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SC 13D
ALLEN PAUL G filed this Form SC 13D on 11/22/1999
Entire Document
 


<PAGE>   1

PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT HAS
BEEN OMITTED FROM THIS FILING AND MARKED WITH AN ASTERISK [*]. A COMPLETE COPY
OF THE DOCUMENT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.


                                                                    EXHIBIT 10.1



================================================================================

                                 $1,500,000,000
                         CREDIT AND GUARANTEE AGREEMENT


                                      among


                               PGA CREDIT II LLC,
                                as the Borrower,


                                 PAUL G. ALLEN,
                                as the Guarantor,


              The Several Lenders from Time to Time Parties Hereto,


            BANK OF MONTREAL and CREDIT LYONNAIS LOS ANGELES BRANCH,
                            as Co-Syndication Agents,


                                    PARIBAS,
                             as Documentation Agent,


        BANK OF MONTREAL, CREDIT LYONNAIS LOS ANGELES BRANCH and PARIBAS,
                                as Co-Arrangers,


                                       and


                        COMMERZBANK AG, NEW YORK BRANCH,
                  as Administrative Agent and Collateral Agent


                          ---------------------------

                         DATED AS OF SEPTEMBER 17, 1999

                          ---------------------------


================================================================================

                        COMMERZBANK AG, NEW YORK BRANCH,
                                as Lead Arranger



<PAGE>   2

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
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                                                                                                               ----
<S>                                                                                                              <C>
ARTICLE I

         DEFINITIONS..............................................................................................1

         SECTION 1.1  Defined Terms...............................................................................1
         SECTION 1.2  Other Definitional Provisions..............................................................13

ARTICLE II

         LOANS...................................................................................................13

         SECTION 2.1  Commitments................................................................................13
         SECTION 2.2  Procedure for Loan Borrowing...............................................................14
         SECTION 2.3  Repayment of Loans; Evidence of Debt.......................................................14
         SECTION 2.4  Prepayments; Collateral Releases...........................................................15
         SECTION 2.5  Continuation Options
 for Loans.............................................................16
         SECTION 2.6  Minimum Amounts and Maximum Number of Tranches.............................................16
         SECTION 2.7  Interest Rates and Payment Dates...........................................................16
         SECTION 2.8  Computation of Interest and Fees...........................................................17
         SECTION 2.9  Inability to Determine Interest Rate.......................................................17
         SECTION 2.10  Pro Rata Treatment and Payments...........................................................18
         SECTION 2.11  Requirements of Law.......................................................................19
         SECTION 2.12  Taxes.....................................................................................21
         SECTION 2.13  Indemnity.................................................................................24
         SECTION 2.14  Change of Lending Office..................................................................24
         SECTION 2.15  Replacement of Lenders under Certain Circumstances........................................24

ARTICLE III

         REPRESENTATIONS AND WARRANTIES..........................................................................25

         SECTION 3.1  Financial Condition........................................................................25
         SECTION 3.2  Financial Statements.......................................................................26
         SECTION 3.3  No Material Adverse Effect.................................................................26
         SECTION 3.4  Limited Liability Company Existence; Compliance with Law...................................26
         SECTION 3.5  Powers Authorization, Enforceable Obligations..............................................26
         SECTION 3.6  No Legal Bar...............................................................................27
         SECTION 3.7  No Material Litigation.....................................................................27
         SECTION 3.8  No Default.................................................................................27
         SECTION 3.9  Ownership of Property; Liens...............................................................27
         SECTION 3.10  Taxes.....................................................................................27
</TABLE>



                                       (i)

<PAGE>   3


<TABLE>
<S>                                                                                                              <C>
         SECTION 3.11  Accuracy of Information...................................................................28
         SECTION 3.12  Federal Regulations.......................................................................28
         SECTION 3.13  ERISA.....................................................................................28
         SECTION 3.14  Ownership of the Borrower.................................................................29
         SECTION 3.15  Investment Company Act; Other Regulations.................................................29
         SECTION 3.16  Subsidiaries..............................................................................29
         SECTION 3.17  Purpose of Loans..........................................................................29
         SECTION 3.18  Public Utility Holding Company Act........................................................29
         SECTION 3.19  Business of the Borrower..................................................................29
         SECTION 3.20  Residency of the Guarantor................................................................29

ARTICLE IV

         CONDITIONS PRECEDENT....................................................................................30

         SECTION 4.1 Conditions to Effective Date................................................................30
         SECTION 4.2 Conditions to Each Loan on the Funding Date.................................................31

ARTICLE V

         AFFIRMATIVE COVENANTS...................................................................................31

         SECTION 5.1  Financial Statements; Tax Returns..........................................................31
         SECTION 5.2  Certificates; Other Information............................................................32
         SECTION 5.3  Payment of Taxes; Obligations..............................................................33
         SECTION 5.4  Conduct of Business and Maintenance of Existence...........................................33
         SECTION 5.5  Compliance with Contractual Obligations and Laws...........................................33
         SECTION 5.6  Notice.....................................................................................33
         SECTION 5.7  Maintenance of Unencumbered Assets.........................................................34
         SECTION 5.8  Maintenance of Minimum Net Worth...........................................................34
         SECTION 5.9  ERISA......................................................................................34
         SECTION 5.10  Change of Residency of the Guarantor......................................................34

ARTICLE VI

         NEGATIVE COVENANTS......................................................................................34

         SECTION 6.1  Limitation on Activities of the Borrower...................................................35
         SECTION 6.2  Limitation on Indebtedness.................................................................35
         SECTION 6.3  Limitation on Liens........................................................................35
         SECTION 6.4  Limitation on Investments, Loans and Advances..............................................35
         SECTION 6.5  Limitation on Fundamental Changes and Sales of Assets......................................35

ARTICLE VII

         GUARANTEE...............................................................................................35

         SECTION 7.1  Guarantee..................................................................................35
</TABLE>


                                      (ii)


<PAGE>   4


<TABLE>
<S>                                                                                                              <C>
         SECTION 7.2  No Subrogation.............................................................................36
         SECTION 7.3  Amendments, etc............................................................................36
         SECTION 7.4  Guarantee Absolute and Unconditional.......................................................37
         SECTION 7.5  Reinstatement..............................................................................38
         SECTION 7.6  Payments...................................................................................38
         SECTION 7.7  Binding on Successors and Assigns..........................................................38

ARTICLE VIII

         EVENTS OF DEFAULT.......................................................................................38

         SECTION 8.1  Events of Default..........................................................................38

ARTICLE IX

         THE ADMINISTRATIVE AGENT................................................................................42

         SECTION 9.1  Appointment................................................................................42
         SECTION 9.2  Delegation of Duties.......................................................................42
         SECTION 9.3  Exculpatory Provisions.....................................................................42
         SECTION 9.4  Reliance by Administrative Agent...........................................................43
         SECTION 9.5  Notice of Default..........................................................................43
         SECTION 9.6  Non-Reliance on Administrative Agent and Other Lenders.....................................43
         SECTION 9.7  Indemnification............................................................................44
         SECTION 9.8  Administrative Agent in Its Individual Capacity............................................44
         SECTION 9.9  Successor Administrative Agent.............................................................45
         SECTION 9.10  The Arrangers, Co-Syndication Agents and Documentation Agent..............................45

ARTICLE X

         MISCELLANEOUS...........................................................................................45

         SECTION 10.1  Amendments and Waivers....................................................................45
         SECTION 10.2  Notices...................................................................................46
         SECTION 10.3  No Waiver; Cumulative Remedies............................................................48
         SECTION 10.4  Survival of Representations and Warranties................................................48
         SECTION 10.5  Payment of Expenses and Taxes.............................................................48
         SECTION 10.6  Successors and Assigns; Participations and Assignments....................................49
         SECTION 10.7  Adjustments; Set-off......................................................................51
         SECTION 10.8  Counterparts..............................................................................52
         SECTION 10.9  Severability..............................................................................52
         SECTION 10.10  Integration..............................................................................52
         SECTION 10.11  GOVERNING LAW............................................................................52
         SECTION 10.12  Submission To Jurisdiction; Waivers......................................................52
         SECTION 10.13  Acknowledgments..........................................................................53
</TABLE>


                                      (iii)

<PAGE>   5


<TABLE>
<S>                                                                                                              <C>
         SECTION 10.14  WAIVERS OF JURY TRIAL....................................................................53
         SECTION 10.15  Confidentiality..........................................................................53
         SECTION 10.16  Headings Descriptive.....................................................................54


                             SCHEDULES AND EXHIBITS

SCHEDULE 1  -        SCHEDULE OF COMMITMENTS

EXHIBIT A            -    [FORM OF] STOCK PLEDGE AGREEMENT
EXHIBIT A-1          -    [FORM OF] SECURITIES ACCOUNT CONTROL
                              AGREEMENT
EXHIBIT B            -    [FORM OF] CLOSING CERTIFICATE
EXHIBIT C-1          -    [FORM OF] OPINION OF HELLER, EHRMAN, WHITE &
                              McAULIFFE
EXHIBIT C-2          -    [FORM OF] OPINION OF ROBERT A. ESHELMAN, 
                              GENERAL COUNSEL, FINANCE & OPERATIONS FOR 
                              MICROSOFT CORPORATION
EXHIBIT D            -    [FORM OF] CERTIFICATE REGARDING UNENCUMBERED
                              ASSETS
EXHIBIT E            -    [FORM OF] ASSIGNMENT AND ACCEPTANCE
EXHIBIT F            -    [FORM OF] PROMISSORY NOTE
</TABLE>


                                      (iv)


<PAGE>   6

                         CREDIT AND GUARANTEE AGREEMENT

         This CREDIT AND GUARANTEE AGREEMENT, dated as of September 17, 1999
(together with all amendments, modifications and supplements, this "Agreement"),
among PGA CREDIT II LLC, a Delaware limited liability company, as the borrower
(the "Borrower"); PAUL G. ALLEN, a Washington resident, as guarantor (as more
specifically defined below, the "Guarantor"); COMMERZBANK AG, a German banking
corporation acting through its New York and Grand Cayman Branches together with
the several banks and other financial institutions from time to time parties to
this Agreement, as lenders (each, a "Lender" and, collectively, the "Lenders");
BANK OF MONTREAL and CREDIT LYONNAIS LOS ANGELES BRANCH, as co-syndication
agents (collectively, in such capacity, the "Co-Syndication Agents"), PARIBAS,
as documentation agent (in such capacity, the "Documentation Agent");
COMMERZBANK AG, a German banking corporation acting through its New York Branch,
as lead arranger (in such capacity, the "Lead Arranger"); BANK OF MONTREAL,
CREDIT LYONNAIS LOS ANGELES BRANCH and PARIBAS as co-arrangers (collectively,
with the Lead Arranger in such capacity, the "Arrangers") and COMMERZBANK AG, a
German banking corporation acting through its New York Branch as administrative
agent and collateral agent for the Lenders hereunder (as more specifically
defined below, the "Administrative Agent").


                              W I T N E S S E T H:


         WHEREAS, the Borrower has requested, and the Lenders have agreed to
make available, a term credit facility upon the terms and conditions described
herein; and

         WHEREAS, in order to induce the Lenders to enter into this Agreement,
the Guarantor has agreed to execute and deliver the guarantees contained herein.

         NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties, covenants and other agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are recognized and acknowledged by all parties hereto, the parties hereby
agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

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

               "ABR" shall mean for any day, a rate per annum (rounded upwards,
          if necessary, to the next 1/16 of 1%) 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 plus 1/2 of 1%. If for any reason the
          Administrative Agent shall have determined (which determination shall
          be conclusive absent manifest error) that it is unable to ascertain
          the Federal Funds Effective


<PAGE>   7
         Rate for any reason, including the inability or failure of the
         Administrative Agent to obtain sufficient quotations in accordance with
         the terms thereof, the ABR shall be determined without regard to clause
         (b) of the first sentence of this definition until the circumstances
         giving rise to such inability no longer exist. Any change in the ABR
         due to a change in the Prime Rate or the Federal Funds Effective Rate
         shall be effective as of the opening of business on the effective day
         of such change in the Prime Rate or the Federal Funds Effective Rate,
         respectively.

                  "ABR Loans" shall mean that portion of each Lender's Loan
         which bears interest based upon the ABR.

                  "Administrative Agent" shall mean Commerzbank AG, acting
         through its New York Branch, as the administrative agent and collateral
         agent for the Lenders under this Agreement and the other Loan
         Documents, and any successor agent appointed pursuant to Section 9.9.

                  "Affiliate" shall mean as to any Person, any other Person
         which, directly or indirectly, is in control of, is controlled by, or
         is under common control with, such Person. For purposes of this
         definition, "control" of a Person means the power, directly or
         indirectly, either to (a) vote 20% or more of the voting interests of
         such Person or (b) direct or cause the direction of the management and
         policies of such Person, whether by contract or otherwise.

                  "After-Tax Basis" means a basis such that any payment
         received, actually or constructively, or accrued by any Person shall be
         supplemented by a further payment to that Person so that the sum of the
         two payments shall, after deduction for the net increase in all Taxes
         (taking into account all related current credits or current deductions)
         resulting from the receipt (actual or constructive) or accrual of such
         payments, be equal to the first of such payments. In making
         calculations pursuant to this definition, it shall be assumed that the
         recipient is fully taxable for all income tax purposes at the highest
         marginal rate applicable to corporations at the time such amount is
         received or properly accrued.

                  "Agents" shall mean, collectively, the Arrangers, the
          Co-Syndication Agents and the Documentation Agent.

                  "Applicable Margin" shall mean with respect to any Eurodollar
         Loans, [*]% per annum, and with respect to any ABR Loans, [*]% per
         annum.

                  "Approved Fund" shall mean with respect to any Lender that is
         a fund that invests in bank loans, any other fund or trust or entity
         that invests in bank loans and is advised or managed by the same
         investment advisor as such Lender or by an Affiliate of such investment
         advisor.

                  "Approved Holder" shall mean each of the Borrower and any
         other direct or indirect wholly-owned Subsidiary of the Guarantor.


         [*] Confidential treatment requested.


                                      -2-

<PAGE>   8

                  "Arrangers" shall have the meaning provided in the preamble.

                  "Benefited Lender" shall have the meaning provided in Section
          10.7.

                  "Board" shall mean the Board of Governors of the Federal
          Reserve System.

                  "Borrower" shall have the meaning provided in the preamble.

                  "Business Day" shall mean a day other than a Saturday, Sunday
          or other day on which commercial banks in New York City or London are
          authorized or required by law to close.

                  "Capital Stock" shall mean any and all shares, interests,
          participations or other equivalents (however designated) of capital
          stock of a corporation, any and all equivalent ownership interests in
          a Person (other than a corporation) and any and all warrants or
          options to purchase any of the foregoing.

                  "Cash and Cash Equivalents" shall mean (a) cash on hand; (b)
          Dollar demand deposits maintained in the United States with any
          commercial bank and Dollar time deposits maintained in the United
          States with, or certificates of deposit having a maturity of one year
          or less issued by, any commercial bank which has its head office in
          the United States and which has a combined capital and surplus of at
          least $100,000,000; (c) direct obligations of, or obligations
          unconditionally guaranteed by, the United States and having a maturity
          of one year or less; (d) readily marketable commercial paper having a
          maturity of one year or less, issued by any corporation organized and
          existing under the laws of the United States or any state thereof or
          the District of Columbia and rated by Standard & Poor's Ratings
          Services or Moody's Investors Service, Inc. (or, if neither such
          organization shall rate such commercial paper at any time, rated by
          any nationally recognized rating organization in the United States)
          with the highest rating assigned by such organization; (e) repurchase
          agreements which (i) are callable at any time or have a maturity date
          of one year or less, (ii) are entered into with any commercial bank
          that has its head office in the United States and has a combined
          capital and surplus of at least $100,000,000 and (iii) are secured by
          direct obligations of, or obligations unconditionally guaranteed by,
          the United States and having a maturity of one year or less; (f)
          mutual funds that invest exclusively in direct obligations of, or
          obligations unconditionally guaranteed by, the United States and
          having a maturity of one year or less; and (g) such other short-term
          investments as shall be acceptable to the Administrative Agent from
          time to time in its sole discretion.

