sheets, such
comparison shall be to the last day of the prior fiscal year),

 

(ii)           a
certificate of a Financial Officer of the Borrower, which certificate shall
state that said consolidated financial statements referred to in the preceding
clause (i) fairly present the consolidated financial condition and results of
operations of the Credit Parties and that said consolidating financial
statements referred to in the preceding clause (i) fairly present the
respective individual unconsolidated financial condition and results of
operations of the Credit Parties, in each case in accordance with generally
accepted accounting principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments and the
omission of footnotes), and

 

(iii)          to
the extent that the Borrower is at such time subject to an obligation to file
with the Securities and Exchange Commission the certifications required pursuant
to the Sarbanes –Oxley Act and the applicable rules under the Exchange Act and
otherwise in accordance with the requirements of the Sarbanes-Oxley Act and the
Exchange Act, certifications of each of the chief executive officer and chief
financial officer of the Borrower substantially similar in form and substance
to such required certifications, including a certification that (A) said
consolidated financial statements referred to in the preceding clause (i)
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading, and
(B) such financial statements fairly present in all material respects the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries on a consolidated basis as of and for the periods presented in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;

 

54

 

(c)           as soon as available and in any event
within 30 days after the end of each month, internally prepared financial
statements consisting of consolidated and consolidating statements of income,
and cash flows of the Credit Parties for such month and for the period from the
beginning of the current fiscal year to the end of such month, and the related
consolidated and consolidating balance sheets of the Credit Parties as at the
end of such month setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the corresponding
period in Credit Parties’ strategic plan for such period;

 

(d)           concurrently with any delivery of
financial statements under clauses (a) and (b) above, a Compliance Certificate;

 

(e)           [Reserved];

 

(f)            concurrently with any delivery of
financial statements under clause (a) above, a certificate of the accounting
firm that reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial statements
of any Default (which certificate may be limited to the extent required by
accounting rules or guidelines);

 

(g)           as soon as available and in any event
within 30 days after the beginning of the fiscal year of the Borrower,
consolidated and consolidating statements of forecasted income for the Credit
Parties for each fiscal month in such fiscal year and a forecasted consolidated
and consolidating balance sheets of the Credit Parties, together with
supporting assumptions which were reasonable when made, as at the end of each
fiscal month, all prepared in good faith in reasonable detail and consistent
with the Borrower’s and the Borrower’s past practices in preparing projections and
otherwise reasonably satisfactory in scope to the Administrative Agent;

 

(h)           promptly after the same become
publicly available, copies of all registration statements, regular periodic and
other reports and statements filed by the Holding Company or any Credit Party
with the Securities and Exchange Commission or any Governmental Authority
succeeding to any or all of the functions of said Commission or with any
national securities exchange or market quotation system and copies of all press
releases by the Holding Company or any Credit Party;

 

(i)            promptly upon the mailing thereof to
the shareholders of the Borrower generally, copies of all financial statements,
reports and proxy or information statements so mailed;

 

(j)            promptly upon the Administrative Agent’s
request, for each publication for which audits are regularly prepared by any
Credit Party (i) audits of the magazine subscriptions for each of the
publications of the Credit Parties as of December 31 and June 30 each
year performed by either Audit Bureau of Circulations or Business Publications
Audit of Circulation, Inc. and (ii) audits of the membership subscriptions for
the Credit Parties as of December 31 and June 30 each year;

 

(k)           promptly upon the Administrative
Agent’s request, the Borrower shall deliver to the Administrative Agent tapes,
disks or other storage media containing the then-

 

55

 

current subscription and membership lists and other
data bases maintained by each of the Credit Parties, together with the
technical specifications for how to read such information, all in form
reasonably satisfactory to the Administrative Agent which may include the
requirement that the Borrower request that each of its and its Subsidiaries’
fulfillment houses furnish such information regarding the Credit Parties’
subscription lists as are maintained by such fulfillment houses; provided,
however, that the Administrative Agent shall not divulge such
information to any Person prior to the occurrence of an Event of Default; provided,
further however, that after the occurrence and during the
continuation of an Event of Default, the Administrative Agent may use that
information for any lawful purpose (including a sale of one or more data
bases), provided that the Administrative Agent acts in a commercially
reasonable fashion in making such use, but the Administrative Agent shall have
no obligation to make any such use of such information unless directed to do so
by the Required Senior Lenders;

 

(l)            promptly after delivery of the same
to the Paying Agent, copies of all notices of redemption, payment instructions,
officer’s certificates, and other similar documents delivered to the Paying
Agent under the Holding Company Notes Indenture in connection with any
redemption of Holding Company Notes; and

 

(m)          promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of any Credit Party, or compliance with the terms of this
Agreement, as the Administrative Agent or any Noteholder may reasonably
request.

 

6.2           Notices of Material Events.  The Credit Parties will furnish to the
Administrative Agent and each Noteholder prompt written notice of the
following:

 

(a)           the occurrence of any Default;

 

(b)           the filing or commencement of any
action, suit or proceeding by or before any arbitrator or Governmental
Authority against or affecting any Credit Party or any Affiliate thereof that,
if adversely determined, could reasonably be expected to result in a Material
Adverse Effect;

 

(c)           the occurrence of any ERISA Event
that, alone or together with any other ERISA Events that have occurred, could
reasonably be expected to result in liability of the Credit Parties in an
aggregate amount exceeding $100,000; and

 

(d)           the occurrence of any event of
default or termination under any Sale-Leaseback Agreement between a Credit
Party and AGRP Holding Corp. or any of its Subsidiaries;

 

(e)           the occurrence of any event of
default or termination under any instrument, agreement or mortgage between AGRP
Holding Corp. or any of its Subsidiaries and CIBC Inc. in connection with any
loan secured by a mortgage on property leased or used by any Credit Party; and

 

(f)            any other development that results
in, or could reasonably be expected to result in, a Material Adverse Effect.

 

56

 

Each notice delivered under this Section 6.2 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

 

6.3           Existence; Conduct of Business.  The Credit Parties will do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business. No Credit Party shall
change its corporate, partnership or limited liability company form or
jurisdiction of organization without the written consent of the Required Senior
Lenders or the Administrative Agent on their behalf, which consent shall not be
unreasonably withheld; provided that such consent shall be
predicated upon such amendments to the Note Purchase Documents as shall be
necessary to reflect such change.  The
foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.4.

 

6.4           Payment of Obligations.  Each of the Credit Parties will pay its
obligations, including Tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good
faith by appropriate proceedings, (b) such Credit Party has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.

 

6.5           Maintenance of Properties; Insurance.  The Credit Parties will (a) keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted, and (b) maintain insurance,
with financially sound and reputable insurance companies, as may be required by
law and such other insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations, including media perils
insurance.  Without limiting the
generality of the foregoing, the Credit Parties will (i) maintain or cause to
be maintained flood insurance with respect to each Flood Hazard Property in
amounts approved by the Administrative Agent, or provide evidence acceptable to
the Administrative Agent that such insurance is not available, (ii) maintain or
cause to be maintained replacement value casualty insurance on the Collateral
and media perils insurance under such policies of insurance, in each case with
such insurance companies, in such amounts, with such deductibles, and covering
such terms and risks as are at all times satisfactory to the Administrative
Agent in its commercially reasonable judgment. 
Each such policy of insurance shall (x) name the Administrative Agent
for the benefit of the Lenders and the Noteholders as an additional insured
thereunder as its interests may appear and (y) in the case of each casualty
insurance policy, contain a loss payable clause or endorsement, satisfactory in
form and substance to the Administrative Agent that names the Administrative
Agent for the benefit of the Lenders and the Noteholders as the loss payee
thereunder for any covered loss in an amount not less than $1,000,000 per
occurrence, with “umbrella” coverage in an aggregate amount not less than
$25,000,000 and provides for at least 30 days prior written notice to the
Administrative Agent of any modifications or cancellation of such policy.

 

57

 

6.6           Books and Records; Inspection Rights.  The Credit Parties will keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.  The Credit Parties will permit any
representatives designated by the Administrative Agent or any Noteholder, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.  The Borrower, in consultation with the
Administrative Agent, will arrange for a meeting to be held at least once every
year with the Noteholders hereunder at which the business and operations of the
Credit Parties are discussed.

 

6.7           Fiscal Year.  To enable the ready and consistent determination of compliance
with the covenants set forth in Section 7 hereof, the Credit Parties (other
than Camping World) will not change the last day of their fiscal year from
December 31 of each year, or the last day of the first three fiscal quarters in
each of its fiscal years from March 31, June 30 and September 30,
respectively, except that Camping World may have a fiscal year which ends on
the Sunday closest to December 31 of each calendar year and such fiscal year
shall consist of four thirteen-week fiscal quarters.

 

6.8           Compliance with Laws.  The Credit Parties will comply with (i) all
laws, rules, regulations and orders including, without limitation,
Environmental Laws, of any Governmental Authority and (ii) all contractual
obligations, in each case applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

 

6.9           Use of Proceeds.  The proceeds of the Term B2 Loans will be used only for (i) the
refinancing of Indebtedness outstanding under the Existing Credit Agreement,
(ii) [reserved], (iii) the working capital needs of the Credit Parties, (iv) a
distribution to the Holding Company on the Effective Date, in an amount not to
exceed $13,700,000 in the aggregate, to fund a distribution to the shareholders
of the Holding Company, (v) Acquisitions permitted hereunder, (vi) Capital
Expenditures permitted hereunder, and (vii) expenses incurred in connection
with the foregoing transactions and for general corporate purposes.  No part of the proceeds of any Term B2 Loan
will be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T,
U and X.

 

6.10         Certain Obligations Respecting Subsidiaries and
Collateral Security.

 

(a)           Additional Subsidiaries.  In the event that any Credit Party shall
form or acquire any new Subsidiary after the date hereof, such Credit
Party  will, and will cause each of its
Subsidiaries to, cause such new Subsidiary within five Business Days of such
formation or acquisition:

 

(i)            to
execute and deliver to the Administrative Agent the following documents: (1) a
counterpart to this Agreement (and thereby to become a party to this Agreement,
as a “Guarantor” hereunder), (2) a counterpart to the Pledge Agreement, (3) a
counterpart to the Security Agreement, (4) a counterpart to the Trademark
Security

 

58

 

Agreement
and (5) Mortgages and such other instruments documents and agreements as may be
required by the Administrative Agent; and

 

(ii)           to
take such action (including delivering such shares of stock and such UCC
financing statements) as shall be necessary to create and perfect valid and
enforceable first priority Liens consistent with the provisions of the
applicable Collateral Documents; and

 

(iii)          to
deliver such proof of corporate action, incumbency of officers and other
documents as is consistent with those delivered by each Subsidiary pursuant to
Section 5.1 upon the Effective Date or as the Administrative Agent shall have
reasonably requested.

 

(b)           Ownership of Subsidiaries.  No Credit Party shall sell, transfer or
otherwise dispose of any shares of stock in any Subsidiary owned by it, nor
permit any Subsidiary to issue any shares of stock of any class whatsoever to
any Person other than to a Credit Party. 
The Credit Parties will take such action from time to time as shall be
necessary to ensure that the percentage of the equity capital of any class or
character owned by it in any Subsidiary on the Effective Date (or, in the case
of any newly formed or newly acquired Subsidiary, on the date of formation or
acquisition) is not at any time decreased, other than by reason of transfers to
another Credit Party.  In the event that
any additional shares of stock shall be issued by any Credit Party, the
respective holder of such shares of stock shall forthwith deliver to the
Administrative Agent pursuant to the Pledge Agreement the certificates
evidencing such shares of stock, accompanied by undated stock powers executed
in blank and to take such other action as the Administrative Agent shall
request to perfect the security interest created therein pursuant to the Pledge
Agreement.

 

6.11         ERISA. 
The Credit Parties will maintain, each Plan in compliance with all
material applicable requirements of ERISA and of the Code and with all
applicable rulings and regulations issued under the provisions of ERISA and of
the Code and will not and not permit any of the ERISA Affiliates to (a) engage
in any transaction in connection with which the Borrower or any of the ERISA
Affiliates would be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, in either
case in an amount exceeding $50,000, (b) fail to make full payment when due of
all amounts which, under the provisions of any Plan, the Borrower or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, with respect to any Plan
in an aggregate amount exceeding $50,000 or (c) fail to make any payments in an
aggregate amount exceeding $50,000 to any Multiemployer Plan that the Borrower
or any of the ERISA Affiliates may be required to make under any agreement
relating to such Multiemployer Plan or any law pertaining thereto.

 

6.12         Environmental Matters; Reporting.  The Credit Parties will observe and comply
with, all laws, rules, regulations and orders of any government or government
agency relating to health, safety, pollution, hazardous materials or other
environmental matters to the extent non-compliance could result in a material
liability or otherwise have a material adverse effect on the Borrower and the
Subsidiaries taken as a whole.  The
Borrower will give the

 

59

 

Administrative Agent prompt written notice of any
violation as to any environmental matter by any Credit Party and of the
commencement of any judicial or administrative proceeding relating to health,
safety or environmental matters (a) in which an adverse effect on any operating
permits, air emission permits, water discharge permits, hazardous waste permits
or other permits held by any Credit Party which are material to the operations
of such Credit Party, or (b) which will or threatens to impose a material
liability on such Credit Party to any Person or which will require a material
expenditure by such Credit Party to cure any alleged problem or violation.

 

6.13         Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral.

 

(a)           If any Credit Party acquires any
Material Leasehold Property, the Borrower shall, or shall cause such Subsidiary
to, use its best efforts (without requiring such Credit Party to relinquish any
material rights or incur any material obligations or to expend more than a
nominal amount of money over and above the reimbursement, if required, of the
landlord’s out-of-pockets costs, including attorneys’ fees) to cause such
Leasehold Property to be a Conforming Leasehold Interest.

