Exhibit 10.1

Execution Version

 

 

 

Published CUSIP Numbers

Deal: 9288UAA7

Term Loan: 92886UAB5

CREDIT AGREEMENT

Dated as of December 14, 2010

among

VONAGE AMERICA INC.

and

VONAGE HOLDINGS CORP.

as the Borrowers,

BANK OF AMERICA, N.A.,

as Administrative Agent,

and

The Other Lenders Party Hereto            

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

as Lead Arranger and Sole Book Runner

and

DEUTSCHE BANK SECURITIES INC.

and

CITIGROUP GLOBAL MARKETS INC.,

as Co-Arrangers

 

 

 

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TABLE OF CONTENTS

 

Section

       Page   ARTICLE I DEFINITIONS AND ACCOUNTING TERMS    1.01.   Defined
Terms      1    1.02.   Other Interpretive Provisions      22    1.03.  
Accounting Terms      22    1.04.   Rounding      23    1.05.   Times of Day   
  23    1.06.   Currency Equivalents      23    1.07.   Cumulative Credit
Transactions      23    1.08.   Pro Forma Calculations      23    ARTICLE II THE
COMMITMENTS AND CREDIT EXTENSIONS    2.01.   The Loans      24    2.02.  
Borrowings, Conversions and Continuations of Loans      24    2.03.  
Prepayments      25    2.04.   Termination of Commitments      27    2.05.  
Repayment of Loans      27    2.06.   Interest      27    2.07.   Fees      27
   2.08.   Computation of Interest and Fees      27    2.09.   Evidence of Debt
     28    2.10.   Payments Generally; Administrative Agent’s Clawback      28
   2.11.   Sharing of Payments by Lenders      29    2.12.   Increase in
Commitments      30    2.13.   Joint and Several Liability      31    ARTICLE
III TAXES, YIELD PROTECTION AND ILLEGALITY    3.01.   Taxes      33    3.02.  
Illegality      35    3.03.   Inability to Determine Rates      35    3.04.  
Increased Costs; Reserves on Eurodollar Rate Loans      35    3.05.  
Compensation for Losses      37    3.06.   Mitigation Obligations; Replacement
of Lenders      37    3.07.   Survival      37    ARTICLE IV CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS    4.01.   Conditions of Initial Credit Extension
     38    4.02.   Conditions to All Credit Extensions      40    ARTICLE V
REPRESENTATIONS AND WARRANTIES    5.01.   Existence, Qualification and Power   
  40    5.02.   Authorization; No Contravention      40    5.03.   Governmental
Authorization; Other Consents      41    5.04.   Binding Effect      41    5.05.
  Financial Statements; No Material Adverse Effect      41    5.06.   Litigation
     41   

 

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5.07.   No Default      41   

5.08.

  Ownership of Property; Liens      42   

5.09.

  Environmental Compliance      42   

5.10.

  Insurance      42   

5.11.

  Taxes      42   

5.12.

  ERISA Compliance      42   

5.13.

  Subsidiaries; Equity Interests; Loan Parties      43   

5.14.

  Margin Regulations; Investment Company Act      43   

5.15.

  Disclosure      44   

5.16.

  Compliance with Laws      44   

5.17.

  Intellectual Property/Proprietary Rights, Etc.      44   

5.18.

  Solvency      45   

5.19.

  Casualty, Etc.      45   

5.20.

  Labor Matters      45   

5.21.

  Collateral Documents      45   

5.22.

  Anti-Terrorism Laws      45   

5.23.

  Regulatory Matters      46    ARTICLE VI AFFIRMATIVE COVENANTS   

6.01.

  Financial Statements      47   

6.02.

  Certificates; Other Information      47   

6.03.

  Notices      49   

6.04.

  Payment of Obligations      49   

6.05.

  Preservation of Existence, Etc.      50   

6.06.

  Maintenance of Properties      50   

6.07.

  Maintenance of Insurance      50   

6.08.

  Compliance with Laws      50   

6.09.

  Books and Records      50   

6.10.

  Inspection Rights      50   

6.11.

  Use of Proceeds      51   

6.12.

  Covenant to Guarantee Obligations and Give Security      51   

6.13.

  Compliance with Environmental Laws      52   

6.14.

  Maintenance of Ratings      52   

6.15.

  Further Assurances      52   

6.16.

  Compliance with Terms of Leaseholds      52   

6.17.

  Reserved      53   

6.18.

  Information Regarding Collateral and Loan Documents      53   

6.19.

  Post Closing Matters      53    ARTICLE VII NEGATIVE COVENANTS   

7.01.

  Liens      53   

7.02.

  Indebtedness      54   

7.03.

  Investments      56   

7.04.

  Fundamental Changes      57   

7.05.

  Dispositions      57   

7.06.

  Restricted Payments      58   

7.07.

  Change in Nature of Business      59   

7.08.

  Transactions with Affiliates      59   

7.09.

  Burdensome Agreements      59   

7.10.

  Use of Proceeds      59   

7.11.

  Financial Covenants      59   

7.12.

  Capital Expenditures      60   

7.13.

  Amendments of Organization Documents      60   

7.14.

  Accounting Changes      60    7.15.   Prepayments, Etc. of Indebtedness     
60   

 

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ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES    8.01.   Events of Default      61
   8.02.   Remedies upon Event of Default      62    8.03.   Application of
Funds      63    ARTICLE IX ADMINISTRATIVE AGENT    9.01.   Appointment and
Authority      63    9.02.   Rights as a Lender      64    9.03.   Exculpatory
Provisions      64    9.04.   Reliance by Administrative Agent      64    9.05.
  Delegation of Duties      65    9.06.   Resignation of Administrative Agent   
  65    9.07.   Non-Reliance on Administrative Agent and Other Lenders      65
   9.08.   No Other Duties, Etc.      65    9.09.   Administrative Agent May
File Proofs of Claim      66    9.10.   Collateral and Guaranty Matters      66
   9.11.   Secured Cash Management Agreements and Secured Hedge Agreements     
67    9.12.   Withholding Tax      67    ARTICLE X MISCELLANEOUS    10.01.  
Amendments, Etc.      67    10.02.   Notices; Effectiveness; Electronic
Communications      68    10.03.   No Waiver; Cumulative Remedies; Enforcement
     70    10.04.   Expenses; Indemnity; Damage Waiver      70    10.05.  
Payments Set Aside      72    10.06.   Successors and Assigns      72    10.07.
  Treatment of Certain Information; Confidentiality      74    10.08.   Right of
Setoff      75    10.09.   Interest Rate Limitation      75    10.10.  
Counterparts; Integration; Effectiveness      75    10.11.   Survival of
Representations and Warranties      75    10.12.   Severability      75   
10.13.   Replacement of Lenders      76    10.14.   Governing Law; Jurisdiction;
Etc.      76    10.15.   WAIVER OF JURY TRIAL      77    10.16.   No Advisory or
Fiduciary Responsibility      77    10.17.   Electronic Execution of Assignments
and Certain Other Documents      77    10.18.   USA PATRIOT Act      77   
10.19.   Time of the Essence      78   

 

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SCHEDULES 2.01    Commitments and Applicable Percentages 5.06    Litigation
5.17(d)    Proprietary Rights 6.12    Guarantors 6.19    Post Closing Matters
7.01(b)    Liens 7.02(d)    Existing Indebtedness 7.03(f)    Investments 7.09   
Burdensome Agreements 10.02    Administrative Agent’s Office, Certain Addresses
for Notices

 

EXHIBITS

Form of    A    Committed Loan Notice B    Note C    Compliance Certificate D-1
   Assignment and Assumption D-2    Administrative Questionnaire E    Guaranty F
   Security Agreement G-1    Perfection Certificate G-2    Perfection
Certificate Supplement H    United States Tax Compliance Certificate I   
Solvency Certificate

 

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CREDIT AGREEMENT

This CREDIT AGREEMENT (“Agreement”) is entered into as of December 14, 2010
among VONAGE AMERICA INC., a Delaware corporation (“Vonage America”), VONAGE
HOLDINGS CORP., a Delaware corporation (“Holdings” and, together with Vonage
America, the “Borrowers” and each a “Borrower”), each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”), and
BANK OF AMERICA, N.A., as Administrative Agent.

PRELIMINARY STATEMENTS:

The Borrowers have requested that the Lenders provide a term loan facility and
the Lenders have indicated their willingness to do so on the terms and subject
to the conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01. Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth below:

“Administrative Agent” means Bank of America in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account with respect to such currency as the Administrative Agent may from time
to time notify to the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in
substantially the form of Exhibit D-2 or any other form approved by the
Administrative Agent.

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls, or is Controlled by or
is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Anti-Terrorism Laws” shall mean any Requirement of Law related to terrorism
financing or money laundering including the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
(“USA PATRIOT Act”) of 2001 (Title III of Pub. L. 107-56), The Currency and
Foreign Transactions Reporting Act (also known as the “Bank Secrecy Act”, 31
U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), the
Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended) and Executive
Order 13224 (effective September 24, 2001).

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Facility represented
by the principal amount of such Lender’s Loans and outstanding Commitments at
such time. The initial Applicable Percentage of each Lender is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means 7.00% per annum for Base Rate Loans and 8.00% per annum
for Eurodollar Rate Loans.

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“Appropriate Lender” means, at any time, a Lender.

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

“Arrangers” means, collectively, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Deutsche Bank Securities Inc. and Citigroup Global Markets Inc.

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit D-1 or any other form approved by the
Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease or similar payments under the relevant lease or
other applicable agreement or instrument that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease or
other agreement or instrument were accounted for as a Capitalized Lease and
(c) all Synthetic Debt of such Person.

“Audited Financial Statements” means the audited consolidated balance sheet of
Holdings and its Subsidiaries for the fiscal year ended December 31, 2009, and
the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of Holdings and its Subsidiaries,
including the notes thereto provided, however, that for the purposes of
Section 5.05(c), “Audited Financial Statements” shall mean the audited financial
statements of Holdings and its Subsidiaries most recently delivered to the
Administrative Agreement pursuant to Section 6.01(a).

“Bank of America” means Bank of America, N.A. and its successors.

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus  1/2 of 1%, (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate,” and (c) the Eurodollar Rate applicable to one month
Interest Periods plus 1.00% (which Eurodollar Rate shall be deemed to be not
less than 1.75% with respect to Term Loans). The “prime rate” is a rate set by
Bank of America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in such prime rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All
Base Rate Loans shall be denominated in Dollars.

“Borrowers” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Rate Loans, having the same Interest Period made
by each of the Lenders pursuant to Section 2.01.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and if
such day relates to any Eurodollar Rate Loan, means any such day that is also a
London Banking Day.

 

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“Capital Expenditures” means, with respect to any Person for any period, any
expenditure in respect of the purchase or other acquisition of any fixed or
capital asset (excluding (i) Investments made pursuant to Section 7.03(g),
(ii) normal replacements and maintenance which are properly charged to current
operations and (iii) replacements funded with the proceeds of insurance claims
or condemnation awards.

“Capitalized Leases” means all leases that have been or should be, in accordance
with GAAP, recorded as capitalized leases.

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by Holdings or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Collateral Documents and other Liens
permitted hereunder):

(a) readily marketable obligations issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality thereof having
maturities of not more than one (1) year from the date of acquisition thereof;
provided that the full faith and credit of the United States is pledged in
support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’
acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized
under the laws of the United States, any state thereof or the District of
Columbia or is the principal banking subsidiary of a bank holding company
organized under the laws of the United States, any state thereof or the District
of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the
parent of which issues) commercial paper rated as described in clause (c) of
this definition and (iii) has combined capital and surplus of at least
$1,000,000,000, in each case with maturities of not more than 180 days from the
date of acquisition thereof;

(c) commercial paper issued by any Person organized under the laws of any state
of the United States and rated at least “Prime-1” (or the then equivalent grade)
by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case
with maturities of not more than 270 days from the date of acquisition thereof;
and

(d) Investments, classified in accordance with GAAP as current assets of the
Borrower or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, which are administered by
financial institutions that have one of the two highest ratings obtainable from
either Moody’s or S&P, and the portfolios of which are limited solely to
Investments of the character, quality and maturity described in clauses
(a) through (c) of this definition.

“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person that, at the time it enters into a Cash
Management Agreement, is a Lender or an Affiliate of a Lender, in its capacity
as a party to such Cash Management Agreement.

“Change in Law” means the occurrence, after the date of this Agreement, or, in
the case of an Assignee, after the date on which such Assignee becomes a party
to this Agreement and, in the case of a Participant after the date on which it
acquires its participation, of any of the following: (a) the adoption or taking
effect of any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, guideline or directive (whether or not having the force of law) by any
Governmental Authority.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such

 

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plan other than any Permitted Holder, becomes the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that
a person or group shall be deemed to have “beneficial ownership” of all
securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 35% or more of the equity
securities of Holdings entitled to vote for members of the board of directors or
equivalent governing body of Holdings on a fully diluted basis (and taking into
account all such securities that such “person” or “group” has the right to
acquire pursuant to any option right); or

(b) during any period of 24 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of Holdings cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

(c) Holdings shall cease, directly or indirectly, to own and control legally and
beneficially all of the Equity Interests in Vonage America; or

(d) a “change of control” or any comparable term under and as defined in any
agreement governing any other Indebtedness of Holdings and its Subsidiaries in
an aggregate principal amount in excess of the Threshold Amount.

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and Treasury Regulations promulgated thereunder.

“Collateral” means all of the “Collateral” and “Mortgaged Property” referred to
in the Collateral Documents and all of the other property that is or is intended
under the terms of the Collateral Documents to be subject to Liens in favor of
the Administrative Agent for the benefit of the Secured Parties.

“Collateral Documents” means, collectively, the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages, each of the mortgages,
collateral assignments, security agreements, pledge agreements or other similar
agreements delivered to the Administrative Agent in accordance with applicable
local law to grant a valid, perfected security interest in any property as
collateral for the Obligations, all UCC or other financing statements or
instruments of perfection required by the Security Agreement, the Intellectual
Property Security Agreements, any Mortgage or any other such security document
or pledge agreement to be filed with respect to the security interests in
property and fixtures created pursuant to the Security Agreement, the
Intellectual Property Security Agreements or any Mortgage and each of the other
agreements, instruments or documents that create or purport to create a Lien in
favor of the Administrative Agent for the benefit of the Secured Parties.

“Commercial Software” means packaged commercially available software programs
generally available to the public which have been licensed to either Borrower or
any of their respective Subsidiaries pursuant to end-user licenses and which are
used in Vonage America’s business but not a component of or incorporated into
any of its products.

“Commitment” means, as to each Lender, its obligation to make Loans to the
Borrowers pursuant to Section 2.01 in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite

 

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such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite
such caption in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, as such amount may be adjusted from time
to time in accordance with this Agreement. As of the Closing Date, the aggregate
Commitment under this Agreement is $200.0 million.

“Committed Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.

“Company Software” means proprietary rights in the software for which
Proprietary Rights are owned by either Borrower or any of their respective
Subsidiaries, including copyrights, trademarks, patents and trade secrets.

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

“Consolidated Cash Interest Charges” means, for any Measurement Period, all
Consolidated Interest Charges paid or currently payable in cash by Holdings and
its Subsidiaries on a consolidated basis.

“Consolidated Current Assets” means, at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current assets”
(or any like caption) on a consolidated balance sheet of Holdings and its
Subsidiaries at such date (other than (i) cash and Cash Equivalents and
(ii) amounts related to current or deferred Taxes based on income or profits).

“Consolidated Current Liabilities” means, at any date, all amounts that would,
in conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of Holdings
and its Subsidiaries at such date, but excluding the current portion of any
Consolidated Funded Indebtedness of Holdings and its Subsidiaries.

“Consolidated EBITDA” means, at any date of determination, an amount equal to
Consolidated Net Income of Holdings and its Subsidiaries on a consolidated basis
for the most recently completed Measurement Period plus (i) the sum of the
following amounts for such period (to the extent deducted in the determination
of Consolidated Net Income for such period and without duplication):

(a) consolidated interest expense, plus

(b) provisions for taxes based on income, plus

(c) total depreciation expense, plus

(d) total amortization expense (other than amortization of deferred customer
acquisitions costs), plus

(e) non-cash stock compensation expense arising during such period from the
granting of equity-based compensation, consistent with past practice, and other
non-cash stock expense, plus

(f) any financial advisory fees, financing arrangement fees, accountant fees,
legal fees, rating agency fees, transfer or mortgage recording taxes and other
out-of-pocket expenses of Holdings or any of its subsidiaries (including
expenses of third parties paid or reimbursed by Holdings or any of its
subsidiaries) incurred directly in connection with the Loan Documents or any
amendments thereto, the Transaction, any acquisition permitted under the terms
of the Loan Documents or the issuance of any debt or equity securities, any
refinancing transaction or any amendment or other modification of any debt
instruments to the extent not prohibited by the terms of the Loan Documents plus

(g) amendment fees and consent fees payable in connection with the Transaction
and with amendments to any of the Loan Documents, plus

 

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(h) prepayment premiums and make-whole payments payable in connection with the
Refinancing and with any permitted repayments of Indebtedness in accordance with
the terms of such Indebtedness, plus

(i) amortization of costs associated with permitted issuances of Indebtedness,
plus

(j) amortization of beneficial conversions or original issue discount associated
with any capital stock of Holdings (other than Disqualified Capital Stock), plus

(k) non-cash loss attributable to the mark-to-market movement in the valuation
of obligations under Swap Contracts (to the extent the cash impact resulting
from such loss has not been realized) or other derivative instruments pursuant
to Accounting Standards Codification 815, plus

(l) non-recurring costs payable in connection with the establishment of rate
management transactions permitted under the Loan Documents, plus

(m) realized and unrealized losses on foreign currencies incurred in the
ordinary course of business (provided that any such loss that was added back
while unrealized shall not be added back when realized without a corresponding
reversal of such unrealized loss), plus

(n) extraordinary losses (as determined in accordance with GAAP and reflected
below operating costs), plus

(o) any losses attributable to asset sales outside of the ordinary course of
business, plus

(p) any loss on early extinguishment of Indebtedness, minus

(ii) the sum, without duplication of the following amounts of such period:

(a) interest income, plus

(b) extraordinary gains and other extraordinary income (as determined in
accordance with GAAP and reflected below operating income); plus

(c) non-cash gains attributable to the mark-to-market movement in the valuation
of obligations under Swap Contracts (to the extent the cash impact resulting
from such loss has not been realized) or other derivative instruments pursuant
to Accounting Standards Codification 815, plus

(d) realized and unrealized gains on foreign currencies incurred in the ordinary
course of business (provided that any such gain that was subtracted while
unrealized shall not be deducted when realized without a corresponding reversal
of such unrealized gain); plus

(e) any non-cash stock compensation income and other non-cash income or credits
arising from the granting of stock options or the granting of stock appreciation
rights (for example, those arising from the reversal of accruals or the reversal
of previously recorded non-cash expense), plus

(f) any gains attributable to asset sales outside of the ordinary course of
business, plus

(g) any gain on early extinguishment of Indebtedness.

“Consolidated Funded Indebtedness” means, as of any date of determination,
without duplication, for Holdings and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money and all obligations evidenced by bonds,
debentures, notes, loan agreements or other similar instruments, (b) all
purchase money Indebtedness (for avoidance of doubt, without duplication of
amounts in clause (e) below), (c) all direct obligations arising under letters
of credit, whether drawn or

 

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undrawn (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments, (d) all obligations in respect
of the deferred purchase price of property or services (other than trade
accounts payable in the ordinary course of business), (e) all Attributable
Indebtedness, (f) without duplication, all Guarantees with respect to
outstanding Indebtedness of the types specified in clauses (a) through (e) above
of Persons other than Holdings or any Subsidiary, and (g) all Indebtedness of
the types referred to in clauses (a) through (f) above of any partnership or
joint venture (other than a joint venture that is itself a corporation or
limited liability company) in which Holdings or any Subsidiary is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to Holdings or such Subsidiary.

“Consolidated Interest Charges” means, for any Measurement Period, without
duplication, the sum of (a) all interest, premium payments, debt discount, fees,
charges and related expenses in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
(b) all interest paid or payable with respect to discontinued operations and
(c) the portion of rent expense under Capitalized Leases that is treated as
interest in accordance with GAAP, in each case, of or by Holdings and its
Subsidiaries on a consolidated basis for the most recently completed Measurement
Period.

Notwithstanding anything to the contrary contained herein, for purposes of
determining Consolidated Interest Charges for any period ending prior to the
first anniversary of the Closing Date, Consolidated Interest Charges in respect
of Indebtedness under the Loan Documents shall be an amount equal to actual
Consolidated Interest Charges in respect of Indebtedness under the Loan
Documents from the Closing Date through the date of determination multiplied by
a fraction the numerator of which is 365 and the denominator of which is the
number of days from the Closing Date through the date of determination.

“Consolidated Interest Coverage Ratio” means, as of any date of determination,
the ratio of (a) Consolidated EBITDA to (b) Consolidated Cash Interest Charges
of Holdings and its Subsidiaries on a consolidated basis for the most recently
completed Measurement Period.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated
EBITDA of Holdings and its Subsidiaries on a consolidated basis for the most
recently completed Measurement Period.

“Consolidated Net Income” means, at any date of determination, the net income
(or loss) of Holdings and its Subsidiaries on a consolidated basis for the most
recently completed Measurement Period; provided that Consolidated Net Income
shall exclude:

(a) the income (or loss) of any person (other than a Subsidiary of Holdings) in
which any other person (other than Holdings or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Holdings or any of its Subsidiaries by such
person during such period, plus

(b) the income (or loss) of any person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any of
its Subsidiaries or that person’s assets are acquired by Holdings or any of its
subsidiaries, plus

(c) the income of any Subsidiary of Holdings to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of such
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.

“Consolidated Senior Secured Leverage Ratio” means, as of any date of
determination, the ratio of (a) Secured Indebtedness as of such date to
(b) Consolidated EBITDA of Holdings and its Subsidiaries on a consolidated basis
for the most recently completed Measurement Period.

 

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“Consolidated Working Capital” means, at any date, the excess of Consolidated
Current Assets on such date minus Consolidated Current Liabilities on such date.

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.

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

“Credit Extension” means the making of a Loan by a Lender.

“Cumulative Credit” means, at any date, an amount, not less than zero in the
aggregate, determined on a cumulative basis equal to, without duplication:

(a) the Cumulative Retained Excess Cash Flow Amount at such time; plus

(b) the cumulative amount of cash and Cash Equivalent proceeds from the sale of
Equity Interests (other than Disqualified Capital Stock) of Holdings or of any
direct or indirect parent of Holdings after the Closing Date and on or prior to
such time (including upon exercise of warrants or options) which proceeds have
been contributed as common equity to the capital of Holdings, in each case, not
otherwise applied for a purpose other than use in the Cumulative Credit; plus

(c) 100% of the aggregate amount of contributions to the common capital of
Holdings (other than from a Subsidiary) received in cash and Cash Equivalents
after the Closing Date, not otherwise applied for a purpose other than use in
the Cumulative Credit; minus

(d) any amount of the Cumulative Credit used to make Investments pursuant to
Section 7.03(h) after the Closing Date and prior to such time; minus

(e) any amount of the Cumulative Credit used to make Restricted Payments
pursuant to Section 7.06(e) after the Closing Date and prior to such time; minus

(f) any amount of the Cumulative Credit used to make payments or distributions
in respect of Junior Indebtedness pursuant to Section 7.15 after the Closing
Date and prior to such time; minus

(g) any amount of the Cumulative Credit used to make Capital Expenditures
pursuant to Section 7.12 after the Closing Date and prior to such time.