                  "Code" shall mean the Internal Revenue Code of 1986, as
          amended from time to time.

                  "Collateral Coverage Ratio" shall mean on any date, the ratio
          of (a) the Market Value of the Pledged Microsoft Stock on such date to
          (b) the Total Outstanding Extensions of Credit on such date.


                                      -3-

<PAGE>   9

                  "Commitment" shall mean as to any Lender, the obligation of
          such Lender to make a Loan to the Borrower hereunder in a principal
          amount not to exceed the amount set forth under the heading
          "Commitment" opposite such Lender's name on Schedule 1. The original
          aggregate principal amount of all of the Commitments is
          $1,500,000,000.

                  "Commonly Controlled Entity" shall mean an entity, whether or
          not incorporated, which is under common control with the Borrower or
          the Guarantor within the meaning of Section 4001 of ERISA or is part
          of a group which includes the Borrower or the Guarantor and which is
          treated as a single employer under Section 414(b) or (c) of the Code,
          or solely for purposes of determining liability under Section 412 of
          the Code, which is treated as a single employer under Section 414(b),
          (c), (m) or (o) of the Code.

                  "Confidential Information Memorandum" shall mean the
          Confidential Information Memorandum with respect to the Guarantor and
          the Facility dated August 1999.

                  "Conservator" shall mean a guardian, conservator or committee
          for the Guarantor.

                  "Conservatorship" shall mean a guardianship, committee or
          conservatorship of the Guarantor.

                  "Contractual Obligation" shall mean as to any Person, any
          provision of any security issued by such Person or of any agreement,
          contract, indenture, mortgage, deed of trust, instrument or other
          undertaking to which such Person is a party or by which it or any of
          its property or assets is bound.

                  "Control Agreement" shall mean the Securities Account Control
          Agreement entered into among the Borrower, the Administrative Agent
          and Commerzbank Capital Markets Corp. substantially in the form of
          Exhibit A-1 to the Stock Pledge Agreement.

                  "Co-Syndication Agents" shall have the meaning provided in the
          preamble.

                  "Cut-Off Date" shall have the meaning provided in Section
          2.11(e).

                  "Default" shall mean any event, occurrence or circumstance,
          which with the giving of notice or the lapse of time, or both, would
          constitute an Event of Default.

                  "Documentation Agent" shall have the meaning provided in the
          preamble.

                  "Dollars" and "$" shall mean dollars in lawful currency of the
          United States of America.

                  "Effective Date" shall mean the first date on which the
          conditions precedent set forth in Section 4.1 shall be satisfied.

                  "ERISA" shall mean the Employee Retirement Income Security Act
          of 1974, as amended from time to time.


                                      -4-

<PAGE>   10

                  "Estate" shall mean all of (i) the personal representatives,
          executors and/or administrators of the Guarantor's estate, (ii) the
          trustees of any revocable trust created by the Guarantor during his
          life for his own benefit and (iii) the other successors in interest of
          the Guarantor.

                  "Eurodollar Loan" shall mean that portion of each Lender's
          Loan which bears interest based upon the Eurodollar Rate.

                  "Eurodollar Rate" shall mean with respect to each Eurodollar
          Loan during a specified Interest Period, the rate of interest
          determined on the basis of the rate for deposits in Dollars for a
          period equal to such Interest Period commencing on the first day of
          such Interest Period appearing on Page 3750 of the Dow Jones Markets
          screen as of 11:00 A.M., London time, two Business Days prior to the
          beginning of such Interest Period. In the event that such rate does
          not appear on Page 3750 of the Dow Jones Markets screen (or otherwise
          on such service), the Eurodollar Rate shall be determined by reference
          to such other publicly available service for displaying eurodollar
          rates as may be agreed upon by the Administrative Agent and the
          Borrower or, in the absence of such agreement, the Eurodollar Rate
          shall instead be the rate per annum equal to the rate at which
          Commerzbank AG is offered Dollar deposits at or about 11:00 A.M., New
          York City time, two Business Days prior to the beginning of such
          Interest Period, in the interbank eurodollar market where the
          eurodollar and foreign currency and exchange operations in respect of
          its Eurodollar Loan is then being conducted for delivery on the first
          day of such Interest Period for a period equal to such Interest Period
          and in an amount comparable to the amount of its Eurodollar Loan to be
          outstanding during such Interest Period.

                  "Eurodollar Tranche" shall mean the collective reference to
          Eurodollar Loans or portions thereof under the Facility with respect
          to which the then current Interest Periods all begin on the same date
          and end on the same later date.

                  "Event of Default" shall mean any of the events specified in
          Section 8.1.

                  "Exchange Investment" shall mean any security into which any
          Initial Investment is exchanged or converted.

                  "Exposure" shall mean with respect to any Lender at any time,
          an amount equal to (a) until the Funding Date, the amount of such
          Lender's Commitment at such time and (b) thereafter, the unpaid
          principal amount of such Lender's Loan then outstanding at such time.

                  "Exposure Percentage" shall mean with respect to any Lender at
          any time, the ratio (expressed as a percentage) of such Lender's
          Exposure at such time to the Exposure of all Lenders at such time.

                  "Facility" shall mean the Commitments and each Lender's Loan
          made thereunder.


                                      -5-

<PAGE>   11

                  "Federal Funds Effective Rate" shall mean for any day, the
          weighted average of the rates on overnight federal funds transactions
          with members of the Federal Reserve System arranged by federal funds
          brokers, as published 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 which is a Business Day, the average of the quotations for
          the day of such transactions received by the Administrative Agent from
          three federal funds brokers of recognized standing selected by it.

                  "Financing Lease" shall mean any lease of property, real or
          personal, the obligations of the lessee in respect of which are
          required in accordance with GAAP to be capitalized on the balance
          sheet of the lessee.

                  "Funding Date" shall have the meaning provided in Section 2.2.

                  "GAAP" shall mean generally accepted accounting principles set
          forth from time to time in the opinions and pronouncements of the
          Accounting Principles Board and the American Institute of Certified
          Public Accountants and statements and pronouncements of the Financial
          Accounting Standards Board (or agencies with similar functions of
          comparable stature and authority within the accounting profession), or
          in such other statements by such other entity as may be in general use
          by significant segments of the U.S. accounting profession, which are
          applicable to the circumstances as of the date of determination.

                  "Governmental Authority" shall mean any nation or government,
          any state or other political subdivision thereof and any entity
          exercising executive, legislative, judicial, regulatory or
          administrative functions of or pertaining to government.

                  "Guarantee" shall mean the guarantee made by the Guarantor
          pursuant to Article VII hereof.

                  "Guarantee Obligation" shall mean as to any Person (the
          guaranteeing person), any obligation of (a) the guaranteeing person or
          (b) another Person (including, without limitation, any bank under any
          letter of credit) to induce the creation of which the guaranteeing
          person has issued a reimbursement, counterindemnity or similar
          obligation, in either case guaranteeing or in effect guaranteeing any
          Indebtedness, leases, dividends or other obligations (the primary
          obligations) of any other third Person (the primary obligor) in any
          manner, whether directly or indirectly, including, without limitation,
          any obligation of the guaranteeing person, whether or not contingent,
          (i) to purchase any such primary obligation or any property
          constituting direct or indirect security therefor, (ii) to advance or
          supply funds (1) for the purchase or payment of any such primary
          obligation or (2) to maintain working capital or equity capital of the
          primary obligor or otherwise to maintain the net worth or solvency of
          the primary obligor, (iii) to purchase property, securities or
          services primarily for the purpose of assuring the owner of any such
          primary obligation of the ability of the primary obligor to make
          payment of such primary obligation or (iv) otherwise to assure or hold
          harmless the owner of any such primary obligation against loss in
          respect thereof; provided, however, that the term Guarantee


                                      -6-

<PAGE>   12

         Obligation shall not include endorsements of instruments for deposit or
         collection in the ordinary course of business. The amount of any
         Guarantee Obligation of any guaranteeing person shall be deemed to be
         the lower of (a) an amount equal to the stated or determinable amount
         of the primary obligation in respect of which such Guarantee Obligation
         is made and (b) the maximum amount for which such guaranteeing person
         may be liable pursuant to the terms of the instrument embodying such
         Guarantee Obligation, unless such primary obligation and the maximum
         amount for which such guaranteeing person may be liable are not stated
         or determinable, in which case the amount of such Guarantee Obligation
         shall be such guaranteeing person's maximum reasonably anticipated
         liability in respect thereof as determined by the Borrower in good
         faith.

                  "Guarantor" shall mean Paul G. Allen, a Washington resident,
          and his successors and assigns (including, without limitation, the
          Estate).

                  "Hedging Agreement" shall mean 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.

                  "Indebtedness" of any Person shall mean at any date, without
          duplication, (a) all indebtedness of such Person for borrowed money,
          (b) all obligations of such Person for the deferred purchase price of
          property or services (other than current trade payables incurred in
          the ordinary course of such Person's business), (c) all obligations of
          such Person evidenced by notes, bonds, debentures or other similar
          instruments, (d) all indebtedness created or arising under any
          conditional sale or other title retention agreement with respect to
          property acquired by such Person (even though the rights and remedies
          of the seller or lender under such agreement in the event of default
          are limited to repossession or sale of such property), (e) all
          obligations of such Person in respect of Financing Leases, (f) all
          obligations, contingent or otherwise, of such Person as an account
          party under acceptance, letter of credit or similar facilities, (g)
          all obligations of such Person to purchase, redeem, retire or
          otherwise acquire for value any Capital Stock of such Person, (h) all
          Guarantee Obligations of such Person, (i) all net payment obligations
          of such Person in respect of Interest Rate Protection Agreements and
          other Hedging Agreements due and payable as of such date, (j) all net
          payment obligations of such Person in respect of derivative
          instruments based on the performance of an asset, index or other
          investment due and payable as of such date and (k) all obligations of
          the kind referred to in clauses (a) through (j) above secured by (or
          for which the holder of such obligation has an existing right,
          contingent or otherwise, to be secured by) any Lien on property
          (including, without limitation, accounts and contract rights) owned by
          such Person, whether or not such Person has assumed or become liable
          for the payment of such obligation.

                  "Initial Investment" shall mean any limited liability company
          interest in Charter Communications Holding Company, LLC, a Delaware
          limited liability company, purchased by the Guarantor or any Affiliate
          thereof with the proceeds of the Loans.


                                      -7-

<PAGE>   13

                  "Interest Payment Date" shall mean (a) as to any ABR Loan or
          portion thereof, the last day of each March, June, September and
          December, the date of any prepayment thereof and the Termination Date,
          (b) as to any Eurodollar Loan or portion thereof having an Interest
          Period of three months or less, the last day of such Interest Period
          and the date of any prepayment thereof and (c) as to any Eurodollar
          Loan or portion thereof having an Interest Period longer than three
          months, each day which is three months, or a whole multiple thereof,
          after the first day of such Interest Period, the last day of such
          Interest Period and the date of any prepayment thereof.

                  "Interest Period" shall mean with respect to any Eurodollar
          Loan or portion thereof:

                           (a) initially, the period commencing on the Funding
                  Date with respect to such Eurodollar Loan or portion thereof
                  and ending one, two, three or six months thereafter (or, to
                  the extent available from all Lenders, nine or twelve months
                  thereafter), as selected by the Borrower in its notice of
                  borrowing, as the case may be, given with respect thereto; and

                           (b) thereafter, each period commencing on the last
                  day of the next preceding Interest Period applicable to such
                  Eurodollar Loan or portion thereof and ending one, two, three
                  or six months thereafter (or, to the extent available from all
                  Lenders, nine or twelve months thereafter), as selected by the
                  Borrower by irrevocable notice to the Administrative Agent not
                  less than three Business Days prior to the last day of the
                  then current Interest Period with respect thereto;

         provided, that, all of the foregoing provisions relating to Interest
         Periods are subject to the following:

                           (1) if any Interest Period would otherwise end on a
                  day that is not a Business Day, such Interest Period shall be
                  extended to the next succeeding Business Day unless the result
                  of such extension would be to carry such Interest Period into
                  another calendar month, in which event such Interest Period
                  shall end on the immediately preceding Business Day;

                           (2) any Interest Period that would otherwise extend
                  beyond the Termination Date shall end on the Termination Date;
                  and

                           (3) any Interest Period that begins on the last
                  Business Day of a calendar month (or on a day for which there
                  is no numerically corresponding day in the calendar month at
                  the end of such Interest Period) shall end on the last
                  Business Day of a calendar month.

                  "Interest Rate Protection Agreement" shall mean any interest
          rate swap, cap, collar or other agreement that is designed to protect
          against fluctuations in interest rates and not for speculation.


                                      -8-

<PAGE>   14

                  "Investment" shall mean any Initial Investment and any
          Exchange Investment.

                  "Lead Arranger" shall have the meaning provided in the
          preamble.

                  "Lenders" shall have the meaning provided in the preamble
          hereto.

                  "Lien" shall mean any mortgage, pledge, hypothecation,
          assignment, deposit arrangement, encumbrance, lien (statutory or
          other), charge or other security interest or any preference, priority
          or other security agreement or preferential arrangement of any kind or
          nature whatsoever (including, without limitation, any conditional sale
          or other title retention agreement and any Financing Lease having
          substantially the same economic effect as any of the foregoing).

                  "Loan" shall have the meaning provided in Section 2.1.

                  "Loan Documents" shall mean this Agreement, the Stock Pledge
          Agreement, the Control Agreement and any Net Worth Agreement.

                  "Loan Parties" shall mean the collective reference to the
          Borrower and the Guarantor.

                  "Majority Lenders" shall mean at any time, the holders of more
          than 50% of (a) until the Funding Date, the Commitments then in effect
          and (b) thereafter, the aggregate unpaid principal amount of each
          Lender's Loan then outstanding.

                  "Market Value" shall mean (a) (i) with respect to any
          marketable security quoted on the Nasdaq National Market, the last
          reported sale price on the Nasdaq National Market on the Business Day
          immediately preceding the date of determination or, if no such
          reported sale takes place on such immediately preceding Business Day,
          then the average of the last reported bid and asked prices on such
          immediately preceding Business Day or, if such average of the last
          reported bid and asked prices cannot be determined, then as determined
          by the Administrative Agent in good faith and furnished to the
          Borrower upon request and (ii) with respect to any marketable security
          listed or admitted to trading on the New York Stock Exchange or the
          American Stock Exchange, the last reported sale price of such security
          on the New York Stock Exchange or the American Stock Exchange, as the
          case may be, on the Business Day immediately preceding the date of
          determination, or, if no such reported sale takes place on such
          immediately preceding Business Day, the average of the last reported
          bid and asked prices for such security on the New York Stock Exchange
          or the American Stock Exchange, as the case may be, on such
          immediately preceding Business Day or, if such average of the last
          reported bid and asked prices cannot be determined, then as determined
          by the Administrative Agent in good faith and furnished to the
          Borrower upon request and (b) with respect to Cash and Cash
          Equivalents at any date of determination thereof, the value thereof
          determined in a manner reasonably acceptable to the Administrative
          Agent.


                                      -9-

<PAGE>   15

                  "Material Adverse Effect" shall mean (a) a material adverse
          change in, or a material adverse effect upon, (i) in the case of the
          Guarantor, his financial condition or his properties and assets, taken
          as a whole, (ii) in the case of the Estate or the Conservatorship, the
          financial condition thereof or the properties and assets thereof,
          taken as a whole, or (iii) in the case of the Borrower, its
          operations, business, properties or condition (financial or
          otherwise); (b) a material impairment of the ability of any Loan Party
          to perform under any Loan Document and to avoid any Event of Default;
          or (c) a material adverse effect upon the legality, validity, binding
          effect or enforceability against any Loan Party of any Loan Document.

                  "Microsoft" shall mean Microsoft Corporation, a Delaware
          corporation.

                  "Multiemployer Plan" shall mean a Plan which is a
          multiemployer plan as defined in Section 4001(a)(3) of ERISA.