 

(b)           From and after the Effective Date, in
the event that (i) any Credit Party acquires any fee interest in real property
having a fair market value in excess of $1,000,000 or any Material Leasehold
Property, or the Administrative Agent determines in its sole discretion to
place a Mortgage on any Real Property Asset having a fair market value in
excess of $1,000,000 owned on the Effective Date by any Credit Party if a
Mortgage was not placed on any such Real Property Asset as of the Effective
Date, or (ii) at the time any Person becomes a Subsidiary, such Person owns or
holds any fee interest in real property or any Material Leasehold Property, in
either case excluding any such Real Property Asset the encumbering of which
requires the consent of any applicable lessor or (in the case of clause (ii)
above) any then-existing senior lienholder, where the Credit Parties are unable
to obtain such lessor’s or senior lienholder’s consent (any such non-excluded
Real Property Asset described in the foregoing clause (i) or (ii) being a “Additional
Mortgaged Property”), such Credit Party shall deliver to the Administrative
Agent, as soon as practicable after such Person acquires such Additional
Mortgaged Property, the following:

 

(i)            Additional
Mortgages.  A fully executed and
notarized Mortgage (an “Additional Mortgage”), in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering the interest of such Credit Party in such Additional Mortgaged
Property;

 

(ii)           Surveys.  With respect to each Additional Mortgaged
Property, copies of all existing surveys, surveyors certificates and such
additional surveys or surveyor certificates as the Administrative Agent may
reasonably require;

 

(iii)          Recorded
Leasehold Interests.  In the case of
any Additional Mortgaged Property consisting of a Leasehold Property, copies of
all leases between any Credit Party and any landlord or tenant;

 

60

 

(iv)          Landlord
Consents and Estoppels.  In the case
of any Additional Mortgaged Property consisting of a Leasehold Property, (a) a
Landlord Consent and Estoppel with respect thereto and where required by the
terms of any lease, the consent of the mortgagee, ground lessor or other party
and (b) evidence that such Leasehold Property is a Recorded Leasehold Interest;

 

(v)           Matters
Relating to Flood Hazard Properties. 
(A) Evidence as to whether any Additional Mortgaged Property is a Flood
Hazard Property and (B) if such Additional Mortgaged Property is a Flood Hazard
Property, evidence that the applicable Credit Party has obtained flood
insurance with respect to each Flood Hazard Property in amounts approved by the
Administrative Agent, or evidence acceptable to the Administrative Agent that
such insurance is not available;

 

(vi)          Title
Insurance.  (A) If required by the
Administrative Agent, ALTA mortgagee title insurance policies or unconditional
commitments therefor (the “Additional Mortgage Policies”) issued by the
Title Company with respect to the Additional Mortgaged Property, in an amount
satisfactory to the Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, each such Additional Mortgaged Property vested in
such Credit Party and assuring the Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on such
Additional Mortgaged Property, subject only to any standard exceptions as may
be reasonably acceptable to the Administrative Agent, which Additional Mortgage
Policy (I) shall include all endorsements for matters reasonably requested by
the Administrative Agent and (II) shall provide for affirmative insurance and
such reinsurance as the Administrative Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to the Administrative
Agent; and (B) evidence satisfactory to the Administrative Agent that such
Credit Party has (I) delivered to the Title Company all certificates and affidavits
required by the Title Company in connection with the issuance of the Additional
Mortgage Policy and (II) paid to the Title Company or to the appropriate
Governmental Authorities all expenses and premiums of the Title Company in
connection with the issuance of the Additional Mortgage Policy and all
recording and stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Additional Mortgage in the appropriate
real estate records;

 

(vii)         Title
Reports.  If no Additional Mortgage
Policy is required with respect to such Additional Mortgaged Property, a title
report issued by the Title Company with respect thereto, dated not more than 30
days prior to the date such Additional Mortgage is to be recorded and satisfactory
in form and substance to the Administrative Agent;

 

(viii)        Copies
of Documents Relating to Title Exceptions. 
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Additional Mortgage Policy or in the title reports
delivered pursuant to Section 6.13(b)(vii);

 

(ix)           Environmental
Audit.  If required by the
Administrative Agent, reports and other information in form, scope and
substance satisfactory to the

 

61

 

Administrative
Agent and prepared by environmental consultants satisfactory to the
Administrative Agent, concerning any environmental hazards or liabilities to
which any Credit Party may be subject with respect to such Additional Mortgaged
Property; and

 

(x)            Opinions
of Counsel.  (1) An favorable
opinion of counsel (which counsel shall be satisfactory to the Administrative
Agent and Special Counsel), as to the due authorization, execution and delivery
by such Credit Party of such Additional Mortgage and such other matters as the
Administrative Agent may reasonably request, and (2) if required by the
Administrative Agent, an opinion of counsel (which counsel shall be
satisfactory to the Administrative Agent and Special Counsel) in the state in
which such Additional Mortgaged Property is located with respect to the
enforceability of the form of Additional Mortgages to be recorded in such state
and such other matters (including without limitation any matters governed by
the laws of such state regarding personal property security interests in
respect of any Collateral) as the Administrative Agent may reasonably request,
in each case in form and substance reasonably satisfactory to the
Administrative Agent.

 

(c)           The Credit Parties will permit an
independent real estate appraiser satisfactory to the Administrative Agent,
upon reasonable notice, to visit and inspect any Additional Mortgaged Property
for the purpose of preparing an appraisal of such Additional Mortgaged Property
satisfying the requirements of all applicable laws and regulations (in each
case to the extent required under such laws and regulations as determined by
the Administrative Agent in its sole discretion).

 

ARTICLE
VII

Negative Covenants

 

Until the Term B2 Loan Commitments have expired or terminated and the
principal of and interest on each Term B2 Loan and all fees payable hereunder
have been paid in full, the Credit Parties covenant and agree with the
Noteholders that:

 

7.1           Indebtedness.  No Credit Party will create, incur, assume or permit to exist any
Indebtedness, except:

 

(a)           Indebtedness created hereunder or
under the Credit Agreement;

 

(b)           Indebtedness existing on the date
hereof and set forth in Schedule 4.14 and any extension, renewal,
refunding or replacement of any such Indebtedness that does not increase the
principal amount thereof;

 

(c)           Indebtedness of any Credit Party to
any other Credit Party;

 

(d)           Guarantees by any Credit Party of
Indebtedness of any other Credit Party;

 

(e)           Indebtedness of any Credit Party
(determined on a consolidated basis without duplication in accordance with
GAAP) in an aggregate principal amount which does not exceed $20,000,000 at any
one time outstanding; provided that up to $10,000,000 in an 

 

62

 

aggregate
principal amount of such Indebtedness at any one time outstanding may be
secured by Liens permitted under Section 7.2(i);

 

(f)            Holding Company Notes Borrower
Refinancing Indebtedness; and

 

(g)           Indebtedness, the proceeds of which
are used to prepay and refinance all or a portion of the Term Loans; provided
that such Indebtedness:  (i) is
unsecured Subordinated Indebtedness issued by the Borrower, (ii) has a weighted
average life to maturity that is greater than the weighted average life to
maturity of the Term Loans, and (iii) has a maturity date not earlier than six
months after the Term B2 Loan Maturity Date.

 

7.2           Liens. No Credit Party will create, incur,
assume or permit to exist any Lien on any Property or asset now owned or
hereafter acquired by it, or assign, sell or transfer any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:

 

(a)           Liens created under the Collateral
Documents;

 

(b)           any Lien on any property or asset of
any Credit Party existing on the date hereof and set forth in Schedule 4.14,
provided
that (i) such Lien shall not apply to any other property or asset of any Credit
Party and (ii) such Lien shall secure only those obligations which it secures
on the date hereof and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof;

 

(c)           Liens imposed by any Governmental
Authority for taxes, assessments or charges not yet due or which are being
contested in good faith and by appropriate proceedings if adequate reserves
with respect thereto are maintained on the books of any Credit Party in
accordance with GAAP;

 

(d)           carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s or other like Liens, and vendors’ Liens
imposed by statute or common law not securing the repayment of Indebtedness,
arising in the ordinary course of business which are not overdue for a period
of more than 60 days or which are being contested in good faith and by
appropriate proceedings and Liens securing judgments (including, without
limitation, pre-judgment attachments) but only to the extent for an amount and
for a period not resulting in an Event of Default under Section 8.1(j)
hereof;

 

(e)           pledges or deposits under worker’s
compensation, unemployment insurance and other social security legislation;

 

(f)            deposits to secure the performance
of bids, tenders, trade contracts (other than for borrowed money), leases
(other than capital leases), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(g)           easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions, easements,
licenses, restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which do not,
in the aggregate, 

 

63

 

materially detract from the value of the Property of
any Credit Party or interfere with the ordinary conduct of the business of any
Credit Party;

 

(h)           Liens consisting of bankers’ liens
and rights of setoff, in each case, arising by operation of law, and Liens on
documents presented in letters of credit drawings; and

 

(i)            Liens on fixed or capital assets,
including real or personal property, acquired, constructed or improved by any
Credit Party, provided that (A) such Liens secure Indebtedness (including
Capital Lease Obligations) permitted by the proviso to Section 7.1(e) (B) such
Liens and the Indebtedness secured thereby are incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed the cost of
acquiring, constructing or improving such fixed or capital assets and (D) such
security interests shall not apply to any other property or assets of any
Credit Party.

 

7.3           Contingent Liabilities. No Credit Party
will Guarantee the Indebtedness or other obligations of any Person, or
Guarantee the payment of dividends or other distributions upon the stock of, or
the earnings of, any Person, except:

 

(a)           endorsements of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business,

 

(b)           Guarantees of obligations of any
Credit Party by any other Credit Party;

 

(c)           Guarantees in effect on the date
hereof which are disclosed in Schedules 4.14 or 7.7, any
replacements thereof in amounts not exceeding such Guarantees and any additions
thereto, provided
the additions thereto do not exceed $1,000,000 outstanding in the aggregate;
and

 

(d)           obligations in respect of Letters of
Credit (as defined in the Credit Agreement).

 

7.4           Fundamental Changes.  Except for (a) the liquidation of Thunder
Press into its parent company, Ehlert Publishing Group, Inc., and (b) the
merger of Woodall Publications Corporation with and into TL Enterprises, Inc.,
each of which shall occur on or prior to the Effective Date, no Credit Party will
enter into any transaction of merger or consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution).  No Credit Party will
acquire any business or property from, or capital stock of, or be a party to
any acquisition of, any Person except for purchases of inventory and other
property to be sold or used in the ordinary course of business, Investments
permitted under Section 7.5 and Capital Expenditures permitted under
Section 7.9(e).  No Credit Party
will convey, sell, lease, transfer or otherwise dispose of, in one transaction
or a series of transactions, any material part of its business or property,
whether now owned or hereafter acquired (including, without limitation,
receivables and leasehold interests, but excluding (x) obsolete or worn-out
property, including leasehold interests, no longer used or useful in its
business, (y) any inventory or other property sold or disposed of in the
ordinary course of business and on ordinary business terms and (z)
Sale-Leaseback Transactions to the extent permitted by Section 7.14.

 

64

 

Notwithstanding the foregoing provisions of this Section 7.4:

 

(a)           any Subsidiary may be merged or
consolidated with or into any other Subsidiary or into the Borrower; provided
that if any such transaction shall be between a Subsidiary and a Wholly Owned
Subsidiary, the Wholly Owned Subsidiary shall be the continuing or surviving
corporation;

 

(b)           any Subsidiary may sell, lease, transfer
or otherwise dispose of any or all of its property (upon voluntary liquidation
or otherwise) to any Subsidiary that is a Wholly Owned Subsidiary of the
Borrower;

 

(c)           the capital stock of any Subsidiary
may be sold, transferred or otherwise disposed of to the Borrower or any
Subsidiary that is a Wholly Owned Subsidiary of the Borrower; and

 

(d)           any Credit Party may consummate any
Acquisition with any other Person (whether by way of purchase of assets or
stock, by merger or consolidation or otherwise), so long as:

 

(i)            the
aggregate purchase price (including assumed liabilities and any non-cash
consideration valued at the fair market value thereof determined in good faith
by the Board of Directors of the Borrower) paid by the Credit Parties for
Acquisitions in any fiscal year shall not, without the prior consent of the
Required Senior Lenders, exceed $15,000,000;

 

(ii)           such
Acquisition (if by purchase of assets, merger or consolidation) shall be
effected in such manner so that the acquired business, and the related assets,
are owned by a Credit Party and, if effected by merger or consolidation
involving a Credit Party, the Credit Party shall be the continuing or surviving
entity;

 

(iii)          such
Acquisition (if by purchase of stock) shall be effected in such manner so that
the acquired entity becomes a Wholly Owned Subsidiary of a Credit Party;

 

(iv)          the
type of business of the business acquired in such Acquisition shall be one of
the types of business engaged in by the Credit Parties as of the Effective Date
and such business shall be located in the United States or Canada;

 

(v)           after
giving effect to such Acquisition the Credit Parties shall be in compliance
with Section 7.9 and the Borrower shall have delivered to the Administrative
Agent a certificate of a Financial Officer showing such calculations in
reasonable detail to demonstrate such compliance; and

 

(vi)          immediately
prior to such Acquisition and after giving effect thereto, no Default shall
have occurred and be continuing.

 

7.5           Investments; Hedging Agreements.

 

(a)           No Credit Party will make or permit
to remain outstanding any 

 

65

 

Investment, except:

 

(i)            Investments
by any Credit Party in any other Credit Party, advances by any Credit Party to
any other Credit Party in the ordinary course of business and capital
contributions by any Credit Party to any other Credit Party;

 

(ii)           Permitted
Investments;

 

(iii)          Deposit
and operating accounts;

 

(iv)          Investments
represented by accounts receivable created or acquired in the ordinary course
of business;

 

(v)           Advances
to employees in the ordinary course of business not exceeding $2,000,000 in the
aggregate at any one time outstanding;

 

(vi)          Additional
Investments in an aggregate amount not in excess of $4,000,000 at any one time
outstanding; and

 

(vii)         Investments
in addition to the foregoing made prior to the date hereof and set forth in Schedule
7.5 annexed to the Credit Agreement.

 

(b)           No Credit Party will enter into any
Hedging Agreement, other than Hedging Agreements entered into in the ordinary
course of business to hedge or mitigate risks to which the Borrower or any
Subsidiary is exposed in the conduct of its business or the management of its
liabilities.