“Cumulative Retained Excess Cash Flow Amount” means, at any date, the amount of
Excess Cash Flow for each fiscal year commencing with the fiscal year ending
December 31, 2011 that (i) is not required to be applied as a mandatory
prepayment pursuant to Section 2.03(b)(i) and (ii) has been calculated and
included in a Compliance Certificate delivered in accordance with
Section 6.02(b).

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

“Default Rate” means an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum.

 

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“Deposit Account Control Agreement” has the meaning specified in the Security
Agreement.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction and any sale of any
Equity Interest, but excluding any issuance by such Person of its own Equity
Interest) of any property by any Person (or the granting of any option or other
right to do any of the foregoing), including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith; provided, however, that Disposition
shall not include transactions involving sales, transfers, licenses, leases or
other dispositions of assets for consideration of less than $250,000 with
respect to any transaction or series of related transactions.

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the first anniversary of the Maturity Date, (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Equity Interests referred to in (a) above, in each case
at any time on or prior to the first anniversary of the Maturity Date, or
(c) contains any repurchase obligation which may come into effect prior to
payment in full of all Obligations; provided, however, that any Equity Interests
that would not constitute Disqualified Capital Stock but for provisions thereof
giving holders thereof (or the holders of any security into or for which such
Equity Interests is convertible, exchangeable or exercisable) the right to
require the issuer thereof to redeem such Equity Interests upon the occurrence
of a change in control or an asset sale occurring prior to the first anniversary
of the Maturity Date shall not constitute Disqualified Capital Stock if such
Equity Interests provide that the issuer thereof will not redeem any such Equity
Interests pursuant to such provisions prior to the repayment in full of the
Obligations.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii) and (v) (subject to such consents, if any,
as may be required under Section 10.06(b)(iii)).

“Embargoed Person” shall mean any party that (i) is publicly identified on the
most current list of “Specially Designated Nationals and Blocked Persons”
published by the U.S. Treasury Department’s Office of Foreign Assets Control
(“OFAC”) or resides, is organized or chartered, or has a place of business in a
country or territory subject to OFAC sanctions or embargo programs or (ii) is
publicly identified as prohibited from doing business with the United States
under the International Emergency Economic Powers Act, the Trading With the
Enemy Act, or any other Requirement of Law.

“Embedded Products” means all licenses, sublicenses and other agreements to
which Holdings or any of its Subsidiaries is a party and pursuant to which such
Person is authorized to use any third party patents, patent rights, trademarks,
service marks, trade secrets or copyrights, including software, which are
distributed by any such Person or incorporated in any existing product or
service of any such Person.

“Environment” means ambient air, indoor air, surface water, groundwater,
drinking water, soil, surface and subsurface strata, and natural resources such
as wetlands, flora and fauna.

“Environmental Laws” means the common law and any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, franchises, licenses, agreements or governmental restrictions
relating to pollution, the protection of the Environment or human health (to the
extent related to exposure to Hazardous Materials), including those relating to
Release or threat of Release, generation, storage, treatment, transport or
handling of Hazardous Materials.

 

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

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with any Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) with respect to any Pension Plan, the failure to meet all applicable
requirements under the Pension Funding Rules, whether or not waived, or the
failure to make any required contribution to a Multiemployer Plan; (c) the
withdrawal of any Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which such entity was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations
that is treated as such a withdrawal under Section 4062(e) of ERISA; (d) a
complete or partial withdrawal by any Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (e) receipt by any Borrower or ERISA Affiliate from the PBGC or
a plan administrator of a notice of intent to terminate a Pension Plan under
Section 4041(c) of ERISA or notice to any Borrower or ERISA Affiliate of either
a notice of intent to terminate a Multiemployer Plan or the treatment of a
Multiemployer Plan amendment as a termination under Section 4041A of ERISA;
(f) the institution by the PBGC of proceedings to terminate a Pension Plan;
(g) the occurrence of any event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (h) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; (i) the imposition of any liability under Title IV of ERISA, other than
for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any
Borrower or any ERISA Affiliate; or (j) the occurrence of a nonexempt prohibited
transaction (within the meaning of Section 4975 of the Code or Section 406 of
ERISA) which could result in liability to any Borrower.

“Eurodollar Rate” means:

(a) for any Interest Period with respect to a Eurodollar Rate Loan, the rate per
annum equal to (i) the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or such other commercially available source providing
quotations of BBA LIBOR as may be designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two London Banking Days
prior to the commencement of such Interest Period, for Dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period or (ii) if such rate is not available at such time for any
reason, then the “Eurodollar Rate” for such Interest Period shall be the rate
per annum determined by the Administrative Agent to be the rate at which
deposits in Dollars for delivery on the first day of such Interest Period in
same day funds in the approximate amount of the Eurodollar Rate Loan being

 

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made, continued or converted by Bank of America and with a term equivalent to
such Interest Period would be offered by Bank of America’s London Branch to
major banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two London Banking Days prior to the
commencement of such Interest Period; and

(b) for any interest calculation with respect to a Base Rate Loan on any date,
the rate per annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London
time determined two London Banking Days prior to such date for Dollar deposits
being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at such time
for any reason, the rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the date of determination
in same day funds in the approximate amount of the Base Rate Loan being made or
maintained and with a term equal to one month would be offered by Bank of
America’s London Branch to major banks in the London interbank Eurodollar market
at their request at the date and time of determination;

provided that, solely with respect to a Eurodollar Rate Loan that is a Term
Loan, the Eurodollar Rate shall not be less than 1.75%.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

“Event of Default” has the meaning specified in Section 8.01.

“Excess Cash Flow” means, for any fiscal year of Holdings, the excess (if any)
of (a) the sum of (i) Consolidated EBITDA for such fiscal year, (ii) decreases
in Consolidated Working Capital and (iii) all cash income or gain to the extent
excluded from Consolidated Net Income in the calculation thereof or subtracted
from Consolidated Net Income in the calculation of Consolidated EBITDA minus
(b) the sum (for such fiscal year) of (i) Consolidated Cash Interest Charges,
(ii) scheduled principal payments, to the extent actually made, in respect of
Indebtedness of Holdings or any Subsidiary, in each case made with Internally
Generated Cash, (iii) all income taxes paid in cash by Holdings and its
Subsidiaries, (iv) Capital Expenditures of Holdings and its Subsidiaries in such
fiscal year, to the extent funded with Internally Generated Cash, (v) increase
in Consolidated Working Capital and (vi) cash expenses or charges that were
excluded from Consolidated Net Income in the calculation thereof or added to
Consolidated Net Income in the calculation of Consolidated EBITDA.

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

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Loan Party hereunder or under any other Loan Document (a) Taxes imposed
on or measured by its net or overall gross income (however denominated), and
franchise taxes imposed on it (in lieu thereof), by any jurisdiction as a result
of such recipient being organized or having its principal office in, or, in the
case of any Lender, having its applicable Lending Office in, such jurisdiction
or as a result of any other present or former connection of such recipient with
such jurisdiction (other than any connection deemed to arise from such Person
having executed, delivered, become a party to, performed its obligations or
received payments under, or enforced and/or engaged in any other activities
contemplated with respect to, this Agreement or any other Loan Document),
(b) any Tax in the nature of the branch profits tax under Section 884(a) of the
Code imposed by any jurisdiction described in clause (a) above, (c) any
withholding tax imposed by any Governmental Authority that is attributable to
such recipient’s failure to comply with Section 3.0l (e), (d) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrowers
under Section 10.13), any United States federal any withholding tax imposed on
any amounts payable to such Foreign Lender pursuant to the Laws in force at the
time such Lender becomes a party hereto (or designates a new Lending Office),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new Lending Office (or assignment), to
receive additional amounts from the Borrowers with respect to such withholding
tax pursuant to Section 3.01(a) and (e) United States federal withholding taxes
that would not have been imposed but for a failure by a Lender (or any financial
institution through which any payment is made to such Lender) to comply with the
procedures, certifications, information reporting, disclosure, or other related
requirements of current Sections 1471-1474 of the Code (and any amended or
successor version that is substantively comparable) or any published
administrative guidance implementing such law to establish relief or exemption
from the tax imposed by such provisions.

 

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“Existing Credit Agreements” means, collectively, the Existing First Lien Credit
Agreement, the Existing Second Lien Credit Agreement and the Existing Third Lien
Note Purchase Agreement.

“Existing First Lien Credit Agreement” means that certain First Lien Credit and
Guaranty Agreement, dated as of October 19, 2008, among the Borrowers, the other
parties thereto from time to time and Silver Point Finance, LLC, as
Administrative Agent.

“Existing Second Lien Credit Agreement” means that certain Second Lien Credit
and Guaranty Agreement, dated as of October 19, 2008, among the Borrowers, the
other parties thereto from time to time and Silver Point Finance, LLC, as
Administrative Agent.

“Existing Third Lien Note Purchase Agreement” means that certain Third Lien Note
Purchase Agreement dated October 19, 2008 by and among Borrowers, the other
parties thereto and Silverpoint Finance, LLC.

“Extraordinary Receipt” means any cash received by or paid to or for the account
of any Person not in the ordinary course of business, including pension plan
reversions, proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof) and indemnity
payments; provided, however, that an Extraordinary Receipt shall not include
(i) the proceeds of the sale or issuance of any Equity Interests of Holdings or
(ii) cash receipts from proceeds of insurance, condemnation awards (or payments
in lieu thereof) or indemnity payments to the extent that such proceeds, awards
or payments (a) in respect of loss or damage to equipment, fixed assets or real
property are applied (or in respect of which expenditures were previously
incurred) to replace or repair the equipment, fixed assets or real property in
respect of which such proceeds were received in accordance with the terms of
Section 2.05(b)(iv) or (b) are received by any Person in respect of any third
party claim against such Person and applied to pay (or to reimburse such Person
for its prior payment of) such claim and the costs and expenses of such Person
with respect thereto.

“Facility” means the facility providing for the Borrowing of Loans. The initial
aggregate amount of the Facility is $200.0 million.

“FASB ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

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

“Fee Letter” means the letter agreement, dated December 14, 2010 among the
Borrowers and the Administrative Agent.

“Flood Insurance Laws” means collectively (i) the National Flood Insurance Act
of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto and (iv) the
Flood Insurance Reform Act of 2004 as now or hereafter in effect or any
successor statute thereto.

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

“Foreign Plan” has the meaning specified in Section 5.12(d).

 

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“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

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

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

“GAAP” means generally accepted accounting principles in the United States set
forth 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 such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, any (a) obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

“Guarantors” means, collectively, the Subsidiaries of Holdings listed on
Schedule 6.12 and each other Subsidiary of Holdings that shall be required to
execute and deliver a guaranty or guaranty supplement pursuant to Section 6.12.

“Guaranty” means, collectively, the Guaranty made by the Guarantors in favor of
the Secured Parties, substantially in the form of Exhibit E, together with each
other guaranty and guaranty supplement delivered pursuant to Section 6.12.

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

“Hedge Bank” means any Person that, at the time it enters into a Swap Contract
required or permitted under Article VI or VII, is a Lender or an Affiliate of a
Lender, in its capacity as a party to such Swap Contract.

“Holdings” has the meaning specified in the introductory paragraph hereto.

 

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“IFRS” means the International Financial Reporting Standards as adopted by the
International Accounting Standards Board from time to time.

“Increase Effective Date” has the meaning specified in Section 2.12.

“Incremental Commitments” means, with respect to any Lender, such Lender’s
Commitments under any Incremental Facility.

“Incremental Facility” has the meaning specified in Section 2.12.

“Incremental Revolving Credit Facility” has the meaning specified in
Section 2.12.

“Incremental Term Facility” has the meaning specified in Section 2.12.

“Incremental Term Loan” means a Loan made pursuant to an Incremental Term
Facility.

“Incremental Term Loan Maturity Date” has the meaning assigned to such term in
Section 2.12(c).

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of
such Person evidenced by bonds, debentures, notes, loan agreements or other
similar instruments;

(b) the maximum amount of all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract;

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and not past due for more than 120 days or otherwise subject to a
good faith dispute);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

(f) all Attributable Indebtedness in respect of Capitalized Leases and Synthetic
Lease Obligations of such Person and all Synthetic Debt of such Person;

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person or any warrant, right or option to acquire such Equity
Interest, valued, in the case of a redeemable preferred interest, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends; and

(h) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date.

 

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“Indemnified Taxes” means any Taxes other than Excluded Taxes.

“Indemnitee” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intellectual Property Security Agreement” has the meaning specified in
Section 4.01(a)(iv).

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day
of each Interest Period applicable to such Loan and the Maturity Date; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrowers in their Committed Loan Notice or nine
or twelve months if requested by the Borrowers and consented to by all the
Appropriate Lenders; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

(b) 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
the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Maturity Date.

“Internally Generated Cash” means any cash of Holdings or any of its
Subsidiaries that is not generated from an Asset Sale, an Extraordinary Receipt,
an incurrence of Indebtedness, an issuance of Equity Interests or a capital
contribution.

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, Guarantee or assumption of Indebtedness of, or purchase
or other acquisition of any other debt or interest in, another Person, or
(c) the purchase or other acquisition (in one transaction or a series of
transactions) of assets of another Person that constitute a business unit or all
or a substantial part of the assets of, such Person and excluding Capital
Expenditures. For purposes of covenant compliance, the amount of any Investment
shall be the amount actually invested, without adjustment for subsequent
increases or decreases in the value of such Investment.

“Latest Maturity Date” means, as of any date, the latest of (i) the Maturity
Date and (ii) the Incremental Term Loan Maturity Date with respect to any
Incremental Term Loans outstanding on such date.

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

“Lender” has the meaning specified in the introductory paragraph hereto.

 

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“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to the Borrowers under Article
II.

“Loan Documents” means, collectively, (a) this Agreement, (b) the Notes, (c) the
Guaranty, (d) the Collateral Documents, and (e) the Fee Letter.

“Loan Parties” means, collectively, the Borrowers and each Guarantor.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank eurodollar market.

“Majority-Owned Affiliate” of a specified Person means another Person that is a
controlled Affiliate of such specified Person, with respect to which such
specified Person (directly or indirectly) owns an economic and voting interest
in more than 50% of such controlled Affiliate’s outstanding Equity Interests.

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent) or financial condition of Holdings or Holdings and its
Subsidiaries taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Loan Document, or
of the ability of any Loan Party to perform its obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.

“Maturity Date” means the fifth anniversary of the date hereof; provided,
however, that, in each case, if such date is not a Business Day, the Maturity
Date shall be the next preceding Business Day.

“Measurement Period” means, at any date of determination, the most recently
completed four fiscal quarters of Holdings.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Mortgage” means an agreement, including, but not limited to, a mortgage, deed
of trust or any other document, creating and evidencing a Lien on a Mortgaged
Property, which shall be in form reasonably satisfactory to the Administrative
Agent, in each case, with such schedules and including such provisions as shall
be necessary to conform such document to applicable local or foreign law or as
shall be customary under applicable local or foreign law.

“Mortgaged Property” means each Real Property of the Loan Parties subject to a
Mortgage.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“Net Cash Proceeds” means:

(a) with respect to any Disposition by Holdings or any of its Subsidiaries, or
any Extraordinary Receipt received or paid to the account of Holdings or any of
its Subsidiaries, the excess, if any, of (i)

 

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the sum of cash and Cash Equivalents received in connection with such
transaction (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by the applicable asset and that is required to
be repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary out-of-pocket expenses
incurred by Holdings or such Subsidiary in connection with such transaction and
(C) Taxes, including, without limitation, income taxes reasonably estimated to
be payable within two years of the date of the relevant transaction as a result
of any gain recognized in connection therewith; provided that, if the amount of
any estimated taxes pursuant to subclause (C) exceeds the amount of taxes
actually required to be paid in cash within two years of the relevant
transaction in respect of such Disposition, the aggregate amount of such excess
shall constitute Net Cash Proceeds at the end of such two year period; and

(b) with respect to the incurrence or issuance of any Indebtedness by Holdings
or any of its Subsidiaries, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii) the
underwriting discounts and commissions, and other reasonable and customary
out-of-pocket expenses, incurred by Holdings or such Subsidiary in connection
therewith.

“Note” means a promissory note made by the Borrowers in favor of a Lender,
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, Secured Cash Management Agreement or Secured
Hedge Agreement, in each case whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

“Organization Documents” means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

“Other Taxes” means any and all present or future stamp or documentary Taxes or
any other excise, property or similar Taxes arising from any payment made
hereunder or under any other Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement or any other Loan
Document.

“Outstanding Amount” means, on any date, the aggregate outstanding principal
amount of Loans hereunder after giving effect to any borrowings and prepayments
or repayments of Loans occurring on such date.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated
in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation, and (b) with respect to any amount denominated in an
Alternative Currency, the rate of interest per annum at which overnight deposits
in the applicable Alternative Currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be offered for
such day by a branch or Affiliate of Bank of America in the applicable offshore
interbank market for such currency to major banks in such interbank market.

“Participant” has the meaning specified in Section 10.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

 

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“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the effective
date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each
as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431,
432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (excluding a
Multiemployer Plan) that is maintained or is contributed to by any Borrower or
any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to
the minimum funding standards under Section 412 of the Code.

“Perfection Certificate” means a certificate in the form of Exhibit G-1 or any
other form approved by the Administrative Agent, as the same shall be
supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

“Perfection Certificate Supplement” means a certificate supplement in the form
of Exhibit G-2 or any other form approved by the Administrative Agent.

“Permitted Holder” means (i) Jeffrey A. Citron, (ii) any member of his
“immediate family” (as defined in Rule 303A.02 of the New York Stock Exchange
Listed Company Manual), (iii) the Persons listed in Note (1) to the “Stock
Ownership Information” table contained in the Statement on Schedule 14A of
Holdings, dated as of April 28, 2010, (iv) any Majority-Owned Affiliate of
Mr. Citron or (v) any trust whose sole beneficiaries are persons listed in
clauses (i) and (ii) above.

“Permitted Liens” means the Liens identified in Section 7.01.

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

“Plan” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of any Borrower or
any ERISA Affiliate or any such Plan to which any Borrower or any ERISA
Affiliate contributes to on behalf of any of its employees.

“Platform” has the meaning specified in Section 6.02.

“Pledged Securities” has the meaning specified in the Security Agreement.

“Pro Forma Basis” means on a basis in accordance with GAAP and Regulation S-X
promulgated under the Securities Act of 1933, as amended, and otherwise
reasonably satisfactory to the Administrative Agent and for purposes of
calculating the financial covenants set forth in Section 7.11 or any other
financial ratio or test, such calculation shall be made in accordance with
Section 1.08 hereof.

“Proprietary Rights” means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

 

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“Public Lender” has the meaning specified in Section 6.02.

“Qualified Capital Stock” of any person shall mean any Equity Interests of such
person that are not Disqualified Capital Stock.

“Real Property” means, collectively, all right, title and interest (including
any leasehold, mineral or other estate) in and to any and all parcels of or
interests in real property owned, leased or operated by any Person, whether by
lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.

“Register” has the meaning specified in Section 10.06(c).

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

“Release” means any release, spill, emission, discharge, deposit, disposal,
leaking, pumping, pouring, dumping, emptying, injection or leaching into the
Environment, or into, from or through any building, structure or facility.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Required Lenders” means, as of any date of determination, Lenders holding more
than 50% of the sum of the Total Outstandings.

“Requirements of Law” means, collectively, any and all applicable requirements
of any Governmental Authority, including any and all Laws.

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, treasurer, assistant treasurer, controller,
secretary or assistant secretary of a Loan Party. Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Loan Party.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Person or any of its Subsidiaries, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such capital stock or other
Equity Interest, or on account of any return of capital to any Person’s
stockholders, partners or members (or the equivalent of any thereof), or any
option, warrant or other right to acquire any such dividend or other
distribution or payment.

“Revolving Credit Loan” means a Loan made pursuant to an Incremental Revolving
Credit Facility.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., and any successor thereto.

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement that is
entered into by and between a Borrower or any of its Subsidiaries and any Cash
Management Bank.

 

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“Secured Hedge Agreement” means any Swap Contract permitted under VII that is
entered into by and between a Borrower or any of its Subsidiaries and any Hedge
Bank.

“Secured Indebtedness” means Consolidated Funded Indebtedness secured by a Lien.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the Hedge Banks, the Cash Management Banks, each co-agent or sub-agent appointed
by the Administrative Agent from time to time pursuant to Section 9.05, and the
other Persons to whom the Obligations are owing and which Obligations are or are
purported to be secured by the Collateral under the terms of the Collateral
Documents.

“Security Agreement” has the meaning specified in Section 4.01(a)(iii).

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital, and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

“Specified Transaction” means any (a) Disposition of all or substantially all
the assets of or all the Equity Interests of any Subsidiary or of any business
unit, line of business or division of any Borrower or any of its Subsidiaries,
(b) acquisition pursuant to Section 7.03(g) or (c) the proposed incurrence of
Indebtedness or making of a Restricted Payment in respect of which compliance
with the financial covenants set forth in Section 7.11 is by the terms of this
Agreement required to be calculated on a Pro Forma Basis.

“Subordinated Indebtedness” shall mean Indebtedness of any Borrower or any
Guarantor that is by its terms subordinated in right of payment to the
Obligations of such Borrower and such Guarantor, as applicable.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a direct or indirect Subsidiary
or Subsidiaries of Holdings.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

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“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

“Synthetic Debt” means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to function primarily as a
borrowing of funds (including any minority interest transactions that function
primarily as a borrowing) but are not otherwise included in the definition of
“Indebtedness” or as a liability on the consolidated balance sheet of such
Person and its Subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property (including sale and leaseback
transactions), in each case, creating obligations that do not appear on the
balance sheet of such Person but which, upon the application of any Debtor
Relief Laws to such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Threshold Amount” means $10.0 million.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans.

“Transaction” means, collectively, (a) the entering into by the Loan Parties and
their applicable Subsidiaries of the Loan Documents to which they are or are
intended to be a party, (b) the refinancing of certain outstanding Indebtedness
of the Borrowers and the termination of all commitments with respect thereto,
including the Indebtedness and commitments under the Existing Credit Agreements
and (c) the payment of the fees and expenses incurred in connection with the
consummation of the foregoing (including to the lenders, agents and noteholders
under the Existing Credit Agreements).

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

“United States” and “U.S.” mean the United States of America.

“Vonage America” has the meaning specified in the introductory paragraph hereto.

“Voting Stock” means Equity Interests of the class or classes pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, managers or trustees of
a corporation (irrespective of whether or not at the time Equity Interests of
any other class or classes shall have or might have voting power by reason of
the happening of any contingency).

“Wholly Owned Subsidiary” means, as to any Person, (a) any corporation 100% of
whose capital stock (other than directors’ qualifying shares) is at the time
owned by such Person and/or one or more Wholly Owned Subsidiaries of such Person
and (b) any partnership, association, joint venture, limited liability company
or other entity in which such Person and/or one or more Wholly Owned
Subsidiaries of such Person have a 100% equity interest at such time.

 

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1.02. Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

(i) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “hereto,” “herein,”
“hereof” and “hereunder,” and words of similar import when used in any Loan
Document, shall be construed to refer to such Loan Document in its entirety and
not to any particular provision thereof, (iv) all references in a Loan Document
to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Preliminary Statements,
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

(ii) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including.”