                  "Net Cash Proceeds" shall mean in connection with any sale or
          other disposition of any Investment, the cash proceeds (including any
          cash payments received by way of deferred payment of principal
          pursuant to a note or installment receivable or purchase price
          adjustment receivable or otherwise, but only as and when received) of
          such sale, net of attorneys' fees, accountants' fees, investment
          banking fees and other customary fees actually incurred in connection
          therewith and net of taxes paid or reasonably estimated to be payable
          as a result thereof (after taking into account any tax credits or
          deductions and any tax sharing arrangements by the Loan Parties
          available or in effect at the time such determination is made).

                  "Net Worth" shall mean total assets less direct and contingent
          liabilities, as determined based on the most recent balance sheet
          delivered pursuant to Section 5.1(a).

                  "Net Worth Agreement" shall have the meaning provided in
          Section 8.1(k).

                  "New Lending Office" shall have the meaning provided in
          Section 2.12(c).

                  "Non-Excluded Taxes" shall have the meaning provided in
          Section 2.12(a).

                  "Non-U.S. Lender" shall heave the meaning provided in Section
          2.12(c).

                  "Note" shall have the meaning provided in Section 2.3(e).

                  "Obligations" shall mean all the unpaid principal of and
          accrued interest on (including, without limitation, interest accruing
          after the maturity of each Lender's Loan and interest accruing after
          the filing of any petition in bankruptcy, or the commencement of any
          insolvency, reorganization or like proceeding, relating to the
          Borrower, whether or not a claim for post-filing or post-petition
          interest is allowed in such proceeding) each Lender's Loan and all
          other obligations and liabilities of the Borrower to the Lenders,
          whether direct or indirect, absolute or contingent, due or to become
          due, or now existing or hereafter incurred, which may arise under, out
          of, or in connection with, this


                                      -10-

<PAGE>   16

         Agreement, the other Loan Documents and any other document made,
         delivered or given in connection herewith or therewith, whether on
         account of principal, interest, fees, indemnities, costs, expenses
         (including, without limitation, all fees and disbursements of counsel
         to the Lenders) or otherwise.

                  "Participants" shall have the meaning provided in Section
          10.6(b).

                  "Payment Office" shall mean the office of the Administrative
          Agent specified in Section 10.2 or such other office as the
          Administrative Agent may hereafter designate in writing as such to the
          other parties hereto.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
          established pursuant to Subtitle A of Title IV of ERISA (or any
          successor).

                  "Person" shall mean an individual, partnership, corporation,
          limited liability company, business trust, joint stock company, trust,
          unincorporated association, joint venture, Governmental Authority or
          other organization or entity of whatever nature.

                  "Plan" shall mean at a particular time, any employee benefit
          plan which is covered by ERISA and in respect of which a Loan Party or
          a Commonly Controlled Entity is (or, if such plan were terminated or a
          complete or partial withdrawal occurred at such time, would under
          Section 4069 or Section 4212(c) of ERISA be deemed to be) an
          "employer" as defined in Section 3(5) of ERISA.

                  "Pledged Microsoft Stock" shall mean the Capital Stock of
          Microsoft (a) which is owned beneficially and of record by the
          Borrower, (b) which qualifies as a Readily Marketable Security and (c)
          which has been pledged to the Administrative Agent and upon which the
          Administrative Agent and the Lenders shall have a first priority
          perfected security interest pursuant to the Stock Pledge Agreement,
          subject to no other Lien.

                  "Prime Rate" shall mean the rate of interest per annum
          publicly announced from time to time by Commerzbank AG as its prime
          lending rate or reference rate in effect at its principal office in
          New York City. The Prime Rate is a reference rate and does not
          necessarily represent the lowest or best rate actually charged to any
          customer. Commerzbank AG may make commercial loans or other loans at
          rates of interest at, above or below the Prime Rate. Any change in the
          Prime Rate announced by Commerzbank AG shall take effect at the
          opening of business on the day specified in the public announcement of
          such change.

                  "Purchasing Lenders" shall have the meaning provided in
          Section 10.6(c).

                  "Readily Marketable Securities" shall mean, at any date of
          determination, marketable securities listed or admitted to trading on
          the New York Stock Exchange or the American Stock Exchange or quoted
          on the Nasdaq National Market so long as, in the case of any such
          securities the transfer of which is restricted by Rule 144, such
          securities satisfy the requirements of subsection (k) of Rule 144 at
          such date.


                                      -11-

<PAGE>   17

                  "Register" shall have the meaning provided in Section 10.6(d).

                  "Regulation U" shall mean Regulation U of the Board as in
          effect from time to time.

                  "Reportable Event" shall mean any of the events set forth in
          Section 4043(b) of ERISA, other than those events as to which the
          thirty-day notice period is waived under subsection .27, .28, .29,
          .30, .31, .32, .34 or .35 of PBGC Reg. Section 4043.

                  "Requirement of Law" shall mean as to any Person, (a) the
          organizational or governing documents of such Person and (b) any law,
          treaty, rule or regulation or order or determination of an arbitrator
          or a court or Governmental Authority, in each case applicable to or
          binding upon such Person or any of its property or to which such
          Person or any of its property is subject.

                  "Responsible Representative" shall mean (a) with respect to
          the Borrower, any officer of the Borrower holding the title of
          president, vice president or chief financial officer or such other
          Person, reasonably acceptable to the Administrative Agent, as may be
          designated by any of the foregoing officers from time to time and (b)
          with respect to the Guarantor, the Guarantor or such other Person,
          reasonably acceptable to the Administrative Agent, as may be
          designated by the Guarantor from time to time.

                  "Rule 144" shall mean Rule 144 of the Securities Act of 1933,
          as amended.

                  "Single Employer Plan" shall mean any Plan that is covered by
          Title IV of ERISA, but that is not a Multiemployer Plan.

                  "Stock Pledge Agreement" shall mean the Stock Pledge Agreement
          entered into between the Borrower and the Administrative Agent, for
          the benefit of the Lenders, substantially in the form of Exhibit A to
          this Agreement, as the same may be amended, supplemented or otherwise
          modified from time to time.

                  "Subsidiary" shall mean as to any Person, a corporation,
          partnership or other entity of which shares of stock or other
          ownership interests having ordinary voting power (other than stock or
          such other ownership interests having such power only by reason of the
          happening of a contingency) to elect a majority of the board of
          directors or other managers of such corporation, partnership or other
          entity are at the time owned, or the management of which is otherwise
          controlled, directly or indirectly through one or more intermediaries,
          or both, by such Person. Unless otherwise qualified, all references to
          a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
          Subsidiary or Subsidiaries of the Borrower.

                  "Super-Majority Lenders" shall mean at any time, the holders
          of more than 80% of (a) until the Funding Date, the Commitments then
          in effect and (b) thereafter, the aggregate unpaid principal amount of
          the Loans then outstanding.


                                      -12-

<PAGE>   18

                  "Termination Date" shall mean the fifth-anniversary of the
          Funding Date.

                  "Total Outstanding Extensions of Credit" shall mean at any
          time, the aggregate principal amount of each Lender's Loan outstanding
          at such time.

                  "Transferee" shall have the meaning provided in Section
          10.6(f).

                  "Type" shall mean as to any Loan, its nature as an ABR Loan or
          a Eurodollar Loan.

                  "Unencumbered" shall mean with respect to any asset held by
          the Guarantor or the Approved Holder, at any date of determination,
          the circumstance that such asset on such date (a) is not subject to
          any Lien or claim (including restrictions on transferability or
          assignability) of any kind, (b) is not subject to any agreement
          (including any agreement governing Indebtedness incurred in order to
          finance or refinance the acquisition of such asset) which limits the
          ability of the Guarantor or the Approved Holder, as the case may be,
          to create, incur, assume or suffer to exist any Lien upon such asset
          (but other than any Unencumbered Asset Covenant) and (c) is not
          subject to any agreement (including any agreement governing
          Indebtedness incurred in order to finance or refinance the acquisition
          of such asset) which entitles any Person to the benefit of any Lien on
          such asset, or would entitle any Person to the benefit of any Lien on
          such asset upon the occurrence of any contingency (including, without
          limitation, pursuant to an "equal and ratable" clause). For purposes
          of clause (a) in this definition, restricted securities which are
          immediately transferable in accordance with subsection (k) of Rule 144
          on such date of determination shall not be considered to be subject to
          restrictions on transferability or assignability.

                  "Unencumbered Asset Covenant" shall have the meaning provided
          in Section 5.7.

          SECTION 1.2  Other Definitional Provisions.

                  (a) Unless otherwise specified therein, all terms defined in
          this Agreement shall have the defined meanings when used in any other
          Loan Document or any certificate or other document made or delivered
          pursuant hereto or thereto.

                  (b) As used herein and in any other Loan Document, and any
          certificate or other document made or delivered pursuant hereto or
          thereto, accounting terms relating to the Borrower not defined in
          Section 1.1 and accounting terms partly defined in Section 1.1, to the
          extent not defined, shall have the respective meanings given to them
          under GAAP.

                  (c) The words "hereof," "herein" and "hereunder" and words of
          similar import when used in this Agreement shall refer to this
          Agreement as a whole and not to any particular provision of this
          Agreement, and Article, Section, Schedule and Exhibit references are
          to this Agreement unless otherwise specified.

                                      -13-

<PAGE>   19

                  (d) The meanings given to terms defined herein shall be
          equally applicable to both the singular and plural forms of such
          terms.

                                   ARTICLE II

                                      LOANS

         SECTION 2.1 Commitments. Subject to the terms and conditions hereof,
each Lender severally agrees to make a term loan (a "Loan") to the Borrower in
an amount not to exceed the amount of the Commitment of such Lender. Subject to
Section 2.9, the Loans shall be Eurodollar Loans.

         SECTION 2.2 Procedure for Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable written notice by 10:00 A.M., New York City
time, on the Effective Date requesting that the Lenders make each Lender's Loan
in a single drawing on the third Business Day thereafter (the "Funding Date")
and specifying the amount to be borrowed and the Interest Period with respect
thereto. Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof. Not later than 12:00 Noon, New York City time, on
the Funding Date, each Lender shall make available to the Administrative Agent
at the Payment Office an amount in immediately available funds equal to the Loan
to be made by such Lender. The Administrative Agent shall credit the account of
the Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders in immediately available funds.

         SECTION 2.3 Repayment of Loans; Evidence of Debt.

         (a) The Borrower hereby unconditionally promises to repay in Dollars
and in immediately available funds the outstanding principal amount of each
Lender's Loan in full on the Termination Date. The Borrower hereby further
agrees to pay interest in Dollars and in immediately available funds at the
Payment Office on the unpaid principal amount of each Lender's Loan from time to
time outstanding from the Funding Date until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.7.

         (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from the Loan of such Lender, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.

         (c) The Administrative Agent shall maintain the Register pursuant to
Section 10.6(d), and a subaccount therein for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of the Loan made
hereunder, the Type thereof and each 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 Lender hereunder and (iii) both the amount of
any sum received by the Administrative Agent hereunder from the Borrower and
each Lender's share thereof.


                                      -14-

<PAGE>   20

         (d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loan made to
the Borrower by such Lender in accordance with the terms of this Agreement.

         (e) Notwithstanding the foregoing, upon the request of any Lender made
through the Administrative Agent, the Loan made by each Lender may be evidenced
by one or more promissory notes, substantially in the form of Exhibit F (each, a
"Note"), instead of accounts. Each such Lender shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of the Loan made by it and
the amount of each payment of principal made by the Borrower with respect
thereto. Each such Lender is irrevocably authorized by the Borrower to endorse
its Note(s) and each Lender's record shall be conclusive absent manifest error;
provided, however, that the failure of a Lender to make, or an error in making,
a notation thereon with respect to its Loan shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any other Loan Document, or
under any such Note to such Lender.

         SECTION 2.4  Prepayments; Collateral Releases.

         (a) The Borrower may, at any time and from time to time, prepay each
Lender's Loan, in whole or in part, without premium or penalty, (i) in the case
of a prepayment of all or a part of a Eurodollar Loan, upon at least three
Business Days' irrevocable notice to the Administrative Agent, or (ii) in the
case of a prepayment of all or a part of an ABR Loan, upon at least one Business
Day's irrevocable notice to the Administrative Agent, in each case, specifying
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans, ABR Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to Section 2.13.
Partial prepayments of Loans shall be in a minimum aggregate principal amount of
$10,000,000 or a whole multiple of $100,000 in excess thereof (or, if less, the
entire remaining outstanding principal amount thereof).

         (b) Within five Business Days of any day on which the Borrower, the
Guarantor or any Affiliate of either receives Net Cash Proceeds, the Borrower
shall prepay the principal amount of the Loans then outstanding in an amount
equal to such Net Cash Proceeds (or, if less, the entire remaining outstanding
principal amount thereof).

         (c) If the Collateral Coverage Ratio shall be (i) [*] to 1.00 or less
for any period of five consecutive days or (ii) [*] to 1.00 or less on any day,
then, on the Business Day next succeeding the end of such period or such day, as
the case may be, the Borrower shall prepay each Lender's Loan and/or pledge and
deliver to the Administrative Agent additional shares of


[*] Confidential treatment requested.


                                      -15-

<PAGE>   21
Pledged Microsoft Stock such that, after giving effect thereto, the Collateral
Coverage Ratio shall be at least equal to [*] to 1.00.

         (d) If the Collateral Coverage Ratio shall exceed [*] to 1.00 for any
period of five consecutive days, as certified by the Borrower to the
Administrative Agent by written notice, then on the Business Day next succeeding
the receipt of such notice by the Administrative Agent, the Administrative Agent
shall release Pledged Microsoft Stock (in amounts specified by the Borrower in a
written notice to the Administrative Agent) to the extent necessary such that,
after giving effect thereto, the Collateral Coverage Ratio shall be equal to or
greater than [*] to 1.00; provided however, that any such release of collateral
may not occur more than once during each calendar quarter.

         (e) In the event the Borrower, the Guarantor or any Affiliate of either
of them elects to exchange any Exchange Investment comprising of Class B Common
Stock of Charter Communications, Inc. into Class A Common Stock of Charter
Communications, Inc., the Borrower shall, at least five Business Days prior to
the date on which such Class A Common Stock is to be issued in such exchange,
prepay the entire principal amount of the Loans then outstanding together with
all accrued and unpaid interest thereon through the date of prepayment.

         SECTION 2.5 Continuation Options for Loans. Any Eurodollar Loans may be
continued in whole or in part as such upon the expiration of the then current
Interest Period with respect thereto by the Borrower giving notice to the
Administrative Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in Section 1.1, of the length of the next Interest
Period to be applicable to such Loan or portions thereof, provided that if the
Borrower fails to give such notice, any such Eurodollar Loans shall continue as
such for a new Interest Period of one month and provided, further that no
Eurodollar Loan may be continued as such after the date that is one month prior
to the Termination Date.

         SECTION 2.6 Minimum Amounts and Maximum Number of Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, (a) the aggregate principal
amount of the Loans or portions thereof comprising each Eurodollar Tranche shall
be equal to $10,000,000 or a whole multiple of $100,000 in excess thereof and
(b) there shall be no more than 10 Eurodollar Tranches outstanding at any time.

         SECTION 2.7  Interest Rates and Payment Dates.

         (a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such Interest Period plus the Applicable Margin.

         (b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.


[*] Confidential treatment requested.

                                      -16-

<PAGE>   22

         (c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any administrative or other fee or other
amount payable hereunder or under any fee arrangement with the Borrower and/or
the Guarantor shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
Section 2.7 plus 2% or (y) in the case of any overdue interest, administrative
or other fee or other amount, equal to the Prime Rate plus 2%, in each case from
the date such non-payment first becomes due until such amount is paid in full
(whether before or after judgment).

         (d) Interest shall be payable in arrears on each Interest Payment Date,
each date of prepayment and the Termination Date; provided that interest
accruing pursuant to paragraph (c) of this Section 2.7 shall be payable from
time to time on demand.

         SECTION 2.8 Computation of Interest and Fees.

         (a) Fees and interest shall be calculated on the basis of a 360 day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate in respect of any Eurodollar Tranche. Any change in the interest
rate on a Loan or portion thereof resulting from a change in the ABR shall
become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify
the Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.

         (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.7(a).