 

7.6           Restricted Junior Payments and Cash Flow Distributions.

 

(a)           No Credit Party will declare or make
any Restricted Junior Payment at any time; provided, however, that (i) so long as
no Default shall have occurred or be continuing or shall be caused thereby the
Borrower may declare and make Restricted Junior Payments to the Holding Company
in amounts equal to the cash interest payments to the holders of the Holding
Company Notes in accordance with, and only to the extent required by, the
Holding Company Notes Indenture and, if the Holding Company Notes have been
refinanced with Holding Company Notes Refinancing Indebtedness, in amounts
equal to the cash interest payments to the holders of such Holding Company
Notes Refinancing Indebtedness in accordance with, and only to the extent
required by, the indenture or other document governing the Holding Company
Notes Refinancing Indebtedness, (ii) so long as no Default shall have occurred
or be continuing or shall be caused thereby the Borrower may declare and make
Restricted Junior Payments to the Holding Company in amounts equal to the
Permitted Tax Distributions, (iii) so long as no Default shall have occurred
and be continuing or shall be caused thereby, the Borrower may declare and make
a Restricted Junior Payment to the Holding Company to permit the Holding Company
to consummate the Holding Company Notes Refunding with respect to not more than
$30,000,000 in an aggregate principal amount of Holding Company Notes (plus any
amounts payable with respect thereto for reasonable fees, expenses, premium and
the amount of any accrued interest thereon), (iv) so long as no Default shall
have occurred or be continuing or shall be caused thereby, the Borrower may
declare and make a Restricted Junior Payment to the 

 

66

 

Holding Company on the Effective Date in an amount not
to exceed $13,700,000 to permit the Holding Company to fund a distribution to
the shareholders of the Holding Company, (v) so long as no Default shall have
occurred or be continuing or shall be caused thereby the Borrower may make
Restricted Junior Payments to the Holding Company of any proceeds from Holding
Company Notes Borrower Refinancing Indebtedness in excess of the Holding
Company Notes Refinancing Payment, (vi) the Borrower may declare and make Restricted
Junior Payments to the Holding Company to the extent permitted by Section
7.6(b), (vii) so long as no Default shall have occurred or be continuing or
shall be caused thereby, if the Holding Company Notes have been refinanced with
Holding Company Notes Borrower Refinancing Indebtedness, the Borrower may
declare and make Restricted Junior Payments in amounts equal to the cash
interest payments to the holders of such Holding Company Notes Borrower
Refinancing Indebtedness in accordance with, and only to the extent required
by, the indenture or other document governing such indebtedness, (viii) so long
as no Default shall have occurred or be continuing or shall be caused thereby,
the Borrower may distribute to the Holding Company, the capital stock of Camping
World RV Sales, Inc., and (ix) so long as no Default shall have occurred or be
continuing or shall be caused thereby, (A) the Borrower may distribute its
ownership interest in those certain life insurance policies (Policy #1993334V
issued by Minnesota Life Insurance Company and Policy #0012787 issued by
Massachusetts Mutual Life Insurance Company), in each case, insuring the life
of Stephen Adams; provided that upon such distribution the Borrower shall no
longer have any obligation to pay any premium or other amounts payable in
connection with such policy or (B) if the Borrower determines to surrender such
policy to the issuer for the cash surrender benefit, the Borrower may
distribute the cash surrender benefit of such policy to the Holding Company (net
of any taxes, costs or other charges incurred by the Borrower in connection
with such surrender); provided, however, that nothing herein
shall be deemed to prohibit the making of any dividend or distribution by any
Subsidiary to any other Credit Party.

 

(b)           During each fiscal year commencing
with the fiscal year ending December 31, 2003 if (i) the Consolidated
Total Leverage Ratio is less than 3.00 to 1.00, as of the end of a fiscal year
assuming on a pro forma basis that the proposed Restricted Junior Payment
referred to below was made during such fiscal year (as reported on the
Compliance Certificate delivered with the financial statements required by
Section 6.1(a) for such fiscal year and with respect to such pro forma
calculation a similar certificate containing a reasonably detailed calculation
of the Consolidated Total Leverage Ratio), (ii) no Default shall have occurred
or be continuing or shall be caused by such proposed Restricted Junior Payment
referred to below, and (iii) the Borrower shall have the ability to borrow not
less than $20,000,000 in principal amount of Revolving Credit Loans in addition
to the Revolving Credit Exposure (as defined in the Credit Agreement) then
outstanding, assuming the proposed Restricted Junior Payment referred to below
has been made, then the Borrower shall be entitled to declare and make a
Restricted Junior Payment in an amount not in excess of the lesser of (x)
$10,000,000  or (y) the sum of (I) 25% of Excess Cash Flow for such fiscal
year, plus (II) the undistributed portion, if any, of the Permitted Cash
Flow Distributions from all prior fiscal years commencing with the fiscal year
ending December 31, 2003.  Each such
Restricted Junior Payment, if any, shall be made during the period (q)
commencing on the date of the delivery by the Borrower of the financial
statements for such fiscal year required to be delivered pursuant to Section
6.1(a), accompanied by a Compliance Certificate required to be delivered
pursuant to Section 6.1(d) demonstrating compliance with this Section 7.6(b)
and Sections 7.9 and 2.10(b)(iv) and (r) ending on the date 

 

67

 

which is 90 days thereafter; provided that such
Restricted Junior Payment shall not be made prior to the making of mandatory
prepayment in respect of Excess Cash Flow for such fiscal year as required by
Section 2.10(b)(iv).

 

7.7           Transactions with Affiliates.  Except as expressly permitted by this
Agreement, no Credit Party will, directly or indirectly (a) make any Investment
in an Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; (c) merge into or consolidate with an Affiliate, or
purchase or acquire property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of obligations of an
Affiliate); provided
that:

 

(i)            any
Affiliate who is an individual may serve as a director, officer, employee or
consultant of any Credit Party and receive reasonable compensation for his or
her services in such capacity;

 

(ii)           the
Credit Parties may engage in and continue the transactions with or for the
benefit of Affiliates which are described in Schedule 7.7 annexed
to the Credit Agreement;

 

(iii)          the
Credit Parties may make payments to the KEYSOP Plan with respect to bonuses or
payments under the Phantom Stock Agreements for key employees of the Credit
Parties to the extent that such payments are permitted to be made pursuant to
the other provisions of this Agreement;

 

(iv)          if
the capital stock of Camping World RV Sales, Inc. is distributed as permitted
by Section 7.6(a)(viii), then the Credit Parties may enter into cost allocation
agreements with Camping World RV Sales, Inc. in order to provide for a
reasonable allocation of shared overhead and costs, such agreement to be in
form and substance satisfactory to the Administrative Agent; and

 

(v)           the
Credit Parties may engage in arms-length transactions for fair market value with
or for the benefit of Affiliates not in excess of $2,000,000 in any fiscal year
in addition to payments and transactions referred to in clauses (i) through
(iv) above.

 

7.8           Restrictive Agreements.  No Credit Party will, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of any Credit Party to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital
stock or to make or repay loans or advances to any other Credit Party or to
Guarantee Indebtedness of any other Credit Party; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement or the Credit Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Schedule
7.8 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such

 

68

 

sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.

 

7.9           Certain Financial Covenants.

 

(a)           Consolidated Fixed Charges Ratio.  The Credit Parties will not permit the
Consolidated Fixed Charges Ratio as of the end of any fiscal quarter ending
during the periods set forth below to be less than the ratio set opposite such
period below:

 

	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  From the Effective Date through September 30, 2004

  	
   

  	
  1.15 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2004 through September 30, 2005

  	
   

  	
  1.20 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2005 through September 30, 2006

  	
   

  	
  1.25 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2006 through September 30, 2007

  	
   

  	
  1.30 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2007 and at all times thereafter

  	
   

  	
  1.40 to 1.00

  

 

(b)           Consolidated Total Leverage Ratio.  The Credit Parties will not permit the
Consolidated Total Leverage Ratio at any time during any period below to exceed
the ratio set opposite such period below:

 

	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  From the Effective Date through September 30, 2004

  	
   

  	
  4.75 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2004 through September 30, 2005

  	
   

  	
  4.50 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2005 through September 30, 2006

  	
   

  	
  4.25 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2006 through September 30, 2007

  	
   

  	
  4.00 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2007 and at all times thereafter

  	
   

  	
  3.75 to 1.00

  

 

(c)           Consolidated Senior Leverage Ratio.  The Credit Parties will not permit the
Consolidated Senior Leverage Ratio at any time during any period below to
exceed the ratio set opposite such period below:

 

69

 

	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  From the Effective Date through September 30, 2004

  	
   

  	
  2.75 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2004 through September 30, 2005

  	
   

  	
  2.60 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2005 through September 30, 2006

  	
   

  	
  2.40 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2006 through September 30, 2007

  	
   

  	
  2.20 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2007 and at all times thereafter

  	
   

  	
  2.00 to 1.00

  

 

(d)           Consolidated Interest Coverage
Ratio.  The Credit Parties will not
permit the Consolidated Interest Coverage Ratio as of the end of any fiscal quarter
ending during the periods below to be less than the ratio set opposite such
period below:

 

	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  From the Effective Date through September 30, 2004

  	
   

  	
  2.60 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2004 through September 30, 2005

  	
   

  	
  2.70 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2005 through September 30, 2006

  	
   

  	
  2.80 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2006 through September 30, 2007

  	
   

  	
  2.90 to 1.00

  
	
   

  	
   

  	
   

  
	
  From October 1, 2007 and at all times thereafter

  	
   

  	
  3.00 to 1.00

  

 

(e)           Capital Expenditures.  The Credit Parties will not permit:

 

(i)            the
aggregate amount of Capital Expenditures (excluding Construction Capital
Expenditures) to exceed $20,000,000 in any fiscal year commencing with the
fiscal year ending December 31, 2003; provided that to the extent that actual
Capital Expenditures (other than Construction Capital Expenditures) in any
fiscal year shall be less than $20,000,000 in the aggregate, the lesser of (i)
$10,000,000 and (ii) the excess of $20,000,000 over the actual Capital
Expenditures (other than Construction Capital Expenditures) shall be available
for Capital Expenditures (other than Construction Capital Expenditures) in the
next fiscal year but may not be carried over into any subsequent fiscal year;
and

 

(ii)           the
amount of Construction Capital Expenditures made since the Effective Date to
exceed $10,000,000 in the aggregate; provided that the aggregate amount of
Construction Capital Expenditures shall be deemed to be reduced by the
aggregate amount of Net Cash Payments received by a Credit Party as a result of
Related Retail Sale-Leaseback Transactions.

 

70

 

7.10         Lines of Business.  No Credit Party will engage to any
substantial extent in any line or lines of business activity other than (i) the
types of businesses engaged in by the Credit Parties as of the Effective Date,
(ii) the rental and sale of recreational vehicles and (iii) such other lines of
business as may be consented to by the Required Senior Lenders.

 

7.11         Management Compensation.  The aggregate amount of compensation
(including salary, bonuses, and any and all other cash compensation) paid by
any Credit Party in respect of any fiscal year to Stephen Adams or any of his
Affiliates shall not exceed the aggregate amount of annual compensation
required to be paid to him and them under the employment agreement dated as of
the 1st day of August 1993, between the Borrower and Mr. Adams as in effect on
the date hereof including any extension of the term thereof.

 

7.12         Subordinated Indebtedness.  No Credit Party will purchase, redeem,
retire or otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for the purchase, redemption, retirement or
other acquisition of, or make any voluntary payment or prepayment of the
principal of or interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except for regularly scheduled payments or
prepayments of principal and interest in respect thereof required pursuant to
the instruments evidencing such Subordinated Indebtedness.  No Credit Party will Guarantee any other
Subordinated Indebtedness without the prior consent of the Required Senior
Lenders.

 

7.13         Modifications of Certain Documents.  No Credit Party will consent to any
modification, supplement or waiver of any of the provisions of any documents or
agreements evidencing or governing any Subordinated Indebtedness or any
Sale-Leaseback Transaction, without the prior consent of the Required Senior
Lenders.

 

7.14         Sale-Leaseback Transactions  No Credit Party will, directly or
indirectly, enter into any Sale-Leaseback Transactions without the prior
written consent of the Required Senior Lenders; provided that the Credit
Parties may enter into Sale-Leaseback Transactions if the proceeds of such
Sale-Leaseback Transactions would constitute Related Retail Sale-Leaseback
Proceeds.

 

7.15         Real Property Leases.  No Credit Party will enter into or maintain
any lease of (or other arrangement conveying the right to use) real property,
as lessee, if immediately after giving effect thereto, (a) the aggregate
maximum fixed rentals paid or payable by the Credit Parties under all such real
property leases of the Credit Parties (excluding amounts paid or payable on
account of maintenance, utilities, ordinary repairs, insurance, taxes,
assessments and other similar charges, whether or not designated as rental or
additional rental) for the succeeding period of four consecutive fiscal
quarters minus (b) the amount of any payments scheduled to be received
by the Credit Parties during such period from the sublease of leasehold
interests would exceed $20,000,000.