(iii) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

1.03. Accounting Terms.

(a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, applied in a manner
consistent with that used in preparing the Audited Financial Statements, except
as otherwise specifically prescribed herein. Notwithstanding the foregoing, for
purposes of determining compliance with any covenant (including the computation
of any financial covenant) contained herein, Indebtedness of Holdings and its
Subsidiaries shall be deemed to be carried at 100% of the outstanding principal
amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial
liabilities shall be disregarded.

(b) Changes in GAAP. If at any time any change in GAAP (or a requirement that
Holdings and its Subsidiaries commence the preparation of financial statements
in accordance with IFRS) would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the Borrower or the
Required Lenders shall so request, the Administrative Agent, the Lenders and the
Borrowers shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP or the
adoption of IFRS, as the case may be (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP or the adoption of IFRS, as the case may be.

 

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1.04. Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

1.05. Times of Day. Unless otherwise specified, all references herein to times
of day shall be references to Eastern time (daylight or standard, as
applicable).

1.06. Currency Equivalents. Any amount specified in this Agreement (other than
in Articles II and IX) or any of the other Loan Documents to be in Dollars shall
also include the equivalent of such amount in any currency other than Dollars,
such equivalent amount thereof in the applicable currency to be determined by
the Administrative Agent at such time on the basis of the Spot Rate (as defined
below) for the purchase of such currency with Dollars. For purposes of this
Section 1.06, the “Spot Rate” for a currency means the rate determined by the
Administrative Agent to be the rate quoted by the Person acting in such capacity
as the spot rate for the purchase by such Person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. on the date two Business Days prior to the date of such
determination; provided that the Administrative Agent may obtain such spot rate
from another financial institution designated by the Administrative Agent if the
Person acting in such capacity does not have as of the date of determination a
spot buying rate for any such currency.

1.07. Cumulative Credit Transactions. If more than one action occurs on any
given date the permissibility of the taking of which is determined hereunder by
reference to the amount of the Cumulative Credit immediately prior to the taking
of such action, the permissibility of the taking of each such action shall be
determined independently and in no event may any two or more such actions be
treated as occurring simultaneously.

1.08. Pro Forma Calculations.

(a) Notwithstanding anything to the contrary contained herein, financial ratios
and tests (including the Consolidated Leverage Ratio, Consolidated Interest
Coverage Ratio and Consolidated Secured Leverage Ratio) pursuant to this
Agreement shall be calculated in the manner prescribed by this Section 1.08.

(b) In the event that Holdings or any Subsidiary incurs, assumes, guarantees,
redeems, repays, retires or extinguishes any Indebtedness (other than
Indebtedness incurred or repaid under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) during the
applicable Measurement Period or subsequent to the end of the Measurement Period
for which such financial ratio or test is being calculated but prior to or
simultaneously with the event for which such calculation is being made, then
such financial ratio or test shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, redemption, repayment, retirement or
extinguishment of Indebtedness, as if the same had occurred on the last day of
the applicable Measurement Period (except in the case of the Consolidated
Interest Coverage Ratio (or similar ratio), such incurrence, assumption,
guarantee, redemption, repayment, retirement or extinguishment of Indebtedness,
as if the same had occurred on the first day of the applicable Measurement
Period).

(c) For purposes of calculating any financial ratio or test, Specified
Transactions that have been made by Holdings or any of its Subsidiaries during
the applicable Measurement Period or subsequent to such Measurement Period and
prior to or simultaneously with the event for which such calculation is being
made shall be calculated on a pro forma basis assuming that all such Specified
Transactions (and the change in Consolidated EBITDA resulting therefrom) had
occurred on the first day of the applicable Measurement Period.

(d) Notwithstanding the foregoing, when calculating the Consolidated Interest
Coverage Ratio and Consolidated Leverage Ratio for the purposes of
Section 2.03(b)(i) and Section 7.11, the events described in Sections 1.08(b)
and (c) above that occurred subsequent to the end of the Measurement Period
shall not be given pro forma effect.

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01. The Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make a single Loan to the Borrowers on the Closing
Date in an amount equal to such Lender’s Commitment. Amounts borrowed under this
Section 2.01 and repaid or prepaid may not be reborrowed. Loans may be Base Rate
Loans or Eurodollar Rate Loans as further provided herein.

2.02. Borrowings, Conversions and Continuations of Loans.

(a) Each Borrowing, each conversion of Loans from one Type to the other, and
each continuation of Eurodollar Rate Loans shall be made upon the Borrowers’
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
(i) 1:00 p.m. three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any conversion
of Eurodollar Rate Loans to Base Rate Loans and (ii) 11:00 a.m. on the requested
date of any Borrowing of Base Rate Loans; provided, however, that if the
Borrower wishes to request Eurodollar Rate Loans having an Interest Period other
than one, two, three or six months in duration as provided in the definition of
“Interest Period,” the applicable notice must be received by the Administrative
Agent not later than 1:00 p.m. four Business Days prior to the requested date of
such Borrowing, conversion or continuation, whereupon the Administrative Agent
shall give prompt notice to the Appropriate Lenders of such request and
determine whether the requested Interest Period is acceptable to all of them.
Not later than 11:00 a.m., three Business Days before the requested date of such
Borrowing, conversion or continuation, the Administrative Agent shall notify the
Borrowers (which notice may be by telephone) whether or not the requested
Interest Period has been consented to by all the Lenders. Each telephonic notice
by the Borrowers pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of each Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Committed Loan Notice (whether telephonic or written) shall specify
(i) whether the Borrowers is requesting a Borrowing, a conversion of Loans from
one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or to
which existing Loans are to be converted, and (v) if applicable, the duration of
the Interest Period with respect thereto. If the Borrowers fail to specify a
Type of Loan in a Committed Loan Notice or if the Borrowers fail to give a
timely notice requesting a conversion or continuation, then the applicable Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrowers request a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Committed Loan Notice, but fail to specify
an Interest Period, they will be deemed to have specified an Interest Period of
one month.

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrowers, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in Section 2.02(a). In
the case of a Borrowing, each Appropriate Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent’s Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is the
initial Borrowing, Section 4.01), the Administrative Agent shall make all funds
so received available to the Borrowers in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrowers on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrowers.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

 

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(d) The Administrative Agent shall promptly notify the Borrowers and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate, but in no event later than the first
day of the applicable Interest Period. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrowers and the Lenders
of any change in Bank of America’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e) After giving effect to all Loans, all conversions of Loans from one Type to
the other, and all continuations of Loans as the same Type, there shall not be
more than six Interest Periods in effect in respect of the Loans.

2.03. Prepayments.

(a) Optional.

(i) Subject to the last sentence of this Section 2.03(a)(i), the Borrowers may,
upon notice to the Administrative Agent, at any time or from time to time
voluntarily prepay Loans (subject to payment of any prepayment premium required
by Section 2.03(a)(ii)) in whole or in part; provided that (A) such notice must
be received by the Administrative Agent not later than (1) 1:00 p.m. three
Business Days prior to any date of prepayment of Eurodollar Rate Loans and
(2) 11:00 a.m. on the date of prepayment of Base Rate Loans; (B) any prepayment
of Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof; and (C) any prepayment of Base Rate
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans
are to be prepaid, the Interest Period(s) of such Loans. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender’s ratable portion of such prepayment (based on such
Lender’s Applicable Percentage in respect of the relevant Facility). If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein; provided that a notice of prepayment delivered by the
Borrowers may state that such notice is conditioned upon the consummation of an
acquisition, in which case such notice may be revoked by the Borrowers (by
notice to the Administrative Agent on or prior to the specified effective date)
if such condition is not satisfied. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05. Each prepayment
of the outstanding Loans pursuant to this Section 2.03(a) shall be applied to
the principal repayment installments thereof, as directed by Holdings and absent
such direction, in direct order to such scheduled repayments, and subject to
Section 2.13, each such prepayment shall be paid to the Lenders in accordance
with their respective Applicable Percentages in respect of the Facility.
Notwithstanding anything to the contrary contained herein, the Borrowers shall
not be permitted to prepay the Loans pursuant to this Section 2.03(a)(i) during
the period from the Closing Date through the date ten Business Days thereafter.

(ii) In the event that, prior to the first anniversary of the Closing Date, the
Borrowers make any voluntary prepayment of the Loans of any Lender using
proceeds from a substantially concurrent issuance or incurrence of Indebtedness
by a Loan Party, such prepayment shall be accompanied by a prepayment fee equal
to 1.0% of the principal amount of such Loans prepaid.

(b) Mandatory.

(i) Within ten Business Days after financial statements have been, or should
have been, delivered pursuant to Section 6.01(a) and the related Compliance
Certificate has been, or should have been, delivered pursuant to
Section 6.02(b), the Borrowers shall, in each fiscal year commencing with the
fiscal year ended December 31, 2011, prepay an aggregate principal amount of
Loans equal to the excess (if any) of (A) 75% of Excess Cash Flow for the fiscal
year covered by such financial statements over (B) the

 

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aggregate principal amount of Loans prepaid pursuant to Section 2.03(a)(i) (such
prepayments to be applied as set forth in clause (v) below); provided that for
each such fiscal year, the percentage of Excess Cash Flow specified in clause
(A) above will be 50% if Holdings’ Consolidated Leverage Ratio as of the end of
the fiscal year or period covered by such financial statements is less than
1.00:1.0.

(ii) If Holdings or any of its Subsidiaries Disposes of any property (other than
any Disposition of any property permitted by Section 7.05(a), (b), (c), (d),
(e) or (f)) which results in the realization by such Person of Net Cash
Proceeds, the Borrowers shall prepay an aggregate principal amount of Loans
equal to 100% of such Net Cash Proceeds promptly upon receipt thereof by such
Person (such prepayments to be applied as set forth in clause (v) below);
provided, however, that, with respect to any Net Cash Proceeds realized under a
Disposition described in this Section 2.03(b)(ii), at the election of the
Borrowers (as notified by the Borrowers to the Administrative Agent on or prior
to the date of such Disposition), and so long as no Default shall have occurred
and be continuing, Holdings or such Subsidiary may reinvest all or any portion
of such Net Cash Proceeds in operating assets so long as within 365 days after
the receipt of such Net Cash Proceeds, such purchase shall have been
consummated; and provided further, however, that any Net Cash Proceeds not so
reinvested shall be promptly applied to the prepayment of the Loans as set forth
in this Section 2.03(b)(ii).

(iii) Upon the incurrence or issuance by Holdings or any of its Subsidiaries of
any Indebtedness (other than Indebtedness expressly permitted to be incurred or
issued pursuant to Section 7.02), the Borrowers shall prepay an aggregate
principal amount of Loans equal to 100% of all Net Cash Proceeds received
therefrom promptly upon receipt thereof by Holdings or such Subsidiary (such
prepayments to be applied as set forth in clause (v) below).

(iv) Upon any Extraordinary Receipt received by or paid to or for the account of
Holdings or any of its Subsidiaries, and not otherwise included in clause
(ii) or (iii) of this Section 2.03(b), the Borrowers shall prepay an aggregate
principal amount of Loans equal to 100% of all Net Cash Proceeds received
therefrom promptly upon receipt thereof by Holdings or such Subsidiary (such
prepayments to be applied as set forth in clause (v) below); provided, however,
that with respect to any proceeds of insurance, condemnation awards (or payments
in lieu thereof) or indemnity payments, at the election of the Borrowers (as
notified by the Borrowers to the Administrative Agent on or prior to the date of
receipt of such insurance proceeds, condemnation awards or indemnity payments),
and so long as no Default shall have occurred and be continuing, Holdings or
such Subsidiary may reinvest all or any portion of such proceeds in operating
assets so long as within 365 days after the receipt of such proceeds, such
purchase shall have been consummated; and provided, further, however, that any
cash proceeds not so applied shall be promptly applied to the prepayment of the
Loans as set forth in this Section 2.03(b)(iv).

(v) Each prepayment of Loans pursuant to the foregoing provisions of this
Section 2.03(b) shall be applied to the principal repayment installments thereof
in inverse order of maturity.

(vi) Notwithstanding any of the other provisions of clause (ii), (iii) or
(iv) of this Section 2.03(b), so long as no Default shall have occurred and be
continuing, if, on any date on which a prepayment would otherwise be required to
be made pursuant to clause (ii), (iii) or (iv) of this Section 2.03(b), the
aggregate amount of Net Cash Proceeds required by such clause to be applied to
prepay Loans on such date is less than or equal to $2,500,000, the Borrower may
defer such prepayment until the first date on which the aggregate amount of Net
Cash Proceeds or other amounts otherwise required under clause (ii) or (iv) of
this Section 2.03(b) to be applied to prepay Loans exceeds $2,500,000. Upon the
occurrence of a Default during any such deferral period, the Borrowers shall
promptly prepay the Loans in the amount of all Net Cash Proceeds received by the
Borrowers and other amounts, as applicable, that are required to be applied to
prepay Loans under this Section 2.03(b) (without giving effect to the first and
second sentences of this clause (vi)) but which have not previously been so
applied.

2.04. Termination of Commitments. The Aggregate Commitments shall be
automatically and permanently reduced to zero on the Closing Date.

 

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2.05. Repayment of Loans. The Borrowers shall repay to the Lenders 2.50% of the
aggregate principal amount of all Loans initially issued hereunder on the last
Business Day of each March, June, September and December, commencing on
March 31, 2011 (which amounts shall be reduced as a result of the application of
prepayments in accordance with the order of priority set forth in Section 2.03)
and the remaining principal amount of the Loans outstanding on the Maturity
Date.

2.06. Interest. Subject to the provisions of Section 2.06(b), (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.

(a) Notwithstanding the foregoing, if (x) any principal of or interest on any
Loan or any fee or other amount payable by the Borrowers hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, (y) any of
the Events of Default set forth in clause (f) or (g) of Section 8.01 has
occurred and is continuing or (z) any other Event of Default has occurred and is
continuing and, only with respect to this subclause (z), if requested by the
Required Lenders and following prior written notice to the Borrower from the
Administrative Agent, then the Obligations shall, to the extent permitted by
applicable law, bear interest, after as well as before judgment, at a rate per
annum equal to the Default Rate.

(b) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

2.07. Fees.

(a) Closing Fee. The Borrowers agree to pay on the Closing Date to each Lender
party to this Agreement as a Lender on the Closing Date, as fee compensation for
the funding of such Lender’s Loan, a closing fee in an amount equal to 3.00% of
the stated principal amount of such Lender’s Loan, payable to each Lender out of
the proceeds of such Lender’s Loan as and when funded on the Closing Date. Such
closing fee will be in all respects fully earned, due and payable upon the
funding of the Loans on the Closing Date and non-refundable and non-creditable
thereafter.

(b) Other Fees.

(i) The Borrowers shall pay to the Administrative Agent fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

(ii) The Borrowers shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

2.08. Computation of Interest and Fees. All computations of interest for Base
Rate Loans including Base Rate Loans determined by reference to the Eurodollar
Rate shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.10(a),
bear interest for one day. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.

 

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2.09. Evidence of Debt. The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender and by
the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions made by
the Lenders to the Borrowers and the interest and payments thereon. Any failure
to so record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Borrowers hereunder to pay any amount owing with
respect to the Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of the
Administrative Agent in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error. Upon the
request of any Lender made through the Administrative Agent, the Borrowers shall
execute and deliver to such Lender (through the Administrative Agent) a Note,
which shall evidence such Lender’s Loans in addition to such accounts or
records. Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

2.10. Payments Generally; Administrative Agent’s Clawback.

(a) General. All payments to be made by the Borrowers shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise provided herein, all payments by the Borrowers hereunder
shall be made to the Administrative Agent, for the account of the respective
Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than 2:00 p.m. on the date
specified herein. The Administrative Agent will promptly distribute to each
Lender its Applicable Percentage (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Lender’s
Lending Office. All payments received by the Administrative Agent after 2:00
p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by the Borrowers shall come due on a day other than a Business Day, payment
shall be made on the next following Business Day, and such extension of time
shall be reflected on computing interest or fees, as the case may be.

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing)
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such
Lender has made such share available in accordance with and at the time required
by Section 2.02) and may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrowers severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any administrative, processing or similar
fees customarily charged by the Administrative Agent in connection with the
foregoing, and (B) in the case of a payment to be made by the Borrowers, the
interest rate applicable to Base Rate Loans. If the Borrowers and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrowers the amount of such interest paid by the Borrowers for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender’s Loan included in
such Borrowing. Any payment by the Borrowers shall be without prejudice to any
claim the Borrowers may have against a Lender that shall have failed to make
such payment to the Administrative Agent.

(c) Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrowers prior to the
time at which any payment is due to the Administrative Agent for the account of
the Lenders hereunder that the Borrowers will not make such payment, the
Administrative Agent may assume that the Borrowers have made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Appropriate Lenders the amount due. In such event, if the
Borrowers have not in fact made such payment, then each of the Appropriate
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender, in immediately available

 

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funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

(d) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrowers by the Administrative Agent because the
conditions to the Credit Extension set forth in Article IV are not satisfied or
waived in accordance with the terms hereof, the Administrative Agent shall
return such funds (in like funds as received from such Lender) to such Lender,
without interest.

(e) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 10.04(c) are several and not
joint. The failure of any Lender to make any Loan or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan, to
purchase its participation or to make its payment under Section 10.04(c).

(f) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

(g) Insufficient Funds. If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

2.11. Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of
(a) Obligations due and payable to such Lender hereunder and under the other
Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such Lender
at such time to (ii) the aggregate amount of the Obligations due and payable to
all Lenders hereunder and under the other Loan Documents at such time) of
payments on account of the Obligations due and payable to all Lenders hereunder
and under the other Loan Documents at such time obtained by all the Lenders at
such time or (b) Obligations owing (but not due and payable) to such Lender
hereunder and under the other Loan Documents at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
owing (but not due and payable) to such Lender at such time to (ii) the
aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the other Loan Documents at such time obtained by all of the
Lenders at such time then the Lender receiving such greater proportion shall
(a) notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of Obligations then due and payable to the Lenders or owing (but not due and
payable) to the Lenders, as the case may be, provided that:

(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest; and

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by or on behalf of the Borrowers pursuant to and in accordance with
the express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than an assignment to any Borrower
or any of its Affiliates (as to which the provisions of this Section shall
apply).

 

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Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Loan Party in the
amount of such participation.

2.12. Increase in Commitments.

(a) Borrower Request. The Borrower may by written notice to the Administrative
Agent elect to request the establishment of one or more new term loan
commitments (each, an “Incremental Term Facility”) and/or revolving credit
facilities (each an “Incremental Revolving Credit Facility”; the Incremental
Term Facility and the Incremental Revolving Facility are collectively referred
to as “Incremental Facilities”), by an aggregate amount not in excess of $40.0
million. Each such notice shall specify (i) the date (each, an “Increase
Effective Date”) on which the Borrower proposes that the Incremental Facilities
shall be effective, which shall be a date not less than 10 Business Days after
the date on which such notice is delivered to the Administrative Agent; provided
that any existing Lender approached to provide all or a portion of such increase
may elect or decline, in its sole discretion, to provide such Incremental
Facility.

(b) Conditions. The Incremental Facilities shall become effective on the
Increase Effective Date; provided that:

(i) each of the conditions set forth in Section 4.02 shall be satisfied;

(ii) no Default shall have occurred and be continuing or would result from the
borrowings to be made on the Increase Effective Date;

(iii) the representations and warranties contained in Article V and the other
Loan Documents are true and correct in all material respects on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall have
been true and correct in all material respects as of such earlier date, and
except that for purposes of this Section 2.12(b), the representations and
warranties contained in Section 5.05(a) and Section 5.05(b) shall be deemed to
refer to the most recent financial statements furnished pursuant to subsections
(a) and (b), respectively, of Section 6.01;

(iv) on a Pro Forma Basis (assuming, in the case of Incremental Revolving Credit
Facility, that such Incremental Revolving Credit Facility is fully drawn), the
Borrower shall be in compliance with each of the covenants set forth in
Section 7.11 and the Consolidated Senior Secured Leverage Ratio shall be less
than 1.50:1.00 as of the end of the latest fiscal quarter for which internal
financial statements are available; and

(v) the Borrower shall deliver or cause to be delivered officer’s certificates
and legal opinions of the type delivered on the Closing Date to the extent
reasonably requested by, and in form and substance reasonably satisfactory to,
the Administrative Agent.

(c) Terms of New Loans and Commitments. The terms and provisions of Loans made
pursuant to Incremental Facilities shall be as follows:

(i) terms and provisions of Incremental Term Loans shall be, except as otherwise
set forth herein or in the Increase Joinder, identical to the Loans (it being
understood that Incremental Term Loans may be a part of the Loans) and to the
extent that the terms and provisions of Incremental Term Loans are not identical
to the Loans (except to the extent permitted by clause (iii), (iv) or (v) below)
they shall be reasonably satisfactory to the Administrative Agent; provided that
in any event the Incremental Term Loans must comply with clauses (iii), (iv) and
(v) below;

 

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(ii) the terms and provisions of Revolving Credit Loans shall be set forth in an
amendment to this Agreement;

(iii) the weighted average life to maturity of any Incremental Term Loans shall
be no shorter than the remaining weighted average life to maturity of the then
existing Loans;

(iv) the maturity date of Incremental Term Loans (the “Incremental Term Loan
Maturity Date”) shall not be earlier than the then Latest Maturity Date;

(v) the Applicable Rate for Incremental Term Loans shall be determined by the
Borrower and the Lenders of the Incremental Term Loans; provided that in the
event that the Applicable Rate for any Incremental Term Loan is greater than the
Applicable Rate for the Loans by more than 25 basis points, then the Applicable
Rate for the Loans shall be increased to the extent necessary so that the
Applicable Rate for the Incremental Term Loans is 25 basis points higher than
the Applicable Rate for the Loans; provided, further, that in determining the
Applicable Rate applicable to the Loans and the Incremental Term Loans,
(x) original issue discount (“OID”) or upfront fees (which shall be deemed to
constitute like amounts of OID) payable by the Borrower to the Lenders of the
Loans or the Incremental Term Loans in the primary syndication thereof shall be
included (with OID being equated to interest based on an assumed four-year life
to maturity), (y) customary arrangement or commitment fees payable to the
Arranger (or its respective affiliates) in connection with the Loans or to one
or more arrangers (or their affiliates) of the Incremental Term Loans shall be
excluded, and (z) if the LIBOR or Base Rate “floor” for the Incremental Term
Loans is greater than the LIBOR or Base Rate “floor,” respectively, for the
existing Loans, the difference between such floor for the Incremental Term Loans
and the existing Loans shall be equated to an increase in the Applicable Rate
for purposes of this clause (v).

The Incremental Commitments shall be effected by a joinder agreement (the
“Increase Joinder”) executed by the Borrower, the Administrative Agent and each
Lender making such Incremental Commitment, in form and substance reasonably
satisfactory to each of them. Notwithstanding the provisions of Section 10.01,
the Increase Joinder may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Administrative Agent, to effect
the provisions of this Section 2.12. In addition, unless otherwise specifically
provided herein, all references in Loan Documents or Loans shall be deemed,
unless the context otherwise requires, to include references to Revolving Credit
Loans and Incremental Term Loans, respectively, made pursuant to this Agreement.
This Section 2.12 shall supersede any provisions in Section 2.11 or
Section 10.01 to the contrary.

(d) Making of New Term Loans. On any Increase Effective Date on which new
Commitments for Loans are effective, subject to the satisfaction of the
foregoing terms and conditions, each Lender of such new Commitment shall make a
Loan to the Borrowers in an amount equal to its new Commitment.