         SECTION 2.9 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:

                  (a) The Administrative Agent shall have determined (which
         determination shall be conclusive and binding upon the Borrower) that,
         by reason of circumstances affecting the eurodollar market, adequate
         and reasonable means do not exist for ascertaining the Eurodollar Rate
         for such Interest Period, or

                  (b) The Administrative Agent shall have received notice from
         the Majority Lenders that the Eurodollar Rate determined or to be
         determined for such Interest Period will not adequately and fairly
         reflect the cost to such Lenders (as conclusively certified by such
         Lenders) of making or maintaining their affected Eurodollar Loans
         during such Interest Period, or

                  (c) Any Lender shall have determined (which determination
         shall be conclusive and binding upon the Borrower) at any time, that
         the making or continuance


                                      -17-

<PAGE>   23

         of any Eurodollar Loan has been made (x) unlawful by any law or
         governmental rule, regulation or order or (y) impossible by compliance
         by such Lender with any request by a Governmental Authority (whether or
         not having force of law), such Lender shall give written notice thereof
         to the Administrative Agent,

the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given , in the case of the circumstances described in clauses (a) and (b) above,
the Eurodollar Loans of all Lenders, or, in the case of the circumstances
described in clause (c) above, the affected Lender's Eurodollar Loan, shall be
converted to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans or portions thereof shall be
continued as such. If such a notice is withdrawn by the Administrative Agent,
the Agent shall give the Lenders written notice thereof and upon the third
Business Day thereafter each Lender's outstanding ABR Loan shall automatically
be converted into a Eurodollar Loan.

         SECTION 2.10  Pro Rata Treatment and Payments.

         (a) The borrowing by the Borrower from the Lenders hereunder on the
Funding Date shall be made pro rata according to the Exposure Percentages of the
relevant Lenders.

         (b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on each Lender's Loan shall be made pro rata
according to the respective outstanding principal amounts of each Lender's Loan
then held by the Lenders.

         (c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders (other than fees payable solely to the Administrative
Agent or the Agents), at the Payment Office, in Dollars and in immediately
available funds. Any payment received by the Administrative Agent after such
time shall be deemed to have been received on the next succeeding Business Day.
The Administrative Agent shall distribute to the Lenders such payments which are
payable to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the due date thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.

         (d) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to the Business Day preceding the Funding Date that such
Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent on the Funding Date, the
Administrative Agent may assume that such Lender is making such


                                      -18-

<PAGE>   24

amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Administrative Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
Administrative Agent, on demand, such amount with interest thereon at a rate
equal to the daily average Federal Funds Effective Rate for the period until
such Lender makes such amount immediately available to the Administrative Agent.
A certificate of the Administrative Agent submitted to any Lender with respect
to any amounts owing under this Section 2.10(d) shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Eurodollar Loans hereunder, on demand, from the Borrower.

         (e) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.

         SECTION 2.11 Requirements of Law.

         (a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority, in each case made subsequent to the
Effective Date:

                  (i) shall subject any Lender to any tax of any kind whatsoever
         with respect to this Agreement or the Loan made by it or change the
         basis of taxation of payments to such Lender in respect thereof (except
         for Non-Excluded Taxes covered by Section 2.12 and changes in the rate
         of tax on the overall net income of such Lender);

                  (ii) shall impose, modify or hold applicable any reserve,
         special deposit, compulsory loan or similar requirement against assets
         held by, deposits or other liabilities in or for the account of,
         advances, loans or other extensions of credit by, or any other
         acquisition of funds by, any office of such Lender which is not
         otherwise included in the determination of the Eurodollar Rate or is
         not otherwise paid by the Borrower pursuant to Section 2.11(c); or

                  (iii) shall impose on such Lender any other condition;


                                      -19-

<PAGE>   25

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, continuing or
maintaining its Eurodollar Loan or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section
2.11(a), it shall promptly notify the Borrower, through the Administrative
Agent, of the event by reason of which it has become so entitled.

         (b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case made subsequent to the Effective Date, has the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall promptly pay to such Lender such additional amount
or amounts as will compensate such Lender for such reduction.

         (c) The Borrower agrees to pay to each Lender which requests
compensation under this Section 2.11(c) (by notice to the Borrower), on the last
day of each Interest Period with respect to the Eurodollar Loan or any portion
thereof made by such Lender, so long as such Lender may be required by the Board
or by any other Governmental Authority to maintain reserves against any other
category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
against any category or extensions of credit or other assets of such Lender
which includes its Eurodollar Loan, an additional amount (determined by such
Lender and notified to the Borrower with a copy to the Administrative Agent)
representing such Lender's calculation or, if an accurate calculation is
impracticable, reasonable estimate (using such reasonable means of allocation as
such Lender shall determine) of the actual costs, if any, incurred by such
Lender during such Interest Period as a result of the applicability of the
foregoing reserves to such Eurodollar Loan or portion thereof, which amount in
any event shall not exceed the product of the following for each day of such
Interest Period:

                  (i) the principal amount of the Eurodollar Loan or portion
         thereof, as the case may be, made by such Lender to which such Interest
         Period relates and outstanding on such day; and

                  (ii) the difference between (x) a fraction, the numerator of
         which is the Eurodollar Rate (expressed as a decimal) applicable to
         such Eurodollar Loan or portion thereof, and the denominator of which
         is one minus the maximum rate (expressed as a


                                      -20-

<PAGE>   26

         decimal) at which such reserve requirements are imposed by the Board or
         other Governmental Authority on such date, minus (y) such numerator;
         and

                  (iii) a fraction the numerator of which is one and the
         denominator of which is 360.

Any Lender which gives notice under this Section 2.11(c) shall promptly withdraw
such notice (by written notice of withdrawal given to the Administrative Agent
and the Borrower) in the event such Lender is no longer required to maintain
such reserves or the circumstances giving rise to such notice shall otherwise
cease to exist.

         (d) A certificate as to any additional amounts payable pursuant to this
Section 2.11 submitted by any Lender, with a copy to the Administrative Agent,
to the Borrower shall specify in reasonable detail the basis for the request for
compensation of such additional amounts and the method of computation thereof
and shall be conclusive in the absence of manifest error. The Borrower shall
(except as otherwise provided in Section 2.11(c)) pay each Lender the amount
shown as due on any such certificate delivered by it within 30 days after
receipt thereof. The obligations of the Borrower pursuant to this Section 2.11
shall survive the termination of this Agreement and the payment of each Lender's
Loan and all other amounts payable hereunder.

         (e) Promptly after any Lender has determined that it will make a
request for additional amounts pursuant to this Section 2.11, such Lender will
notify the Borrower thereof. Failure on the part of any Lender so to notify the
Borrower or to demand additional amounts with respect to any period shall not
constitute a waiver of such Lender's right to demand additional amounts with
respect to such period or any other period; provided that the Borrower shall not
be under any obligation to compensate any Lender with respect to increased costs
or reductions with respect to any period prior to the date (the "Cut-Off Date")
that is six months prior to such request if such Lender was aware on the Cut-Off
Date of all the circumstances giving rise to such increased costs or reductions
and of the fact that such circumstances would in fact result in such increased
costs or reduction and provided, further, that the limitation in the preceding
proviso shall not apply to any increased costs or reductions arising out of the
retroactive application of any Requirement of Law.

         SECTION 2.12  Taxes.

         (a) Except as otherwise required by law, all payments made by the
Borrower under this Agreement shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority. If any taxes, levies, imposts, duties, charges,
fees deductions or withholdings are required to be withheld from any amounts
payable to the Administrative Agent or any Lender (or Transferee) hereunder
other than, (i) in the case of taxes imposed by the U.S. federal government, any
such taxes imposed under law in effect on the date such Lender (or Transferee)
becomes a Lender (or a Transferee) hereunder, or (ii) net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender (or Transferee) as a result of a present or
former connection between the


                                      -21-

<PAGE>   27

Administrative Agent or such Lender (or Transferee) and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender (or Transferee) having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement) (taxes not described in clauses (i) and (ii) shall be
"Non-Excluded Taxes"), the amounts so payable to the Administrative Agent or
such Lender (or Transferee) shall be increased to the extent necessary to yield
to the Administrative Agent or such Lender (or Transferee) (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement on an After-Tax Basis.
Promptly upon any Non-Excluded Taxes becoming payable by the Borrower, the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender (or Transferee), as the case may be, a certified copy of
an original official receipt received by the Borrower showing payment thereof.
If the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence or fails to pay any amount
necessary so that each Lender and Transferee receives each payment hereunder
grossed up on an After-Tax Basis for any Non-Excluded Taxes (including any U.S.
federal withholding taxes included in such term), the Borrower shall indemnify,
on an After-Tax Basis, the Administrative Agent and the Lenders (and any
Transferees) for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender (or Transferee) as a result of
any such failure. The agreements in this Section 2.12 shall survive the
termination of this Agreement and the payment of each Lender's Loan and all
other amounts payable hereunder.

         (b) If any Lender (or Transferee) or the Administrative Agent, as
applicable, receives a refund of a tax for which a payment has been made by the
Borrower pursuant to this Section 2.12, which refund in the good faith judgment
of such Lender (or Transferee) or the Administrative Agent, as the case may be,
is attributable to such payment made by the Borrower, then such Lender (or
Transferee) or the Administrative Agent, as the case may be, shall reimburse the
Borrower (without interest, other than interest included in such refund) for
such amount as such Lender (or Transferee) or the Administrative Agent, as the
case may be, determines to be the proportion of the refund as will leave it,
after such reimbursement, in no better or worse position than it would have been
if the payment had not been required. Each Lender (or Transferee) and the
Administrative Agent, as the case may be, shall use good faith in determining
whether to make claim for any refund that it determines is available to it.
Neither any Lender (or Transferee) nor the Administrative Agent shall be
obligated to disclose any information regarding its tax affairs or computations
to any Person in connection with this paragraph (b) or any other provision of
this Section 2.12.

         (c) Each Lender (or Transferee) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) (i) on the Effective Date
(or date of transfer), two copies of either U.S. Internal Revenue Service Form
1001, Form 4224, Form W-8, Form W-9 or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Lender (or
Transferee) claiming complete exemption from U.S. federal withholding tax on all
payments by


                                      -22-

<PAGE>   28

the Borrower under this Agreement and the other Loan Documents or specifying the
level of withholding of U.S. federal income tax required as of the date such
forms are supplied and (ii) in the case of each Lender (or Transferee) that is
not a U.S. Person (as defined in Section 7701(a)(30) of the Code) on or before
the first interest payment date on or after January 1, 2001, two copies of
properly completed United States Internal Revenue Service Form W-8BEN or W-8ECI
(or other appropriate form) that complies with requirements of law in effect as
of January 1, 2001 for claiming an exemption from or reduction in the rate of
United States withholding tax and shall continue to maintain the validity of
such form or shall provide other appropriate forms for the purpose of
establishing an exemption from or reduction in the rate of United States
withholding tax by complying on an ongoing basis with any applicable law in
effect on and after January 1, 2001 unless such Lender (or Transferee) is unable
to do so due to a change in law after the date such Lender (or Transferee)
becomes a Lender (or Transferee) hereunder. The forms described in clause (i)
shall be delivered by each Lender (or Transferee) on or before the date of the
first interest payment to it following the date it becomes a Lender (or a
Transferee) hereunder (or, in the case of any Participant, on or before the date
such Participant purchases the related participation) and on or before the date
of the first interest payment to it following the date, if any, such Lender (or
Transferee) changes its applicable lending office by designating a different
lending office (a "New Lending Office"). In addition, each Lender (or
Transferee) shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Lender (or Transferee)
unless such Lender (or Transferee) is unable to do so due to a change in law
after the date such Lender (or Transferee) becomes a Lender (or Transferee)
hereunder in which case, such Lender or Transferee will notify the Borrower and
the Administrative Agent of such inability in lieu of delivering such forms.
Each Lender (or Transferee) shall also promptly notify the Borrower at any time
it determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose) due to a change in its
circumstances and not due, inter alia, to a change in applicable law after the
date it became a Lender (or a Transferee) hereunder or due to a change in the
circumstances of the Borrower, the Guarantor or the use of proceeds of such
Lender's (or Transferee's) Loan. The failure of a Lender (or a Transferee) to
deliver any form pursuant to this Section 2.12(c) as a result of a change in law
after the date such Lender (or a Transferee) becomes a Lender (or a Transferee)
hereunder or as a result of a change in circumstances of the Borrower, the
Guarantor or the use of proceeds of such Lender's (or Transferee's) Loan shall
not constitute a failure to comply with this Section 2.12(c). If a Lender (or
Transferee) is unable to deliver any form pursuant to this Section 2.12(c), the
sole consequence of such failure shall be that the indemnity described in
Section 2.12(a) hereof shall not be available with respect to such Lender or
Transferee.

         (d) The parties agree, notwithstanding the foregoing, that the Borrower
shall be responsible pursuant to this Section 2.12 to indemnify, on an After Tax
Basis, any affected Lender or the Administrative Agent for any U.S. federal
withholding tax imposed, even if such tax is imposed under law as currently in
effect, if such tax is imposed pursuant to the conduit financing regulations set
forth in Treasury Regulations Section 1.881-3 due to any financing transaction
(as such term is defined in Treasury Regulations Section 1.881-3) (other than
the Loan) to which the Borrower, the Guarantor or any Affiliate of either is a
party.


                                      -23-

<PAGE>   29

         (e) Any Lender (or Transferee) claiming any indemnity payment or
additional amounts payable pursuant to this Section 2.12 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrower if the
making of such a filing would avoid the need for or reduce the amount of any
such indemnity payment or additional amounts that may thereafter accrue and
would not, in the sole determination of such Lender (or Transferee), be
otherwise disadvantageous to such Lender (or Transferee).

         (f) In the event that a Lender or Transferee delivers to the Borrower
and the Administrative Agent a form pursuant to paragraph (c) above that
indicates that U.S. federal taxes (other than Non-Excluded Taxes) must be
withheld on payments to such Lender or Transferee, then the Administrative Agent
shall thereupon withhold from each payment due to the affected Lender or
Transferee such U.S. federal withholding taxes at the rate indicated, timely
deposit such amounts with an authorized depository and make such reports,
filings and other reports in connection therewith at the times and in the manner
required by law.

         (g) In the event any taxes other than Non-Excluded Taxes are imposed on
and paid by the Borrower or the Administrative Agent (other than through
withholding from payments made to the affected Lender (or Transferee)), then the
affected Lender (or Transferee) shall reimburse the Borrower or the
Administrative Agent, as the case may be, for any payment of such taxes, and any
penalties, interest, and other amounts, plus interest equal to the Prime Rate
plus 2% from the date of payment of such amounts.

         SECTION 2.13 Indemnity. The Borrower agrees to indemnify each Lender
(or Transferee) and to hold each Lender (or Transferee) harmless from any loss
or expense which such Lender (or Transferee) may sustain or incur as a
consequence of (a) the conversion of any Eurodollar Loan or portion pursuant to
Section 2.9 hereof, (b) a default by the Borrower in the continuation of
Eurodollar Loans or portions thereof after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (c) a
default by the Borrower in making any prepayment of Eurodollar Loans or portions
thereof after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) the making of a prepayment of Eurodollar
Loans or portions thereof on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so converted or continued, for the period from the
date of such prepayment or of such failure to convert or continue to the last
day of such Interest Period (or the proposed Interest Period), in each case at
the applicable rate of interest for such Loans provided for herein (excluding
the Applicable Margin) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. The obligations contained in this
Section 2.13 shall survive the termination of this Agreement and the payment of
each Lender's Loan and all other amounts payable hereunder.

         SECTION 2.14 Change of Lending Office. Each Lender (or Transferee)
agrees that, upon the occurrence of any event giving rise to the operation of
Section 2.11 or 2.12 with respect


                                      -24-

<PAGE>   30

to such Lender (or Transferee), it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender (or
Transferee)) to designate another lending office for its Loan or portion thereof
affected by such event with the object of avoiding the consequences of such
event; provided, that such designation is made on terms that, in the sole
judgment of such Lender, cause such Lender and its lending office(s) to suffer
no material economic, legal or regulatory disadvantage, and provided, further,
that nothing in this Section 2.14 shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender (or Transferee) pursuant
to Sections 2.11 and 2.12; and provided, further that Section 2.12(d) shall not
apply to any Lender (or Transferee) who designates a New Lending Office at the
request of the Borrower pursuant to this Section 2.14.