 

71

 

ARTICLE
VIII

Events of Default

 

8.1           Events of Default.

 

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

 

(a)           the Credit Parties shall fail to pay
any principal of, or interest on, any Term B2 Loan or any reimbursement
obligation in respect of any LC Disbursement, or other amount payable under
this Agreement or any fee payable under this Agreement or any other agreement
to the Administrative Agent or the Noteholders, when and as the same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;

 

(b)           any representation or warranty made
or deemed made by or on behalf any Credit Party in or in connection with this
Agreement, any of the other Basic Documents or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement, any of the
other Basic Documents or any amendment or modification hereof or thereof, shall
prove to have been incorrect when made or deemed made in any material respect;

 

(c)           the Credit Parties shall fail to
observe or perform any covenant, condition or agreement contained in Article VI
with the exception of Sections 6.1 (g), (h) and (i) or in Article VII;

 

(d)           any Credit Party shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in clauses (a), (b) or (c) of this
Article) or any other Note Purchase Document, and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent (given at the request of the Required Senior Lenders) to the Borrower;

 

(e)           any Credit Party shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable;

 

(f)            any event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or Administrative Agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;

 

(g)           an involuntary proceeding shall be
commenced or an involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Parent, the Holding Company or
any Credit Party or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in

 

72

 

effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent, the
Holding Company or any Credit Party or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall be entered;

 

(h)           the Parent, the Holding Company or
any Credit Party shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or petition described in clause
(g) of this Article, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Parent, the Holding Company or any Credit Party or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;

 

(i)            any Credit Party, the Parent or the
Holding Company shall become unable, admit in writing or fail generally to pay
its debts as they become due;

 

(j)            a final judgment or judgments for
the payment of money in excess of $1,000,000 in the aggregate (exclusive of
judgment amounts fully covered by insurance where the insurer has admitted
liability in respect of such judgment) shall be rendered by a one or more
courts, administrative tribunals or other bodies having jurisdiction against
any Credit Party and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the relevant Credit
Party shall not, within said period of 60 days, or such longer period during
which execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal;

 

(k)           an ERISA Event shall have occurred
that, in the opinion of the Required Senior Lenders, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;

 

(l)            a reasonable basis shall exist for
the assertion against any Credit Party (or there shall have been asserted
against any Credit Party) claims or liabilities, whether accrued, absolute or
contingent, based on or arising from the generation, storage, transport,
handling or disposal of Hazardous Materials by any Credit Party or any of its
Subsidiaries or Affiliates, or any predecessor in interest of any Credit Party
or any of its Subsidiaries or Affiliates, or relating to any site or facility
owned, operated or leased by any Credit Party or any of its Subsidiaries or
Affiliates, which claims or liabilities (insofar as they are payable by any
Credit Party or any of its Subsidiaries but after deducting any portion thereof
which is reasonably expected to be paid by other credit worthy Persons jointly
and severally liable therefor), in the judgment of the Required Senior Lenders
are reasonably likely to be determined adversely to any Credit Party or any of
its Subsidiaries, and the amount thereof is, singly or in the aggregate,
reasonably likely to have a Material Adverse Effect;

 

(m)          any of the following events shall
occur and be continuing:

 

73

 

(i)            the
capital stock of the Parent owned directly or indirectly by Stephen Adams, his
wife, his children, his grandchildren, trusts of which he, his wife, his
children and his grandchildren are the sole beneficiaries and for which one or
more of such individuals are the trustee(s) shall (on a fully diluted basis
after giving effect to the exercise of any outstanding rights or options to
acquire capital stock of the Borrower) cease to constitute either (x) at least
51% of the aggregate equity capital of the Parent or (y) at least such
percentage of the aggregate voting stock of the Parent as is sufficient at all
times to elect a majority of the Board of Directors of the Parent;

 

(ii)           the
Parent shall cease to own directly or indirectly all of the outstanding capital
stock of the Holding Company;

 

(iii)          any
Person or group (within the meaning of the Securities Exchange Act of 1934 and
the rules of the Securities and Exchange Commission thereunder as in effect on
the date hereof) other than Stephen Adams and any of the other permitted holders
referred to in clause (i) above shall (x) acquire or own, directly or
indirectly, beneficially or of record, shares representing more than 20% of the
aggregate equity capital of the Parent or (y) acquire direct or indirect
Control of the Parent;

 

(iv)          a
majority of the seats (other than vacant seats) on the board of directors of
the Borrower shall be occupied by Persons who were neither (x) nominated by the
board of directors of the Borrower nor (y) appointed by directors so nominated;
or

 

(v)           the
Holding Company shall cease to own, directly or indirectly, at least 90% of the
outstanding capital stock of the Borrower;

 

(n)           any of the following shall occur: (i)
the Liens created by the Collateral Documents shall at any time (other than by
reason of the Administrative Agent relinquishing such Lien) cease to constitute
valid and perfected Liens on the Collateral intended to be covered thereby;
(ii) except for expiration in accordance with its respective terms, any
Collateral Document shall for whatever reason be terminated, or shall cease to
be in full force and effect; or (iii) the enforceability of any Collateral
Document shall be contested by any Credit Party;

 

(o)           any Guarantor or the Holding Company
shall assert that its obligations hereunder or under the Collateral Documents
shall be invalid or unenforceable;

 

(p)           an “Event of Default” shall have
occurred under the Holding Company Notes Indenture or any document or
instrument governing any refinancing in respect of the Holding Company Notes;
or

 

(q)           an “Event of Default” shall have
occurred under the Credit Agreement;

 

then, and in every such event (other than an event with respect to the
Credit Parties described in clause (g) or (h) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Senior Lenders shall, by notice to the
Credit Parties, take any or all of the following actions, at the same or
different times: (i) terminate the Term B2 Loan Commitments, if any, and
thereupon the Term B2 Loan Commitments shall terminate immediately, (ii)
declare the Term B2 Loans then outstanding to

 

74

 

be due and payable in whole (or in part, in which case any principal
not so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Term B2 Loans so declared to be
due and payable, together with accrued interest thereon and all fees and other
obligations of the Credit Parties accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Credit Parties, and (iii) the
Administrative Agent may exercise all of the rights as secured party and
mortgagee under the Collateral Documents; and in case of any event with respect
to the Credit Parties described in clause (g) or (h) of this Article, the Term
B2 Loan Commitments shall automatically terminate and the principal of the Term
B2 Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Credit Parties accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Credit Parties,
and the Administrative Agent shall be permitted to exercise such rights as
secured party and mortgagee under the Collateral Documents to the extent
permitted by applicable law.

 

8.2           Receivership.  Without limiting the generality of the foregoing or limiting in
any way the rights of the Administrative Agent or the Noteholders under the
Collateral Documents or otherwise under applicable law, at any time after (i)
the entire principal balance of any Term B2 Loan shall have become due and
payable (whether at maturity, by acceleration or otherwise) and (ii) the
Administrative Agent shall have provided to the Credit Parties not less than
ten (10) days prior written notice of its intention to apply for a receiver, the
Administrative Agent shall be entitled to apply for and have a receiver
appointed under state or federal law by a court of competent jurisdiction in
any action taken by the Administrative Agent to enforce the Noteholders’ and
Administrative Agent’s rights and remedies hereunder and under the Collateral
Documents in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Collateral and continue the operation of the business
of the Credit Parties, and to collect all revenues and profits thereof and
apply the same to the payment of all expenses and other charges of such
receivership, including the compensation of the receiver, and to the payment of
the Term B2 Loans and other fees and expenses due hereunder and under the Collateral
Documents as aforesaid until a sale or other disposition of such Collateral
shall be finally made and consummated. 
THE CREDIT PARTIES HEREBY IRREVOCABLY CONSENT TO AND WAIVE ANY RIGHT TO
OBJECT TO OR OTHERWISE CONTEST THE APPOINTMENT OF RECEIVER AS PROVIDED
ABOVE.  THE CREDIT PARTIES (I) GRANT
SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE IMPLICATIONS
THEREOF WITH COUNSEL, (II) ACKNOWLEDGE THAT (A) THE UNCONTESTED RIGHT TO HAVE A
RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE ENFORCEMENT OF THE NOTEHOLDERS’ AND
ADMINISTRATIVE AGENT’S RIGHTS AND REMEDIES HEREUNDER AND UNDER THE COLLATERAL
DOCUMENTS, AND (B) THE AVAILABILITY OF SUCH APPOINTMENT AS A REMEDY UNDER THE
FOREGOING CIRCUMSTANCES WAS A MATERIAL FACTOR IN INDUCING THE NOTEHOLDERS TO
MAKE THE TERM B2 LOANS TO THE BORROWER; AND (III) AGREE TO ENTER INTO ANY AND
ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR AGREEMENTS OR OTHER INSTRUMENTS IN
CONNECTION WITH THE FOREGOING AND TO COOPERATE FULLY WITH THE ADMINISTRATIVE
AGENT AND THE NOTEHOLDERS IN

 

75

 

CONNECTION WITH THE ASSUMPTION AND EXERCISE OF CONTROL
BY THE RECEIVER OVER ALL OR ANY PORTION OF THE COLLATERAL.  THE NOTEHOLDERS AND THE ADMINISTRATIVE AGENT
ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS SECTION 8.2 SHALL BE DEEMED TO
CONSTITUTE A WAIVER OF THE CREDIT PARTIES’ RIGHT TO FILE FOR PROTECTION UNDER
TITLE 11 OF THE UNITED STATES CODE AT ANY TIME PRIOR TO THE APPOINTMENT OF A
RECEIVER.

 

76

 

ARTICLE
VIX

The Agents

 

9.1           Appointment and Authorization.  Each of the Noteholders hereby irrevocably
appoints Fleet as its Administrative Agent and CIBC as its Syndication Agent
and authorizes each Agent to take such actions on its behalf and to exercise
such powers as are delegated to such Agent by the terms of this Agreement and
the other Note Purchase Documents, together with such actions and powers as are
reasonably incidental thereto.

 

9.2           Agents’ Rights as Noteholders.  Each of Fleet and CIBC shall have the same
rights and powers in its capacity as a Noteholder hereunder as any other
Noteholder and may exercise the same as though neither Fleet nor CIBC were the
Administrative Agent or the Syndication Agent, respectively, and Fleet, CIBC
and their Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with any Credit Party or any Subsidiary or other
Affiliate of any thereof as if it were not an Agent hereunder.

 

9.3           Duties As Expressly Stated.  The Agents shall not have any duties or
obligations except those expressly set forth in this Agreement and the other
Note Purchase Documents.  Without
limiting the generality of the foregoing, (a) the Agents shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Agents shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by this Agreement and the other Note
Purchase Documents that the Agents are required to exercise in writing by the
Required Senior Lenders, and (c) except as expressly set forth herein and in the
other Note Purchase Documents, the Agents shall not have any duty to disclose,
and shall not be liable for the failure to disclose, any information relating
to any Credit Party or any of their respective Subsidiaries that is
communicated to or obtained by Fleet or any of its Affiliates in any
capacity.  Each of the Agents shall not
be liable for any action taken or not taken by it with the consent or at the
request of the Required Senior Lenders or, if provided herein, with the consent
or at the request of the Required Term Loan Lenders, or in the absence of its
own gross negligence or willful misconduct. 
No Agent shall be deemed to have knowledge of any Default unless and
until written notice thereof is given to such Agent by the Borrower or a
Noteholder, and no Agent shall be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or the other Note Purchase Documents, (ii) the
contents of any certificate, report or other document delivered hereunder or
under any of the other Note Purchase Documents or in connection herewith of
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Note
Purchase Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Note Purchase Documents or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article V or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.  The Administrative Agent shall not, except
to the extent expressly instructed by the Required Senior Lenders with respect
to collateral security under the Collateral Documents, be required to initiate
or conduct any

 

77

 

litigation or collection proceedings hereunder or
under any other Note Purchase Document; provided, however, that the Administrative
Agent shall not be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to the Note Purchase Documents
or applicable law.

 

9.4           Reliance By Agents.  The Agents shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  Each of the Agents also may rely upon any
statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon.  The Agents may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other
experts selected by them, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

 

9.5           Action Through Sub-Agents.  The Administrative Agent may perform any and
all of its duties, and exercise its rights and powers, by or through any one or
more sub-Administrative Agents appointed by the Administrative Agent in good
faith.  The Administrative Agent and any
such sub-Administrative Agent may perform any and all its duties and exercise
its rights and powers through its Related Parties.  The exculpatory provisions of the preceding paragraphs shall
apply to any such sub-Administrative Agent and to the Related Parties of the
Administrative Agent and any such sub-Administrative Agent, and shall apply to
its activities in connection with the syndication of the credit facilities
provided for herein as well as activities as the Administrative Agent.

 

9.6           Resignation of Agent and Appointment of Successor
Agent.  Subject to the
appointment and acceptance of a successor Agent, as provided in this paragraph,
the Administrative Agent or the Syndication Agent may resign at any time by
notifying the Noteholders and the Borrower. 
Upon any such resignation, the Required Senior Lenders shall have the
right, in consultation with the Borrower, to appoint a successor Agent.  If no successor shall have been so appointed
and shall have accepted such appointment within 30 days after such retiring
Agent gives notice of its resignation, then such retiring Agent may, on behalf
of the Noteholders, appoint a successor Agent, which shall be a bank with an
office in Boston, Massachusetts or New York, New York, or an Affiliate of any
such bank.  Upon the acceptance of its
appointment as an Agent, by a successor, such successor shall succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Note Purchase Documents.  The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor.  After an Agent’s resignation hereunder, the provisions
of this Article and Section 10.3 shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was
acting as an Agent.

 

9.7           Noteholders’ Independent Decisions.  Each Noteholder acknowledges that it has,
independently and without reliance upon the Agents or any other Noteholder and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Noteholder also acknowledges that it
will,

 

78

 

independently and without reliance upon any Agent or
any other Noteholder and based on such documents and information as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement and the other
Note Purchase Documents, any related agreement or any document furnished
hereunder or thereunder.  Except as
explicitly provided herein, neither the Administrative Agent nor the
Syndication Agent has any duty or responsibility, either initially or on a
continuing basis, to provide any Noteholder with any credit or other
information with respect to such operations, business, property, condition or
creditworthiness, whether such information comes into its possession on or
before the first Event of Default or at any time thereafter.

 

9.8           Documentation Agent.  The Documentation Agent shall not have any
duties or obligations under this Agreement and the other Note Purchase
Documents, express or implied.  The
Documentation Agent shall incur no personal liability by reason of being named
the Documentation Agent hereunder.

 

9.9           Indemnification.  Each Noteholder agrees to indemnify and hold harmless each Agent
(to the extent not reimbursed under Section 10.3, but without limiting the
obligations of the Credit Parties under Section 10.3), ratably in
accordance with the aggregate principal amount of the respective Term B2 Loan
Commitments of and/or Term B2 Loans held by the Noteholders (or, if all of the
Term B2 Loan Commitments shall have been terminated or expired, ratably in
accordance with the aggregate outstanding amount of the Term B2 Loans held by
the Noteholders), for any and all liabilities (including pursuant to any
Environmental Law), obligations, losses, damages, penalties, actions,
judgments, deficiencies, suits, costs, expenses (including reasonable
attorney’s fees) or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against such Agent (including by any
Noteholder) arising out of or by reason of any investigation in or in any way
relating to or arising out of any Note Purchase Document or any other documents
contemplated by or referred to therein for any action taken or omitted to be
taken by such Agent under or in respect of any of the Note Purchase Documents
or other such documents or the transactions contemplated thereby (including the
costs and expenses that the Borrower is obligated to pay under Section 10.3,
but excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or
of any such other documents; provided, however, that no Noteholder
shall be liable for any of the foregoing to the extent they are determined by a
court of competent jurisdiction in a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of the party to be
indemnified.  The agreements set forth
in this Section 9.9 shall survive the payment of all Term B2 Loans and
other obligations hereunder and shall be in addition to and not in lieu of any
other indemnification agreements contained in any other Note Purchase Document.