(e) Equal and Ratable Benefit. The Loans and Commitments established pursuant to
this paragraph shall constitute Loans and Commitments under, and shall be
entitled to all the benefits afforded by, this Agreement and the other Loan
Documents, and shall, without limiting the foregoing, benefit equally and
ratably from the Guarantees and security interests created by the Collateral
Documents, except that the new Loans may be subordinated in right of payment or
the Liens securing the new Loans may be subordinated, in each case, to the
extent set forth in the Increase Joinder. The Loan Parties shall take any
actions reasonably required by the Administrative Agent to ensure and/or
demonstrate that the Lien and security interests granted by the Collateral
Documents continue to be perfected under the UCC or otherwise after giving
effect to the establishment of any such class of Loans or any such new
Commitments.

2.13. Joint and Several Liability.

(a) Each Borrower agrees that it is jointly and severally liable to the
Administrative Agent and the Lenders for the payment of all Obligations arising
under this Agreement, and that such liability is independent of the obligations
of the other Borrowers. Each obligation, promise, covenant, representation and
warranty in this Agreement shall be deemed to have been made by, and be binding
upon, each Borrower, unless this Agreement expressly provides otherwise. The
Administrative Agent and the Lenders may bring an action against any Borrower,
whether or not an action is brought against the other Borrowers.

 

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(b) Each Borrower agrees that any release which may be given by the
Administrative Agent or the Lenders to the other Borrowers or any Guarantor will
not release such Borrower from its Obligations under this Agreement.

(c) Each Borrower waives, to the extent it may effectively do so under
applicable Law, any right to assert against the Administrative Agent or the
Lenders any defense, setoff or counterclaim it may have against the other
Borrowers arising hereunder, or claims which such Borrower may have against the
other Borrowers arising hereunder.

(d) Each Borrower waives, to the extent it may effectively do so under
applicable Law, any defense it may have against the Administrative Agent or the
Lenders by reason of any other Borrower’s defense, disability, or release from
liability, except payment in full of the outstanding Obligations. The
Administrative Agent and the Lenders can exercise their rights against each
Borrower even if any other Borrower or any other person no longer is liable
because of a statute of limitations or for other reasons.

(e) Each Borrower agrees that it is solely responsible for keeping itself
informed as to the financial condition of the other Borrowers and of all
circumstances which bear upon the risk of nonpayment. Each Borrower waives, to
the extent it may effectively do so under applicable Law, any right it may have
to require the Administrative Agent and the Lenders to disclose to such Borrower
any information which the Administrative Agent and the Lenders may now or
hereafter acquire concerning the financial condition of the other Borrowers.

(f) Each Borrower waives, to the extent it may effectively do so under
applicable Law, all rights to notices of default or nonperformance by any other
Borrower under this Agreement. Each Borrower further waives, to the extent it
may effectively do so under applicable Law, all rights to notices of the
existence or the creation of new Indebtedness by any other Borrower and all
rights to any other notices to any party liable on any of the credit extended
under this Agreement.

(g) The Borrowers represent and warrant to the Administrative Agent and the
Lenders that each will derive benefit, directly and indirectly, from the
collective administration and availability of credit under this Agreement. The
Borrowers agree that the Administrative Agent and the Lenders will not be
required to inquire as to the disposition by any Borrower of funds disbursed in
accordance with the terms of this Agreement.

(h) Until all outstanding Obligations of the Borrowers to the Administrative
Agent and the Lenders under this Agreement have been paid in full and the
Commitments of the Lenders under this Agreement have been terminated, each
Borrower, to the extent it may effectively do so under applicable Law,
(a) waives any right of subrogation, reimbursement, indemnification and
contribution (contractual, statutory or otherwise), including without
limitation, any claim or right of subrogation under the Bankruptcy Code (Title
11, United States Code) or any successor statute, which such Borrower may now or
hereafter have against any other Borrower with respect to the Obligations
incurred under this Agreement; and (b) waives any right to enforce any remedy
which the Administrative Agent or the Lenders now have or may hereafter have
against any other Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by the Administrative Agent
or the Lenders.

(i) Each Borrower waives any right to require the Administrative Agent and the
Lenders to proceed against any other Borrower or any other person; proceed
against or exhaust any security; or pursue any other remedy. Further, each
Borrower consents to the taking of, or failure to take, any action by the
Administrative Agent and the Lenders which might in any manner or to any extent
vary the risks of the Borrowers under this Agreement or which, but for this
provision, might operate as a discharge of the Borrowers.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01. Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of
Taxes.

(i) Any and all payments by or on account of any obligation of any Loan Party
hereunder or under any other Loan Document shall, to the extent permitted by
applicable Laws, be made free and clear of and without deduction or withholding
of any Taxes. If, however, applicable Laws require the applicable withholding
agent to withhold or deduct any Tax (as determined in the good faith discretion
of the applicable withholding agent), such Tax shall be withheld or deducted in
accordance with such Laws.

(ii) If the applicable withholding agent shall be required to withhold or deduct
any Taxes from any payment, then (A) the applicable withholding agent shall
withhold or make such deductions as are required, (B) the applicable withholding
agent shall timely pay the full amount withheld or deducted to the relevant
Governmental Authority in accordance with applicable Laws and (C) to the extent
that the withholding or deduction is made on account of Indemnified Taxes or
Other Taxes, the sum payable by the applicable Loan Party shall be increased as
necessary so that after any required withholding and deductions have been made
(including withholding and deductions applicable to additional sums payable
under this Section 3.01), the applicable Lender, as the case may be, receives an
amount equal to the sum it would have received had no such withholding or
deduction been made.

(b) Payment of Other Taxes. Without limiting the provisions of subsection
(a) above, the relevant Loan Party shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable Laws.

(c) Indemnification. Without limiting the provisions of subsection (a) or
(b) above, the Borrowers shall, jointly and severally, indemnify the
Administrative Agent and each Lender, and shall make payment in respect thereof
within 10 days after a written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this
Section 3.01) payable by the Administrative Agent or such Lender, as the case
may be, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate
setting forth the amount of any such payment or liability and the reasons for
such payment or liability in reasonable detail delivered to the Borrowers by a
Lender (with a copy to the Administrative Agent), or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be prima facie evidence of the
matters set forth therein.

(d) Evidence of Payments. As soon as practicable after any payment of any
Indemnified Taxes or Other Taxes by any Loan Party to a Governmental Authority
as provided in this Section 3.01, the Borrowers shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of any return
required by applicable Laws to report such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.

(e) Status of Lenders; Tax Documentation. Each Lender shall deliver to the
Borrowers and to the Administrative Agent, whenever reasonably requested by the
Borrowers or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable Laws and such other reasonably requested
information as will permit the Borrowers or the Administrative Agent, as the
case may be, (A) to determine whether or not payments made hereunder or under
any other Loan Document are subject to Taxes,(B) to determine, if applicable,
the required rate of withholding or deduction, and (C) to establish such
Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of any payments to be made to such Lender by the
Borrowers pursuant to any Loan Document or otherwise to establish such Lender’s
status for withholding tax purposes in an applicable jurisdiction.

Without limiting the generality of the foregoing:

(1) Any Lender that is a “United States person” within the meaning of
Section 7701(a)(30) of the Code shall deliver to the Borrowers and the
Administrative Agent executed originals of IRS Form W-9 or such other
documentation or information prescribed by applicable Laws or reasonably
requested by the Borrowers or the Administrative Agent as will enable the
Borrowers or the Administrative Agent, as the case may be, to determine whether
or not such Lender is subject to backup withholding or information reporting
requirements; and

 

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(2) Each Foreign Lender that is entitled under the Code or any applicable treaty
to an exemption from or reduction of U.S. federal withholding tax with respect
to any payments hereunder or under any other Loan Document shall deliver to the
Borrowers and the Administrative Agent (in such number of signed originals as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter (1) if any documentation previously delivered has expired or become
obsolete, invalid or incorrect, or (2) upon the request of the Borrowers or the
Administrative Agent), whichever of the following is applicable:

(I) IRS Form W-8BEN (or any successor thereto) claiming eligibility for benefits
of an income tax treaty to which the United States is a party,

(II) IRS Form W-8ECI (or any successor thereto),

(III) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Sections 881(c) or 871(h) of the Code (the “Portfolio
Interest Exemption”), (x) a certificate substantially in the form of Exhibit H
(a “Tax Status Certificate”), to the effect that such Foreign Lender is not
(A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrowers within the meaning of Section 881(c)(3)(B)
of the Code, or (C) a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code, and that no payments to be received in
connection with the Loan Documents is effectively connected with such Lender’s
conduct of a U.S. trade or business and (y) duly completed and executed original
copies of IRS Form W-8BEN (or any successor thereto),

(IV) where such Lender is a partnership (for U.S. federal income tax purposes)
or otherwise not a beneficial owner (e.g. where such Lender has sold a typical
participation), IRS Form W-8IMY (or any successor thereto) and all required
supporting documentation (including, where one or more of the underlying
beneficial owner(s) is claiming the benefits of the Portfolio Interest
Exemption, a Tax Status Certificate of such beneficial owner(s) (provided that,
if the Foreign Lender is a partnership and not a participating Lender, the Tax
Status Certificate from the beneficial owner(s) shall be provided by the Foreign
Lender on the beneficial owner’s behalf)), or

(V) any other form prescribed by applicable Laws as a basis for claiming
exemption from or a reduction in United States federal withholding tax together
with such supplementary documentation as may be prescribed by applicable Laws to
permit the Borrowers or the Administrative Agent to determine the withholding or
deduction required to be made.

Each Lender shall promptly notify the Borrowers and the Administrative Agent of
any change in circumstances which would modify or render invalid any
documentation previously provided and provide any appropriate updated
documentation.

Notwithstanding anything to the contrary in this Section 3.01(e), no Lender
shall be required to deliver any documentation that it is not legally eligible
to deliver.

(f) Treatment of Certain Refunds. If the Administrative Agent or any Lender
determines, in its good faith sole discretion, that it has received a refund of
any Indemnified Taxes or Other Taxes as to which it has been indemnified by any
Loan Party or with respect to which any Loan Party has paid additional amounts
pursuant to this Section 3.01, it shall pay to the Borrowers an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by such Loan Party under this Section 3.01 with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) incurred by the Administrative Agent or
such Lender, as the case may be, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund;
provided that each Borrower, upon the request of the Administrative Agent or
such Lender, agrees to repay the amount paid over to any Loan Party (plus any
penalties,

 

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interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, or such Lender, in the event the Administrative Agent or
such Lender is required to repay such amount to such Governmental Authority.
This subsection shall not be construed to require the Administrative Agent or
any Lender to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrowers or any other Person.

(g) Payment by Administrative Agent. For purposes of this Section 3.01, any
payment made by the Administrative Agent to a Lender shall be deemed to be a
payment made by the Borrowers to such Lender.

3.02. Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Loans whose interest
is determined by reference to the Eurodollar Rate, or to determine or charge
interest rates based upon the Eurodollar Rate, or any Governmental Authority has
imposed material restrictions on the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the London interbank market, then, on
notice thereof by such Lender to the Borrowers through the Administrative Agent,
(i) any obligation of such Lender to make or continue Eurodollar Rate Loans or
to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and
(ii) if such notice asserts the illegality of such Lender making or maintaining
Base Rate Loans the interest rate on which is determined by reference to the
Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate
Loans of such Lender shall, if necessary to avoid such illegality, be determined
by the Administrative Agent without reference to the Eurodollar Rate component
of the Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrowers that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, (x) the Borrowers shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans
(the interest rate on which Base Rate Loans of such Lender shall, if necessary
to avoid such illegality, be determined by the Administrative Agent without
reference to the Eurodollar Rate component of the Base Rate), either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such
notice asserts the illegality of such Lender determining or charging interest
rates based upon the Eurodollar Rate, the Administrative Agent shall during the
period of such suspension compute the Base Rate applicable to such Lender
without reference to the Eurodollar Rate component thereof until the
Administrative Agent is advised in writing by such Lender that it is no longer
illegal for such Lender to determine or charge interest rates based upon the
Eurodollar Rate. Upon any such prepayment or conversion, the Borrowers shall
also pay accrued interest on the amount so prepaid or converted.

3.03. Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or in
connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan, the Administrative Agent will promptly so notify the
Borrowers and each Lender. Thereafter, (x) the obligation of the Lenders to make
or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a
determination described in the preceding sentence with respect to the Eurodollar
Rate component of the Base Rate, the utilization of the Eurodollar Rate
component in determining the Base Rate shall be suspended, in each case until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrowers may revoke any pending
request for a Borrowing of, conversion to or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of, or conversion to, Base Rate Loans in the amount
specified therein.

3.04. Increased Costs; Reserves on Eurodollar Rate Loans.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.04(e));

 

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(ii) subject any Lender to any Tax of any kind whatsoever with respect to this
Agreement or any Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.01 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Rate Loans made by such
Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan the interest on which is determined by
reference to the Eurodollar Rate (or, in the case of clause (ii) above, any
Loan), or of maintaining its obligation to make any such Loan, or to reduce the
amount of any sum received or receivable by such Lender (whether of principal,
interest or any other amount) then, upon request of such Lender, the Borrowers
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered; provided,
however, that in the case of any increase resulting from clause (iii) above, the
Borrowers may (x) if the affected Eurodollar Rate Loan is then being made
pursuant to a Borrowing, cancel such Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrowers receive any such demand from such Lender or (y) if the
affected Eurodollar Rate Loan is then outstanding, upon at least three Business
Days’ notice to the Administrative Agent, required the affected Lender to
convert such Eurodollar Rate Loan into a Base Rate Loan, subject to the
requirements of Section 3.05 to the extent applicable.

(b) Capital Requirements. If any Lender determines that any Change in Law
affecting such Lender or any Lending Office of such Lender or such Lender’s
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender’s capital or on the capital
of such Lender’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender to a level below
that which such Lender or such Lender’s holding company could have achieved but
for such Change in Law (taking into consideration such Lender’s policies and the
policies of such Lender’s holding company with respect to capital adequacy),
then from time to time the Borrowers will pay to such Lender such additional
amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.

(c) Certificates for Reimbursement. A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrowers shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.

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

(e) Reserves on Eurodollar Rate Loans. The Borrowers shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits,
additional interest on the unpaid principal amount of each Eurodollar Rate Loan
equal to the actual costs of such reserves allocated to such Loan by such Lender
(as determined by such Lender in good faith, which determination shall be
conclusive absent manifest error), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrowers shall have
received at least 10 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender. If a Lender fails to give
notice 10 days prior to the relevant Interest Payment Date, such additional
interest shall be due and payable 10 days from receipt of such notice.

 

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3.05. Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any actual loss, cost or
expense incurred by it as a result of:

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

(b) any failure by the Borrowers (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrowers; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrowers pursuant
to Section 10.13;

including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained; provided, that the Borrowers shall
not be required to compensate any Lender pursuant to this Section 3.05 for any
loss, cost or expense incurred more than nine months prior to the date that such
Lender notifies the Borrower, in writing, of such loss or expense and such
Lender’s intention to claim compensation thereof. The Borrowers shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the offshore interbank market for such
currency for a comparable amount and for a comparable period, whether or not
such Eurodollar Rate Loan was in fact so funded.

3.06. Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.01, or if any Lender gives a notice pursuant to
Section 3.02, then such Lender shall, as applicable, use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01 or 3.04, as the case may be, or eliminate the need for the notice
pursuant to Section 3.02, as applicable, and (ii) in each case, would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender; provided that nothing in this Section 3.06(a)
shall affect or postpone any of the obligations of the Borrowers or the rights
of such Lender pursuant to Sections 3.01, 3.02 or 3.04. The Borrowers hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, the Borrowers may replace such Lender in accordance with
Section 10.13.

3.07. Survival. All of the Borrowers’ obligations under this Article III shall
survive termination of the Aggregate Commitments, repayment of all other
Obligations hereunder, and resignation of the Administrative Agent.

 

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ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01. Conditions of Initial Credit Extension. The obligation of each Lender to
make its initial Credit Extension hereunder is subject to satisfaction of the
following conditions precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, the Guaranty and the Perfection
Certificate, sufficient in number for distribution to the Administrative Agent
and the Borrowers;

(ii) a Note executed by each Borrower in favor of each Lender requesting a Note;

(iii) a security agreement, in substantially the form of Exhibit F (together
with each other security agreement and security agreement supplement delivered
pursuant to Section 6.12, in each case as amended, the “Security Agreement”),
duly executed by each Loan Party, together with:

(A) certificates representing the Pledged Securities referred to therein
accompanied by undated stock powers executed in blank in the case of equity and
instruments indorsed in blank in the case of debt,

(B) copies of UCC, United States Patent and Trademark Office and United States
Copyright Office, tax and judgment lien searches, bankruptcy and pending lawsuit
searches or equivalent reports or searches, each of a recent date listing all
effective financing statements, lien notices or comparable documents that name
any Loan Party as debtor and that are filed in those state and county
jurisdictions in which any Loan Party is organized or maintains its principal
place of business and such other searches that are required by the Perfection
Certificate or that the Administrative Agent deems necessary or appropriate,
none of which encumber the Collateral covered or intended to be covered by the
Collateral Documents (other than Permitted Liens or any other Liens acceptable
to the Administrative Agent),

(C) the Deposit Account Control Agreements and the Securities Account Control
Agreements, in each case referred to in the Security Agreement and duly executed
by the appropriate parties, and

(D) evidence that all other action that the Administrative Agent may deem
necessary or desirable in order to perfect the Liens created under the Security
Agreement has been taken (including receipt of duly executed payoff letters and
UCC-3 termination statements);

(iv) an intellectual property security agreement for each of copyrights, patents
and trademarks (in each case, if applicable) in substantially the forms attached
to the Security Agreement (the “Intellectual Property Security Agreement”), duly
executed by each Loan Party;

(v) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party or is to be a party;

(vi) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each Loan Party is validly existing, in

 

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good standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so would
not reasonably be expected to have a Material Adverse Effect;

(vii) a favorable opinion of Weil, Gotshal & Manges LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, in form and
substance reasonably satisfactory to the Administrative Agent;

(viii) a certificate signed by a Responsible Officer of each Borrower certifying
that (A) that the conditions specified in Sections 4.02(a) and (b) have been
satisfied and (B) there has been no event or circumstance since the date of the
Audited Financial Statements that has had or could be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect;

(ix) a business plan and budget of Holdings and its Subsidiaries on a
consolidated basis, including forecasts prepared by management of Holdings, of
consolidated balance sheets and statements of income or operations and cash
flows of Holdings and its Subsidiaries on a quarterly basis for the first year
following the Closing Date;

(x) a certificate attesting to the Solvency of the Borrowers and their
respective Subsidiaries, taken as a whole, before and after giving effect to the
Transaction and the incurrence of the Indebtedness related thereto, from the
chief financial officer of Holdings in the form of Exhibit I;

(xi) certificates of insurance, naming the Administrative Agent, on behalf of
the Lenders, as an additional insured or loss payee, as the case may be, under
all insurance policies maintained with respect to the assets and properties of
the Loan Parties that constitute Collateral;

(xii) evidence that (A) the Existing First Lien Credit Agreement, (B) the
Existing Second Lien Credit Agreement and (C) the Existing Third Lien Note
Purchase Agreement have been, or concurrently with the Closing Date are being,
terminated and all Liens securing obligations under each such Existing Credit
Agreement have been, or concurrently with the Closing Date are being, released;

(xiii) all documentation and other information that may be required by the
Lenders in order to enable compliance with applicable “know your customer” and
anti-money laundering rules and regulations, including the United States PATRIOT
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
“Patriot Act”) including the information described in Section 10.18; and

(xiv) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent reasonably may require.

(b) (i) All fees and expenses required to be paid to the Administrative Agent
and the Arrangers on or before the Closing Date shall have been paid and
(ii) all fees required to be paid to the Lenders on or before the Closing Date
shall have been paid.

(c) Unless waived by the Administrative Agent, the Borrowers shall have paid all
reasonable fees, charges and disbursements of counsel to the Administrative
Agent (directly to such counsel if requested by the Administrative Agent) to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).

Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.

 

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4.02. Conditions to All Credit Extensions. The obligation of each Lender to
honor any Committed Loan Notice (other than a Committed Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Eurodollar
Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrowers and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct in all material respects (except that any
representation and warranty that is already qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects, subject to
such qualification) on and as of the date of such Credit Extension, except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct in all material
respects (except that any representation and warranty that is already qualified
as to “materiality” or “Material Adverse Effect” shall be true and correct in
all respects, subject to such qualification) as of such earlier date, and except
that for purposes of this Section 4.02, the representations and warranties
contained in Sections 5.05(a) and (b) shall be deemed to refer to the most
recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) The Administrative Agent shall have received a Committed Loan Notice in
accordance with the requirements hereof.

Each Committed Loan Notice (other than a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrowers shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants to the Administrative Agent and the
Lenders that:

5.01. Existence, Qualification and Power. Each Loan Party and each of its
Subsidiaries (a) is duly organized or formed, validly existing and, as
applicable, in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite corporate power and
authority and all requisite governmental licenses, authorizations, consents and
approvals to (i) own or lease its assets and carry on its business and
(ii) execute, deliver and perform its obligations under the Loan Documents to
which it is a party and consummate the Transaction, and (c) is duly qualified
and is licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

5.02. Authorization; No Contravention. The execution, delivery and performance
by each Loan Party of each Loan Document to which such Person is or is to be a
party have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Person or its property is subject;
or (c) violate any Law; except, in each case referred to in clause (b), to the
extent such conflict, violation or breach could not reasonably be expected to
have a Material Adverse Effect.

 

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5.03. Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or (except as
contemplated by Section 5.21) filing with, any Governmental Authority or any
other Person is necessary or required in connection with (a) the execution,
delivery or performance by, or enforcement against, any Loan Party of this
Agreement or any other Loan Document, or for the consummation of the
Transaction, (b) the grant by any Loan Party of the Liens granted by it pursuant
to the Collateral Documents, (c) the perfection or maintenance of the Liens
created under the Collateral Documents (including the first priority nature
thereof) or (d) the exercise by the Administrative Agent or any Lender of its
rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents except (i) those obtained or made on or
prior to the Closing Date and (ii) those the failure of which to obtain or make
could not reasonably be expected to have a Material Adverse Effect. All
applicable waiting periods in connection with the Transaction have expired
without any action having been taken by any Governmental Authority restraining,
preventing or imposing materially adverse conditions upon the Transaction or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.

5.04. Binding Effect. This Agreement has been, and each other Loan Document,
when delivered hereunder, will have been, duly executed and delivered by each
Loan Party that is party thereto. This Agreement constitutes, and each other
Loan Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).

5.05. Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of Holdings
and its Subsidiaries as of the date thereof and their results of operations for
the period covered thereby in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein; and (iii) show all material indebtedness and other liabilities, direct
or contingent, of Holdings and its Subsidiaries as of the date thereof,
including liabilities for Taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of Holdings and its Subsidiaries
dated September 30, 2010, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal quarter ended on
that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present the financial condition of Holdings and its
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (i) and (ii), to the
absence of footnotes and to normal year-end audit adjustments.

(c) Since the date of the Audited Financial Statements, there has been no event
or circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.

(d) The consolidated forecasted balance sheet, statements of income and cash
flows of Holdings and its Subsidiaries delivered to the Lenders prior to the
Closing Date or delivered pursuant to Section 6.01(c) were prepared in good
faith based on assumptions stated therein, which assumptions were fair in light
of the conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrowers’ best estimate of its future
financial condition and performance.