         SECTION 2.15 Replacement of Lenders under Certain Circumstances. The
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Sections 2.11 or 2.12 or (b)
defaults in its obligation to make its Loan hereunder, with a replacement bank
or other financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) the Borrower
shall repay (or the replacement bank or institution shall purchase, at par) the
Loan and other amounts owing to such replaced Lender prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender under
Section 2.13 if any Eurodollar Loan or portion thereof owing to such replaced
Lender shall be prepaid (or purchased) other than on the last day of the
Interest Period relating thereto, (v) the replacement bank or institution, if
not already a Lender, and the terms and conditions of such replacement, shall be
reasonably satisfactory to the Administrative Agent, (vi) the replaced Lender
shall be obligated to make such replacement in accordance with the provisions of
Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (vii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Sections 2.11 or 2.12, as the case may be,
and (viii) any such replacement shall not be deemed to be a waiver of any rights
which the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make each Lender's Loan, each of the Guarantor and the Borrower
hereby represents and warrants to the Administrative Agent, the Agents and each
Lender as of the Effective Date, which representations and warranties shall
survive the execution and delivery of this Agreement, that:

         SECTION 3.1 Financial Condition.

         (a) The reviewed balance sheet of the Guarantor as at June 30, 1999, a
copy of which has heretofore been furnished to each Lender, is complete and
correct and presents fairly the


                                      -25-

<PAGE>   31

financial condition of the Guarantor at such date. The Guarantor did not have,
at the date of the balance sheet referred to above, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
derivative product, interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing balance sheet or in the
notes thereto.

         (b) The Federal income tax returns of the Guarantor (form 1040 and
Schedules A through E thereto) for the 1997 tax year, copies of which have
heretofore been furnished to the Administrative Agent, are in the form in which
they were filed with the Internal Revenue Service. As of the Effective Date, (i)
such tax returns have not been amended, supplemented or otherwise modified by or
on behalf of the Guarantor and (ii) the Guarantor has received no notice from
the Internal Revenue Service of any threatened or actual adjustments thereto.
The Guarantor has not yet filed his Federal income tax return for the 1998 tax
year but has timely filed for an extension.

         (c) Prior to the Effective Date, the Borrower has not at any time held
any material assets other than the Pledged Microsoft Stock or incurred any
material liabilities or expenses.

         SECTION 3.2 Financial Statements.

         (a) The pro forma unaudited balance sheet of the Borrower included in
the Confidential Information Memorandum is complete and correct and presents
fairly the financial condition of the Borrower at the date of the Confidential
Information Memorandum. The Borrower did not have, at the date of the balance
sheets referred to above, any material Guarantee Obligation, contingent
liability or liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any derivative products,
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statement.

         (b) Except as reflected in the balance sheets delivered pursuant to
Sections 3.1(a) or 3.2(a), there are no liabilities or obligations with respect
to the Borrower or the Guarantor of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, would be material to the Borrower or the
Guarantor. Neither the Borrower nor the Guarantor know of any basis for the
assertion against the Borrower or the Guarantor of any liability or obligation
of any nature whatsoever that is not fully reflected in the documents delivered
pursuant to Sections 3.1(a) and 3.2(a) which, either individually or in the
aggregate, would reasonably be expected to be material to the Borrower or the
Guarantor.

         SECTION 3.3 No Material Adverse Effect. Since the date of the balance
sheet of the Guarantor referred to in Section 3.1(a) and since the date of the
balance sheet of the Borrower referred to in Section 3.2(a), there has been no
development, event or circumstance which has had or could reasonably be expected
to have a Material Adverse Effect on the Guarantor or the Borrower,
respectively.

         SECTION 3.4 Limited Liability Company Existence; Compliance with Law.
The Borrower (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the limited liability
company power and authority, and the


                                      -26-

<PAGE>   32

legal right, to own and operate its property and assets and to conduct the
business in which it is currently engaged and (c) is duly qualified as a foreign
entity and in good standing under the laws of each jurisdiction where such
qualification is required. Each of the Borrower and Guarantor is in compliance
with all Requirements of Law, except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         SECTION 3.5  Powers Authorization, Enforceable Obligations.

         (a) The Borrower has the limited liability company power and authority,
and the legal right, to execute, deliver and perform the Loan Documents to which
it is a party and the other documents and agreements executed and delivered
pursuant thereto and to grant the Liens to be granted by the Borrower pursuant
to the Stock Pledge Agreement, and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the other documents and agreements executed
and delivered pursuant thereto. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or the other Loan Documents.

         (b) The Guarantor has the legal right to make, deliver and perform each
Loan Document to which he is a party and to guarantee the Obligations pursuant
to Article VII, and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and the other Loan Documents to which
he is a party.

         (c) This Agreement has been, and each other Loan Document to which the
Borrower or the Guarantor is a party will be, duly executed and delivered on
behalf of each Loan Party thereto. This Agreement constitutes, and each other
Loan Document to which either Loan Party is a party when executed and delivered
will constitute, a legal, valid and binding obligation of each Loan Party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

         SECTION 3.6 No Legal Bar. The execution, delivery and performance of
the Loan Documents, the extensions of credit hereunder and the use of the
proceeds thereof and the grant of Liens pursuant to the Stock Pledge Agreement
will not (a) contravene any Requirement of Law, (b) conflict or be inconsistent
with or result in any breach of any terms, covenants, conditions or provisions
of, or constitute a default under any Contractual Obligation of any Loan Party
and will not result in, or require, the creation or imposition of any Lien on
any of its properties, assets or revenues pursuant to any such Requirement of
Law or Contractual Obligation (other than pursuant to the Stock Pledge
Agreement) or (c) violate any provision of the charter documents of the
Borrower.

         SECTION 3.7 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of any Loan


                                      -27-

<PAGE>   33

Party, threatened by or against any Loan Party (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, (b)
the Pledged Microsoft Stock or (c) which could reasonably be expected to have a
Material Adverse Effect.

         SECTION 3.8 No Default. Neither Loan Party is in default under or in
breach of any of its Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.

         SECTION 3.9 Ownership of Property; Liens. Each Loan Party has good
title to all of its material property and none of such property of the Borrower
is subject to any Lien except as permitted by Section 6.3. The Borrower owns,
beneficially and of record, all of the Pledged Microsoft Stock free of any and
all Liens or options in favor of, or claims of, any other Person, except the
security interest created by the Stock Pledge Agreement. The Borrower and, prior
to transfer by the Guarantor to the Borrower, the Guarantor, have successively
been the beneficial owners of the Capital Stock of Microsoft being pledged
pursuant to the Loan Documents for more than two years and more than two years
has elapsed since the Guarantor paid full consideration for such stock.

         SECTION 3.10 Taxes. Each Loan Party has filed or caused to be filed all
material tax returns which are required to be filed (or, in the case of the
Guarantor, has filed appropriate extensions of the time for filing such returns)
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property by any Governmental Authority
(other than any such taxes or assessments which are not required to be paid
pursuant to Section 5.3 hereof); no tax Lien has been filed, and, to the
knowledge of any Loan Party, no claim is being asserted, with respect to any
such tax, fee or other charge.

         SECTION 3.11 Accuracy of Information. Neither the Confidential
Information Memorandum (taken as a whole and as supplemented by the Borrower and
the Guarantor prior to the Effective Date) nor this Agreement, any other Loan
Document or any other document, certificate, writing, return or statement
furnished or to be furnished to the Administrative Agent or the Lenders or any
of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained or will contain, as of the date such statement, information, document
or certificate was or is so furnished (or, in the case of the Confidential
Information Memorandum, as of the Effective Date) any untrue statement of a
material fact, or omitted or will omit a material fact necessary in order to
make the statements contained herein or therein not misleading. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in such other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.

         SECTION 3.12 Federal Regulations. No part of the proceeds of any Loans
will be used directly or indirectly for "buying" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board as now and from time to


                                      -28-

<PAGE>   34

time hereafter in effect. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in said Regulation U.

         SECTION 3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period, in either case that would have a Material Adverse Effect. The present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Guarantor nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a material liability under
ERISA, and neither the Guarantor nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Guarantor or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
"reorganization" or "insolvent" (as such terms are defined in ERISA).

         SECTION 3.14 Ownership of the Borrower. The Guarantor or the Estate
owns, beneficially and of record, all of the issued and outstanding Capital
Stock of the Borrower. All capital contributions required to be paid by any
member of the Borrower have been fully paid. The Borrower does not have
outstanding any other securities including, but not limited to, any securities
convertible into or exchangeable for any Capital Stock or any outstanding rights
to subscribe for or to purchase, or any options or warrants for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to its Capital Stock.

         SECTION 3.15 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board) which limits its ability to
incur Indebtedness.

         SECTION 3.16  Subsidiaries. The Borrower has no Subsidiaries.

         SECTION 3.17  Purpose of Loans. The proceeds of the Loans shall be used
by the Borrower to make distributions to the Guarantor for purposes of funding
the Initial Investments. The proceeds of the Loans may also be used for other
general purposes. Notwithstanding this or any other provision of this Agreement,
the Borrower may transfer to the Guarantor all or any


                                      -29-

<PAGE>   35

portion of the proceeds of each Lender's Loan; provided, that the Guarantor
shall use any such proceeds transferred from the Borrower in a manner consistent
with the provisions of Section 3.12 and this Section 3.17.

         SECTION 3.18 Public Utility Holding Company Act. The Borrower is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

         SECTION 3.19 Business of the Borrower. The Borrower is not engaged in
any business or activity of any kind or is a party to any transaction,
Contractual Obligation, Guarantee Obligation or other undertaking which is not
expressly permitted by, or directly related to the transactions contemplated by,
the Loan Documents.

         SECTION 3.20 Residency of the Guarantor. The Guarantor is a resident of
the State of Washington.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

         SECTION 4.1 Conditions to Effective Date. The agreement of each Lender
to make any Loans requested to be made by it shall be subject to the
satisfaction of the following conditions precedent:

                  (a) Agreement. The Administrative Agent and each Lender shall
         have received this Agreement, executed and delivered by a duly
         authorized officer of the Borrower and by the Guarantor.

                  (b) Stock Pledge Agreement. The Administrative Agent shall
         have received the Stock Pledge Agreement and the Securities Account
         Control Agreement in the form attached to the Stock Pledge Agreement as
         Exhibit A-1, each duly authorized, executed and delivered by the
         Borrower.

                  (c) Closing Certificate. The Administrative Agent shall have
         received a certificate of the Borrower, dated the Effective Date,
         substantially in the form of Exhibit B, with appropriate insertions and
         attachments, reasonably satisfactory in form and substance to the
         Administrative Agent, executed by a Responsible Representative of the
         Borrower and attested to by the Secretary or Assistant Secretary of the
         Borrower.

                  (d) Legal Opinions. The Administrative Agent shall have
         received the following executed legal opinions addressed to the
         Administrative Agent and each Lender:


                                      -30-

<PAGE>   36

                           (i) the executed legal opinion of Heller Ehrman White
                  & McAuliffe, counsel to the Borrower and the Guarantor,
                  substantially in the form of Exhibit C-1; and

                           (ii) the executed letter of Robert A. Eshelman,
                  General Counsel of Finance and Administration of Microsoft
                  Corporation, substantially in the form of Exhibit C-2.

                  (e) Fees and Expenses. The Administrative Agent shall have
         received all fees and expenses required to be paid to the
         Administrative Agent, the Agents and the Lenders on or prior to the
         Effective Date.

                  (f) Effective Date Collateral Coverage Ratio; Ownership of
         Property. The Collateral Coverage Ratio on the Effective Date (after
         giving effect to the Loans to be made on such date) shall be at least
         [*] to 1.00, and the Pledged Microsoft Stock required to maintain such
         ratio shall have been deposited with or transferred electronically to
         the Administrative Agent, for the benefit of the Lenders, and the
         Lenders shall be satisfied that the Administrative Agent has a
         perfected first priority security interest in the collateral pledged by
         any Loan Party at the Effective Date.

                  (g) Certificate Regarding Unencumbered Assets. The
         Administrative Agent shall have received a certificate of a Responsible
         Representative of the Guarantor with respect to compliance with Section
         5.7 as of June 30, 1999, substantially in the form of Exhibit D, and
         certifying that as of the Effective Date, after giving effect to the
         Loans, there has been no change which could reasonably be expected to
         prevent the Guarantor from being able to comply with Section 5.7.

                  (h) Notice of Borrowing. The Administrative Agent shall have
         received from the Borrower the written notice of borrowing required
         under Section 2.2.

                  (i) Other Documents. The Administrative Agent shall have
         received copies of all material agreements entered into by the
         Borrower, the Guarantor or any of their respective Affiliates in
         connection with the purchase, exchange or conversion of any Investment,
         or if such agreements are not in final form, the most recent drafts of
         such agreements available as of the Effective Date.

                  SECTION 4.2 Conditions to Each Loan on the Funding Date. The
agreement of each Lender to make the Loan requested to be made by it on the
Funding Date is subject to the satisfaction of the following conditions
precedent:

                  (a) Representations and Warranties. Each of the
         representations and warranties made by any Loan Party in or pursuant to
         the Loan Documents shall be true and correct in all material respects
         on and as of such date as if made on and as of such date.


[*] Confidential treatment requested.


                                      -31-

<PAGE>   37

                  (b) No Default. No Default or Event of Default shall have
         occurred and be continuing on such date or after giving effect to the
         Loans requested to be made on such date.

                  (c) Collateral Coverage Ratio. The Collateral Coverage Ratio
         on such date (after giving effect to such Loans) shall be at least [*]
         to 1.00.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         Each of the Borrower and the Guarantor hereby agrees that, so long as
the Commitments remain in effect, or the Loans remain outstanding or unpaid, or
any amount is owing to any Lender or the Administrative Agent or the Agents
hereunder or under any other Loan Document:

         SECTION 5.1 Financial Statements; Tax Returns. The Borrower or the
Guarantor, as applicable, shall furnish to each Lender (through the
Administrative Agent):

                  (a) as soon as available, but in any event by September 15 of
         each year, a reviewed balance sheet of the Guarantor as of June 30 of
         such year, prepared in accordance with the Statements on Standards for
         Accounting and Review Services issued by the American Institute of
         Certified Public Accountants, in form and detail consistent with the
         reviewed balance sheet referred to in Section 3.1(a) (or otherwise
         satisfactory to the Administrative Agent), certified by the Guarantor
         as being true and correct in all material respects as of such June 30;

                  (b) as soon as available (i) following the Effective Date, the
         balance sheet of the Borrower as of the Effective Date and (ii) but in
         any event within 120 days following each June 30 (commencing June 30,
         2000), a balance sheet of the Borrower as of such June 30, in each case
         audited in accordance with GAAP by independent certified public
         accountants of nationally recognized standing;

                  (c) as soon as available, but in any event within fifteen days
         after the date of filing with the Internal Revenue Service, a true and
         correct copy of the Form 1040 (including Schedules A through E thereto)
         or Form 1041 (with Schedules attached), and any extension request with
         respect thereto, filed by the Guarantor or the Estate; and

                  (d) if the Guarantor dies before the Obligations are paid in
         full and the Commitments are terminated, the Estate shall deliver to
         the Administrative Agent, as soon as possible, but in any event not
         later than 10 days after it is due (after all applicable extensions),
         the federal estate tax return for the Estate, together with any
         accountings that are prepared in connection therewith, all exhibits
         thereto and the letter of transmittal accompanying such return, and any
         other documents filed with respect to such return, including, but not
         limited to any applications for extension of filing and any
         documentation relating to elections made under Section 6166 of the Code
         and any documents relating to the federal estate tax return after it is
         filed (including amendments).


[*] Confidential treatment requested.


                                      -32-

<PAGE>   38

All such financial statements and forms shall be complete and correct in all
material respects and shall be prepared in reasonable detail and, where
applicable, in accordance with GAAP applied consistently throughout the periods
reflected therein (except as may be approved by a Responsible Representative and
disclosed therein).