 

9.10         Consents Under Other Note Purchase Documents.  Except as otherwise provided in this
Agreement and the other Note Purchase Documents, the Agents may, with the prior
consent of the Required Senior Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Note Purchase
Documents.

 

79

 

ARTICLE
X

 

Miscellaneous

 

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

 

(a)           if to any Credit Party, to 64
Inverness Drive East, Englewood, Colorado 80112 Attention of Mark J. Boggess
(Telecopy No. (303) 792-7322);

 

(b)           if to the Administrative Agent, to
Fleet National Bank, 100 Federal Street, Mail Stop MA DE 10011B, Boston,
Massachusetts 02110, Attention of Peter van der Horst (Telecopy No.
(617) 434-6471), with a copy to Palmer & Dodge LLP, 111 Huntington
Avenue, Boston, Massachusetts 02199, Attention of George Ticknor (Telecopy No.
617-227-4420); and

 

(c)           if to any Noteholder, to it at its
address (or telecopy number) set forth in its Administrative Questionnaire.

 

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

 

10.2         Waivers; Amendments.

 

(a)           No failure or delay by the
Administrative Agent or any Noteholder in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent and the
Noteholders hereunder are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. 
No waiver of any provision of this Agreement or consent to any departure
by any Credit Party therefrom shall in any event be effective unless the same
shall be permitted by the Intercreditor Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the purpose
for which given.  Without limiting the
generality of the foregoing, the making of a Term B2 Loan shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent or any Noteholder may have had notice or knowledge of such Default at the
time.

 

(b)           Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to the
terms of Section 7 of the Intercreditor Agreement.

 

(c)           None of the Collateral Documents nor
any provision thereof may be waived, amended or modified except pursuant to the
terms of Section 7 of the Intercreditor Agreement.

 

80

 

10.3         Expenses; Indemnity: Damage Waiver.

 

(a)           The Credit Parties jointly and severally
agree to pay, or reimburse the Administrative Agent or Noteholders for paying,
(i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Syndication Agent, the Co-Lead Arrangers and their
Affiliates, including the reasonable fees, charges and disbursements of Special
Counsel, in connection with the syndication of the credit facilities provided
for herein, the preparation of this Agreement and the other Note Purchase
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby
shall be consummated), (ii) [Reserved], (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Syndication Agent, the
Co-Lead Arrangers or any Noteholder, including the fees, charges and
disbursements of any counsel for such Administrative Agent, Syndication Agent,
Co-Lead Arrangers or the Noteholders, in connection with the enforcement or
protection of its rights in connection with this Agreement and the other Note
Purchase Documents, including its rights under this Section 10.3, or in
connection with the Term B2 Loans made hereunder, including in connection with
any workout, restructuring or negotiations in respect thereof, and (iv) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Note Purchase Documents or any other document referred to
herein or therein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any security interest contemplated by any Collateral Document or any other
document referred to therein.

 

(b)           The Credit Parties jointly and
severally agree to indemnify the Administrative Agent, the Syndication Agent,
the Co-Lead Arrangers, each Noteholder and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, the other Note Purchase
Documents or any agreement or instrument contemplated hereby, the performance
by the parties hereto and thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby or thereby, (ii) any Term B2 Loan or the use of the
proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any Credit
Party or any of their subsidiaries, or any Environmental Liability related in
any way to any Credit Party or any of their subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (are determined by a court of
competent jurisdiction by final and nonappealable judgment to have) resulted
from the gross negligence or willful misconduct of such Indemnitee.

 

The Credit Parties agree that, without the prior
written consent of the Administrative Agent and the Required Senior Lenders,
which consent shall not be unreasonably withheld, no Credit Party will settle,
compromise or consent to the entry of any judgment in any pending or threatened
proceeding in respect of which indemnification is reasonably likely to be
sought under the indemnification provisions of this Section 10.3 (whether
or not any Indemnitee is an actual or potential party to such proceeding),
unless such settlement, compromise or consent

 

81

 

includes
an unconditional written release of each Indemnitee from all liability arising
out of such proceeding and does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Indemnitee and does
not involve any payment of money or other value by any Indemnitee or
performance of any obligation by an Indemnitee or any injunctive relief or
factual findings or stipulations binding on any Indemnitee.

 

(c)           To the extent that the Credit Parties
fail to pay any amount required to be paid by them to the Administrative Agent
under paragraph (a) or (b) of this Section 10.3, each Noteholder severally
agrees to pay to the Administrative Agent such Noteholder’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent in its capacity as such.

 

(d)           To the extent permitted by applicable
law, none of the Credit Parties shall assert, and each Credit Party hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, the other Note Purchase Documents or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Term B2 Loan or the use
of the proceeds thereof.

 

(e)           All amounts due under this Section
10.3 shall be payable promptly after written demand therefor.

 

10.4         Successors and Assigns.

 

(a)           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 (i) no Credit
Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Noteholder (and any
attempted assignment or transfer by any Credit Party without such consent shall
be null and void) and (ii) no Noteholder may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, and the Noteholders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.

 

(b)           The Noteholders may assign their
interests hereunder as follows:

 

(i)            Subject
to the conditions set forth in paragraph (b)(ii) below, any Noteholder may
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of the Term B2 Loans at the
time owing to it) with the prior written consent (such consent not to be
unreasonably withheld) of the Borrower and the Administrative Agent, provided
that (x) [reserved], (y) no such consent shall be required for an
assignment of Term B2 Loans by any Noteholder to any other Noteholder that was
a Noteholder prior to the completion of such

 

82

 

assignment,
an Affiliate of such a Noteholder or an Approved Fund, and (z) no such
consent of the Borrower shall be required for an assignment to any assignee, if
an Event of Default has occurred and is continuing.

 

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

 

(A)          except
in the case of an assignment to a Noteholder or an Affiliate (or Approved Fund)
of a Noteholder or an assignment of the entire remaining amount of the
assigning Noteholder’s Term B2 Loan Commitment or Term B2 Loans, the amount of
the Term B2 Loan Commitment or Term B2 Loans of the assigning Noteholder
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent; provided that no consent of the Borrower
shall be required under this clause (A) if an Event of Default has occurred and
is continuing,

 

(B)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Noteholder’s rights and obligations under this Agreement; provided
however
that no Noteholder shall be entitled to assign Term B1 Loan Commitments (as
defined in the Credit Agreement) and Term B1 Loans in different proportions
than its Term B2 Loans and vice versa and the percentage of Term B1 Loans held
by each Noteholder shall all times equal the percentage of Term B2 Loans held
by such Noteholder; provided further that Fleet and CIBC may
assign Term B2 Loans on or about the Effective Date without a proportional
assignment of the Term B1 Loans and Term B1 Loan Commitments but only if such
assignee and Fleet or CIBC, as the case may be, agree in writing to consummate
an assignment of Term B1 Loans after the Holding Company Notes Refunding (as
defined in the Credit Agreement) in such amount as shall be necessary to cause
the percentage of Term B1 Loans held by such assignee to equal the percentage
of Term B2 Loans held by such assignee immediately after such assignment,

 

(C)           the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, together with a processing and recordation
fee required by the Credit Agreement, and not in the aggregate in excess of
$3,500, and

 

(D)          the
assignee, if it shall not be a Noteholder, shall deliver to the Administrative
Agent an Administrative Questionnaire.

 

(iii)          Subject
to acceptance and recording pursuant to paragraph (iv) of this
Section 10.4, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Noteholder under this Agreement, and the
assigning Noteholder thereunder shall, to the

 

83

 

extent
of the interest assigned by such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Noteholder’s rights and obligations
under this Agreement, such Noteholder shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 2.14, 2.15,  2.16 and 10.3).  Notwithstanding anything therein to the contrary, no Approved
Fund shall be entitled to receive any greater amount pursuant to
Sections 2.14, 2.15 and 2.16 than the transferor Noteholder would
have been entitled to receive in respect of the assignment effected by such
transferor Noteholder had no assignment occurred.  Any assignment or transfer by a Noteholder of rights or
obligations under this Agreement that does not comply with this paragraph (b)
shall be treated for purposes of this Agreement as a sale by such Noteholder of
a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

 

(iv)          The
Administrative Agent, acting for this purpose as an agent of the Borrower,
shall maintain at one of its offices in Boston, Massachusetts or New York, New
York a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Noteholders, the
principal amount of the Term B2 Loans owing to, each Noteholder pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, absent manifest error, and the Borrower, the Administrative Agent
and the Noteholders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Noteholder hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Noteholder, at any reasonable time and from
time to time upon reasonable prior notice.

 

(v)           Upon
its receipt of a duly completed Assignment and Acceptance executed by an
assigning Noteholder and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Noteholder hereunder),
the processing and recordation fee referred to in paragraph (b)(ii)(C) of this
Section 10.4 and any written consent to such assignment required by paragraph
(b) of this Section 10.4, the Administrative Agent shall accept such Assignment
and Acceptance and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(c)           The Noteholders may sell
participations in their interests hereunder as follows:

 

(i)            Any
Noteholder may, without the consent of or notice to the Borrower or the
Administrative Agent, sell participations to one or more banks or other
entities (a “Participant”) in all or a portion of such Noteholder’s
rights and obligations under this Agreement (including all or a portion of its
Term B2 Loan Commitment and the Term B2 Loans owing to it); provided
that (A) such Noteholder’s obligations under this Agreement shall remain
unchanged, (B) such Noteholder shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower,
the Administrative Agent and the other Noteholders shall continue to deal
solely and directly with such Noteholder in connection with such Noteholder’s
rights and

 

84

 

obligations
under this Agreement.  Any agreement or
instrument pursuant to which a Noteholder sells such  participation shall provide that such Noteholder 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 Noteholder will not, without the consent of
the Participant, agree to any amendment, modification or waiver described in
the Intercreditor Agreement, that affects such Participant.  Subject to paragraph (c)(ii) of this Section
10.4, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 10.3 to the same extent as if it were
a Noteholder and had acquired its interest by assignment pursuant to paragraph
(b) of this Section 10.4.

 

(ii)           A
Participant shall not be entitled to receive any greater payment under
Section 2.14 or 2.16 than the applicable Noteholder would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent.  A
Participant that would be a Foreign Noteholder if it were a Noteholder shall
not be entitled to the benefits of Section 2.16 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for
the benefit of the Borrower, to comply with Section 2.16(e) as though it were a
Noteholder.

 

(d)           Any Noteholder 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 Noteholder, including any such pledge
or assignment to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Noteholder from any of its
obligations hereunder or substitute any such assignee for such Noteholder as a
party hereto.

 

(e)           Anything in this Section 10.4 to the
contrary notwithstanding, no Noteholder may assign or participate any interest
in any Term B2 Loan held by it hereunder to any Credit Party or any of its
Affiliates or Subsidiaries without the prior consent of each Noteholder.

 

(f)            A Noteholder may furnish any
information concerning any Credit Party or Subsidiary or Affiliate in the
possession of such Noteholder from time to time to assignees and participants
(including prospective assignees and participants) subject, however, to and so
long as the recipient agrees in writing to be bound by, the provisions of
Section 10.13.  In addition, the
Administrative Agent may furnish any information concerning any Credit Party or
any of its Subsidiaries or Affiliates in the Administrative Agent’s possession
to any Affiliate of the Administrative Agent, subject, however, to the
provisions of Section 10.13.  The
Credit Parties shall assist any Noteholder in effectuating any assignment or
participation pursuant to this Section 10.4 (including during syndication)
in whatever manner such Noteholder reasonably deems necessary, including
participation in meetings with prospective transferees.

 

10.5         Survival. 
All covenants, agreements, representations and warranties made by the
Credit Parties herein and in the other Note Purchase Documents, and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement and the other Note Purchase Documents, shall be considered to
have been relied upon by the other parties hereto

 

85

 

and shall survive the execution and delivery of this
Agreement and the other Note Purchase Documents and the making of any Term B2
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Noteholder may
have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect so long as the principal of or any accrued interest on
any Term B2 Loan or any fee or any other amount payable under this Agreement or
the other Note Purchase Documents is outstanding and unpaid.  The provisions of Sections 2.14, 2.15, 2.16
and 10.3 and Article IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Term B2 Loans, or the termination of this Agreement or any
other Note Purchase Document or any provision hereof or thereof.

 

10.6         Counterparts; Integration; References to Agreement;
Effectiveness.  This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and any separate letter
agreements with respect to fees payable to the Administrative Agent and Special
Counsel constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.  Whenever there is a reference in any
Collateral Document or UCC Financing Statement to the “Credit Agreement” to
which the Administrative Agent, the Noteholders and the Credit Parties are
parties, such reference shall be deemed to be made to this Agreement among the
parties hereto, including the Documentation Agent and the Syndication
Agent.  Except as provided in Section
5.1, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of
a manually executed counterpart of this Agreement.

 

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

 

10.8         Right of Setoff.  If an Event of Default shall have occurred and be continuing,
each Noteholder is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Noteholder to or for the credit or
the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such
Noteholder, irrespective of whether or not such Noteholder shall have made any
demand under this Agreement and although such obligations may be
unmatured.  The rights of each
Noteholder under this Section 10.8 are in addition to any other rights and
remedies (including other rights of setoff) which such Noteholder may have.

 

86

 

10.9         Governing Law; Jurisdiction; Consent to Service of
Process.

 

(a)           This Agreement shall be construed in
accordance with and governed by the law of the Commonwealth of Massachusetts.

 

(b)           Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and of the
United States District Court for the District of Massachusetts, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Note Purchase Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such Massachusetts
court (or, to the extent permitted by law, in such Federal court).  Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this
Agreement shall affect any right that the Administrative Agent or any
Noteholder may otherwise have to bring any action or proceeding relating to this
Agreement against any Credit Party or its properties in the courts of any
jurisdiction.

 

(c)           Each party hereto hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Note Purchase Documents in any court referred to in
paragraph (b) of this Section 10.9. 
Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

 

(d)           Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 10.1.  Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

10.10       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.10.