5.06. Litigation. Except as set forth on Schedule 5.06, there are no actions,
suits, proceedings, claims or disputes pending or, to the knowledge of the
Responsible Officers of Holdings after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against Holdings or any of its Subsidiaries or
against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement, any other Loan Document or the consummation of the
Transaction, or (b) either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.

 

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5.07. No Default. Neither any Loan Party nor any Subsidiary thereof is in
default under or with respect to, or a party to, any Contractual Obligation that
could, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. No Default has occurred and is continuing or would
result from the consummation of the Transaction.

5.08. Ownership of Property; Liens. Each Loan Party and each of its Subsidiaries
has title in fee simple to, or a valid leasehold interest in, all real property
necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.09. Environmental Compliance. Except as could not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect:
(i) the Loan Parties and their respective Subsidiaries and their respective
operations and facilities are in compliance with applicable Environmental Laws,
which compliance includes, without limitation, having obtained and being in
compliance with any permits, licenses or other governmental authorizations or
approvals, and having made all filings and provided all financial assurances and
notices, required for the ownership and operation of the business, properties
and facilities of the Loan Parties and their respective Subsidiaries under
applicable Environmental Laws, and compliance with the terms and conditions
thereof; (ii) none of the Loan Parties or their respective Subsidiaries has
received any written communication that alleges that any Loan Party or any of
their respective Subsidiaries are in violation of any Environmental Law;
(iii) there is no claim, action or cause of action filed with a court or
governmental authority, no investigation with respect to which any Loan Party
has received written notice, and no written notice by any person or entity
alleging actual or potential liability on the part of any Loan Party or any of
their respective Subsidiaries based on or pursuant to any Environmental Law
pending or, to the Loan Parties’ or their Subsidiaries’ knowledge, threatened
against any of them; (iv) none of the Loan Parties or their respective
Subsidiaries is conducting or paying for, in whole or in part, any
investigation, response or other corrective action pursuant to any Environmental
Law at any site or facility, nor is any of them subject or a party to any order,
judgment, decree, contract or agreement which imposes any obligation or
liability under any Environmental Law; and (v) there are no actions, conditions
or occurrences, including, without limitation, the Release or threatened Release
of any Hazardous Materials, that could reasonably be expected to result in a
violation of or liability under any Environmental Law on the part of the Loan
Parties and their respective Subsidiaries.

5.10. Insurance. The properties of Holdings and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of
Holdings, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Holdings or the applicable Subsidiary
operates.

5.11. Taxes. Each of the Borrowers and each of their respective Subsidiaries has
timely filed all federal, state, foreign and other tax returns and reports
required to be filed, and has timely paid all federal, state, foreign and other
Taxes (whether or not shown on a tax return), including in its capacity as a
withholding agent, levied or imposed upon it or its properties, income or assets
otherwise due and payable, except (a) those Taxes which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP or (b) where the
failure to file or pay could not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. There is no proposed material
tax deficiency assessment or other claim against, and no material tax audit with
respect to, the Borrowers or any of their respective Subsidiaries. Except as
could not be reasonably expected to, individually or in the aggregate, result in
a Material Adverse Effect, neither the Borrowers nor any of their respective
Subsidiaries has ever “participated” in a “listed transaction” within the
meaning of Treasury Regulation Section 1.6011-4.

5.12. ERISA Compliance.

(a) Except as could not reasonably be expected to have a Material Adverse
Effect, each Plan is in compliance with the applicable provisions of ERISA, the
Code and other Federal or state laws. Each Pension Plan that is intended to be a
qualified plan under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service to the effect that the
form of such Pension Plan is qualified under Section 401(a) of the Code or an
application for such a letter is currently being processed by the Internal
Revenue Service. To the knowledge of the Responsible Officers of Holdings,
nothing has occurred that would prevent or cause the loss of such tax-qualified
status.

 

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(b) There are no pending or, to the knowledge of the Responsible Officers of
Holdings, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan (other than routine claims for benefits)
that could reasonably be expected to have a Material Adverse Effect.

(c) Except as could not reasonably be expected to result in a Material Adverse
Effect, (i) no ERISA Event has occurred or is reasonably expected to occur and
(ii) neither any Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or Section 4212(c) of ERISA.

(d) Except as could not reasonably be expected to result in a Material Adverse
Effect, with respect to each employee benefit plan maintained or contributed to
by any Loan Party or any Subsidiary of any Loan Party that is not subject to
United States law (a “Foreign Plan”):

(i) each such Foreign Plan is in compliance with applicable law and the terms of
the Foreign Plan;

(ii) solely to the extent that any Foreign Plan is required to be funded (or
satisfy any applicable funding requirements of the jurisdiction under which such
Foreign Plan is governed) by any Loan Party, the fair market value of the assets
of each funded Foreign Plan, the liability of each insurer for any Foreign Plan
funded through insurance or the book reserve established for any Foreign Plan,
together with any accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the date hereof, with respect to all
current and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations in
accordance with applicable generally accepted accounting principles; and

(iii) each Foreign Plan required to be registered has been registered and has
been maintained in good standing with applicable regulatory authorities.

5.13. Subsidiaries; Equity Interests; Loan Parties. (a) As of the Closing Date,
Schedules 1(a), 5(a) and 5(b) of the Perfection Certificate set forth the name
and jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the number of each class of its Equity Interests authorized, and the
number outstanding, on the Closing Date, the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the Closing Date and the percentage of each class of Equity Interests
owned by any Loan Party, (b) all Equity Interests of Vonage America and each
other Subsidiary of Holdings are duly and validly issued and are fully paid and
non-assessable, are owned by Holdings, directly or indirectly through Wholly
Owned Subsidiaries, (c) each Loan Party is the record and beneficial owner of,
and has good and marketable title to, the Equity Interests pledged by it under
the Security Agreement, free of any and all Liens, rights or claims of other
Persons, except the security interest created by the Security Agreement and
(d) there are no outstanding subscriptions, options, warrants, calls, rights or
other agreements or commitments (other than stock options granted to employees
or directors and directors’ qualifying shares) of any nature relating to any
Equity Interest of Vonage America or any of the other Subsidiaries of Holdings,
except as created by the Loan Documents. No consent of any Person including any
other general or limited partner, any other member of a limited liability
company, any other shareholder or any other trust beneficiary is necessary in
connection with the creation, perfection or first priority status of the
security interest of the Administrative Agent in any Equity Interests pledged to
the Administrative Agent for the benefit of the Secured Parties under the
Security Agreement or the exercise by the Administrative Agent of the voting or
other rights provided for in the Security Agreement or the exercise of remedies
in respect thereof.

5.14. Margin Regulations; Investment Company Act.

(a) The Borrowers are not engaged and will not engage, principally or as one of
its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock in violation of such
regulation.

 

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(b) No Loan Party, any Person Controlling any Loan Party, or any Subsidiary of a
Loan Party is or is required to be registered as an “investment company” under
the Investment Company Act of 1940.

5.15. Disclosure. Holdings has disclosed to the Administrative Agent all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
factual information (taken as a whole) furnished (whether in writing or orally)
by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this
Agreement or delivered hereunder or under any other Loan Document (in each case
as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein (taken as a whole), in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrowers represent only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time prepared (it being understood that projections are
subject to uncertainties and contingencies, many of which are beyond the control
of the Borrowers, and that no assurance can be given that such projections will
be realized).

5.16. Compliance with Laws. Each Loan Party and each Subsidiary thereof is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

5.17. Intellectual Property/Proprietary Rights, Etc.

(a) To the knowledge of the Borrowers and their respective Subsidiaries, each of
the Borrowers and their respective Subsidiaries owns, or is licensed, or
otherwise possesses legally enforceable rights, to use, sell or license, as
applicable, all Proprietary Rights used or held for use in the business as
currently conducted of each such Person. Schedules 7(a), (b) and (c) to the
Perfection Certificate contains a complete and correct list of all of the
Borrowers’ and each of their respective Subsidiaries’ patents and patent
applications; trademark and service mark registrations and applications for
registration thereof; domain names; and copyright registrations and applications
for registration thereof. The Borrowers and each of their respective
Subsidiaries have licenses for all Commercial Software used in their respective
businesses, except in such instances in which the failure to have such licenses,
either individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

(b) Neither of the Borrowers nor any of their respective Subsidiaries is in
violation, in any material respect, of any license, sublicense or the agreement
pursuant to which the Borrowers or any of their respective Subsidiaries are
authorized to use, sell, distribute or license any Proprietary Right and such
license, sublicense and agreements will continue to be legal, valid, binding
enforceable and in full force and effect following the Closing Date, except in
such instances in which such violation, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

(c) Except for Commercial Software and Embedded Products for which the Borrowers
and their respective Subsidiaries have valid non-exclusive licenses or have
otherwise been validly granted the rights to use such Commercial Software and
Embedded Products, the Borrowers and their respective Subsidiaries are the sole
and exclusive owners of the Proprietary Rights that the Borrowers and their
respective Subsidiaries purport to own (free and clear of any Liens, other than
Permitted Liens).

(d) Except as set forth on Schedule 5.17(d), to the knowledge of the Borrowers
and their respective Subsidiaries, except in such instances, either individually
or in the aggregate, as could not reasonably be expected to have a Material
Adverse Effect, (i) none of the Proprietary Rights used in the business of the
Borrowers and/or their respective Subsidiaries infringes on any intellectual
property rights of any third Persons, (ii) no Person is infringing any of the
Proprietary Rights of the Borrowers and their respective Subsidiaries and
(iii) no Person has made a claim of ownership over any Proprietary Right adverse
to the ownership interest of the Borrowers or any of their respective
Subsidiaries. The Borrowers and their respective Subsidiaries have not received
a written demand, claim, notice or inquiry from any Person in respect of
registered intellectual property owned by a Borrower or one of its respective
Subsidiaries which challenges or threatens to challenge the validity of such
registered intellectual property that has not been resolved.

 

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(e) All software products sold or licensed by the Borrowers and their respective
Subsidiaries to customers or used in providing services to customers (i) were
authored by employees of the Borrowers and their respective Subsidiaries within
the scope of their employment and the Borrowers and their respective
Subsidiaries thus were the original author pursuant to the work made for hire
doctrine, (ii) are software products that the Borrowers and their respective
Subsidiaries license from providers thereof that purport to have the right to
grant such licenses and the Borrowers and their respective Subsidiaries have no
reason to believe such providers do not have the right to grant such licenses
with appropriate rights to resell or sublicense to third parties or use in
providing services to customers, as applicable, (iii) were authored by third
party contractors who have agreed in writing to assign all of their rights in
such software products to the Borrowers and their respective Subsidiaries, or
(iv) were authored by third party contractors who have granted rights in such
software products to the Borrowers and their respective Subsidiaries such that
the Borrowers and their respective Subsidiaries can operate their business as
currently conducted and proposed to be conducted. Each of the Borrowers
represent and warrant that the Borrowers and/or each of their respective
Subsidiaries have taken commercially reasonable steps and implemented measures
to safeguard the secrecy and confidentiality of any material trade secrets
within the Borrowers’ and their respective Subsidiaries’ Proprietary Rights.

(f) (i) The Proprietary Rights listed on Schedule 7.01(b) are not material to
the operation of the Borrowers or any of their respective Subsidiaries and (ii)
to the extent that any of the Proprietary Rights of the Borrowers or any of
their respective Subsidiaries are material to the operation of one of their
respective Affiliates, Borrowers and their respective Subsidiaries have the
right to grant such Affiliates the rights to use such Proprietary Rights.

5.18. Solvency. Each Borrower and its Subsidiaries, taken as a whole, is and
after giving effect to the Transaction and the incurrence of the Indebtedness
and obligations being incurred in connection herewith will be, individually and
together with its Subsidiaries on a consolidated basis, Solvent.

5.19. Casualty, Etc. Neither the businesses nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) that, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

5.20. Labor Matters. Except as could not reasonably be expected to result in a
Material Adverse Effect (i) there are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrower or any of its
Subsidiaries as of the Closing Date, and (ii) neither of the Borrowers nor any
Subsidiary has suffered any strikes, walkouts, work stoppages or other material
labor difficulty within the last three years prior to the Closing Date.

5.21. Collateral Documents. The provisions of the Collateral Documents are
effective to create in favor of the Administrative Agent for the benefit of the
Secured Parties a legal, valid and enforceable first priority Lien (subject to
Permitted Liens) on all right, title and interest of the respective Loan Parties
in the Collateral described therein, subject to the exceptions provided herein
or therein. Except for filings completed prior to the Closing Date or as
otherwise contemplated hereby and by the Collateral Documents, no filing or
other action will be necessary to perfect or protect such Liens.

5.22. Anti-Terrorism Laws.

(a) No Loan Party, none of its Subsidiaries and, to the knowledge of the
Responsible Officers of each Loan Party, none of its Affiliates and none of the
respective officers, directors, brokers or agents of such Loan Party, such
Subsidiary or Affiliate (i) has violated or is in violation of Anti-Terrorism
Laws or (ii) has engaged or engages in any transaction, investment, undertaking
or activity that conceals the identity, source or destination of the proceeds
from any category of offenses designated in the “Forty Recommendations” and
“Nine Special Recommendations” published by the Organization for Economic
Co-operation and Development’s Financial Action Task Force on Money Laundering.

 

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(b) No Loan Party, none of its Subsidiaries and, to the knowledge of the
Responsible Officers of each Loan Party, none of its Affiliates and none of the
respective officers, directors, brokers or agents of such Loan Party, such
Subsidiary or such Affiliate that is acting or benefiting in any capacity in
connection with the Loans is an Embargoed Person.

(c) No Loan Party, none of its Subsidiaries and, to the knowledge of the
Responsible Officers of each Loan Party, none of its Affiliates and none of the
respective officers, directors, brokers or agents of such Loan Party, such
Subsidiary or such Affiliate acting or benefiting in any capacity in connection
with the Loans (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Embargoed
Person, (ii) deals in, or otherwise engages in any transaction related to, any
property or interests in property blocked pursuant to any Anti-Terrorism Law or
(iii) engages in or conspires to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.

5.23. Regulatory Matters.

(a) The business of the Borrowers and their Subsidiaries is being conducted in
compliance with (a) applicable requirements under the federal Communications Act
of 1934, as amended, and with all relevant rules, regulations and published
policies of the Federal Communications Commission (the “FCC”); and (b) any
applicable state communications laws and regulations of a state public service
commission or similar state governmental authority (“State PUC”) (collectively,
the “Communications Laws”), except as would not have a Material Adverse Effect.
The Borrowers and their Subsidiaries possess all registrations, licenses,
authorizations, and certifications issued by the FCC and State PUCs necessary to
conduct their respective businesses as currently conducted. All licenses and
authorizations issued by the FCC and State PUCs required for the operations of
the Borrowers and their Subsidiaries are in full force and effect (the “FCC
Licenses” and the “State PUC Licenses”).

(b) There is no condition, event or occurrence existing, nor, to the best of the
Borrowers’ knowledge, is there any proceeding being conducted or threatened by
any Governmental Authority, which would reasonably be expected to cause the
termination, suspension, cancellation, or nonrenewal of any of the FCC Licenses
or State Licenses, or the imposition of any penalty or fine by any Governmental
Authority with respect to any of the FCC Licenses, State Licenses, the Borrowers
or their Subsidiaries, in each case which would have a Material Adverse Effect.

(c) There is no (a) outstanding decree, decision, judgment, or order that has
been issued by the FCC or State PUCs against the Borrowers, any of their
Subsidiaries, the FCC Licenses or the State Licenses or (b) notice of violation,
order to show cause, complaint, investigation or other administrative or
judicial proceeding pending or, to the best of the Borrowers’ knowledge,
threatened by or before the FCC or State PUC against the Borrowers, any of their
Subsidiaries, the FCC Licenses or the State PUC Licenses that, in the case of
each of (a) or (b) above, could reasonably be expected to have a Material
Adverse Effect.

(d) No consent, approval, authorization, order or waiver of, or filing with, the
FCC or State PUCs is required under the Communications Laws to be obtained or
made by the Borrowers or any of their Subsidiaries for the execution, delivery
and performance of this Agreement or the transactions contemplated herein and
therein.

(e) The Borrowers and their Subsidiaries each have filed with the FCC and State
PUCs all necessary reports, documents, instruments, information, or applications
required to be filed pursuant to the Communications Laws, and have paid all fees
required to be paid pursuant to the Communications Laws, except as would not
have a Material Adverse Effect.

 

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ARTICLE VI

AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder (other than contingent indemnification obligations) shall
remain unpaid or unsatisfied, each of the Borrowers shall, and shall (except in
the case of the covenants set forth in Sections 6.01, 6.02, 6.03, 6.11, 6.14 and
6.17) cause each Subsidiary to:

6.01. Financial Statements. Deliver to the Administrative Agent, in form and
detail reasonably satisfactory to the Administrative Agent:

(a) as soon as available, but in any event within 90 days after the end of each
fiscal year of Holdings (or such earlier date on which Holdings is required to
file a Form 10-K under the Exchange Act), a consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income or operations, changes in shareholders’
equity, and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of BDO USA, LLP or such other
independent registered accounting firm of nationally recognized standing
reasonably acceptable to the Administrative Agent, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit;

(b) as soon as available, but in any event within 45 days after the end of each
of the first three fiscal quarters of each fiscal year of Holdings (or such
earlier date on which Holdings is required to file a Form 10-Q under the
Exchange Act), a consolidated balance sheet of Holdings and its Subsidiaries as
at the end of such fiscal quarter, and the related consolidated statements of
income or operations, changes in shareholders’ equity, and cash flows for such
fiscal quarter and for the portion of Holdings’ fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, such consolidated statements to
be certified by the chief executive officer, chief financial officer, treasurer
or controller of Holdings as fairly presenting the financial condition, results
of operations, shareholders’ equity and cash flows of Holdings and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes; and

(c) as soon as available, but in any event no later than 60 days after the end
of each fiscal year of Holdings, an annual business plan and budget of Holdings
and its Subsidiaries on a consolidated basis, including forecasts prepared by
management of Holdings, in form reasonably satisfactory to the Administrative
Agent, of consolidated balance sheets and statements of income or operations and
cash flows of Holdings and its Subsidiaries on a quarterly basis for the
immediately following fiscal year (including the fiscal year in which the
Maturity Date occurs).

As to any information contained in materials furnished pursuant to
Section 6.02(d), the Borrowers shall not be separately required to furnish such
information under Section 6.01(a) or (b) above, but the foregoing shall not be
in derogation of the obligation of the Borrowers to furnish the information and
materials described in Sections 6.01(a) and (b) above at the times specified
therein.

6.02. Certificates; Other Information. Deliver to the Administrative Agent, in
form and detail reasonably satisfactory to the Administrative Agent:

(a) concurrently with the delivery of the annual financial statements referred
to in Section 6.01(a), a certificate of its independent registered accounting
firm certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth in Section 7.11 (it being understood that such
independent registered accounting firm will limit its statements to compliance
with such covenants at fiscal year end and not at the end of the previous three
fiscal quarters) or, if any such Default shall exist, stating the nature and
status of such event;

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of Holdings (which delivery may, unless the Administrative
Agent, or a Lender requests executed originals, be by electronic communication
including fax or email and shall be deemed to be an original authentic
counterpart thereof for all purposes);

 

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(c) promptly after any request by the Administrative Agent or any Lender through
the Administrative Agent, copies of any detailed audit reports, management
letters or recommendations submitted to the board of directors (or the audit
committee of the board of directors) of any Loan Party by independent
accountants in connection with the accounts or books of any Loan Party or any of
its Subsidiaries, or any audit of any of them;

(d) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
(in their capacity as stockholders and not any other capacity) of Holdings, and
copies of all annual, regular, periodic and special reports and registration
statements which Holdings may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national
securities exchange, and in any case not otherwise required to be delivered to
the Administrative Agent pursuant hereto;

(e) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders;

(f) upon the Administrative Agent’s request, which request shall not be made
more than once during each fiscal year of Holdings, a report summarizing any
changes in the insurance coverage (specifying type, amount and carrier) in
effect for each Loan Party and its Subsidiaries since the preceding report
delivered pursuant to this section and containing such additional information as
the Administrative Agent, or any Lender through the Administrative Agent, may
reasonably specify;

(g) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof;

(h) not later than five Business Days after receipt thereof by any Loan Party or
any Subsidiary thereof, copies of all notices, requests and other documents
(including amendments, waivers and other modifications) so received under or
pursuant to any instrument, indenture, loan or credit or similar agreement
regarding or related to any breach or default by any party thereto or any other
event that would materially impair the value of the interests or the rights of
any Loan Party or otherwise have a Material Adverse Effect and, from time to
time upon request by the Administrative Agent, such instruments, indentures and
loan and credit and similar agreements as the Administrative Agent may
reasonably request;

(i) promptly after the assertion or occurrence thereof, notice of any action or
proceeding against or of any noncompliance by any Loan Party or any of its
Subsidiaries with any Environmental Law or Environmental Permit that would
reasonably be expected to have a Material Adverse Effect;

(j) concurrently with the delivery of financial statements pursuant to
Section 6.01(a), a Perfection Certificate Supplement (or a certificate
confirming that there has been no change in information since the date of the
Perfection Certificate or latest Perfection Certificate Supplement), signed by a
Responsible Officer of each Borrower and in a form reasonably satisfactory to
the Administrative Agent; and

(k) promptly, such additional information regarding the business, financial,
legal or corporate affairs of any Loan Party or any Subsidiary thereof, or
compliance with the terms of the Loan Documents, as the Administrative Agent, or
any Lender through the Administrative Agent, may from time to time reasonably
request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrowers post such documents, or provides a link thereto on the Borrowers’
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrowers’ behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that (i) the Borrowers shall deliver paper
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the Administrative Agent for itself or any Lender upon its reasonable request to
the Borrowers to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrowers shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. The Administrative Agent shall have no obligation to
request the delivery of or to maintain paper copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrowers with any such request by a Lender for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrowers or their respective
Affiliates, or the respective securities of any of the foregoing, and who may be
engaged in investment and other market-related activities with respect to such
Persons’ securities. The Borrowers hereby agree that they will use commercially
reasonable efforts to identify that portion of the Borrower Materials that may
be distributed to the Public Lenders and that (w) all such Borrower Materials
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall
mean that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to
have authorized the Administrative Agent, the Arrangers and the Lenders to treat
such Borrower Materials as not containing any material non-public information
(although it may be sensitive and proprietary) with respect to the Borrowers or
their securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Side Information”; and (z) the
Administrative Agent and the Arrangers shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Side Information.”

6.03. Notices. Promptly notify the Administrative Agent:

(a) of the occurrence of any Default, with such notice describing with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached;

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including, to the extent such matters would
reasonably be expected to have a Material Adverse Effect, (i) breach or
non-performance of, or any default under, a Contractual Obligation of Holdings
or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between Holdings or any Subsidiary and any Governmental Authority; or
(iii) the commencement of, or any material development in, any litigation or
proceeding affecting Holdings or any Subsidiary, including pursuant to any
applicable Environmental Laws;

(c) of the occurrence of any ERISA Event;

(d) of any material change in accounting policies or financial reporting
practices by any Loan Party or any Subsidiary thereof; and

(e) of the (i) occurrence of any Disposition of property or assets for which the
Borrowers are required to make a mandatory prepayment pursuant to
Section 2.03(b)(ii), (ii) incurrence or issuance of any Indebtedness for which
the Borrowers are required to make a mandatory prepayment pursuant to
Section 2.03(b)(iii), and (iii) receipt of any Extraordinary Receipt for which
the Borrowers are required to make a mandatory prepayment pursuant to
Section 2.03(b)(iv).