         SECTION 5.2 Certificates; Other Information. The Borrower or the
Guarantor, as applicable, shall furnish to each Lender (through the
Administrative Agent):

                  (a) concurrently with the delivery of the financial statements
         referred to in Sections 5.1(a) and (b), a certificate of a Responsible
         Representative of the relevant Loan Party stating that such Responsible
         Representative has obtained no knowledge of any Default or Event of
         Default except as specified in such certificate;

                  (b) within 45 days after the end of each calendar quarter, a
         certificate of a Responsible Representative of the Guarantor with
         respect to compliance with Section 5.7 as of the last day of such
         period, substantially in the form of Exhibit D;

                  (c) promptly, and in any event within five Business Days of
         execution and delivery, copies of all material agreements entered into
         by the Borrower, the Guarantor, or any of their Affiliates, in
         connection with the purchase, exchange or conversion of any Investment;
         and

                  (d) promptly, such additional financial and other information
         as any Lender may from time to time reasonably request.

         SECTION 5.3 Payment of Taxes; Obligations. Each Loan Party shall pay
and discharge all material taxes, assessments and governmental charges or levies
imposed upon such Loan Party or upon such Loan Party's income or profits, or
upon any properties or assets belonging to such Loan Party, prior to the date on
which material penalties attach thereto, and all lawful material claims which,
if unpaid, would reasonably be expected to become a Lien or charge upon any of
such Loan Party's property, and shall discharge or otherwise satisfy, at or
before maturity or before they become delinquent, as the case may be, all of
such Loan Party's other obligations of whatever nature, except, in each case,
where (a) the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and, in the case of the Borrower only, reserves
in conformity with GAAP with respect thereto have been provided on the
Borrower's books, or (b) the failure to do so could not reasonably be expected
to have a Material Adverse Effect.

         SECTION 5.4 Conduct of Business and Maintenance of Existence. The
Borrower shall preserve, renew and keep in full force and effect its existence
and take all reasonable action to maintain all rights, privileges, licenses and
franchises necessary or desirable in the normal conduct of its business.

         SECTION 5.5 Compliance with Contractual Obligations and Laws. Each Loan
Party shall comply with all Contractual Obligations and Requirements of Law
except to the extent that


                                      -33-

<PAGE>   39

failure to comply therewith, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

         SECTION 5.6 Notice. Each Loan Party shall promptly give written notice
to each Lender (through the Administrative Agent) of:

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

                  (b) Any (i) default or event of default under any Contractual
         Obligation of any Loan Party or (ii) litigation, investigation or
         proceeding which may exist at any time between any Loan Party and any
         other Person, which in either case, if not cured or if adversely
         determined, as the case may be, could reasonably be expected to have a
         Material Adverse Effect (including, in any event notice of any such
         litigation or proceeding in which the amount involved is $50,000,000 or
         more, in the case of the Guarantor, and $10,000,000 or more, in the
         case of the Borrower, and in either case not covered by insurance);

                  (c) The disposition, exchange or conversion of any Investment,
         which notice shall describe the terms of such disposition, exchange or
         conversion in reasonable detail;

                  (d) Any development or event which could reasonably be
         expected to have a Material Adverse Effect; and

                  (e) The following events, as soon as possible and in any event
         within 10 days after such Loan Party knows or has reason to know
         thereof: (i) a failure to make any required contribution to a Plan, any
         Lien in favor of the PBGC or a Plan, or any withdrawal from, or the
         termination, reorganization or insolvency (as such terms are used in
         ERISA) of any Multiemployer Plan or (ii) the institution of proceedings
         or the taking of any other action by the PBGC, any Loan Party or any
         Commonly Controlled Entity or any Multiemployer Plan with respect to
         the withdrawal from or termination, reorganization or insolvency of any
         Plan.

Each notice pursuant to this Section 5.6 shall be accompanied by a statement of
a Responsible Representative of the relevant Loan Party setting forth details of
the occurrence referred to therein and stating what action such Loan Party
proposes to take with respect thereto.

         SECTION 5.7 Maintenance of Unencumbered Assets. The Guarantor and/or an
Approved Holder shall, at all times, own beneficially and of record,
Unencumbered shares of Capital Stock of Microsoft, Unencumbered Readily
Marketable Securities which have been approved by the Administrative Agent for
the purposes of this Section 5.7 and Unencumbered Cash and Cash Equivalents
having an aggregate Market Value equal to [*] of the sum of (a) the Total
Outstanding Extensions of Credit and (b) the aggregate outstanding principal
amount of all Indebtedness of or guaranteed by the Guarantor (i) which is
secured by Capital Stock of Microsoft owned beneficially and of record by the
Guarantor or any of his Affiliates and (ii) the terms of which require the
Guarantor and/or any of his Affiliates to maintain any level of unencumbered
assets (excluding any such maintenance requirement that is not associated with a


[*] Confidential treatment requested.


                                      -34-

<PAGE>   40

requirement to pledge additional shares of Capital Stock of Microsoft to support
repayment obligations in respect of principal) (each such covenant, an
"Unencumbered Asset Covenant").

         SECTION 5.8 Maintenance of Minimum Net Worth. The Guarantor shall, at
all times, maintain a Net Worth of at least $[*].

         SECTION 5.9 ERISA. Neither Loan Party nor any Commonly Controlled
Entity shall maintain or contribute to any Plan or otherwise engage in any
activity of any kind which could reasonably be expected to subject such Loan
Party or any Commonly Controlled Entity to any liability under Title IV of
ERISA.

         SECTION 5.10 Change of Residency of the Guarantor. The Guarantor shall
give notice to the Agent within 90 days following the date on which he is no
longer a resident of Washington State (or any other State in which the Guarantor
may from time to time be a resident), which notice shall include the new State
or other jurisdiction of residency of Guarantor.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

         The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan remains outstanding or unpaid, or any other amount is owing to
any Lender or the Administrative Agent or the Agents hereunder or under any
other Loan Document:

         SECTION 6.1 Limitation on Activities of the Borrower. The Borrower
shall not engage in any business or activity of any kind or enter into any
transaction, Contractual Obligation, Guarantee Obligation or other undertaking
which is not expressly permitted by, or directly related to the transactions
contemplated by, the Loan Documents.

         SECTION 6.2 Limitation on Indebtedness. The Borrower shall not create,
incur, assume or suffer to exist any Indebtedness of the Borrower except
obligations incurred or owing to the Lenders under this Agreement or any other
Loan Document.

         SECTION 6.3 Limitation on Liens. The Borrower shall not create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired, except for:

                  (a) Liens for taxes not yet due or which are being contested
         in good faith by appropriate proceedings, provided that adequate
         reserves with respect thereto are maintained on the books of the
         Borrower in conformity with GAAP; and

                  (b) Liens created pursuant to this Agreement or any other Loan
Document.

         SECTION 6.4 Limitation on Investments, Loans and Advances. The Borrower
shall not make any advance, loan, extension of credit or capital contribution
to, or purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, or


[*] Confidential treatment requested.


                                      -35-

<PAGE>   41

make any other investment in, any Person other than (a) Cash and Cash
Equivalents and (b) Pledged Microsoft Stock. Without limiting the foregoing, the
Borrower shall not form, create or acquire any Subsidiary.

         SECTION 6.5 Limitation on Fundamental Changes and Sales of Assets. The
Borrower shall not enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of,
any of its property, business or assets.

                                   ARTICLE VII

                                    GUARANTEE

         SECTION 7.1  Guarantee.

         (a) In order to induce the Lenders to execute and deliver this
Agreement and to make each Lender's Loan hereunder, and in consideration
thereof, the Guarantor hereby unconditionally and irrevocably guarantees to the
Lenders the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of the Obligations. The Guarantor
further agrees to pay any and all expenses (including, without limitation, all
reasonable fees and disbursements of counsel, including allocated costs of
internal counsel) which may be paid or incurred by the Administrative Agent, the
Agents or any Lender in enforcing, or obtaining advice of counsel in respect of,
any rights under this Article VII. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts that constitute
part of the Obligations and would be owed by the Borrower but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower or for any other
reason. This Guarantee shall remain in full force and effect until all the
Obligations have been paid in full.

         (b) No payment or payments made by the Guarantor or any other Person or
received or collected by the Administrative Agent, the Agents or any Lender from
the Guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Guarantor hereunder who shall
remain obligated hereunder, notwithstanding any such payment or payments (other
than payments made by or received or collected from the Borrower or the
Guarantor in respect of the Obligations) until the date upon which the
Obligations have been paid in full and the Commitments have been terminated.

         SECTION 7.2 No Subrogation. Notwithstanding any payment or payments
made by the Guarantor hereunder, or any set-off or application of funds of the
Guarantor by the Administrative Agent, the Agents or any Lender, the Guarantor
shall not be entitled to be subrogated to any of the rights of the
Administrative Agent, the Agents or any Lender against the Borrower or against
any collateral security or guarantee or right of offset held by the
Administrative Agent, the Agents or any Lender for the payment of the
Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower in


                                      -36-

<PAGE>   42

respect of payments made by the Guarantor hereunder, until the Obligations are
paid in full and the Commitments are terminated. If any amount shall be paid to
the Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by the
Guarantor in trust for the Administrative Agent, the Agents and the Lenders,
segregated from other funds of the Guarantor, and shall, forthwith upon receipt
by the Guarantor, be turned over to the Administrative Agent in the exact form
received by the Guarantor (duly endorsed by the Guarantor to the Administrative
Agent, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine.

         SECTION 7.3 Amendments, etc. The Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against the
Guarantor, and without notice to or further assent by the Guarantor, any demand
for payment of any of the Obligations made by the Administrative Agent, the
Agents or any Lender may be rescinded by such party, and any of the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent, the Agents or any Lender,
and this Agreement, any other Loan Document and any other documents executed and
delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Majority
Lenders, as the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time held by the
Administrative Agent, the Agents or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither the
Administrative Agent nor the Agents or any Lender shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Obligations or pursuant to this Article VII or any property subject
thereto. When making any demand hereunder against the Guarantor, the
Administrative Agent, the Agents or any Lender may, but shall be under no
obligation to, make a similar demand on the Borrower or any other guarantor, and
any failure by the Administrative Agent, the Agents or any Lender to make any
such demand or to collect any payments from the Borrower or any such other
guarantor or any release of the Borrower or such other guarantor shall not
relieve the Guarantor of any liability under this Article VII, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent, the Agents or any Lender against the
Guarantor. For the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.

         SECTION 7.4 Guarantee Absolute and Unconditional. The Guarantor hereby
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Administrative
Agent, the Agents or any Lender upon the guarantee contained in this Article VII
or acceptance of the guarantee contained in this Article VII; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred in reliance upon the guarantee contained in this Article VII; and
all dealings between the Borrower or the Guarantor, on the one hand, and the
Administrative Agent, the Agents and the Lenders, on the other, shall likewise
be conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Article VII. The Guarantor


                                      -37-

<PAGE>   43

waives (to the extent permitted by law) diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrower or the
Guarantor with respect to the Obligations. The Guarantor hereby waives any and
all rights (including, without limitation, defenses) it may have as a surety in
respect of the Borrower. The guarantee contained in this Article VII shall be
construed as a continuing, absolute and unconditional guarantee of payment and
performance without regard to (a) the validity or enforceability of this
Agreement, any other Loan Document or any of the documents executed in
connection therewith, any of the Obligations or any collateral security therefor
or guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Lender, (b) any defense (including,
without limitation, any statute of limitations), set-off or counterclaim (other
than a defense of payment or performance) which may at any time be available to
or be asserted by the Borrower against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of the Borrower or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of the Guarantor (including, without limitation, any defense of a surety or
guarantor) under the guarantee contained in this Article VII, in bankruptcy or
in any other instance. When pursuing their rights and remedies hereunder against
the Guarantor, the Administrative Agent, the Agents and any Lender may, but
shall be under no obligation to, pursue such rights and remedies as they may
have against the Borrower or any other Person or against any collateral security
or guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent, the Agents or any Lender to pursue
such other rights or remedies or to collect any payments from the Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or of any such collateral security, guarantee
or right of offset, shall not relieve the Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent, the Agents or any
Lender against the Guarantor.

         SECTION 7.5 Reinstatement. The Guarantee contained in this Article VII
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent, the Agents
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.

         SECTION 7.6 Payments. The Guarantor hereby agrees that the amounts
payable by the Guarantor hereunder will be paid to the Administrative Agent
without set-off or counterclaim in Dollars at the Payment Office

         SECTION 7.7 Binding on Successors and Assigns. The Guarantor hereby
agrees that the provisions of this Article VII, and the obligations of the
Guarantor hereunder, shall be binding upon the Guarantor's successors and
assigns, and shall inure to the benefit of the Administrative Agent, the Agents
and the Lenders, and their respective successors, endorsees, transferees and
assigns.


                                      -38-

<PAGE>   44

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

         SECTION 8.1 Events of Default. If any of the following events shall
occur and be continuing:

                  (a) The Borrower shall fail to pay any principal of the Loans
         when due in accordance with the terms hereof; or the Borrower shall
         fail to pay any interest on any Loan, or any other amount payable
         hereunder, within five days after any such interest or other amount
         becomes due in accordance with the terms hereof; or

                  (b) Any representation warranty or agreement made or deemed
         made by any Loan Party herein or in any other Loan Document or which is
         contained in any certificate, document or financial or other statement
         furnished by it at any time under or in connection with this Agreement
         or any such other Loan Document shall prove to have been incorrect in
         any material respect on or as of the date made or deemed made; or

                  (c) (i) The Borrower or the Guarantor shall default in the
         observance or performance of any agreement contained in Sections
         2.4(c), 5.7 or 5.8 or Article VI or (ii) the Estate or Conservator
         shall default in the observance or performance of any agreement
         contained in the Net Worth Agreement; or

                  (d) Any Loan Party shall default in the observance or
         performance of any other agreement contained in this Agreement or any
         other Loan Document (other than as provided in paragraphs (a) through
         (c) of this Section 8.1), and such default shall continue unremedied
         for a period of 30 days after notice to the Borrower from the
         Administrative Agent or the Majority Lenders; or

                  (e) Any Loan Party shall (i) default in making any payment of
         any principal of any Indebtedness (including, without limitation, any
         Guarantee Obligation, but excluding the Loans) on the due date with
         respect thereto; or (ii) default in making any payment of any interest
         on any such Indebtedness beyond the period of grace, if any, provided
         in the instrument or agreement under which such Indebtedness was
         created; or (iii) default in the observance or performance of any other
         agreement or condition relating to any Indebtedness or contained in any
         instrument or agreement evidencing, securing or relating thereto, or
         any other event shall occur or condition exist, the effect of which
         default or other event or condition is to cause, or to permit the
         holder or beneficiary of such Indebtedness (or a trustee or agent or
         other party on behalf of such holder or beneficiary) to cause, with or
         without the giving of notice if required, such Indebtedness to become
         due prior to its stated maturity or, in the case of any such
         Indebtedness constituting a Guarantee Obligation, to become payable;
         provided, that a default, event or condition described in clause (i),
         (ii) or (iii) of this paragraph (e) shall not constitute an Event of
         Default under this Agreement unless, at the time of such default, one
         or more defaults, events or conditions of the type described in clauses
         (i), (ii) and (iii) of this


                                      -39-

<PAGE>   45

         paragraph (e) shall have occurred and be continuing with respect to
         Indebtedness the outstanding principal amount of which exceeds in the
         aggregate $10,000,000; or

                  (f)    (i) Any Loan Party shall commence any case, proceeding
         or other action (A) under any existing or future law of any
         jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
         reorganization or relief of debtors, seeking to have an order for
         relief entered with respect to it, or seeking to adjudicate it a
         bankrupt or insolvent, or seeking reorganization, arrangement,
         adjustment, winding-up, liquidation, dissolution, composition or other
         relief with respect to its debts, or (B) seeking appointment of a
         receiver, trustee, custodian or other similar official for it or for
         all or any substantial part of its assets, or any Loan Party shall make
         a general assignment for the benefit of its creditors; or (ii) there
         shall be commenced against any Loan Party any case, proceeding or other
         action of a nature referred to in clause (i) above which (A) results in
         the entry of an order for relief or any such adjudication or
         appointment or (B) remains undismissed, undischarged or unbonded for a
         period of 60 days; or (iii) there shall be commenced against any Loan
         Party any case, proceeding or other action seeking issuance of a
         warrant of attachment, execution, distraint or similar process against
         all or any substantial part of such Loan Party's assets which results
         in the entry of an order for any such relief which shall not have been
         vacated, discharged, or stayed or bonded pending appeal within 60 days
         from the entry thereof; or (iv) any Loan Party shall take any action in
         furtherance of, or indicating its consent to, approval of, or
         acquiescence in, any of the acts set forth in clause (i), (ii), or
         (iii) above; or (v) any Loan Party shall generally not, or shall be
         unable to, or shall admit in writing its inability to, pay its debts as
         they become due; or