 

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

 

87

 

10.12       [Reserved].

 

10.13       Confidentiality.  Each Noteholder agrees to keep confidential information obtained
by it pursuant hereto and the other Note Purchase Documents confidential in
accordance with such Noteholder’s customary practices and agrees that it will
only use such information in connection with the transactions contemplated by
this Agreement and not disclose any of such information other than (a) to such
Noteholder’s employees, representatives, directors, attorneys, auditors,
agents, professional advisors, trustees or affiliates who are advised of the
confidential nature of such information or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty’s
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions
of this Section 10.13), (b) to the extent such information presently is or
hereafter becomes available to such Noteholder on a non-confidential basis from
any source of such information that is in the public domain at the time of
disclosure, (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process (provided
that notice of such requirement or order shall be promptly furnished to the
Borrower unless such notice is legally prohibited) or requested or required by
bank, securities, insurance or investment company regulators or auditors or any
administrative body or commission (including the Securities Valuation Office of
the National Association of Insurance Commissioners) to whose jurisdiction such
Noteholder may be subject, (d) to any rating agency to the extent required in
connection with any rating to be assigned to such Noteholder, (e) to assignees
or participants or prospective assignees or participants who agree to be bound
by the provisions of this Section 10.13, (f) to the extent required in
connection with any litigation between any Credit Party and any Noteholder with
respect to the Term B2 Loans or this Agreement and the other Note Purchase
Documents or (g) with the Borrower’s prior written consent.

 

10.14       Continued Effectiveness; No Novation.  Notwithstanding anything contained herein,
the terms of this Agreement and the Credit Agreement are not intended to and do
not serve to effect a novation of the obligations, liabilities or indebtedness
of the Credit Parties under the Existing Credit Agreement.  Instead, it is the express intention of the
parties hereto and to the Credit Agreement to reaffirm, amend and restate the
obligations, liabilities and indebtedness created under or otherwise evidenced
by the Existing Credit Agreement that is evidenced by the notes provided for
therein and secured by the collateral contemplated thereby and hereby.  The Credit Parties acknowledge and confirm
that the liens and security interests granted pursuant to the Note Purchase
Documents secure the obligations, liabilities and indebtedness of the Credit
Parties to the Noteholders under the Existing Credit Agreement, as amended and
restated hereby, and that the term “Secured Obligations” used in certain of the
Note Purchase Documents (or any other term used herein to describe or refer to
the obligations, liabilities and indebtedness of the Credit Parties) describes
and refers to the Credit Parties’ obligations, liabilities and indebtedness
hereunder and under the Existing Credit Agreement, as amended and restated by
the Credit Agreement and hereby, as the same may be further amended, modified,
supplemented or restated from time to time. 
The Note Purchase Documents and all agreements, documents and
instruments executed and delivered in connection with any of the foregoing
shall each be deemed to be amended to the extent necessary to give effect to
the provisions of this Agreement.

 

88

 

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

 

	
   

  	
  BORROWER

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AFFINITY GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mark J. Boggess

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark J. Boggess

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AFFINITY ADVERTISING, LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:  

  	
  VBI, INC., its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Mark J. Boggess

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark J. Boggess

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
									

 

(Signature Page to Note Purchase Agreement)

 

89

 

	
   

  	
  AFFINITY BROKERAGE, INC.

  
	
   

  	
  AFFINITY ROAD AND TRAVEL CLUB, INC.

  
	
   

  	
  CAMP COAST TO COAST, INC.

  
	
   

  	
  CAMPING REALTY, INC.

  
	
   

  	
  CAMPING WORLD, INC.

  
	
   

  	
  CAMPING WORLD INSURANCE SERVICES OF NEVADA, INC.

  
	
   

  	
  COAST MARKETING GROUP, INC.

  
	
   

  	
  CWI, INC.

  
	
   

  	
  CW MICHIGAN, INC.

  
	
   

  	
  EHLERT PUBLISHING GROUP, INC.

  
	
   

  	
  GOLF CARD HOLDING CORPORATION

  
	
   

  	
  GOLF CARD INTERNATIONAL CORP.

  
	
   

  	
  GOLF CARD RESORT SERVICES, INC.

  
	
   

  	
  GSS ENTERPRISES, INC.

  
	
   

  	
  POWER SPORTS MEDIA, INC.

  
	
   

  	
  THUNDER PRESS

  
	
   

  	
  TL ENTERPRISES, INC.

  
	
   

  	
  VBI, INC.

  
	
   

  	
  WOODALL PUBLICATIONS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 
  Mark J. Boggess

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Mark J. Boggess

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  

 

(signature Page to Note Purchase Agreement)

 

 

SIGNATURE PAGES OF AGENTS AND
NOTEHOLDERS

	
   

  	
  ADMINISTRATIVE AGENT

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  FLEET NATIONAL BANK, as Administrative Agent

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
  /s/   Peter van der Horst

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  Peter van der Horst

  	 

	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  NOTEHOLDER

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  FLEET NATIONAL BANK

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
  /s/   Peter van der Horst

  	
   

  	 

	
   

  	
   

  	
   

  	
  Name:

  	
  Peter van der Horst

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  	 

								

 

(Signature Page to Note Purchase Agreement)

 

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  SYNDICATION AGENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CANADIAN IMPERIAL BANK OF COMMERCE, as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/  Carter Harned

  	
   

  
	
   

  	
   

  	
  Name: Carter Harned

  
	
   

  	
   

  	
  Title: Executive Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTEHOLDER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CIBC INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   /s/  Carter Harned

  	
   

  
	
   

  	
   

  	
  Name: Carter Harned

  
	
   

  	
   

  	
  Title: Executive Director

  
						

 

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  DOCUMENTATION AGENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION, as Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Nitin Sharma

  	
   

  
	
   

  	
   

  	
  Name: Nitin Sharma

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NOTEHOLDER

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Nitin Sharma

  	
   

  
	
   

  	
   

  	
  Name: Nitin Sharma

  
	
   

  	
   

  	
  Title: Vice President

  
										

 

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  THE PROVIDENT BANK

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Alan R. Henning

  	
   

  
	
   

  	
   

  	
  Name: Alan R. Henning

  
	
   

  	
   

  	
  Title: Vice President

  
									

 

(Signature Page to Note Purchase Agreement)

 

 

91Prepared and filed by St Ives Burrups

Exhibit 4.1

	 
	Exhibit 4.1 Management Agreement

	 
	MANAGEMENT AGREEMENT

MANAGEMENT AGREEMENT dated as of August 4, 1998, by
  and between Empresa Brasileira de Telecomunicações S.A. - EMBRATEL,
  a sociedade anonima established and existing under the laws of Brazil, registered
  with the C.G.C./M.F. under number 33.530.486/0001-29, with offices at Av. Presidente
  Vargas, 1012, CEP 20179-900, Rio de Janeiro, RJ, Brazil (“EMBRATEL”)
  and MCI Global Resources, Inc., a Delaware corporation, with offices at 2 International
  Drive, Rye Brook, NY 10573, USA (“MCI”).

	W I T N E S S E T H:

WHEREAS, Startel Participações Ltda., a limited liability company organized under the laws of Brazil (“Purchaser”), and the Union, a/k/a the Government of Brazil, have entered into a Share Purchase Agreement dated August 4, 1998 (the “Share Purchase Agreement”), pursuant to which Purchaser initially acquired 51.79% of the voting stock of Embratel Participações S.A. “Embratel Participações”);

WHEREAS, Embratel Participações owns 98.75% of the voting stock of EMBRATEL;

WHEREAS, Purchaser is an Affiliate of MCI;

WHEREAS, MCI has the management, technical and financial capability, and is committed to developing and maintaining EMBRATEL’s telecommunications system as a technologically advanced, efficient system and EMBRATEL’s services as technologically current and responsive to customer requirements for the benefit of Brazil and its citizens; and

WHEREAS, EMBRATEL desires to benefit from, and MCI desires to provide EMBRATEL with, access to management, policy, operational, marketing and other related experience of the senior management of MCI and its Affiliates for the development and maintenance of EMBRATEL’s telecommunications system and services.

NOW THEREFORE, in consideration of the foregoing, it is agreed by and between the Parties hereto as follows:

	DEFINITIONS

Capitalized terms used in this Agreement and not otherwise defined shall have the following meanings:

“Affiliate” shall mean with respect
  to any person, any other entity that, directly or indirectly, through one or
  more intermediaries, controls, is controlled by or is under common control with,
  the specified person. For purposes of this definition, the term “control”
  as applied to
  any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of that entity, whether through ownership of shares, voting securities, partnership or other ownership interests, agreement or otherwise. As used in this Agreement, the term “Affiliate,” as it applies to MCI, shall not include EMBRATEL or any other entities organized under the laws of Brazil and, as it applies to EMBRATEL, shall not include MCI.

 

“Agreement” means this Management
  Agreement as amended or supplemented from time to time in accordance with its
  terms.

“ANATEL” means the Brazilian Agência
  Nacional de Telecomunicações.

“Annual Revenue” means total annual
  revenue, arising out of the Services, as defined hereinbelow, net of indirect
  taxes and contributions (ICMS, PIS and COFINS).

“Brazil” means the Federative Republic
  of Brazil.

“EMBRATEL” shall mean Empresa Brasileira
  de Telecomunicações S.A. - EMBRATEL and its Affiliates, as applicable.

“Fiscal Year” shall mean a year commencing
  on 1 January and ending on 31 December of each year.

“Intellectual Property” means all
  current and future worldwide rights to any inventions, discoveries or improvements,
  whether or not patentable; copyrights; trade secrets; know-how; utility models;
  Confidential Information; tradenames, trademarks and service marks, whether
  or not registered; all other intangible proprietary rights, including all applications and registrations with respect thereto; and all tangible embodiments of any of the foregoing.

“MCI” shall mean MCI Global Resources,
  Inc. and its Affiliates, as applicable.

“Parties” shall mean both parties
  to this Agreement, each of whom is sometimes referred to herein as a “Party.”

“Services” shall mean the services
  that EMBRATEL is authorized to provide under the terms and conditions of the:

Concession Contract - National Long Distance, and

Concession Contract - International Long Distance

which were executed on June 2, 1998, between EMBRATEL and ANATEL (collectively, the “Concession Contracts”); and the

Authorization Term of Network Transport Telecommunications Service,

Term of Right of Exploitation of Brazilian Satellites,

Authorization Term of Mobile Global Service by Satellite, and

Authorization Term of Maritime Mobile Service

which were executed on July 27, 1998, between EMBRATEL and ANATEL (collectively, the “Authorization Terms”), which services are listed and detailed on Attachment 1 hereto, provided, however, in the event of any discrepancy between the list on Attachment 1 and the terms and conditions of the Concession Contracts and Authorization Terms (as drafted in the original Portuguese), the Concession Contracts and Authorization Terms shall prevail. In addition to the foregoing, the term “Services,” as used in this Agreement, shall automatically include, as of the effective date authorization is granted, any additional services that EMBRATEL is authorized to provide during the Term hereof.

 

2

	ARTICLE I

	 
	APPOINTMENT

1.01 Appointment. EMBRATEL
  hereby appoints MCI to manage and advise and assist with respect to the operations
  and administration of its business, and in particular, the provision of the
  Services, subject to the terms and conditions hereof, the Concession Contracts,
  the
  Authorization Terms, the Share Purchase Agreement, the Certificate of Incorporation and Bylaws of EMBRATEL, and the general authority, supervision and control of EMBRATEL acting through its Board of Directors.

It is understood that the Management Services to be provided under this Agreement are limited to offering advice and assistance of MCI’s senior management based upon MCI’s experience in, and knowledge of, telecommunications. EMBRATEL shall be responsible for determining whether to act upon, and implementing, such advice and assistance and for day-to-day management and operations. No provision of this Agreement shall require MCI or its Affiliates: to dedicate, (calculated on a quarterly average basis) more than 25% (twenty-five percent) of any respective member of senior management’s work time to providing the Management Services hereunder, to second full or part-time personnel to EMBRATEL, to provide monetary contributions or loans to EMBRATEL, to transfer Intellectual Property, or to offer advice and assistance in respect to any EMBRATEL offerings other than the Services. In addition, any MCI senior management or other personnel providing Management
 Services hereunder shall have no authority to conclude or execute agreements on behalf of MCI or its Affiliates while present in Brazil, shall remain employees of MCI or its Affiliates and shall remain subject to all of MCI’s policies, and shall continue to receive all compensation and benefits directly from MCI or its Affiliates.

1.02 Acceptance. MCI
  hereby accepts its appointment hereunder and agrees to make available such skills,
  services and expertise, and to work in good faith and in close cooperation with
  EMBRATEL, with the goal of strengthening the strategic position of EMBRATEL
  in the
  telecommunications industry in Brazil and making it a more business-driven, customer-oriented and technologically advanced telecommunications operator.

	ARTICLE II

	 
	GENERAL SERVICES

2.01 Management Services.
  MCI shall make experienced representatives of the senior management of its existing
  organizational areas and those of its Affiliates reasonably available to EMBRATEL
  to provide advice and services in the following areas: General Management and
  Oversight, Finance and Financial Reporting, Business Planning, Business Strategy, Investor Relations, Regulatory, Legal, Operations, Human Resources, Marketing, Sales, Advertising, Competitive Analysis, Billing, Pricing, Customer Service and Satisfaction, New Products, Procurement, and Network Planning (the “Management Services”).

2.02 Management and Operating
  Experience. MCI will provide the Management Services by coordination
  with EMBRATEL management and by means of making MCI’s senior management
  personnel available to EMBRATEL, as more fully described in this Agreement,
  in the areas
  listed in Section 2.01 above.

 

3

	ARTICLE III

	 
	MANAGEMENT

	 
	3.01 Responsibilities
        of MCI.

(a) MCI shall, as requested by Embratel, provide advice regarding the management, operations, and business of EMBRATEL as they relate to the Services, including, but not limited to, the development and implementation of general performance policies, organizational structure, annual budgets and business and strategic plans (“Strategic Plans”), as described in Section 3.02. To this end, EMBRATEL shall provide to MCI all the information requested by MCI and unrestricted access to books, records and other data that MCI deems advisable for exercising its management advisory responsibilities.