Each notice pursuant to Section 6.03 (other than Section 6.03(e)) shall be
accompanied by a statement of a Responsible Officer of each Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.

 

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6.04. Payment of Obligations.

(a) Pay and discharge as the same shall become due and payable, except to the
extent that the failure to pay or discharge the same could not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect,
all its obligations and liabilities including, (i) all Tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by the Borrowers or such Subsidiary; (ii) all lawful claims which, if unpaid,
would by law become a Lien upon its property; and (iii) all Indebtedness, as and
when due and payable, but subject to any subordination provisions contained in
any instrument or agreement evidencing such Indebtedness.

(b) Timely and correctly file all Tax returns required to be filed by it, except
for failures to file that could not reasonably be expected to, individually or
in the aggregate, have a Material Adverse Effect.

6.05. Preservation of Existence, Etc.

(a) Preserve, renew and maintain in full force and effect its legal existence
and good standing under the Laws of the jurisdiction of its organization except
in a transaction permitted by Section 7.04 or 7.05; provided, however, that
Holdings and its Subsidiaries may consummate any merger or consolidation
permitted under Section 7.04; (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and
(c) preserve or renew all of its registered patents, trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.

6.06. Maintenance of Properties. Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted and (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

6.07. Maintenance of Insurance.

(a) Maintain with financially sound and reputable insurance companies not
Affiliates of any Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons and providing for not less than 30 days’ prior notice to the
Administrative Agent of termination, lapse or cancellation of such insurance.
All such insurance shall name the Administrative Agent as additional insured or
loss payee, as applicable.

(b) If any portion of any Mortgaged Property is at any time located in an area
identified by the Federal Emergency Management Agency (or any successor agency)
as a Special Flood Hazard Area with respect to which flood insurance has been
made available under the National Flood Insurance Act of 1968 (as now or
hereafter in effect or successor act thereto), then the Borrowers shall, or
shall cause each Loan Party to (i) maintain or cause to be maintained with a
financially sound and reputable insurer, flood insurance in an amount and
otherwise sufficient to comply with all applicable rules and regulations
promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the
Administrative Agent evidence of such compliance in form and substance
reasonably acceptable to the Administrative Agent.

6.08. Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or
(b) the failure to comply therewith would not reasonably be expected to have a
Material Adverse Effect.

 

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6.09. Books and Records. Maintain proper books of record and account, in which
full, true and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving the assets and
business of the Borrowers or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrowers or such Subsidiary, as the case may be.

6.10. Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent, twice each year, to visit and inspect any of its
properties, examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrowers and at such reasonable times during normal
business hours, upon reasonable advance notice of not less than 10 Business Days
to the Borrowers; provided, however, that when an Event of Default exists the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrowers at any time during normal business hours and without advance notice.

6.11. Use of Proceeds. Use the proceeds of the Borrowings to finance the
Transaction and for general corporate purposes not in contravention of any Law
or of any Loan Document.

6.12. Covenant to Guarantee Obligations and Give Security.

(a) With respect to any property acquired after the date hereof (other than
property referred to in Section 6.12(c)) by any Loan Party that is intended to
be subject to the Lien created by any of the Collateral Documents but is not so
subject, promptly (and in any event within 45 days (or such longer period as the
Administrative Agent may approve) after the acquisition thereof) (i) execute and
deliver to the Administrative Agent such amendments or supplements to the
relevant Collateral Documents or such other documents as the Administrative
Agent shall deem necessary or advisable to grant to the Administrative Agent,
for its benefit and for the benefit of the other Secured Parties, a Lien on such
property subject to no Liens other than Permitted Liens and (ii) take all
actions necessary or advisable in the reasonable opinion of the Administrative
Agent to cause such Lien to be duly perfected to the extent required by such
Collateral Document in accordance with all applicable Requirements of Law,
including the filing of financing statements in such jurisdictions as may be
reasonably requested by the Administrative Agent. The Borrowers shall otherwise
take such actions and execute and/or deliver to the Administrative Agent such
documents as the Administrative Agent shall require to confirm the validity,
perfection and priority of the Lien of the Collateral Documents on such
after-acquired properties.

(b) With respect to any Person that is or becomes a Subsidiary after the date
hereof (i) deliver to the Administrative Agent the certificates, if any,
representing all of the Equity Interests of such Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, and all intercompany notes owing from such Subsidiary to any Loan
Party together with instruments of transfer executed and delivered in blank by a
duly authorized officer of such Loan Party and (ii) cause such Subsidiary
promptly (and in any event within 30 days (or such longer period as the
Administrative Agent may approve) after such Person becomes a Subsidiary) (A) to
execute a joinder agreement or such comparable documentation to become a
Guarantor and party to the Security Agreement, substantially in the form annexed
thereto and (B) to take all actions necessary or advisable in the reasonable
opinion of the Administrative Agent to cause the Lien created by the Security
Agreement to be duly perfected to the extent required by such agreement in
accordance with all applicable Requirements of Law, including the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent. Notwithstanding the foregoing, (1) in no event shall more
than 65% of the total outstanding Voting Stock in any first-tier Foreign
Subsidiary be required to be so pledged and (2) no Foreign Subsidiary that is or
becomes a Subsidiary after the date hereof shall be required to take the actions
specified in clause (ii) of this Section 6.12(b).

(c) The Borrowers may, at their option, designate a Foreign Subsidiary to be a
Guarantor. If any Foreign Subsidiary becomes a Guarantor after the date hereof,
in addition to the requirements to deliver Equity Interests of such Foreign
Subsidiary pursuant to Section 6.12(b), such Foreign Subsidiary shall (i) grant
a Lien to the Administrative Agent for the benefit of the Secured Parties on all
or substantially all of its assets to the same extent as if it was a Domestic
Subsidiary, (ii) enter into a security agreement to be governed by applicable
local laws and reasonably satisfactory to the Administrative Agent,
(iii) deliver opinions, certificates and any other documents or

 

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information as may be reasonably requested by the Administrative Agent and
(iv) take all other actions necessary or advisable in the reasonable opinion of
the Administrative Agent to cause the Lien created by such security documents to
be duly perfected to extent required by such security documents in accordance
with all applicable Requirements of Law.

(d) Promptly grant to the Administrative Agent, within 60 days (or such longer
period as the Administrative Agent may approve) of the acquisition thereof, a
security interest in and Mortgage on each Real Property owned in fee by such
Loan Party as is acquired by such Loan Party after the Closing Date and that,
together with any improvements thereon, individually has a fair market value of
at least $1,000,000, as additional security for the Obligations (unless the
subject property is already mortgaged to a third party to the extent permitted
by Section 7.01). Such Mortgages shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent and
shall constitute valid and enforceable perfected Liens subject only to Liens
acceptable to the Administrative Agent. The Mortgages or instruments related
thereto shall be duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens in favor
of the Administrative Agent required to be granted pursuant to the Mortgages and
all taxes, fees and other charges payable in connection therewith shall be paid
in full. Such Loan Party shall otherwise take such actions and execute and/or
deliver to the Administrative Agent such documents as the Administrative Agent
shall require to confirm the validity, perfection and priority of the Lien of
any existing Mortgage or new Mortgage against such after-acquired Real Property
(including a “Life-of-Loan” Federal Emergency Management Agency Standard Flood
Hazard Determination (together with notice relating thereto), title policy, a
survey and local counsel opinion (in form and substance reasonably satisfactory
to the Administrative Agent) in respect of such Mortgage).

6.13. Compliance with Environmental Laws. Except where the failure to do so
could not be reasonably expected to have a Material Adverse Effect, comply, and
cause all lessees operating or occupying properties owned or leased by it to
comply, in all material respects, with all applicable Environmental Laws and
Environmental Permits; obtain and renew all Environmental Permits necessary for
its operations and properties; and conduct any investigation, study, sampling
and testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials at, on, under or
emanating from any properties owned or leased by it, as required and in
accordance with the requirements of all Environmental Laws; provided, however,
that neither the Borrowers nor any of their respective Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances in accordance with GAAP.

6.14. Maintenance of Ratings. Use commercially reasonable efforts to cause the
Loans and each Borrower’s corporate credit to continue to be rated by S&P and
Moody’s (but not to maintain a specific rating).

6.15. Further Assurances. Promptly, upon the reasonable request of the
Administrative Agent, at the Borrowers’ expense:

(a) execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Collateral Documents or
otherwise deemed by the Administrative Agent reasonably necessary or desirable
for the continued validity, perfection and priority of the Liens on the
Collateral covered thereby subject to no other Liens except as permitted by the
applicable Collateral Document, or obtain any consents or waivers as may be
necessary or appropriate in connection therewith;

(b) deliver or cause to be delivered to the Administrative Agent from time to
time such other documentation, consents, authorizations, approvals and orders in
form and substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent shall reasonably deem necessary to perfect or maintain the
Liens on the Collateral pursuant to the Collateral Documents; and

(c) upon the exercise by the Administrative Agent or any Lender of any power,
right, privilege or remedy pursuant to any Loan Document which requires any
consent, approval, registration, qualification or authorization of any
Governmental Authority, execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent or such
Lender may require.

 

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If the Administrative Agent or the Required Lenders determine that they are
required by a Requirement of Law to have appraisals prepared in respect of the
Real Property of any Loan Party constituting Collateral, the Borrowers shall
provide to the Administrative Agent appraisals that satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of FIRREA and are
otherwise in form and substance reasonably satisfactory to the Administrative
Agent.

6.16. Compliance with Terms of Leaseholds. Make all payments and otherwise
perform all obligations in respect of all leases of real property to which any
Borrower or any of its Subsidiaries is a party, keep such leases in full force
and effect and not allow such leases to lapse or be terminated or any rights to
renew such leases to be forfeited or cancelled (except for any such actions by
the Borrowers or any of their respective Subsidiaries in the ordinary course of
business), notify the Administrative Agent of any default by any party with
respect to such leases and cooperate with the Administrative Agent in all
respects to cure any such default, and cause each of its Subsidiaries to do so,
except, in any case, where the failure to do so, either individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect.

6.17. Reserved.

6.18. Information Regarding Collateral and Loan Documents. Not effect any change
(i) in any Loan Party’s legal name, (ii) in the location of any Loan Party’s
chief executive office, (iii) in any Loan Party’s identity or organizational
structure, (iv) in any Loan Party’s Federal Taxpayer Identification Number or
organizational identification number, if any, or (v) in any Loan Party’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given the
Administrative Agent not less than 30 days’ prior written notice (in the form of
a certificate by a Responsible Officer), or such lesser notice period agreed to
by the Administrative Agent, of its intention so to do, clearly describing such
change and providing such other information in connection therewith as the
Administrative Agent may reasonably request and (B) it shall have taken all
action reasonably requested by the Administrative Agent to maintain the
perfection and priority of the security interest of the Administrative Agent for
the benefit of the Secured Parties in the Collateral, if applicable. Each Loan
Party agrees to promptly provide the Administrative Agent with certified
Organization Documents reflecting any of the changes described in the preceding
sentence. Each Loan Party also agrees to promptly notify the Administrative
Agent of any change in the location of any office in which it maintains books or
records relating to Collateral owned by it or any office or facility at which
Collateral with a value in excess of (i) in the case of network infrastructure,
$2.5 million and (ii) in the case of all other Collateral, $1.5 million, is
located (including the establishment of any such new office or facility), other
than changes in location to a Mortgaged Property.

6.19. Post Closing Matters. Within sixty (60) days of the Closing Date (unless
waived or extended in the Administrative Agent’s sole discretion), use its
commercially reasonable efforts to deliver or cause to be delivered to the
Administrative Agent, the Deposit Account Control Agreements identified on
Schedule 6.19.

ARTICLE VII

NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder (other than contingent indemnification obligations) shall
remain unpaid or unsatisfied, neither of the Borrowers shall, nor shall they
permit any Subsidiary to, directly or indirectly:

7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any jurisdiction
a financing statement that names Holdings or any of its Subsidiaries as debtor,
or assign any accounts or other right to receive income, other than the
following (the “Permitted Liens”):

(a) Liens pursuant to any Loan Document;

(b) Liens existing on the date hereof and listed on Schedule 7.01(b) and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased
except as contemplated by Section 7.02(d), (iii) the direct or any contingent
obligor with respect thereto is not changed (other than as a result of
intercompany transactions permitted pursuant to Section 7.04), and (iv) any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.02(d);

 

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(c) Liens for Taxes not yet due or Liens for Taxes which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP, and if such proceedings have the effect of preventing the forfeiture or
sale of the property subject to any such Lien;

(d) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen, repairmen, suppliers or other like Liens imposed by law or arising
in the ordinary course of business which are not overdue for a period of more
than 30 days or which are being contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;

(e) pledges or deposits in the ordinary course of business in connection with
tax obligations, workers’ compensation, unemployment insurance and other social
security legislation;

(f) Liens or deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.01(h);

(i) Liens securing Indebtedness permitted under Section 7.02(f); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost of the property being acquired on the date of acquisition;

(j) Liens on property of a Person existing at the time such Person is merged
into or consolidated with Holdings or any Subsidiary of Holdings or becomes a
Subsidiary of Holdings; provided that such Liens were not created in
contemplation of such merger, consolidation or Investment and do not extend to
any assets other than those of the Person merged into or consolidated with
Holdings or such Subsidiary or acquired by Holdings or such Subsidiary, and the
applicable Indebtedness secured by such Lien is permitted under Section 7.02(g);

(k) the interests of lessors under operating leases;

(l) non-exclusive licenses of patents, trademarks, copyrights and other
intellectual property rights in the ordinary course of business;

(m) rights of setoff or bankers’ Liens upon deposits of cash in favor of banks
or other depository institutions, solely to the extent incurred in connection
with the maintenance of such deposit accounts in the ordinary course of
business;

(n) other Liens securing Indebtedness outstanding in an aggregate principal
amount not to exceed $10.0 million; provided that no such Lien shall extend to
or cover any Collateral;

(o) in the case of Real Property leased by any Loan Party as tenant, Liens to
which the fee interest (or any superior interest) in such Real Property is
subject;

(p) Liens on cash and Cash Equivalents, in an aggregate amount not to exceed
$15.0 million, securing Indebtedness permitted under Sections 7.02(a) or (i);
and

(q) the replacement, extension or renewal of any Lien permitted by clauses (a)
through (p) above upon or in the same property theretofore subject thereto or
the replacement, extension or renewal (without increase in the amount (except as
permitted under Section 7.02(d)) or change in any direct or contingent obligor)
of the Indebtedness secured thereby.

 

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7.02. Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

(a) obligations (contingent or otherwise) existing or arising under any Swap
Contract, provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with fluctuations in interest rates, utility rates or foreign
exchange rates and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;

(b) Indebtedness of a Subsidiary of Holdings owed to Holdings or a Subsidiary of
Holdings, which Indebtedness shall (i) in the case of Indebtedness owed to a
Loan Party, be represented in writing by an intercompany note that constitutes
“Pledged Securities” under the Security Agreement, (ii) in the case of
Indebtedness owed by a Loan Party, be subordinated to the Facility on customary
terms and (iii) be otherwise permitted under the provisions of Section 7.03;

(c) Indebtedness under the Loan Documents;

(d) Indebtedness outstanding on the date hereof and listed on Schedule 7.02(d)
and any refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and the direct or any
contingent obligor with respect thereto is not changed, as a result of or in
connection with such refinancing, refunding, renewal or extension (other than as
a result of intercompany transactions permitted pursuant to Section 7.04); and
provided, still further, that the terms relating to principal amount,
amortization, maturity, collateral (if any) and subordination (if any), and
other material terms taken as a whole, of any such refinancing, refunding,
renewing or extending Indebtedness, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable in any material
respect to the Loan Parties or the Lenders than the terms of any agreement or
instrument governing the Indebtedness being refinanced, refunded, renewed or
extended and the interest rate applicable to any such refinancing, refunding,
renewing or extending Indebtedness does not exceed the then applicable market
interest rate;

(e) Guarantees of a Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of any other Borrower or any other Guarantor;

(f) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding under this clause
(f) shall not exceed $15.0 million so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom;

(g) Indebtedness of any Person that becomes a Subsidiary of Holdings after the
date hereof in accordance with the terms of Section 7.03(g), which Indebtedness
is existing at the time such Person becomes a Subsidiary of Holdings (other than
Indebtedness incurred solely in contemplation of such Person’s becoming a
Subsidiary of Holdings);

(h) endorsement of instruments or other payment items for deposit in the
ordinary course of business;

(i) Indebtedness of Loan Parties (including letters of credit) in an aggregate
principal amount not to exceed $35.0 million at any time outstanding so long as
no Default or Event of Default shall have occurred and be continuing or would
result therefrom;

(j) Indebtedness consisting of obligations of Holdings or any of its
Subsidiaries under deferred compensation or other similar arrangements incurred
by such Person in the ordinary course of business or in connection with the
transactions contemplated hereunder or any Investment expressly permitted
hereunder; and

 

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(k) Indebtedness incurred by Holding or any Subsidiary constituting
reimbursement obligations issued or created in the ordinary course of business,
including in respect of workers compensation claims, health, disability or other
employee benefits or self insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation claim, health,
disability or other employee benefits; provided that any reimbursement
obligations in respect thereof are reimbursed within thirty (30) days following
the date thereof.

7.03. Investments. Make any Investments, except:

(a) Investments held by Holdings and its Subsidiaries in the form of Cash
Equivalents;

(b) advances to officers, directors and employees of Holdings and its
Subsidiaries in an aggregate amount not to exceed $1.5 million at any time
outstanding (i) for travel, entertainment, relocation and analogous ordinary
business purposes or (ii) in connection with such Person’s purchase of Equity
Interests of Holdings;

(c) (i) Investments by Holdings and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof; provided that if such Investments
are in the form of intercompany Indebtedness owed to a Loan Party, such
Investments (x) will be represented by an intercompany note that constitutes
“Pledged Securities” under the Security Agreement and (y) may be converted to
equity (solely to the extent required to comply with applicable Law),
(ii) additional Investments by Holdings and its Subsidiaries in Loan Parties
(other than Holdings), (iii) additional Investments by Subsidiaries of Holdings
that are not Loan Parties in other Subsidiaries that are not Loan Parties and
(iv) so long as no Default has occurred and is continuing or would result from
such Investment, additional Investments by the Loan Parties in Subsidiaries that
are not Loan Parties in the form of intercompany Indebtedness represented by an
intercompany note that constitutes “Pledged Securities” under the Security
Agreement or equity (solely to the extent required to comply with applicable
Law), in an aggregate amount invested from the date hereof not to exceed
$10.0 million at any one time outstanding;

(d) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

(e) Guarantees permitted by Section 7.02;

(f) Investments existing on the date hereof and set forth on Schedule 7.03(f);

(g) the purchase or other acquisition of all Equity Interests (other than
directors’ qualifying shares), in, or all or substantially all of the property
of, any Person; provided that, with respect to each purchase or other
acquisition made pursuant to this Section 7.03(g):

(i) any such newly-created or acquired Subsidiary shall comply with the
requirements of Section 6.12;

(ii) upon the consummation thereof, such Person will be (A) a direct or indirect
Wholly Owned Subsidiary of Holdings (including as a result of a merger or
consolidation) or (B) a joint venture that is a Foreign Subsidiary of Holdings
or one or more of its Wholly Owned Subsidiaries;

(iii) the consideration in respect of such purchase or other acquisition shall
consist solely of the Equity Interests of Holdings; provided that the total
consideration in respect of purchases or other acquisitions of Persons that do
not become Loan Parties from the date hereof shall not exceed $50.0 million at
any one time outstanding;

(iv) (A) immediately before and immediately after giving pro forma effect to any
such purchase or other acquisition, no Default shall have occurred and be
continuing and (B) immediately after giving effect to such purchase or other
acquisition, Holdings and its Subsidiaries shall be in compliance on a Pro Forma
Basis with all of the covenants set forth in Section 7.11, such compliance to be
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the basis of the financial information most recently delivered to the
Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as
though such purchase or other acquisition had been consummated as of the first
day of the fiscal period covered thereby; and

(v) the Borrowers shall have delivered to the Administrative Agent and each
Lender, at least five Business Days prior to the date on which any such purchase
or other acquisition is to be consummated (or such shorter period as the
Administrative Agent may approve), a certificate of a Responsible Officer, in
form and substance reasonably satisfactory to the Administrative Agent and the
Required Lenders, certifying that all of the requirements set forth in this
clause (g) have been satisfied or will be satisfied on or prior to the
consummation of such purchase or other acquisition;

(h) other cash Investments in an aggregate amount outstanding pursuant to this
clause (h) (valued at the time of the making thereof, and without giving effect
to any write-downs or write-offs thereof) at any time not to exceed the sum of
(i) $50.0 million and (ii) the portion, if any, of the Cumulative Credit on the
date of such election that the Borrowers elect to apply to this clause (h), such
election to be specified in a written notice of a Responsible Officer of each
Borrower calculating in reasonable detail the amount of Cumulative Credit
immediately prior to such election and the amount thereof elected to be so
applied;

(i) Investments in negotiable instruments deposited or to be deposited for
collection in the ordinary course of business; and

(j) advances of payroll payments to employees in the ordinary course of
business.

7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom and, so long as the Lien on and
security interest in such property granted or to be granted in favor of the
Administrative Agent under the Collateral Documents shall be maintained or
created in accordance with the provisions of Sections 6.12 and 6.15 (subject to
Section 9.10):

(a) any Subsidiary may merge with (i) Vonage America, provided that Vonage
America shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries, provided that when any Loan Party (other than Holdings) is
merging with another Subsidiary that is not a Loan Party, such Loan Party shall
be the continuing or surviving Person;

(b) any Loan Party may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to Vonage America or to another Loan Party
(other than Holdings);

(c) any Subsidiary that is not a Loan Party may dispose of all or substantially
all its assets (including any Disposition that is in the nature of a
liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a
Loan Party;

(d) in connection with any acquisition permitted under Section 7.03, any
Subsidiary of any Borrower may merge into or consolidate with any other Person
or permit any other Person to merge into or consolidate with it; provided that
(i) the Person surviving such merger shall be a Wholly Owned Subsidiary of such
Borrower and (ii) in the case of any such merger to which any Loan Party (other
than a Borrower) is a party, such Loan Party is the surviving Person; and

(e) so long as no Default has occurred and is continuing or would result
therefrom, any Subsidiary of either Borrower may merge into or consolidate with
any other Person or permit any other Person to merge into or consolidate with
it; provided, however, that in each case, immediately after giving effect
thereto (i) in the case of any such merger to which any Borrower is a party,
such Borrower is the surviving corporation and (ii) in the case of any such
merger to which any Loan Party (other than a Borrower) is a party, such Loan
Party is the surviving corporation.

 

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7.05. Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

(a) Dispositions of obsolete or worn out property and assets no longer useful in
the business of the Borrowers and their Subsidiaries, whether now owned or
hereafter acquired, in the ordinary course of business;

(b) Dispositions of inventory in the ordinary course of business;

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

(d) Dispositions of property by any Subsidiary to any Borrower or to a
Wholly-Owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be a Borrower or a Guarantor;

(e) Dispositions permitted by Section 7.04;

(f) Non-exclusive licenses of patents, trademarks, copyrights and other
intellectual property rights in the ordinary course of business and consistent
with past practice;

(g) Dispositions by Holdings and its Subsidiaries not otherwise permitted under
this Section 7.05; provided that (i) at the time of such Disposition, no Default
shall exist or would result from such Disposition, (ii) the aggregate book value
of all property Disposed of in reliance on this clause (h) shall not exceed
$15.0 million and (iii) with respect to any disposition of assets with a fair
market value of $500,000 or greater, at least 75% of the purchase price for such
asset shall be paid to the Borrower or such Subsidiary in cash and Cash
Equivalents; and

(h) so long as no Default shall occur and be continuing, the grant of any option
or other right to purchase any asset in a transaction that would be permitted
under the provisions of Section 7.05(g).

provided, however, that any Disposition pursuant to Section 7.05(a) through
Section 7.05(h) shall be for fair market value.