                  (g) One or more judgments or decrees shall be entered against
         any one or more Loan Parties involving in the aggregate a liability
         (not paid or fully covered by insurance) of $10,000,000 or more, and
         all such judgments or decrees shall not have been vacated, charged,
         stayed or bonded pending appeal within 60 days from the entry thereof,
         or

                  (h) The Guarantee shall cease, for any reason, to be in full
         force and effect or the Guarantor or the Estate shall so assert; or

                  (i) (i) The Stock Pledge Agreement or the Control Agreement
         shall cease, for any reason, to be in full force and effect, or the
         Guarantor or the Borrower shall so assert, or (ii) the Lien created by
         the Stock Pledge Agreement shall cease to be enforceable and of the
         same effect and priority purported to be created thereby; or

                  (j) The Guarantor or the Estate shall at any time cease to be
         the beneficial and record owner of 100% of the issued and outstanding
         Capital Stock of the Borrower, or any Lien shall exist in respect of
         such Capital Stock other than Liens for taxes not yet due or which are
         being contested in good faith by appropriate proceedings; provided,
         that adequate reserves with respect thereto are maintained on the books
         of the Guarantor or the Estate, as the case may be; or

                  (k) The Estate, or a Conservatorship, shall fail:


                                      -40-

<PAGE>   46

                           (i) to duly allow and assume, or otherwise confirm,
                  (A) within 90 days of the filing of a creditor's claim against
                  the Estate or Conservatorship in accordance with applicable
                  law, the Guarantee or any of the Obligations, or (B) within 90
                  days after request therefor by the Administrative Agent (or as
                  soon thereafter as is practicable), the obligations of the
                  Borrower in respect of the Pledged Microsoft Stock in a manner
                  acceptable to the Administrative Agent (it being agreed that
                  any change in such allowance and assumption or confirmation,
                  including any fixing or liquidation of the amount of such
                  obligations, shall also be acceptable to the Administrative
                  Agent) or (C) within 90 days after request therefor by the
                  Administrative Agent (or soon thereafter as is practicable),
                  the Guarantee or any of the Obligations in a manner acceptable
                  to the Administrative Agent, including, without limitation, if
                  requested by the Administrative Agent and in the sole
                  discretion of the Administrative Agent, substituting such
                  Conservatorship (on behalf of the Guarantor and not
                  personally) or the Estate as the counterparty to this
                  Agreement and the other Loan Documents;

                           (ii) within 90 days after request therefor by the
                  Administrative Agent (or as soon thereafter as is
                  practicable), to agree in writing (the "Net Worth Agreement")
                  for the benefit of the Lenders and the Administrative Agent
                  (1) to maintain the net worth of the Estate (i.e., total
                  assets of the Estate less all direct and contingent
                  liabilities of the Estate, including, but not limited to,
                  liabilities for estate taxes) or the assets managed by such
                  Conservatorship (exclusive of any potential spousal claims
                  including elective share, community property interest or
                  otherwise, unless the Guarantor's spouse is liable for the
                  Guarantee or the Obligations under circumstances that the
                  Administrative Agent, in its reasonable judgment, deems
                  acceptable) equal to at least $4,000,000,000, (2) not to make
                  any beneficial distribution from the Estate or the assets
                  managed by such Conservatorship or distribution to any Person
                  with claims junior to claims hereunder that would cause its
                  net worth to be less than such amount and (3) to deliver to
                  the Administrative Agent a copy of the Guarantor's U.S.
                  federal estate tax return Form 706 when filed;

                           (iii) within 30 days after the request therefor by
                  the Administrative Agent, to provide a legal opinion
                  reasonably acceptable to the Administrative Agent regarding
                  the enforceability of any allowance and assumption or
                  confirmation made pursuant to clause (i) hereof and the Net
                  Worth Agreement; or

                           (iv) within 45 days after the request therefor by the
                  Administrative Agent, to provide a legal opinion or opinions,
                  as the case may be, in form and substance reasonably
                  satisfactory to the Administrative Agent stating that neither
                  (A) the laws of the states or jurisdictions governing the
                  Conservatorship of the Guarantor's assets nor (B) the laws of
                  the states or jurisdictions governing the probate proceedings
                  with respect to the Estate will disallow or modify in any way,
                  including, without limitation, for reasons of spousal election
                  or community property interest, the security interest in favor
                  of the Administrative Agent set


                                      -41-

<PAGE>   47

                  forth in the Loan Documents or any of the other terms or
                  provisions of this Agreement or the other Loan Documents;
                  provided, however, that such Conservatorship or Estate shall
                  not be required to take any of the actions set forth in clause
                  (i), (iii) or (iv) of this paragraph (k) in the event that
                  such Conservatorship or Estate, after making such effort as
                  the Administrative Agent deems appropriate, and by reason of
                  evidence that the Administrative Agent deems reasonable,
                  concludes that such Conservatorship or Estate does not have
                  the legal power and authority under the laws of the state or
                  jurisdiction binding the actions of such Conservatorship or
                  Estate to take the actions required.

         For purposes of this paragraph (k), the laws governing the actions of
         the Conservatorship or the Estate shall be the laws of the state of
         jurisdiction of the primary residence of the Guarantor or, if a
         Conservator is appointed in another jurisdiction and the Administrative
         Agent in its reasonable judgment deems it acceptable, the laws of the
         state in which such Conservator is appointed. Any action required to be
         taken or duties required to be performed hereunder by a Conservator on
         behalf of a Conservatorship or by the Estate shall be taken or
         performed by such Conservator or Estate in a fiduciary, and not
         individual, capacity, provided that such Conservator or Estate has
         complied in good faith with the terms and conditions of this Agreement
         and the other Loan Documents; or

                  (l) (i) Any "accumulated funding deficiency" (as defined in
         section 302 of ERISA) shall exist with respect to any Plan, or any Lien
         shall arise on the assets of any Loan Party or any Commonly Controlled
         Entity in favor of the PBGC or a Plan, (ii) any Loan Party or any
         Commonly Controlled Entity shall or in the opinion of the Majority
         Lenders is likely to, incur any liability in connection with a
         withdrawal from, or the insolvency or reorganization of, a
         Multiemployer Plan or (iii) any other event or condition shall occur or
         exist with respect to a Plan; and in each case in clauses (i) through
         (iii), such event or condition, together with all other such events or
         conditions, if any, could reasonably be expected to have a Material
         Adverse Effect;

then, and in any such event, (x) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section 8.1 with respect to the
Borrower, automatically the Commitments shall immediately terminate and each
Lender's Loan hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents shall immediately become
due and payable, and (y) if such event is any other Event of Default, either or
both of the following actions may be taken: (i) with the consent of the Majority
Lenders, the Administrative Agent may, or upon the request of the Majority
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Majority Lenders, the
Administrative Agent may, or upon the request of the Majority Lenders, the
Administrative Agent shall, by notice to the Borrower, declare each Lender's
Loan hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.


                                      -42-

<PAGE>   48

         Except as expressly provided above in this Article VIII, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.

                                   ARTICLE IX

                            THE ADMINISTRATIVE AGENT

         SECTION 9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.

         SECTION 9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.

         SECTION 9.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders or
the holder of any Note for any recitals, statements, information,
representations or warranties made by any Loan Party or any representative
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.

         SECTION 9.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other


                                      -43-

<PAGE>   49

document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Lenders (or such
other requisite Lenders as may be expressly required by any Loan Document) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Majority Lenders (or such other requisite Lenders as may be expressly
required by any Loan Document), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders and all future
holders of the obligations owing by the Borrower hereunder.

         SECTION 9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower or the Guarantor referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Majority Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.

         SECTION 9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of any
Loan Party, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Loan Party and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of each Loan Party. Except for copies of notices, reports
and other documents expressly required to be


                                      -44-

<PAGE>   50

furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.

         SECTION 9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent (and its officers, directors, employees, agents,
attorneys-in-fact and Affiliates) in its capacity as such (to the extent not
reimbursed by the Borrower or the Guarantor and without limiting the obligation
of the Borrower and the Guarantor to do so), ratably according to their
respective Exposure Percentages in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Total Outstanding Extensions of Credit
shall have been reduced to zero, ratably in accordance with such Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the amounts
owing hereunder) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. The agreements in this Article IX shall survive the payment of each
Lender's Loan and all other amounts payable hereunder.

         SECTION 9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with each Loan Party as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loan made by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.

         SECTION 9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent at any time upon 15 days' notice to the
Lenders, the Borrower and the Guarantor. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the other Loan
Documents, then the Majority Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower, whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act


                                      -45-

<PAGE>   51

or deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor Administrative Agent
has been appointed by the 15th Business Day after the date such notice of
resignation was given, the Lenders shall thereafter perform all of the duties of
the Administrative Agent hereunder and/or under any other Loan Document until
such time, if any, as the Lenders appoint a successor Administrative Agent.
After any retiring Administrative Agent's resignation as Administrative Agent,
the provisions of this Article IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.

         SECTION 9.10 The Arrangers, Co-Syndication Agents and Documentation
Agent. None of the Arrangers, the Co-Syndication Agents or the Documentation
Agent shall have any duties or responsibilities under this Agreement or any of
the Loan Documents.

                                    ARTICLE X

                                  MISCELLANEOUS

         SECTION 10.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Majority Lenders may, or, with the written consent of the
Majority Lenders, the Administrative Agent may, from time to time, (a) enter
into with the relevant Loan Party or Loan Parties written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of any Loan Party
hereunder or thereunder or (b) waive, on such terms and conditions as the
Majority Lenders or the Administrative Agent, as the case may be, may specify in
such instrument, any of the requirements of this Agreement or the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of final maturity of
any Loan or of any scheduled installment thereof, or reduce the stated rate of
any interest, fee or commission payable to any Lender hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender directly affected thereby, or (ii) amend, modify or waive any
provision of this Section 10.1 or reduce the percentage specified in the
definition of Majority Lenders or Super-Majority Lenders, or consent to the
assignment or transfer by the Borrower or the Guarantor of any of its rights and
obligations under this Agreement and the other Loan Documents, or release all or
substantially all of the Pledged Microsoft Stock, or terminate the Guarantee
contained in Article VII, in each case without the written consent of all the
Lenders, or (iii) amend, modify or waive any provision of Section 4.1(f) without
the written consent of the Super-Majority Lenders, or (iv) amend, modify or
waive any provision of Article IX without the written consent of the then
Administrative Agent, or (v) amend, modify or waive any provision of Section
2.4(c), (d) or (e) without the written consent of the Super-Majority Lenders and
(b) thereafter, the aggregate unpaid principal amount of the Loans then
outstanding. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower,


                                      -46-

<PAGE>   52

the Guarantor, the Lenders, the Agents, the Administrative Agent and all future
holders of the obligations owing hereunder. In the case of any waiver, the
Borrower, the Guarantor, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.

         SECTION 10.2  Notices.

         (a) Unless otherwise specifically provided in this Agreement, all
notices, requests and other communications provided for hereunder shall be in
writing (including, unless the context expressly otherwise provides, facsimile
transmission, provided that any matter transmitted by facsimile transmission (i)
shall be immediately confirmed by a telephone call to the recipient at the
number specified below and (ii) shall be followed promptly by a hard copy
original thereof) and mailed, sent by facsimile transmission, or delivered, to
the address or number specified for notices below or, as to the other parties,
and as to each other party, at such other address as shall be designated by such
party in a written notice to the Administrative Agent:

                  The Borrower:            PGA CREDIT II LLC
                                           c/o Vulcan Northwest, Inc.
                                           110 110th Avenue N.E., Suite 550
                                           Bellevue, WA  98004
                                           Attention: [*]
                                           Telephone: (425) [*]
                                           Fax:  (425) [*]

                  The Guarantor:           Paul G. Allen
                                           c/o Vulcan Northwest Inc.
                                           110 110th Avenue, N.E., Suite 550
                                           Bellevue, Washington  98004
                                           Attention:  [*]
                                           Telephone: (425) [*]
                                           Fax:  (425) [*]

                  The Administrative       Commerzbank AG, New York Branch
                  Agent:                   2 World Financial Center
                                           New York, New York 10281-1050
                                           Attention:  [*]
                                           Telephone:  [*]
                                           Fax:   [*]

                  with a copy to:          Commerzbank AG, New York Branch
                                           2 World Financial Center
                                           New York, New York 10281-1050
                                           Attention:  [*]


[*] Confidential treatment requested.



                                      -47-

<PAGE>   53

                                           Telephone: [*]
                                           Fax:  [*]

                                           Commerzbank AG, Los Angeles Branch
                                           633 West Fifth Street
                                           Suite 6600
                                           Los Angeles, California 90071
                                           Attention:  [*]
                                           Telephone:  [*]
                                           Fax:  [*]

         (b) All such notices and communications shall, when transmitted by
overnight delivery or telecopied by facsimile, be effective when delivered for
overnight delivery or transmitted by telecopier, respectively, or if delivered,
upon delivery, except that notices pursuant to Articles II or IX shall not be
effective until actually received by the Administrative Agent.

         (c) The Borrower and the Guarantor acknowledge and agree that any
agreement of the Administrative Agent and the Lenders in Article II herein to
receive certain notices by telephone and facsimile is solely for the convenience
and at the request of the Borrower and the Guarantor. The Administrative Agent
and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower or the Guarantor, as the
case may be to give such notice and the Administrative Agent and the Lenders
shall not have any liability to the Borrower or the Guarantor, as the case may
be or other Person on account of any action taken or not taken by the
Administrative Agent and the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Borrower to repay each Lender's Loan
shall not be affected in any way or to any extent by any failure by the
Administrative Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Administrative Agent and
the Lenders of a confirmation which is at variance with the terms understood by
the Administrative Agent and the Lenders to be contained in the telephonic or
facsimile notice.

         SECTION 10.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

         SECTION 10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or thereto
or in connection herewith or therewith shall survive the execution and delivery
of this Agreement and the making of each Lender's Loan hereunder.


[*] Confidential treatment requested.


                                      -48-

<PAGE>   54

         SECTION 10.5 Payment of Expenses and Taxes. The Borrower agrees (a),
whether or not the transactions herein contemplated are consummated, (i) to pay
or reimburse each of the Administrative Agent and the Lead Arranger for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation, syndication and execution of this Agreement, the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of White & Case LLP, counsel to the Administrative Agent
and Lead Arranger, (ii) to pay or reimburse each of the Administrative Agent and
the Lead Arranger for all its reasonable out-of-pocket costs and expenses
incurred in connection with any amendment, supplement or modification to this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of White & Case LLP,
counsel to the Administrative Agent and the Lead Arranger and (iii) to pay or
reimburse each Lender, the Administrative Agent and the Agents for all costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and the other Loan Documents, each as amended,
supplemented or modified, and any such other documents, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent and the Agents, (b) to pay, indemnify, and hold harmless
each Lender, the Administrative Agent and Agents from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (c) to pay, indemnify, and hold harmless each
Lender, the Administrative Agent, the Agents, their Affiliates and each of their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "indemnitee") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, fees, charges and disbursements of counsel to such indemnitee) with
respect to the syndication, execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents or any actual or
proposed use of proceeds of any Loan (all the foregoing in this clause (c),
collectively, the "indemnified liabilities"), provided, that the Borrower shall
have no obligation hereunder to any individual indemnitee with respect to
indemnified liabilities arising from the gross negligence or willful misconduct
of such indemnitee. The agreements in this Section 10.5 shall survive the
termination of the Commitments and the repayment of each Lender's Loan and all
other amounts payable hereunder.