(b) MCI shall use its experience and information and theoretical and practical knowledge, in its capacity as a telecommunications provider and service operator, and those methods and procedures MCI presently knows and uses, as well as all those resulting from the future development of MCI’s knowledge and experience, with the aim of improving and enhancing the operations, business and value of EMBRATEL through the application of operating strategies and management policies and practices available.

(c) At all times EMBRATEL may consult with MCI and may request advice of MCI on any question relating to its business activities within the scope of this Agreement.

(d) MCI shall offer to EMBRATEL the tangible and intangible benefits arising from the relationship with MCI including, among other things, economies of scale in the purchase of equipment, if and to the extent available. In addition, upon mutual agreement of EMBRATEL and MCI, MCI shall assist in the negotiations for EMBRATEL and its Affiliates to obtain certain technology from outside sources other than MCI or any Affiliate thereof.

	3.02 Strategic Plans.

(a) Within one hundred twenty (120) days of the date of this Agreement and, for each subsequent year, at least thirty (but not more than ninety) days prior to the beginning of EMBRATEL’s fiscal year, MCI shall use its management expertise and experience to assist EMBRATEL in the development of a Strategic Plan for EMBRATEL and for the approval of EMBRATEL’s Board of Directors. MCI shall provide Management Services to assist EMBRATEL in implementing such Strategic Plan as requested. Such strategic Plan shall address:

	 	(i)	 Business strategies; planning (including
      technical, commercial, acquisitions, information systems and real property)
      and short, medium and long term timetables for the fulfillment of the plans;
	 	 	 
	 	(ii)	Financial aspects, with particular emphasis
      on the analysis of the financial performance which may include the financing
      needs and the utilization of the most suitable financing sources; improving
      EMBRATEL’s return on capital invested; and assistance regarding the
      relationship with financial institutions and entities in order to obtain
      improved financing terms; and
	 	 	 
	 	(iii)	Administration and human resources with particular
      reference to the adoption of the most advisable administrative, accounting,
      tax, budgetary and fiscal practices, methods and controls.

 

4

 
 

(b) Each Strategic Plan
  shall be developed by Embratel with MCI’s assistance and presented to the
  Board of Directors of EMBRATEL (the “Board”) for its approval.

	3.03 Organizational
        Structure and Designation of Personnel.

(a) MCI shall advise EMBRATEL on any restructuring of, or modifications to, the organizational structure of EMBRATEL (the “Organizational Structure”) which MCI may deem advisable and propose to EMBRATEL, from time to time, the personnel to occupy positions within EMBRATEL and its Affiliates. MCI shall endeavor that any such proposal comply with all pertinent labor laws, regulations, and agreements (including the Share Purchase Agreement). Any action shall be taken only at the direction of Embratel management and shall strictly comply with all pertinent labor laws, regulations, and agreements (including the Share Purchase Agreement). The designation and/or ratification of senior management and changes in the Organizational Structure shall be subject, where appropriate, to the approval of the Board in accordance with EMBRATEL’s By-laws.

(b) The officers and senior management employees proposed by MCI shall, to the knowledge of MCI, have the professional and technical qualifications to perform the functions that in each case are assigned to them. MCI shall assess such qualifications on the basis of objective evaluation methods. Such persons may come from MCI and its Affiliates, from EMBRATEL through internal promotion or from unaffiliated third parties.

	ARTICLE IV
	 
	PAYMENTS

4.01 Management Fee.
  EMBRATEL shall pay MCI as compensation for the Management Services a management
  fee (the “Fee”) which shall be the amount resulting from the application
  of the percentage stipulated below on EMBRATEL’s Annual Revenue derived
  from the Services.

The percentage to be applied shall be 1% per annum through December 31, 2000; 0.5% per annum from January 1, 2001, through December 31, 2002; and 0.2% per annum as of January 1, 2003.

Embratel agrees to provide MCI with appropriate office space, computer equipment and software, telephones, copiers, and local transportation, at its own expense.

	4.02 Payment Terms.

(a) The Fee shall be payable in advance in quarterly installments
    payable no later than the first day of the corresponding calendar quarter
    and shall be calculated by applying the formula set forth in Section 4.01
    of this Agreement to the applicable portion of EMBRATEL’s
    revenue for that quarter as set forth in the current business plan approved
    by the Board (“Advance Fee”). In order to reconcile discrepancies
    between the Advance Fee, based on forecasted revenue, and actual revenue earned
    by EMBRATEL during the same quarter, at the end of each
    calendar quarter EMBRATEL will calculate all revenue of said quarter arising
    out of the Services, including revenues due but not yet paid (“EMBRATEL’s
    Quarterly Revenue”). The percentages set forth in Section 4.01 of this
    Agreement will then be calculated over EMBRATEL’s Quarterly Revenue.
    The Fee payment at the end of each quarter (in addition to the Advance Fee,
    if applicable) shall be calculated by multiplying the final full quarterly
    portion of Annual Revenue, based upon the applicable financial statements
    of EMBRATEL, by the applicable percentage referred to in Section 4.01, and
    subtracting therefrom the Advance Fee payment made with respect to such quarter
    (“Adjusted Fee”). Any excess Advance Fee payments shall be deducted
    from subsequent installments due, or at EMBRATEL’s option, shall be promptly
    refunded by MCI. As the Services are invoiced by EMBRATEL in Brazilian current
    currency, but the Fees are to be paid in U.S. dollars, the calculation of
    both the Advance Fee and the Adjusted Fee shall use the average U.S. dollar
    sales rate, employed by major commercial banks operating with the floating
    exchange rate (commercial rate) in the City of Rio de Janeiro, Rio de Janeiro,
    Brazil, for the first day of the calendar quarter for which such Advance Fee
    or Adjusted Fee is calculated. Once said conversion to U.S. dollars has been
    made, the corresponding Fee shall henceforth for all legal purposes be referred
    to in U.S. dollars. EMBRATEL shall send to MCI every quarter, within 30 (thirty)
    days following the end of said period, a written report of all invoicing and
    the calculation of the Fees during said period. In addition, the Fee payment
    at the end of each Fiscal Year shall be calculated by multiplying the final
    full year Annual Revenue based upon the audited financial statements of EMBRATEL
    by the applicable percentage referred to in Section 4.01, and subtracting
    therefrom all prior Fee installment payments made with respect to such Fiscal
    Year. Any excess payments shall be deducted from subsequent installments due,
    or at EMBRATEL’s option, shall be promptly refunded by MCI.

5

 Any late payments made by EMBRATEL will be subject to a fine
  of 5% (five percent) and a late payment interest rate of 1% (one percent), calculated
  pro rata monthly, over the amounts due in US dollars, provided that the percentage
  limitations set forth in Section 4.01 are not exceeded.

(b) If Embratel is required under Brazilian law to
  make any deduction or withholding of income taxes or social contributions taxes
  in relation to any payment of Fees to MCI, Embratel shall promptly remit such
  withheld tax to the appropriate governmental taxing authority, and shall provide
  MCI with official tax receipts for such remittances within a commercially reasonable
  period but in no event more than 90 days after the closing of Embratel’s
  Fiscal Year.

(c) All payments to MCI pursuant to this Agreement
  shall be made in U.S. dollars by wire transfer to a bank account designated
  by MCI.

	ARTICLE V
	 
	ADDITIONAL AGREEMENTS/INTELLECTUAL
      PROPERTY

5.01 Additional Agreements. The Parties agree to
  negotiate in good faith and enter into a separate agreements as necessary, in
  forms substantially similar to those to be provided by MCI or its Affiliates,
  which shall govern the specific terms and conditions including but not limited
  to MCI’s compensation other than the Fees, under which MCI and/or its Affiliates
  shall provide additional management services related to EMBRATEL products or
  services other than the Services.

5.02 Intellectual Property. EMBRATEL acknowledges
  that MCI and its Affiliates are the owners of various Intellectual Property
  rights. This Agreement is not to be construed in any respect that any license
  or other right is granted to EMBRATEL for such Intellectual Property, other
  than the rights granted in accordance with Section 5.03. EMBRATEL shall not
  dispute the validity of such Intellectual Property rights, nor oppose the registration
  of such Intellectual Property rights within any jurisdiction in the world.

5.03 License Agreements. At the sole option of MCI
  or its Affiliates, if applicable, Intellectual Property of MCI or its Affiliates
  may be made available to EMBRATEL on a case-by-case basis pursuant to a separate
  license agreement. Such license agreement will specify the terms under which
  the Intellectual Property is to be made available, the limitations on its use,
  the forms of compensation, other than the Fees, and the effect on the licenses
  of the Intellectual Property of various termination events.

	ARTICLE VI

	 
	DISCLAIMER OF WARRANTIES

6.01 DISCLAIMER OF WARRANTIES. IT IS EXPRESSLY UNDERSTOOD
  THAT MCI MAKES NO WARRANTY TO EMBRATEL OR ITS AFFILIATES WITH RESPECT TO THE
  PERFORMANCE OR FITNESS FOR ANY PURPOSE OF THE PRODUCTS OR SERVICES CONTEMPLATED
  BY THIS AGREEMENT. MCI EXPRESSLY DISCLAIMS ALL WARRANTIES INCLUDING, WITHOUT
  LIMITATION, THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY AND FITNESS FOR
  A PARTICULAR PURPOSE.

	ARTICLE VII

	 
	DURATION

7.01 Initial Term. This Agreement shall become effective
  as of August 4, 1998, and shall continue through December 31, 2003.

 

6

 
	ARTICLE VIII

	 
	TERMINATION

8.01 Termination by EMBRATEL. EMBRATEL may terminate
  this Agreement in the event MCI relevantly fails to perform its obligations
  and responsibilities under this Agreement and does not cure such failure within
  three months after receipt of a written notice of such failure setting forth
  in reasonable detail the nature of the alleged failure or, if such failure or
  breach is not capable of being cured within such three-month period and MCI
  diligently pursues a cure, such longer period of time as may be reasonable under
  the circumstances; provided, however, that EMBRATEL may not exercise the right
  of termination set forth in this Section 8.01 if MCI has previously notified
  EMBRATEL of its intention to terminate this Agreement pursuant to the provisions
  of Section 8.02.

8.02 Termination by MCI. MCI may terminate this
  Agreement in the event of any of the following:

(a) EMBRATEL fails to pay any amounts owed under this
  Agreement for more than 90 days;

(b) EMBRATEL materially impedes the ability of MCI
  to perform its obligations under this Agreement or is otherwise in material
  breach of this Agreement;

(c) EMBRATEL shall at any time fail to comply with
  or breach any of its representations, warranties, indemnities or other obligations
  under this Agreement and does not cure such breach within thirty days after
  receipt of a written notice of such failure setting for in reasonable detail
  the nature of the alleged failure;

(d) EMBRATEL is at any time the subject of an action
  under any winding up, liquidation, dissolution, insolvency or bankruptcy law
  or proceeding;

(e) MCI is no longer able to fulfill its obligations
  under this Agreement due to a Force Majeure Event that continues for more than
  60 days; or

(f) Failure to receive any necessary approvals of
  this Agreement as written within 90 days of the date of this Agreement by any
  government entities, including, but not limited to (as may be applicable), ANATEL,
  the Comissão de Valores Mobiliários, the Banco Central do Brasil,
  or the Instituto Nacional de Propriedade Industrial, provided, however, that
  MCI may agree with, in its sole discretion, with any government mandated modifications
  to this Agreement which MCI deems acceptable.

(g) Failure to receive any necessary corporate approvals
  of this Agreement by EMBRATEL or its Affiliates, as applicable.

8.03 MCI Operations after Termination. After receipt
  of written notice of termination of this Agreement, but prior to the effective
  date of such termination, MCI shall continue to perform under this Agreement
  unless specifically instructed to discontinue such performance. In any event,
  even if so instructed, MCI will nonetheless be entitled to reimbursement of
  reimbursable expenses incurred and payment of the Fees earned for the period
  ending on the effective date of termination. Such amounts shall be due and payable
  within 30 days of the effective date of the termination.

8.04 LIMITATION OF LIABILITY. THE TERMINATION OF
  THIS AGREEMENT PURSUANT TO THIS ARTICLE VIII SHALL NOT AFFECT THE RIGHTS OF
  ANY PARTY IN RESPECT OF ANY DAMAGES THEY MAY HAVE SUFFERED AS A RESULT OF ANY
  BREACH OF THIS AGREEMENT, NOR SHALL IT AFFECT THE RIGHTS OF ANY PARTY WITH RESPECT
  TO ANY LIABILITIES OR CLAIMS ACCRUING, OR BASED UPON EVENTS OCCURRING, PRIOR
  TO THE EFFECTIVE DATE OF TERMINATION. NOTWITHSTANDING THE FOREGOING, THE TYPES
  OF DAMAGES RECOVERABLE UNDER THIS AGREEMENT SHALL NOT INCLUDE LOSS OF PROFITS,
  LOSS OF BUSINESS OPPORTUNITY OR INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES,
  AND BY EXECUTING THIS AGREEMENT THE PARTIES WAIVE FOR ALL PURPOSES AND UNDER
  ALL CIRCUMSTANCES THE RIGHT TO CLAIM ANY OF THE SAME. IN ADDITION, THE PARTIES
  ACKNOWLEDGE AND AGREE THAT DAMAGES PAYABLE BY MCI TO ANY OTHER PARTIES UNDER
  THIS AGREEMENT SHALL BE LIMITED TO THOSE ACTS CONSTITUTING WILLFUL MISCONDUCT
  ON THE PART OF MCI.

 

7

 
	ARTICLE IX

	 
	GENERAL PROVISIONS

9.01 Governing Law. This Agreement and the rights
  of the Parties shall be construed and interpreted in accordance with the laws
  of the State of New York and the United States of America, as applicable, in
  all respects, including matters of construction, enforcement and performance
  without giving effect to the principles of choice of laws thereof.