7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
or, solely with respect to Holdings and its Subsidiaries, issue or sell any
Equity Interests or accept any capital contributions, except that, so long as no
Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:

(a) each Subsidiary may make Restricted Payments to the Borrowers, any
Subsidiaries of the Borrowers that are Guarantors and any other Person that owns
a direct Equity Interest in such Subsidiary, ratably according to their
respective holdings of the type of Equity Interest in respect of which such
Restricted Payment is being made;

(b) Holdings may declare and make dividend payments or other distributions
payable solely in the common stock or other common Equity Interests of Holdings;

(c) Holdings may purchase, redeem or otherwise acquire its common Equity
Interests with the proceeds received from the substantially concurrent issue of
new common Equity Interests;

(d) the repurchase, retirement or other acquisition for value of Equity
Interests of Holdings held by any future, present or former employee, director
or consultant (or such person’s heirs or decedents) of the Borrowers or any
Subsidiary of the Borrowers pursuant to any management equity plan or stock
option plan or any other management or employee benefit plan or other agreement
or arrangement; provided, however, that the aggregate amounts paid under this
clause (d) (net of any proceeds received by Holdings after the date hereof in
connection with resales of any Equity Interests so repurchased, retired or
acquired) do not exceed $1.5 million in any calendar year plus any amount
received by Holdings from the sale of Equity Interests (other than Disqualified
Capital Stock) to officers and employees; and

 

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(e) so long as (x) no Default has occurred and is continuing or would result
therefrom and (y) Holdings’ Consolidated Leverage Ratio is less than or equal to
1.00:1.0, Restricted Payments in an aggregate amount not to exceed the sum of
(i) $10.0 million and (ii) the portion, if any, of the Cumulative Credit on the
date of such election that the Borrowers elect to apply pursuant to this clause
(e), such election to be specified in a written notice of a Responsible Officer
of each Borrower calculating in reasonable detail the amount of the Cumulative
Credit immediately prior to such election and the amount thereof elected to be
so applied; and

(f) the repurchase of Equity Interests of Holdings or any of its Subsidiaries
deemed to occur upon “cashless” exercise of stock options or warrants or in
respect of withholding taxes payable with respect to any compensatory Equity
Interests.

7.07. Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by Holdings and
its Subsidiaries on the date hereof or any business related or incidental
thereto.

7.08. Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of any Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
such Borrower or such Subsidiary as would be obtainable by such Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate; provided that the foregoing restriction shall not apply
(a) to transactions between or among the Loan Parties, (b) reasonable or
customary indemnification and compensation arrangements for members of the board
of directors (or similar governing body), officers and other employees of
Holdings and its respective Subsidiaries, including, without limitation,
transactions specific director fees and retirement, health, stock option and
other benefit plans and arrangements, (c) any transaction with an Affiliate
where the only consideration paid by any Loan Party is Qualified Capital Stock
of Holdings and (d) Restricted Payments permitted under Section 7.06 and
Investments permitted under Section 7.03.

7.09. Burdensome Agreements. Enter into or permit to exist any Contractual
Obligation (other than this Agreement or any other Loan Document) that
(a) limits the ability (i) of any Subsidiary to make Restricted Payments to any
Borrower or any Guarantor or to otherwise transfer property to or invest in any
Borrower or any Guarantor, except for any agreement in effect (A) on the date
hereof and set forth on Schedule 7.09 or (B) at the time any Subsidiary becomes
a Subsidiary of Holdings, so long as such agreement was not entered into solely
in contemplation of such Person becoming a Subsidiary of Holdings, (ii) of any
Subsidiary or of Holdings, to Guarantee the Indebtedness of the Borrowers or
(iii) of Holdings or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person; provided, however, that this clause
(iii) shall not prohibit any negative pledge incurred or provided in favor of
any holder of Indebtedness permitted under Section 7.02(f) solely to the extent
any such negative pledge relates to the property financed by or the subject of
such Indebtedness; or (b) requires the grant of a Lien to secure an obligation
of such Person if a Lien is granted to secure another obligation of such Person.

7.10. Use of Proceeds. Use the proceeds of any Credit Extension, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.

7.11. Financial Covenants.

(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter of Holdings set forth below to be greater than the
ratio set forth below opposite such period:

 

Fiscal Quarters Ending

   Maximum Consolidated
Leverage Ratio

December 31, 2010

   2.25 to 1.00

March 31, 2011

   2.25 to 1.00

June 30, 2011

   2.25 to 1.00

September 30, 2011

   2.25 to 1.00

December 31, 2011

   2.00 to 1.00

 

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Fiscal Quarters Ending

   Maximum Consolidated
Leverage Ratio

March 31, 2012

   2.00 to 1.00

June 30, 2012

   2.00 to 1.00

September 30, 2012

   2.00 to 1.00

December 31, 2012

   1.75 to 1.00

March 31, 2013

   1.75 to 1.00

June 30, 2013

   1.75 to 1.00

September 30, 2013

   1.75 to 1.00

December 31, 2013

   1.50 to 1.00

March 31, 2014

   1.50 to 1.00

June 30, 2014

   1.50 to 1.00

September 30, 2014

   1.50 to 1.00

December 31, 2014 and each fiscal quarter thereafter

   1.25 to 1.00

(b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest
Coverage Ratio as of the end of any fiscal quarter of Holdings to be less than
the ratio set forth below opposite such fiscal quarter:

 

Fiscal Quarters Ending

   Minimum Interest
Coverage Ratio

December 31, 2010

   3.00 to 1.00

March 31, 2011

   3.00 to 1.00

June 30, 2011

   3.00 to 1.00

September 30, 2011

   3.00 to 1.00

December 31, 2011

   3.00 to 1.00

March 31, 2012

   3.00 to 1.00

June 30, 2012

   3.00 to 1.00

September 30, 2012

   3.00 to 1.00

December 31, 2012

   3.00 to 1.00

March 31, 2013

   3.00 to 1.00

June 30, 2013

   3.00 to 1.00

September 30, 2013 and each fiscal quarter thereafter

   3.50 to 1.00

7.12. Capital Expenditures. Beginning on January 1, 2011, make or become legally
obligated to make any Capital Expenditure, except for Capital Expenditures in
the ordinary course of business not exceeding, in the aggregate for Holdings and
its Subsidiaries during any fiscal year, $55.0 million; provided that so long as
no Default has occurred and is continuing or would result from such expenditure,
any portion of any amount set forth above, if not expended in the fiscal year
for which it is permitted above, may be carried over for expenditure in the next
following fiscal year; and provided, further, if any such amount is so carried
over, it will be deemed used in the applicable subsequent fiscal year.

In addition to the Capital Expenditures permitted pursuant to the preceding
paragraph, Holdings and its Subsidiaries may make additional Capital
Expenditures in an amount not to exceed the portion, if any, of the Cumulative
Credit on the date of such Capital Expenditure that the Borrower elects to apply
to this Section 7.12.

7.13. Amendments of Organization Documents. Amend any of its Organization
Documents in a manner materially adverse to the Lenders.

7.14. Accounting Changes. Make any material change in (a) accounting policies or
reporting practices, except as required by GAAP, or (b) fiscal year.

7.15. Prepayments, Etc. of Indebtedness. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Indebtedness, except
(a) the prepayment of the Credit Extensions in accordance with the terms of this

 

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Agreement, (b) regularly scheduled or required repayments or redemptions of
Indebtedness and refinancings and refundings of Indebtedness in compliance with
Section 7.02(d) and (c) if Holdings shall be in compliance on a Pro Forma Basis
with the covenants set forth in Section 7.11 after giving effect thereto,
prepayments, redemptions, purchases, defeasances and other payments in respect
of Indebtedness prior to its scheduled maturity in an aggregate amount not to
exceed the portion, if any, of the Cumulative Credit on such date that the
Borrower elects to apply to this paragraph, such election to be specified in a
written notice of a Responsible Officer of the Borrower calculating in
reasonable detail the amount of Cumulative Credit immediately prior to such
election and the amount thereof elected to be so applied.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01. Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non-Payment. The Borrowers or any other Loan Party fail to (i) pay when and
as required to be paid herein, any amount of principal of any Loan or (ii) pay
within three Business Days after the same becomes due, any interest on any Loan
or any fee due hereunder, or (iii) pay within five Business Days after notice to
the Borrowers that the same becomes due, any other amount payable hereunder or
under any other Loan Document; or

(b) Specific Covenants. (i) The Borrowers fail to perform or observe any term,
covenant or agreement contained in any of Section 6.03, 6.05, 6.11, 6.12 or
Article VII or (ii) any of the Guarantors fails to perform or observe any term,
covenant or agreement contained in the Guaranty corresponding to any such
section; or

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in Section 8.01(a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days from the earlier of (i) any Borrower’s knowledge of such
Default and (ii) notice thereof from the Administrative Agent; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrowers or any
other Loan Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith shall be incorrect or misleading
in any material respect when made or deemed made; or

(e) Cross-Default. (i) Any Loan Party or any Subsidiary thereof (A) fails to
make any payment when due (subject to applicable grace or cure periods) (whether
by scheduled maturity, required prepayment, acceleration, demand, or otherwise)
in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder
and Indebtedness under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing to
all creditors under any combined or syndicated credit arrangement) of more than
the Threshold Amount, or (B) fails (beyond any applicable grace or cure period)
to observe or perform any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event occurs, the effect
of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which a Loan Party or any Subsidiary
thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which a Loan
Party or any Subsidiary thereof is an Affected Party (as so defined) and, in
either event, the Swap Termination Value owed by such Loan Party or such
Subsidiary as a result thereof is greater than the Threshold Amount; or

(f) Insolvency Proceedings, Etc. Any Loan Party or any Subsidiary thereof
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator

 

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or similar officer for it or for all or any material part of its property; or
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such Person
and the appointment continues undischarged or unstayed for 60 calendar days; or
any proceeding under any Debtor Relief Law relating to any such Person or to all
or any material part of its property is instituted without the consent of such
Person and continues undismissed or unstayed for 60 calendar days, or an order
for relief is entered in any such proceeding; or

(g) Inability to Pay Debts; Attachment. (i) Any Loan Party or any Subsidiary
thereof becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due, or (ii) any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 45 days after its issue or levy; or

(h) Judgments. There is entered against any Loan Party or any Subsidiary thereof
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments and orders) exceeding the Threshold
Amount (to the extent not covered by independent third-party insurance as to
which the insurer is rated at least “A” by A.M. Best Company, has been notified
of the potential claim and does not dispute coverage), or (ii) any one or more
non-monetary final judgments that have, or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order, or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

(i) ERISA. Except as could not reasonably be expected to result in a Material
Adverse Effect (i) an ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or would reasonably be expected to result
in liability of any Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC, or (ii) any Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan; or

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or any Loan Party contests
in any manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any provision of any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

(k) Change of Control. There occurs any Change of Control; or

(l) Collateral Documents. Any Collateral Document after delivery thereof
pursuant to Section 4.01 or 6.12 shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority Lien
(subject to Permitted Liens) on the Collateral purported to be covered thereby
where the value of the collateral purported to be covered thereby is in excess
of $2.5 million.

8.02. Remedies upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans to be terminated,
whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; and

 

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(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Borrower under the Debtor Relief Laws, the
obligation of each Lender to make Loans shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable.

8.03. Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable), any amounts received on account of the Obligations shall be applied by
the Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders arising under the Loan Documents and amounts payable under Article III,
ratably among them in proportion to the respective amounts described in this
clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans and other Obligations arising under the Loan
Documents, ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and Obligations then owing under Secured Hedge Agreements
and Secured Cash Management Agreements, ratably among the Lenders, the Hedge
Banks and the Cash Management Banks in proportion to the respective amounts
described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrowers or as otherwise required by Law.

Notwithstanding the foregoing, Obligations arising under Secured Cash Management
Agreements and Secured Hedge Agreements shall be excluded from the application
described above if the Administrative Agent has not received written notice
thereof, together with such supporting documentation as the Administrative Agent
may request, from the applicable Cash Management Bank or Hedge Bank, as the case
may be. Each Cash Management Bank or Hedge Bank not a party to the Credit
Agreement that has given the notice contemplated by the preceding sentence
shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of Article IX
hereof for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01. Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints Bank of America to act on
its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent and the Lenders, and neither of the
Borrowers nor any other Loan Party shall have rights (other than the Borrowers’
rights under Sections 9.06 and 9.10) as a third party beneficiary of any of such
provisions.

 

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(b) The Administrative Agent shall also act as the “collateral agent” under the
Loan Documents, and each of the Lenders (including in its capacities as a
potential Hedge Bank and a potential Cash Management Bank) hereby irrevocably
appoints and authorizes the Administrative Agent to act as the agent of such
Lender for purposes of acquiring, holding and enforcing any and all Liens on
Collateral granted by any of the Loan Parties to secure any of the Obligations,
together with such powers and discretion as are reasonably incidental thereto.
In this connection, the Administrative Agent, as “collateral agent” and any
co-agents, sub-agents and attorneys-in-fact appointed by the Administrative
Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on
the Collateral (or any portion thereof) granted under the Collateral Documents,
or for exercising any rights and remedies thereunder at the direction of the
Administrative Agent, shall be entitled to the benefits of all provisions of
this Article IX and Article X (including Section 10.04(c)), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under
the Loan Documents as if set forth in full herein with respect thereto.

9.02. Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with Holdings or any Subsidiary or other Affiliate thereof
as if such Person were not the Administrative Agent hereunder and without any
duty to account therefor to the Lenders.

9.03. Exculpatory Provisions. The Administrative Agent shall not have any duties
or obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, the Administrative
Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrowers or any of their respective
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

(d) The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrowers or
a Lender.

(e) The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

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9.04. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, Internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan, that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

9.05. Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

9.06. Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrowers. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrowers, to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the
Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (a) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(b) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrowers to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

9.07. Non-Reliance on Administrative Agent and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

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9.08. No Other Duties, Etc.. Anything herein to the contrary notwithstanding,
none of the Arrangers or Arrangers listed on the cover page hereof shall have
any powers, duties or responsibilities under this Agreement or any of the other
Loan Documents, except in its capacity, as applicable, as the Administrative
Agent hereunder.

9.09. Administrative Agent May File Proofs of Claim. In case of the pendency of
any proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Loan Party, the Administrative Agent (irrespective of whether
the principal of any Loan shall then be due and payable as herein expressed or
by declaration or otherwise and irrespective of whether the Administrative Agent
shall have made any demand on the Borrowers) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Sections 2.09 and 10.04) allowed in such judicial
proceeding; and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, if the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender or in any such proceeding.

9.10. Collateral and Guaranty Matters. Each of the Lenders (including in its
capacities as a potential Cash Management Bank and a potential Hedge Bank)
irrevocably authorize the Administrative Agent, at its option and in its
discretion,

(a) to release any Lien on any property granted to or held by the Administrative
Agent under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than (A) contingent
indemnification obligations and (B) obligations and liabilities under Secured
Cash Management Agreements and Secured Hedge Agreements, (ii) that is sold or to
be sold as part of or in connection with any sale permitted hereunder or under
any other Loan Document to a Person that is not a Loan Party, or (iii) if
approved, authorized or ratified in writing in accordance with Section 10.01;

(b) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder; and\

(c) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.01(i).

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10. In each case as specified in this Section 9.10, the Administrative
Agent will, at the Borrowers’ expense, execute and deliver to the applicable
Loan Party such documents as such Loan Party may reasonably request to evidence
the release of such item of Collateral from the assignment and security interest
granted under the Collateral Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this
Section 9.10.

 

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9.11. Secured Cash Management Agreements and Secured Hedge Agreements. No Cash
Management Bank or Hedge Bank that obtains the benefits of Section 8.03, the
Guaranty or any Collateral by virtue of the provisions hereof or of the Guaranty
or any Collateral Document shall have any right to notice of any action or to
consent to, direct or object to any action hereunder or under any other Loan
Document or otherwise in respect of the Collateral (including the release or
impairment of any Collateral) other than in its capacity as a Lender and, in
such case, only to the extent expressly provided in the Loan Documents.
Notwithstanding any other provision of this Article IX to the contrary, the
Administrative Agent shall not be required to verify the payment of, or that
other satisfactory arrangements have been made with respect to, Obligations
arising under Secured Cash Management Agreements and Secured Hedge Agreements.

9.12. Withholding Tax. To the extent required by any applicable Law, the
Administrative Agent may deduct or withhold from any payment to any Lender an
amount equivalent to any applicable withholding Tax. If the Internal Revenue
Service or any other authority of the United States or other jurisdiction
asserts a claim that the Administrative Agent did not properly withhold Tax from
amounts paid to or for the account of any Lender for any reason (including,
without limitation, because the appropriate form was not delivered or not
property executed, or because such Lender failed to notify the Administrative
Agent of a change in circumstance that rendered the exemption from, or reduction
of withholding Tax ineffective, or for any other reason), such Lender shall
indemnify and hold harmless the Administrative Agent (to the extent that the
Administrative Agent has not already been reimbursed by the Borrowers pursuant
to Sections 3.01 and 3.04 and without limiting any obligation of the Borrowers
to do so pursuant to such Sections) fully for all amounts paid, directly or
indirectly, by the Administrative Agent as Taxes or otherwise (including any and
all related losses, claims, liabilities, penalties, and interest), together with
all expenses incurred, including legal expenses and any other out-of-pocket
expenses, whether or not such Tax was correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender shall make payment in respect
thereof within 10 days after demand therefor. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under this Agreement or any other Loan Document against any
amount due to the Administrative Agent under this Section 9.12. The agreements
in this Section 9.12 shall survive the resignation and/or replacement of the
Administrative Agent, any assignment of rights by, or the replacement of, a
Lender, the termination of this Agreement and the repayment, satisfaction or
discharge of all other Obligations. Unless required by applicable Laws, at no
time shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender any refund of Taxes withheld or deducted from funds
paid for the account of such Lender.

ARTICLE X

MISCELLANEOUS

10.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrowers or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrowers or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, waiver or consent shall:

(a) waive any condition set forth in Section 4.01 (other than Section 4.01(b)(i)
or (c)), or, in the case of the initial Borrowing, Section 4.02, without the
written consent of each Lender;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Loan Document for
(i) any payment (excluding mandatory prepayments) of principal, interest, fees
or other amounts due to the Lenders (or any of them) hereunder or under such
other Loan Document without the written consent of each Lender entitled to such
payment or (ii) any scheduled reduction of the Facility hereunder or under any
other Loan Document without the written consent of each Lender adversely
affected thereby;

 

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(d) reduce the principal of, or the rate of interest specified herein on, any
Loan, or any premium, fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender entitled to such
amount; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or to reduce any fee payable hereunder;

(e) change (i) Section 8.03 in a manner that would alter the pro rata sharing of
payments required thereby without the written consent of each Lender adversely
affected thereby or (ii) the order of application of any reduction in the
Commitments or any prepayment of Loans from the application thereof set forth in
the applicable provisions of Section 2.03(b) or 2.04(b), respectively, in any
manner that materially and adversely affects the Lenders without the written
consent of the Required Lenders;

(f) change any provision of this Section 10.01 or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;

(g) release all or substantially all of the Collateral in any transaction or
series of related transactions, without the written consent of each Lender,
except to the extent the release of such Collateral is permitted pursuant to
Section 9.10 (in which case such release may be made by the Administrative Agent
acting alone);

(h) release all or substantially all of the value of the Guaranty, without the
written consent of each Lender, except to the extent the release of any
Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which
case such release may be made by the Administrative Agent acting alone); or

(i) impose any greater restriction on the ability of any Lender to assign any of
its rights or obligations hereunder without the written consent of such Lender.

Notwithstanding any provision herein to the contrary, this Agreement may be
amended with the written consent of the Required Lenders, the Administrative
Agent and the Borrowers (i) to add one or more additional revolving credit or
term loan facilities to this Agreement and to permit the extensions of credit
and all related obligations and liabilities arising in connection therewith from
time to time outstanding to share ratably (or on a basis subordinated to the
existing facilities hereunder) in the benefits of this Agreement and the other
Loan Documents with the obligations and liabilities from time to time
outstanding in respect of the existing facilities hereunder, and (ii) in
connection with the foregoing, to permit, as deemed appropriate by the
Administrative Agent and approved by the Required Lenders, the Lenders providing
such additional credit facilities to participate in any required vote or action
required to be approved by the Required Lenders or by any other number,
percentage or class of Lenders hereunder.

If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender and that has been approved by the Required Lenders, the Borrowers may
replace such non-consenting Lender in accordance with Section 10.13; provided
that such amendment, waiver, consent or release can be effected as a result of
the assignment contemplated by such Section (together with all other such
assignments required by the Borrowers to be made pursuant to this paragraph).

10.02. Notices; Effectiveness; Electronic Communications.

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

(i) if to the Borrowers or the Administrative Agent, to the address, telecopier
number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

 

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(ii) if to any other Lender, to the address, telecopier number, electronic mail
address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by
a Lender on its Administrative Questionnaire then in effect for the delivery of
notices that may contain material non-public information relating to the
Borrowers).

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business
hours for the recipient, shall be deemed to have been given at the opening of
business on the next business day for the recipient). Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below shall be effective as provided in such
subsection (b).

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrowers may, in its or their
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrowers, any Lender or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether
in tort, contract or otherwise) arising out of the Borrowers’ or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party have
any liability to the Borrowers, any Lender or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or
actual damages).

(d) Change of Address, Etc. Each of the Borrowers and the Administrative Agent
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other

 

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communications hereunder by notice to the Borrowers and the Administrative
Agent. In addition, each Lender agrees to notify the Administrative Agent from
time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender. Furthermore, each Public
Lender agrees to cause at least one individual at or on behalf of such Public
Lender to at all times have selected the “Private Side Information” or similar
designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s
compliance procedures and applicable Law, including United States Federal and
state securities Laws, to make reference to Borrower Materials that are not made
available through the “Public Side Information” portion of the Platform and that
may contain material non-public information with respect to the Borrower or its
securities for purposes of United States Federal or state securities laws.

(e) Reliance by Administrative Agent and Lenders. The Administrative Agent and
the Lenders shall be entitled to rely and act upon any notices (including
telephonic Committed Loan Notices) purportedly given by or on behalf of the
Borrowers even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrowers shall indemnify the
Administrative Agent, each Lender and the Related Parties of each of them from
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrowers. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

10.03. No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder or under any other
Loan Document 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, and
provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan
Document, the authority to enforce rights and remedies hereunder and under the
other Loan Documents against the Loan Parties or any of them shall be vested
exclusively in, and all actions and proceedings at law in connection with such
enforcement shall be instituted and maintained exclusively by, the
Administrative Agent in accordance with Section 8.02 for the benefit of all the
Lenders; provided, however, that the foregoing shall not prohibit (a) the
Administrative Agent from exercising on its own behalf the rights and remedies
that inure to its benefit (solely in its capacity as Administrative Agent)
hereunder and under the other Loan Documents, (b) any Lender from exercising
setoff rights in accordance with Section 10.08 (subject to the terms of
Section 2.11), or (c) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to any Loan Party under any Debtor Relief Law; and provided, further, that if at
any time there is no Person acting as Administrative Agent hereunder and under
the other Loan Documents, then (i) the Required Lenders shall have the rights
otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and
(ii) in addition to the matters set forth in clauses (b), (c) and (d) of the
preceding proviso and subject to Section 2.11, any Lender may, with the consent
of the Required Lenders, enforce any rights and remedies available to it and as
authorized by the Required Lenders.