         SECTION 10.6 Successors and Assigns; Participations and Assignments.

         (a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Guarantor (and any heirs, executors and administrators of the
Guarantor and the successors and assigns of such Persons), the Lenders, the
Administrative Agent, the Agents and their respective successors and assigns,
except that neither the Borrower nor the Guarantor (nor any


                                      -49-

<PAGE>   55

heirs, executors or administrators of the Guarantor or any successors or assigns
of such Persons) may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.

         (b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof, such Lender shall remain the holder of any such Loan for all purposes
under this Agreement and the other Loan Documents, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, any Loan or any fees payable hereunder,
or postpone the date of the final maturity of any Loan, in each case to the
extent subject to such participation. The Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.11, 2.12 and 2.13 with respect
to its participation in the Commitments and the Loan outstanding from time to
time as if it were a Lender; provided that, in the case of Section 2.12, such
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.

         (c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to any
Lender or any affiliate thereof or any Approved Fund or, with the consent of the
Borrower (in each case, so long as no Default or Event of Default has occurred
or is continuing) and the Administrative Agent (which in each case shall not be
unreasonably withheld; it being understood that it shall be reasonable for the
Administrative Agent to withhold consent to an assignment to an assignee that
would be subject to U.S. federal withholding taxation on the date of transfer),
to any other Person (collectively, "Purchasing Lenders") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Purchasing Lender, such transferor Lender (and, in the case
of a Purchasing Lender that is not then a Lender or an affiliate thereof or an
Approved Fund, by the Borrower and the Administrative Agent as permitted by this
Section 10.6(c)) and delivered to the Administrative Agent for its acceptance
and recording in the Register; provided that, except in the case of an
assignment to a Lender or any affiliate thereof or an Approved Fund or an
assignment of all of a Lender's rights and obligations under this Agreement, (x)
the amount of the Commitment and/or Loan of the assigning Lender being assigned
pursuant to each such assignment shall equal at least $5,000,000 and (y) after
giving effect to each such assignment, the


                                      -50-

<PAGE>   56

amount of the remaining Commitment and/or Loan of the assigning Lender shall
equal at least $10,000,000 (or, in each case, such lesser amount as the Borrower
and the Administrative Agent may consent to). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Purchasing Lender thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loan as set forth therein, and (y) the transferor Lender thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an transferor Lender's
rights and obligations under this Agreement, such transferor Lender shall cease
to be a party hereto). Such Assignment and Acceptance shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of Exposure
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such Transferor Lender.

         (d) The Administrative Agent, on behalf of the Borrower, shall maintain
at the address of the Administrative Agent referred to in Section 10.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loan owing to, each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Guarantor, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register as the owner of a
Loan or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.

         (e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Lender and a Purchasing Lender (and, in the case of an Assignee that
is not then a Lender or an affiliate thereof, by the Borrower and the
Administrative Agent), together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower.

         (f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of Section 10.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower or the Guarantor
pursuant to this Agreement or which has been delivered to such Lender by or on
behalf of the Borrower or the Guarantor in connection with such Lender's credit
evaluation of the Borrower, the Guarantor and their Affiliates prior to becoming
a party to this Agreement.

         (g) Nothing herein shall prohibit (i) any Lender from pledging or
assigning all or any portion of its Loans to any Federal Reserve Bank in
accordance with applicable law or (ii) any


                                      -51-

<PAGE>   57

Lender that is a fund that invests in bank loans, from pledging, without the
consent of the Administrative Agent or the Borrower, all or any portion of its
Loans to any trustee for, or any other representative of, holders of obligations
owed, or securities issued, by such fund, as security for such obligations or
securities, provided that any foreclosure or similar action by such trustee or
representative shall be subject to the provisions of this Section 10.6
concerning assignments. In order to facilitate such pledge or assignment, the
Borrower hereby agrees that, upon request of any Lender at any time and from
time to time after the Borrower has made its initial borrowing hereunder, the
Borrower shall provide to such Lender, at the Borrower's own expense, a Note
evidencing the Loan owing to such Lender.

         SECTION 10.7 Adjustments; Set-off.

         (a) Except as otherwise expressly provided herein, if any Lender (a
"Benefited Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8.1 (f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of each such other Lender's Loans owing to each such
other Lender, or interest thereon, such benefited Lender shall purchase for cash
from the other Lenders a participating interest in such portion of each such
other Lender's Loan owing to each such other Lender, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

         (b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right following the occurrence and during the
continuance of any Event of Default, without prior notice to the Borrower or the
Guarantor, any such notice being expressly waived by the Borrower and the
Guarantor to the extent permitted by applicable law, upon any amount becoming
due and payable by the Borrower or the Guarantor hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower or the Guarantor. Each Lender agrees promptly to notify
the Borrower or the Guarantor, as the case may be, and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

         SECTION 10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and


                                      -52-

<PAGE>   58

the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

         SECTION 10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         SECTION 10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Guarantor, the Administrative
Agent, the Agents and the Lenders with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

         SECTION 10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

         SECTION 10.12 Submission To Jurisdiction; Waivers. Each Loan Party
hereby irrevocably and unconditionally:

                  (a) Submits for itself and its property, in any legal action
         or proceeding relating to this Agreement and the other Loan Documents
         to which it is a party, or for recognition and enforcement of any
         judgment in respect thereof, to the non-exclusive general jurisdiction
         of the Courts of the State of New York, the courts of the United States
         of America for the Southern District of New York, and appellate courts
         from any thereof;

                  (b) Consents that any such action or proceeding may be brought
         in such courts and waives any objection that it or now or hereafter has
         to the venue of any such action or proceeding in any such court or that
         such action or proceeding was brought in an inconvenient court and
         agrees not to plead or claim the same;

                  (c) Agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail), postage
         prepaid, to such Loan Party its address set forth in Section 10.2 or at
         such other address of which the Administrative Agent shall have been
         notified pursuant thereto;

                  (d) Agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other Jurisdiction; and


                                      -53-

<PAGE>   59

                  (e) Waives, to the maximum extent not prohibited by law, any
         right it may have to claim or recover in any legal action or proceeding
         referred to in this Section any special, exemplary, punitive or
         consequential damages.

         SECTION 10.13 Acknowledgments. Each Loan Party hereby acknowledges
that:

                  (a) It has been advised by counsel in the negotiation,
         execution and delivery of this Agreement and the other Loan Documents;

                  (b) Neither the Administrative Agent nor any Lender has any
         fiduciary relationship with or duty to the Borrower or the Guarantor
         arising out of or in connection with this Agreement or any of the other
         Loan Documents, and the relationship between Administrative Agent and
         Lenders, on one hand, and the Borrower or the Guarantor, on the other
         hand, in connection herewith or therewith is solely that of debtor and
         creditor; and

                  (c) No joint venture is created hereby or by the other Loan
         Documents or otherwise exists by virtue of the transactions
         contemplated hereby among the Lenders or among the Borrower or the
         Guarantor and the Lenders.

         SECTION 10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE GUARANTOR, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

         SECTION 10.15 Confidentiality. Each of the Administrative Agent and
each Lender agrees to keep confidential all financial information provided
pursuant to Sections 5.1 or 5.2 and any other non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any Affiliate thereof, (b) to any
Transferee or prospective Transferee which agrees to comply with the provisions
of this Section 10.15, (c) to the employees, directors, agents, attorneys,
accountants and other professional advisors of such Lender or its affiliates,
(d) upon the request or demand of any Governmental Authority having jurisdiction
over the Administrative Agent or such Lender, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to applicable law or regulation, (f) if requested or required to do so
in connection with any litigation or similar proceeding, (g) which has been
publicly disclosed other than in breach of this Section 10.15, or (h) in
connection with the exercise of any remedy hereunder or under any other Loan
Document, and provided, further, that, in the case of clause (f) above, the
Administrative Agent or such Lender, as the case may be, shall give the Borrower
prompt notice thereof to the extent it is not prohibited from doing so.


                                      -54-

<PAGE>   60

         SECTION 10.16 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.


                                      -55-

<PAGE>   61

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.



                                       PGA CREDIT II LLC, as the Borrower



                                       By: /s/
                                           -----------------------------------
                                           Name:   Joseph D. Franzi
                                           Title:  Vice President and
                                                       Chief Financial Officer


<PAGE>   62

                                        PAUL G. ALLEN, as the Guarantor


                                        /s/
[notarized]                             ---------------------------------
                                        Paul G. Allen


<PAGE>   63

                                       BAYERISCHE HYPO-UND VEREINSBANK
                                         AG, NEW YORK BRANCH, as Lender



                                       By:   /s/
                                           -----------------------------------
                                           Name:
                                           Title:

                                       By:  /s/
                                           -----------------------------------
                                           Name:
                                           Title:



<PAGE>   64

                                        COMMERZBANK AG, NEW YORK 
                                          BRANCH, as Administrative Agent and 
                                          Lead Arranger



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   65

                                        COMMERZBANK AG, NEW YORK 
                                          BRANCH AND GRAND CAYMAN
                                          BRANCH, as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   66

                                        BANK OF MONTREAL, as Co-Syndication 
                                          Agent, Co-Arranger and Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   67

                                        PARIBAS, as Documentation Agent, Co-
                                          Arranger and Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   68

                                        CREDIT LYONNAIS LOS ANGELES 
                                          BRANCH, as Co-Syndication Agent, Co-
                                          Arranger and Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   69

                                        CAJA MADRID, as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   70

                                        BANK ONE, NA, as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   71

                                        WESTDEUTSCHE LANDESBANK 
                                          GIROZENTRALE, NEW YORK
                                          BRANCH, as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   72

                                        THE NORTHERN TRUST COMPANY, 
                                          as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   73

                                       BANK OF AMERICA, NA, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   74

                                       FLEET NATIONAL BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   75

                                       LANDESBANK HESSEN-THUERINGEN 
                                         GIROZENTRALE, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   76

                                       MELLON BANK, N.A., as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   77

                                       THE BANK OF NOVA SCOTIA, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   78

                                       US BANK NATIONAL ASSOCIATION,  as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   79

                                       WELLS FARGO BANK, N.A., as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   80

                                       DG BANK 
                                         DEUTSCHE GENOSSENSCHAFTSBANK 
                                         AG, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   81

                                       FIRST UNION NATIONAL BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   82

                                       SUNTRUST BANK, CENTRAL FLORIDA, 
                                         N.A., as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   83

                                       BANK HAPOALIM BM, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   84

                                       BANK AUSTRIA CREDITANSTALT 
                                         CORPORATE FINANCE, INC., as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   85

                                       BANK OF CHINA, NEW YORK BRANCH, 
                                         as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   86

                                       BANK OF HAWAII, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   87


                                       CREDIT COMMERCIAL DE FRANCE, 
                                         as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:




<PAGE>   88









                                       LANDESBANK SACHSEN 
                                         GIROZENTRALE, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   89

                                       MERCANTILE BANK N.A., as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   90

                                       MICHIGAN NATIONAL BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   91

                                       THE ROYAL BANK OF SCOTLAND PLC, 
                                         as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   92

                                       WASHINGTON MUTUAL BANK d/b/a 
                                         WESTERN BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   93

                                       AUSTRALIA AND NEW ZEALAND
                                         BANKING GROUP LIMITED, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   94

                                        BANCA POPOLARE di MILANO -
                                            NEW YORK BRANCH, as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   95

                                        NATIONAL CITY BANK, as Lender



                                        By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   96

                                        UNITED WORLD CHINESE COMMERCIAL 
                                          BANK, LOS ANGELES AGENCY, 
                                          as Lender



                                        By: /s/
                                           -----------------------------------
                                            Name:
                                            Title:


<PAGE>   97

                                       ERSTE BANK DER OESTERREICHISCHEN 
                                         SPARKASSEN AG, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   98

                                       THE FUJI BANK, LIMITED, LOS ANGELES 
                                         AGENCY, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   99

                                       IKB DEUTSCHE INDUSTRIEBANK AG, 
                                         LUXEMBOURG BRANCH, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   100

                                       MANUFACTURERS BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



<PAGE>   101

                                       ALLIED IRISH BANKS, PLC, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   102

                                       BANCO TOTTA & ACORES, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   103

                                       BANK OF CANTON OF CALIFORNIA, 
                                         as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   104

                                       BANQUE ET CAISSE D'EPARGNE DE 
                                         L'ETAT, LUXEMBOURG, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   105

                                       LAND BANK OF TAIWAN, LA BRANCH, 
                                         as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   106

                                       PEOPLE'S BANK, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   107

                                       BANQUE DIAMANTAIRE ANVERSOISE 
                                         (SWITZERLAND) SA, as Lender



                                       By: /s/
                                           -----------------------------------
                                           Name:
                                           Title:


<PAGE>   108

                                                                   SCHEDULE 1 TO
                                                  CREDIT AND GUARANTEE AGREEMENT

                             SCHEDULE OF COMMITMENTS




<TABLE>
<CAPTION>
                  Name of Lender                                                     Commitment
                  --------------                                                     ----------
<S>                                                                                <C>          
Commerzbank AG, New York Branch and
     Grand Cayman Branch                                                           $  90,000,000

Bank of Montreal                                                                      80,000,000

Paribas                                                                               80,000,000

Credit Lyonnais Los Angeles Branch                                                    80,000,000

Caja Madrid                                                                           60,000,000

Bank One NA                                                                           55,000,000

Westdeutsche Landesbank Girozentrale, New York Branch                                 55,000,000

The Northern Trust Company                                                            55,000,000

Bank of America, N.A.                                                                 50,000,000

Fleet National Bank                                                                   50,000,000

Landesbank Hessen-Thueringen Girozentrale                                             50,000,000

Mellon Bank, N.A.                                                                     50,000,000

The Bank of Nova Scotia                                                               50,000,000

US Bank National Association                                                          50,000,000

Wells Fargo Bank, N.A.                                                                50,000,000

DG Bank Deutsche Genossenschaftsbank AG                                               37,500,000

First Union National Bank                                                             37,500,000

Suntrust Bank, Central Florida, N.A.                                                  37,500,000

Bank Hapoalim BM                                                                      27,500,000
</TABLE>



<PAGE>   109
                                                                      Schedule 1
                                                                          Page 2


<TABLE>
<CAPTION>
                  Name of Lender                                                     Commitment
                  --------------                                                     ----------
<S>                                                                                <C>          
Bank Austria Creditanstalt Corporate Finance, Inc.                                    25,000,000

Bank of China, New York Branch                                                        25,000,000

Bank of Hawaii                                                                        25,000,000

Bayerische Hypo- und Vereinsbank AG, New York 
   Branch                                                                             25,000,000

Credit Commercial de France                                                           25,000,000

Landesbank Sachsen Girozentrale                                                       25,000,000

Mercantile Bank N.A.                                                                  25,000,000

Michigan National Bank                                                                25,000,000

The Royal Bank of Scotland PLC                                                        25,000,000

Washington Mutual Bank d/b/a Western Bank                                             25,000,000

Australia and New Zealand Banking Group Limited                                       20,000,000

Banca Popolare di Milano - New York Branch                                            20,000,000

National City Bank                                                                    20,000,000

United World Chinese Commercial Bank, Los Angeles 
   Agency                                                                             20,000,000

Erste Bank der Oesterreichischen Sparkassen AG                                        15,000,000

The Fuji Bank, Limited                                                                15,000,000

IKB Deutsche Industriebank AG, Luxembourg Branch                                      15,000,000

Manufacturers Bank                                                                    15,000,000

Allied Irish Banks PLC                                                                10,000,000

Banco Totta & Acores                                                                  10,000,000

Bank of Canton of California                                                          10,000,000

Banque et Caisse D'Espargne de l'Etat, Luxembourg                                     10,000,000
</TABLE>



<PAGE>   110

                                                                      Schedule 1
                                                                          Page 3


<TABLE>
<CAPTION>
                  Name of Lender                                                     Commitment
                  --------------                                                     ----------
<S>                                                                             <C> 
Land Bank of Taiwan, LA Branch                                                        10,000,000

People's Bank                                                                         10,000,000

Banque Diamantaire Anversoise (Switzerland) SA                                         5,000,000

                                       Total                                    $  1,500,000,000
                                                                                ================
</TABLE>