9.02 Arbitration. If the Parties are unable to resolve
  any dispute by amicable settlement, such dispute shall be settled by binding
  arbitration under in accordance with the Arbitration Rules of the United Nations
  Commission on International Trade Law (“UNCITRAL Rules”) as in force
  on the date of commencement of arbitration, and as modified by this Section
  9.02. Claims alleging violations of the telecommunications laws of the United
  States of America, however, shall be brought solely before the United States
  Federal Communications Commission. ADR Associates, of Washington, D.C., U.S.A.,
  shall serve as both the appointing authority and the administering body under
  the UNCITRAL Rules. ADR Associates shall appoint a single arbitrator of a nationality
  other than the nationalities of the Parties. All arbitration proceedings shall
  be conducted in English. The place of arbitration shall be Bermuda. Neither
  the Parties, nor the arbitrator, nor ADR Associates shall disclose the existence,
  content or results of any arbitration except with the prior written consent
  of all Parties to the arbitration. The law governing the arbitration proceedings
  shall be the Bermuda International Arbitration Act of 1993. The arbitrator shall
  abide by the rules of Ethics for International Arbitrators established by the
  International Bar Association. The arbitrator’s authority to grant relief
  is subject to the terms of this Section 9.02, the terms of this Agreement and
  the law governing the Agreement. The arbitrator shall have no authority to award
  punitive or treble damages. Each Party shall pay an equal share of the costs
  of the arbitration (as defined in Article 28 of the UNCITRAL Rules), except
  that each Party shall pay the expenses it incurs for its own legal representation
  and assistance. Judgment on the award may be entered in any court of competent
  jurisdiction. The post-award proceedings shall be governed by the Inter-American
  Convention on International Commercial Arbitration of 1975 (the Panama Convention).
  The validity and construction of this Section 9.02 shall be governed by the
  law of the State of New York, U.S.A., without regard to its conflict of laws
  rules.

9.03 Waiver. None of the terms of this Agreement
  shall be deemed to have been waived by any Party, unless such waiver is in writing
  and signed by that Party. The waiver by any Party of a breach of any provision
  of this Agreement shall not operate or be construed as a waiver of any other
  provision of this Agreement or of any further breach of the provision so waived.
  No extension of time for the performance of any obligation or act hereunder
  shall be deemed to be an extension of time for the performance of any other
  obligation or act.

 

8

 
9.04 Notice. All notices and other communications
  that are required or permitted to be given under this Agreement shall be in
  writing in Portuguese and English and shall be deemed to have been duly given
  if delivered personally or by registered mail (return receipt requested) or
  courier service (documented by receipt) or telefaxed and addressed as follows:

	 	if to EMBRATEL:

	 	 	 
	 	 	Luigi Massimo Giavina Bianchi

	 	 	Finance Director

	 	 	EMBRATEL

	 	 	Av. Presidente Vargas, 1012
        - 15 andar

	 	 	CEP 20179-900 Rio de Janeiro,
        RJ

	 	 	Brazil

	 	 	 
	 	 	fax +55-21-233-7798

	 	 
	 	if to MCI:

	 	 	 
	 	 	Walter Schonfeld

	 	 	Vice President, Corporate
        Development

	 	 	MCI WorldCom, Inc.

	 	 	1801 Pennsylvania Ave. NW

	 	 	Washington, DC 20006

	 	 	USA

	 	 	 
	 	 	fax (202) 887-2443

	 	 
	 	with a copy to:

	 	 	 
	 	 	Ann LaFrance

	 	 	Chief Counsel, International
        Affairs

	 	 	MCI WorldCom, Inc.

	 	 	1717 Pennsylvania Ave. NW,
        8th Floor

	 	 	Washington, DC 20006

	 	 	 
	 	 	fax (202) 721-2790

and/or such other addressee and/or address as either of the above
  shall have specified by notice delivered in accordance with this Section 9.01.
  Each notice or other communication, which shall be delivered personally, mailed,
  telexed or telefaxed in the manner described above, shall be deemed sufficiently
  given, served, sent, received or delivered for all purposes on the first business
  day following the date that it is delivered to the addressee (with the return
  receipt, the delivery receipt, the affidavit or messenger or, with respect to
  a telex or telefax, the answer back being deemed conclusive, but not exclusive,
  evidence of such delivery) or at such time as delivery is refused by the addressee
  upon presentation.

 

9

 
9.05 Entire Agreement. This Agreement contains the
  entire agreement, and supersedes all prior agreements and understandings and
  arrangements, oral or written, between the Parties with respect to the subject
  matter hereof.

9.06 Amendment. This Agreement may not be modified,
  amended or changed in any respect except in writing duly signed by the Party
  against whom enforcement of such modification, amendment or change is sought.

9.07 Successors and Assigns. All of the terms and
  provisions of this Agreement shall be binding upon and shall inure to the benefit
  of the Parties and their respective successors and permitted assigns.

9.08 Assignment. Except as provided in Section 9.09,
  no Party shall assign this Agreement, in whole or in part, without the prior
  written consent of the other Party, and any such assignment contrary to the
  terms hereof shall be null and void and of no force or effect. No permitted
  or purported assignment of all or any portion of this Agreement shall effect
  a release of the transferor of its obligations under this Agreement without
  an express written release from such obligations by the other Party.

9.09 Assignment by MCI. Notwithstanding Section
  9.08, MCI may assign or transfer its rights and obligations under this Agreement
  to any Affiliate of MCI, including entities organized under the laws of Brazil,
  without the consent of EMBRATEL.

9.10 Interpretation. Whenever possible, each provision
  of this Agreement shall be interpreted in such manner as to be effective and
  valid under applicable law, but if any provision of this Agreement shall be
  unenforceable or invalid under applicable law, such provision shall be ineffective
  only to the extent of such unenforceability or invalidity, and the remaining
  provisions of this Agreement shall continue to be binding and in full force
  and effect. In the event of such unenforceability or invalidity the Parties
  shall negotiate in good faith to agree on changes or amendments to this Agreement
  which are required to carry out the intent of this Agreement in light of such
  unenforceability or invalidity.

9.11 Counterparts. This Agreement may be executed
  in counterparts, each of which shall be deemed to be an original, and all such
  counterparts together shall constitute one and the same legal document.

9.12 Language. This Agreement and any amendments
  or other modifications hereof shall be executed in the English language and
  translated into Portuguese for convenience. In the event of a conflict between
  the English language and the Portuguese language versions of this Agreement,
  the English language version shall prevail.

9.13 Headings. The Article and other headings contained
  in this Agreement are for convenience only and shall not be deemed to limit,
  characterize or interpret any provision of this Agreement.

9.14 Force Majeure. Any failure by a Party to perform
  obligations and responsibilities under this Agreement (other than payment obligations)
  shall not be considered a breach of this Agreement if and to the extent such
  failure to perform is caused by one or more occurrences beyond the reasonable
  control of the Party affected, including without limitation acts of God, earthquakes,
  volcanic eruptions, hurricanes or other natural disasters, embargoes, acts of
  government in exercising its sovereign capacity, governmental restrictions,
  strikes, labor unrest, riots, wars or other military action, civil disorders,
  rebellion, acts of terrorism, sabotage, or political or economic crisis or instability
  (each a “Force Majeure Event”). The Party suffering the Force Majeure
  Event shall promptly notify the other Party in writing of the details of such
  Force Majeure Event and thereupon the obligations of the Party giving such notice
  shall be suspended during, but not longer than, the continuance of the Force
  Majeure Event. The affected Party shall use all reasonable diligence to remove
  the Force Majeure Event as quickly as possible, provided that this requirement
  shall not require the settlement of strikes, lockouts or other labor difficulty
  by the Party involved, contrary to its wishes, and how all such difficulties
  shall be handled shall be entirely within the discretion of the Party involved.

 

10

 
	9.15 Confidentiality.

(a) Confidential Information. By virtue of this Agreement,
  the Parties may have access to, or exchange, information that is confidential
  to one another. As used in this Agreement, the term “Confidential Information”
  shall mean only such information of the other Party that may be reasonably understood
  from legends, the nature of such information itself and/or the circumstances
  of such information’s disclosure, to be confidential and/or proprietary
  to the other Party or to third parties to which the other Party owes a duty
  of non-disclosure.

(b) Obligations. Each of the Parties agrees that as
  to any Confidential Information disclosed by one Party (“Discloser”)
  to the other Party (“Recipient”) hereunder:

	 	(i)	to use such Confidential Information only
      in the performance of this Agreement, during its term, or as otherwise expressly
      permitted by this Agreement or by the prior written consent of the Discloser;
	 	 	 
	 	(ii)	not to make copies of any such Confidential
      Information or any part thereof except to the extent expressly permitted
      by this Agreement or by the Discloser;
	 	 	 
	 	(iii)	not to disclose any such Confidential Information
      to any third party, using the same degree of care used to protect Recipient’s
      own confidential or proprietary information of like importance, but in any
      case using no less than a reasonable degree of care; provided, however,
      that Recipient may disclose Confidential Information received hereunder
      to (aa) its Affiliates who are bound to protect the received Confidential
      Information from unauthorized use and disclosure under the terms of a written
      agreement (including without limitation a pre-existing written agreement),
      and (bb) to its employees, consultants and agents, and its Affiliates’
      employees, consultants and agents, who have a need to know to perform or
      exercise rights under this Agreement, and who are bound to protect the received
      Confidential Information from unauthorized use and disclosure under the
      terms of a written agreement (including without limitation a pre-existing
      written agreement).

(c) Exceptions. The restrictions set forth in this
  Section 9.15 on the use and disclosure of Confidential Information shall not
  apply to information that:

	 	(i)	was publicly known at the time of Discloser’s
      communication thereof to Recipient;
	 	 	 
	 	(ii)	becomes publicly known through no fault of
      Recipient subsequent to the time of Discloser’s communication thereof
      to Recipient;
	 	 	 
	 	(iii)	is in Recipient’s possession free of
      any obligation of confidence at the time of Discloser’s communication
      thereof to Recipient;
	 	 	 
	 	(iv)	is developed by Recipient independently of
      and without use of any of Discloser’s Confidential Information or other
      information that Discloser disclosed in confidence to any third party;
	 	 	 
	 	(v)	is rightfully obtained by Recipient without
      restriction from third parties authorized to make such disclosure; or
	 	 	 
	 	(vi)	is identified by Discloser in writing as no
      longer proprietary or confidential.

 

11

 

(d) Disclosure Pursuant to Legal Requirement. In the
  event Recipient is required by law, regulation or court order to disclose any
  of Discloser’s Confidential Information, Recipient will promptly notify
  Discloser in writing prior to making any such disclosure in order to facilitate
  Discloser seeking a protective order or other appropriate remedy from the proper
  authority. Recipient agrees to cooperate with Discloser in seeking such order
  or other remedy. Recipient further agrees that if Discloser is not successful
  in precluding the requesting legal body from requiring the disclosure of the
  Confidential Information, it will furnish only that portion of the Confidential
  Information which is legally required and will exercise all reasonable efforts
  to obtain reliable assurances that confidential treatment will be accorded the
  Confidential Information.

9.16 No Authority to Bind. MCI shall have no authority
  to enter into contracts or otherwise incur obligations on behalf of or bind
  EMBRATEL, except as otherwise expressly approved by the Board.

IN WITNESS WHEREOF, the Parties hereto have
  executed this Agreement as of the day and year first above written.

	Empresa Brasileira de Telecomunicações
      S.A.	 	 MCI
      Global Resources, Inc.	 
	-
        EMBRATEL
	 	  	 
	
        

      
	 	
	 
	Dilio
        Sergio Penedo
	 	 Jorge
      L. Rodriguez	 
	President
	 	 Vice
      President	 
	 	 	 	 
	
        

      
	 	
	 
	Witness
	 	 Witness	 
	 	 	 	 
	
        

      
	 	
	 
	Print
        Name
	 	 Print
      Name	 
	 	 	 	 
	
        

      
	 	
	 
	ID
        Number
	 	 ID
      Number	 

 

12

 
ATTACHMENT 1

The Services

	 CONCESSION
        AUTHORIZATION 
	 	SERVICES DESCRIPTION	 	SERVICES	 
	 
  	
	
	
	
	 
	 CONCESSION
        CONTRACT – NATIONAL LONG DISTANCE
	 	Switched Fixed Telephone Service
      is the telecommunications service which, by means of the transmission of
      voice and other signals, is used for communication between fixed and specific
      points, utilizing telephony processes.	 	Inter-City, Inter-State, and Inter-Region
      Switched Fixed Telephone Service within Brazil.	 
	 
  	
	
	
	
	 
	 CONCESSION
        CONTRACT – INTERNATIONAL LONG DISTANCE
	 	Switched Fixed Telephone Service is
      the telecommunications service which, by means of the transmission of voice
      and other signals, is used for communication between fixed and specific
      points, utilizing telephony processes.	 	International Switched Fixed Telephone Service	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF NETWORK TRANSPORT TELECOMMUNICATIONS SERVICE (NATIONAL AND INTERNATIONAL)

                  	 	Network Transportation Service
      is the service designed for transporting voice, telegraphic, data or
      any other kind of telecommunications signals between fixed points.            	 	Special repetition of TV and video signal
      service	 
	 	 	Special repetition of audio signal service	 
	 	 	Dedicated line service (SLD)	 
	 	 	Analogic signals dedicated line service (SLDA)	 
	 	 	Digital signals dedicated line service (SLDD)	 
	 	 	Dedicated line service for telegraphy (SLDT)	 
	 	 	International dedicated line service (SLDI)	 
	 	 	International dedicated line service for analogic
      signals (SLDIA)	 
	 	 	International dedicated line service for digital
      signals (SLDID)	 
	 	 	International dedicated line service for telegraphy
      (SLDIT)	 
	 	 	Packet switched network service	 
	 	 	Circuit switched network service	 
	 	 	Text communications service – telex	 
	 
  	
	
	
	
	 
	 TERM
        OF RIGHT OF EXPLOITATION OF BRAZILIAN SATELLITES

       	 	  	 	Transport of telecommunications signals	 
	 	 	Provision of Space Capacity	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF MOBILE GLOBAL SERVICE BY SATELLITE
	 	Global Mobile Satellite Service is
      the telecommunications service which uses a set of satellites to provide
      direct communication between a mobile earth station and another telecommunication
      station.	 	 	 
	 
  	
	
	
	
	 
	 AUTHORIZATION
        TERM OF MARITIME MOBILE SERVICE
	 	Mobile Maritime Services is the service
      designed to provide communication between onshore coastal stations and ship
      stations and between coastal earth stations and earth stations installed
      on board ships, vessels or rescue crafts.	 	 	 

 

13

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