10.04. Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable and documented fees, charges and
disbursements of one counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the
other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses
incurred by the Administrative Agent or any Lender (including the reasonable and
documented fees, charges and disbursements of any counsel for the Administrative
Agent or any Lender), in connection with the enforcement or protection of its
rights (A) in connection with this Agreement and the other Loan

 

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Documents, including its rights under this Section, or (B) in connection with
Loans made hereunder, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of such Loans. For the
avoidance of doubt, this Section 10.04(a) shall not apply to Excluded Taxes,
which shall be governed exclusively by Section 3.01 hereof.

(b) Indemnification by the Borrower. The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the
reasonable and documented fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by
any third party or by the Borrowers or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any actual or alleged presence or
Release or threat of Release of Hazardous Materials on, at, under or from any
property owned or operated by the Borrowers or any of their Subsidiaries, or any
Environmental Liability related in any way to any Borrower or any of its
Subsidiaries, or (iii) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by the
Borrowers or any other Loan Party or any of the Borrowers’ or such Loan Party’s
directors, shareholders or creditors, and regardless of whether any Indemnitee
is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by any Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if such Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction. For the avoidance of doubt, this Section 10.04(b) shall
not apply to Taxes (except to the extent of any Taxes that are imposed in
connection with any losses, claims, damages, etc. resulting from a non-Tax
claim).

(c) Reimbursement by Lenders. To the extent that the Borrowers for any reason
fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof) or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent) or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) in its capacity as such, or against any Related Party of any of
the foregoing acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.10(d).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, the Borrowers shall not assert, and hereby waive, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

 

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(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent, the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

10.05. Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the applicable Overnight Rate from time to time in effect, in the
applicable currency of such recovery or payment. The obligations of the Lenders
under clause (b) of the preceding sentence shall survive the payment in full of
the Obligations and the termination of this Agreement.

10.06. Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrowers nor
any other Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the
provisions of Section 10.06(b), (ii) by way of participation in accordance with
the provisions of Section 10.06(d), or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of Section 10.06(f) (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection
(d) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.

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

(i) Minimum Amounts.

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

(B) (in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $1,000,000, unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrowers otherwise consent (each such consent not to be unreasonably withheld
or delayed); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met;

 

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(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrowers (such consent not to be unreasonably withheld)
shall be required unless an Event of Default under Section 8.01(a) or (f) has
occurred and is continuing at the time of such assignment; provided that the
Borrowers shall be deemed to have consented to any such assignment unless they
shall object thereto by written notice to the Administrative Agent within five
(5) Business Days after having received notice thereof; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of (1) any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender or (2) any Loan to a Person that is not a Lender, an Affiliate of a
Lender or an Approved Fund.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
any Borrower or any of the Borrowers’ Affiliates or Subsidiaries, or (B) to a
natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 10.06(d).

(c) Register. The Administrative Agent, acting solely for this purpose as
non-fiduciary agent of the Borrower (and such agency being solely for tax
purposes), shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts (and related interest amounts) of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, absent manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrowers and any Lender (with
respect to such Lender’s interest), at any reasonable time and from time to time
upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or any Borrower or any of the Borrowers’
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it);

 

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provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification described in the first
proviso to Section 10.01 that affects such Participant. Subject to subsection
(e) of this Section, the Borrowers agree that each Participant shall be entitled
to the benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and
limitations of such Sections) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.06(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.13 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as
a non-fiduciary agent of the Borrowers, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and related
interest amounts) of each participant’s interest in the Loans or other
Obligations under this Agreement (the “Participant Register”). The entries in
the Participant Register shall be conclusive, absent manifest error, and such
Lender shall treat each person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.01 or 3.04 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, except to the extent such entitlement to a greater
payment resulted from a Change in Law occurring after the Participant became a
Participant.

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

10.07. Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed
(a) to its Affiliates and to its and its Affiliates’ respective partners,
directors, officers, employees, agents, trustees, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrowers or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Lender or any of their
respective Affiliates on a non-confidential basis from a source other than the
Borrowers.

For purposes of this Section, “Information” means all information received from
Holdings or any Subsidiary relating to Holdings or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent or any Lender on a non-confidential basis prior to
disclosure by Holdings or any Subsidiary, provided that, in the case of
information received from Holdings or any Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

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Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrowers
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable Law, including
United States Federal and state securities Laws.

10.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrowers or any other
Loan Party against any and all of the obligations of the Borrowers or such Loan
Party now or hereafter existing under this Agreement or any other Loan Document
to such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Loan Document and although such
obligations of the Borrowers or such Loan Party may be contingent or unmatured
or are owed to a branch or office of such Lender different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender and their respective Affiliates under this Section are in addition
to other rights and remedies (including other rights of setoff) that such Lender
or its respective Affiliates may have. Each Lender agrees to notify the
Borrowers and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

10.09. Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

10.10. Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

10.11. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Borrowing, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain unpaid
or unsatisfied.

10.12. Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good

 

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faith negotiations to replace the illegal, invalid or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the illegal, invalid or unenforceable provisions. The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

10.13. Replacement of Lenders. If any Lender requests compensation under
Section 3.04, or if the Borrowers are required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, or if any other circumstance exists hereunder that gives the
Borrowers the right to replace a Lender as a party hereto, then the Borrowers
may, at their sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be one or more other
Lenders, if such Lender or Lenders accept such assignment), provided that:

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b) (unless waived by the Administrative Agent);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees,
premium, and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.01, 3.04 or 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts);

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.04 or payments required to be made pursuant to Section 3.01,
such assignment will result in a reduction in such compensation or payments
thereafter; and

(d) such assignment does not conflict with applicable Laws.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

10.14. Governing Law; Jurisdiction; Etc.

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) SUBMISSION TO JURISDICTION. EACH BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

(c) WAIVER OF VENUE. EACH BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF

 

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ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW

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

10.16. No Advisory or Fiduciary Responsibility. In connection with all aspects
of each transaction contemplated hereby (including in connection with any
amendment, waiver or other modification hereof or of any other Loan Document),
each of the Borrowers acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services regarding this
Agreement provided by the Administrative Agent and the Arrangers are
arm’s-length commercial transactions between the Borrowers and their respective
Affiliates, on the one hand, and the Administrative Agent and the Arrangers, on
the other hand, (B) each of the Borrowers has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (C) each of the Borrowers is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) the Administrative Agent and each
Arranger each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for the Borrowers, any of
their respective Affiliates, or any other Person and (B) neither the
Administrative Agent nor any Arranger has any obligation to the Borrowers or any
of their respective Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent and the Arrangers and their
respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrowers and their respective
Affiliates, and neither the Administrative Agent nor any Arranger has any
obligation to disclose any of such interests to the Borrowers or any of their
respective Affiliates. To the fullest extent permitted by law, each of the
Borrowers hereby waives and releases any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

10.17. Electronic Execution of Assignments and Certain Other Documents. The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption or in any amendment or other modification hereof
(including waivers and consents) shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

10.18. USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter
defined) and the Administrative Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrowers that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it

 

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is required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of each Loan Party and
other information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act. The
Borrowers shall, promptly following a request by the Administrative Agent or any
Lender, provide all documentation and other information that the Administrative
Agent or such Lender reasonably requests in order to comply with its ongoing
obligations under applicable “know your customer” an anti-money laundering rules
and regulations, including the Act.

10.19. Time of the Essence. Time is of the essence of the Loan Documents.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

VONAGE AMERICA INC. By:  

/s/ Kurt M. Rogers

  Name: Kurt M. Rogers   Title:   Vice President and Secretary VONAGE HOLDINGS
CORP. By:  

/s/ Barry L. Rowan

  Name: Barry L. Rowan  

Title:   Executive Vice President, Chief Financial

            Officer, Chief Administrative Officer and

            Treasurer

 

 

[Credit Agreement Signature Page]

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

 

BANK OF AMERICA, N.A., as Administrative Agent By:  

/s/ Henry Pennell

  Name: Henry Pennell   Title:   Vice President

 

 

 

[Credit Agreement Signature Page]

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

BANK OF AMERICA, N.A., as Lender By:  

/s/ Peter van der Horst

  Name: Peter van der Horst   Title:   Senior Vice President

 

 

 

[Credit Agreement Signature Page]

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

SCHEDULE 2.01

TO

THE CREDIT AGREEMENT

Commitments and Applicable Percentages

 

Lender

   Commitment      Applicable Percentage  

Bank of America, N.A.

   $ 200,000,000         100.000000000 % 

Total

   $ 200,000,000         100.000000000 % 

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

SCHEDULE 5.06

TO

THE CREDIT AGREEMENT

Litigation1

 

1. Alcatel-Lucent. On November 4, 2008, Vonage received a letter from
Alcatel-Lucent initiating an opportunity for Vonage to obtain a non-exclusive
patent license to certain of its patents that may be relevant to Vonage’s
business. Vonage is currently analyzing the applicability of such patents to its
business, as well as additional patents subsequently identified by
Alcatel-Lucent. If Vonage determines that these patents are applicable to its
business and valid, it may incur expense in licensing them. If Vonage determines
that these patents are not applicable to its business or invalid, it may incur
expense and damages if there is litigation.

 

2. Ceres Communications Technologies LLC. On October 6, 2010, Ceres
Communications Technologies LLC (“Ceres”) filed a lawsuit against Vonage
Holdings Corp. and its subsidiaries Vonage America, Inc. and Vonage Marketing
LLC in the United States District Court for the District of Delaware alleging
that Vonage’s products and services are covered by a patent held by Ceres,
United States Patent No. 5,774,526, entitled “Reconfigurable On-Demand Telephone
and Data Line System.” The suit also named numerous other companies as
defendants, including AT&T, Inc., Cablevision Systems Corporation, Comcast
Corporation, Cox Communications Inc., Skype Global S.a.r.l, Skype Inc., Time
Warner Cable, and Verizon Communications Inc. Vonage is currently reviewing the
validity of the Ceres patent and whether any of Vonage’s products and services
are covered by it. On November 16, 2010, the company filed its Answer and
Counterclaims and a Motion to Dismiss Ceres’ claims for induced infringement,
contributory infringement and willful infringement. Ceres’ opposition to that
Motion is due December 3, 2010.

 

3. j2 Global Communications Inc. Vonage received a letter, dated November 13,
2009, from j2 Global Communications Inc. (“j2”) asserting that Vonage is
violating j2’s patent rights with respect to four (4) j2 patents related to
messaging and communication technologies, and inviting Vonage enter into
licensing negotiations with j2. j2 has not sent any additional letters since
this initial letter.

 

4. Hitachi, Ltd. Vonage received a letter, dated June 25, 2010, from Hitachi,
Ltd. (“Hitachi”) inviting Vonage to license certain Hitachi patents related to
telephone technology. No specific patents were identified in the letter.

 

1

Note: Inclusion of any matter on this schedule is not an acknowledgement by
Borrowers or Borrower’s Subsidiaries that any of these matters are reasonably to
be expected to have a Material Adverse Effect on the business of Borrowers or
Borrower’s Subsidiaries. Such matters are included herein solely in an abundance
of caution.

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

SCHEDULE 5.17(d)

TO

THE CREDIT AGREEMENT

Proprietary rights2

 

1. Alcatel-Lucent. On November 4, 2008, Vonage received a letter from
Alcatel-Lucent initiating an opportunity for Vonage to obtain a non-exclusive
patent license to certain of its patents that may be relevant to Vonage’s
business. Vonage is currently analyzing the applicability of such patents to its
business, as well as additional patents subsequently identified by
Alcatel-Lucent. If Vonage determines that these patents are applicable to its
business and valid, it may incur expense in licensing them. If Vonage determines
that these patents are not applicable to its business or invalid, it may incur
expense and damages if there is litigation.

 

2. Ceres Communications Technologies LLC. On October 6, 2010, Ceres
Communications Technologies LLC (“Ceres”) filed a lawsuit against Vonage
Holdings Corp. and its subsidiaries Vonage America, Inc. and Vonage Marketing
LLC in the United States District Court for the District of Delaware alleging
that Vonage’s products and services are covered by a patent held by Ceres,
United States Patent No. 5,774,526, entitled “Reconfigurable On-Demand Telephone
and Data Line System.” The suit also named numerous other companies as
defendants, including AT&T, Inc., Cablevision Systems Corporation, Comcast
Corporation, Cox Communications Inc., Skype Global S.a.r.l, Skype Inc., Time
Warner Cable, and Verizon Communications Inc. Vonage is currently reviewing the
validity of the Ceres patent and whether any of Vonage’s products and services
are covered by it. On November 16, 2010, the company filed its Answer and
Counterclaims and a Motion to Dismiss Ceres’ claims for induced infringement,
contributory infringement and willful infringement. Ceres’ opposition to that
Motion is due December 3, 2010.

 

3. j2 Global Communications Inc. Vonage received a letter, dated November 13,
2009, from j2 Global Communications Inc. (“j2”) asserting that Vonage is
violating j2’s patent rights with respect to four (4) j2 patents related to
messaging and communication technologies, and inviting Vonage enter into
licensing negotiations with j2. j2 has not sent any additional letters since
this initial letter.

 

4. Hitachi, Ltd. Vonage received a letter, dated June 25, 2010, from Hitachi,
Ltd. (“Hitachi”) inviting Vonage to license certain Hitachi patents related to
telephone technology. No specific patents were identified in the letter.

 

 

2

Note: Inclusion of any matter on this schedule is not an acknowledgement by
Borrowers or Borrower’s Subsidiaries that any of these matters are reasonably to
be expected to have a Material Adverse Effect on the business of Borrowers or
Borrower’s Subsidiaries. Such matters are included herein solely in an abundance
of caution.

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

SCHEDULE 6.12

TO

THE CREDIT AGREEMENT

Guarantors

 

Entity

Vonage Network LLC

Vonage Marketing LLC

Vonage Worldwide Inc.

Vonage International Inc.

Novega Venture Partners, Inc.

DSP LLC

Vonage Applications Inc.

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

SCHEDULE 6.19

TO

THE CREDIT AGREEMENT

Deposit Account Control Agreements

 

Owner

  

Bank

  

Account Numbers

Vonage Holdings Corp.    JP Morgan Chase    957083467 Vonage America Inc.    JP
Morgan Chase    904026868 Vonage America Inc.    JP Morgan Chase    957083440
Vonage America Inc.    JP Morgan Chase    957083491 Vonage America Inc.    JP
Morgan Chase    957087071 Vonage America Inc.    JP Morgan Chase    707638938
Vonage America Inc.    JP Morgan Chase    2908462811 Vonage America Inc.    JP
Morgan Chase    2908462829 Vonage Network LLC    JP Morgan Chase    957082185
Vonage Marketing LLC    JP Morgan Chase    957082622 Novega Venture Partners,
Inc.    JP Morgan Chase    957085257 Vonage Worldwide Inc.    JP Morgan Chase   
886511146 Vonage International Inc.    JP Morgan Chase    886511237 Vonage
Applications Inc.    JP Morgan Chase    886511096

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

SCHEDULE 7.01(b)

TO

THE CREDIT AGREEMENT

Liens

1. Liens on cash and Cash Equivalents securing the Indebtedness listed on
Schedule 7.02(d).

2. The Liens against such immaterial Proprietary Rights identified below;
provided that the Borrowers shall use their commercially reasonable efforts to
cause such Liens to be released during the period which is sixty (60) days
following the Closing Date (or such later date as reasonably determined by the
Administrative Agent as agreed to in writing by the Administrative Agent in its
sole discretion).

 

Title

  

Appl. #/
Filed

Date

  

Pub. No./
Pub. Date

  

Patent # /

Issue

Date

  

Owner/
Assignee

  

Status/Unreleased

Security Interests

Packet Switching Communication System   

08090439

7/9/93

     

5444707

8/22/95

   Vonage Network, LLC   

Granted

 

Assignment: 1

Reel/Frame: 008855/0368

Recorded: 12/19/1997

Conveyance: SECURITY INTEREST

Assignor: NETRIX CORPORATION

Exec Dt: 11/18/1997

Assignee: COAST BUSINESS CREDIT, A DIVISION OF SOUTHERN PACIFIC BANK

 

Assignment: 2

Reel/Frame: 012745/0864

Recorded: 03/26/2002

Conveyance: SECURITY AGREEMENT

Assignor: NSGDATA.COM, INC.

Exec Dt: 03/08/2002

Assignee: NXNETWORKS, INC.

Multiplexed Digital Packet Telephone System   

07119273

11/9/87

     

4782485

11/1/88

   Vonage Network, LLC   

Granted

 

Assignment: 1

Reel/Frame: 005646/0070

Recorded: 02/25/1991

Conveyance: SECURITY INTEREST

Assignor: REPUBLIC TELCOM SYSTEMS CORPORATION, A

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

              

CORP. OF DE

Exec Dt: 02/11/1991

Assignee: NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION A NATIONAL BANKING
ASSOCIATION

 

Assignment: 2

Reel/Frame: 008855/0368

Recorded: 12/19/1997

Conveyance: SECURITY INTEREST

Assignor: NETRIX CORPORATION

Exec Dt: 11/18/1997

Assignee: COAST BUSINESS CREDIT, A DIVISION OF SOUTHERN PACIFIC BANK

 

Assignment: 3

Reel/Frame: 012745/0864

Recorded: 03/26/2002

Conveyance: SECURITY AGREEMENT

Assignor: NSGDATA.COM, INC.

Exec Dt: 03/08/2002

Assignee: NXNETWORKS, INC.

Multiplexed Digital Packet Telephone System   

07579189

9/5/90

     

5018136

5/21/91

   Vonage Network, LLC   

Granted

 

Assignment: 1

Reel/Frame: 008855/0368

Recorded: 12/19/1997

Conveyance: SECURITY INTEREST

Assignor: NETRIX CORPORATION

Exec Dt: 11/18/1997

Assignee: COAST BUSINESS CREDIT, A DIVISION OF SOUTHERN PACIFIC BANK

 

Assignment: 2

Reel/Frame: 012745/0864

Recorded: 03/26/2002

Conveyance: SECURITY AGREEMENT

Assignor: NSGDATA.COM, INC.

Exec Dt: 03/08/2002

Assignee: NXNETWORKS, INC.

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

SCHEDULE 7.02(d)

TO

THE CREDIT AGREEMENT

Existing Indebtedness

Letters of Credit:

 

Beneficiary

   Instrument
Number    Liability Amount
(USD)      Expiry Date

Vonage America Inc.

   T623110    $ 7,000,000.00       3/14/2011

Vonage America Inc.

   TTS317265    $ 10,000,000.00       3/2/2011

Vonage America Inc.

   2950713459    $ 535,000.00       6/24/2011

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

SCHEDULE 7.03(f)

TO

THE CREDIT AGREEMENT

Investments

None.

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

SCHEDULE 7.09

TO

THE CREDIT AGREEMENT

Burdensome Agreements

None.

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

SCHEDULE 10.02

TO

THE CREDIT AGREEMENT

Administrative Agent’s Office,

Certain Addresses for Notices

BORROWERS:

Vonage Holdings Corp.

Street Address: 23 W. Main Street

City, State ZIP Code: Holmdel, NJ 07733

Attention: Barry Rowan, Chief Financial Officer

Telephone: 732.444.2767

Telecopier: 732.817.0293

Electronic Mail: barry.rowan@vonage.com

Website Address: www.vonage.com

U.S. Taxpayer Identification Number: 11-3547680

With a copy to:

Vonage Holdings Corp.

Street Address: 23 W. Main Street

City, State ZIP Code: Holmdel, NJ 07733

Attention: Kurt Rogers, Chief Legal Officer

Telephone: 732.444.2364

Telecopier: 732.202.5221

Electronic Mail: kurt.rogers@vonage.com

Website Address: www.vonage.com

U.S. Taxpayer Identification Number: 11-3547680

ADMINISTRATIVE AGENT:

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

Street Address: 101 N. Tryon St

Mail Code: NC1-001-04-39

City, State ZIP Code: Charlotte, NC 28255

Attention: Charles Hensley

Telephone: 980-388-3225

Telecopier: 704-719-5362

Electronic Mail: charles.hensley@baml.com

Account No.: 1366212250600

Ref: Vonage America, Inc

ABA# 026009593

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

Other Notices as Administrative Agent: (financials and all notices to lenders)

Bank of America, N.A.

Agency Management

Street Address: 901 Main Street

Mail Code: TX1-492-14-11

City, State ZIP Code: Dallas, TX 75202

Attention: Antonikia (Toni) L. Thomas

Telephone: 214-209-1569

Telecopier: 877-206-8432

Electronic Mail: antonikia.l.thomas@baml.com

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

EXHIBIT A

FORM OF COMMITTED LOAN NOTICE

Date:                     ,         

 

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of December 14,
2010 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among VONAGE AMERICA INC., a Delaware corporation
(“Vonage America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings”
and, together with Vonage America, the “Borrowers” and each a “Borrower”), the
Lenders from time to time party thereto, and BANK OF AMERICA, N.A., as
Administrative Agent.

The undersigned hereby requests (select one):

¨ A Borrowing of Loans

¨ A [conversion] [continuation] of Loans

 

  1. On                                          (a Business Day).

 

  2. In the amount of $                    

 

  3. Comprised of [Base Rate Loan] [Eurodollar Rate Loan]

 

  [4.

For Eurodollar Rate Loans: with an Interest Period of          months.]1

 

1

To be included for Eurodollar Rate Loans only.

 

A - 1

Form of Committed Loan Notice

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

[Each Borrower hereby represents and warrants that the conditions specified in
Sections 4.02(a) and (b) shall be satisfied on and as of the date of the
applicable Credit Extension.]2

 

VONAGE AMERICA INC.

By:

 

 

Name:

 

 

Title:

 

 

VONAGE HOLDINGS CORP.

By:

 

 

Name:

 

 

Title:

 

 

 

2

Not required to be included in a Committed Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans.

 

A - 2

Form of Committed Loan Notice

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

EXHIBIT B

FORM OF NOTE

                    ,         

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby promise to pay to
                     or registered assigns (the “Lender”), in accordance with
the provisions of the Agreement (as hereinafter defined), the principal amount
of the Loan from time to time made by the Lender to the Borrowers under that
certain Credit Agreement, dated as of December 14, 2010 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among the Borrowers, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent.

The Borrowers promise to pay interest on the unpaid principal amount of the Loan
made by the Lender from the date of such Loan until such principal amount is
paid in full, at such interest rates and at such times as provided in the
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent’s Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

This Note is one of the Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein. This Note is also entitled to the benefits of the
Guaranty and is secured by the Collateral. Upon the occurrence and continuation
of one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Note may be declared to be, immediately due and
payable all as provided in the Agreement. The Loan made by the Lender shall be
evidenced by one or more loan accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.

Each Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

 

B - 1

Form of Note

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

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

 

VONAGE AMERICA INC.

By:

 

 

Name:

 

 

Title:

 

 

VONAGE HOLDINGS CORP.

By:

 

 

Name:

 

 

Title:

 

 

 

B - 2

Form of Note

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

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

  

Type of
Loan Made

  

Amount of
Loan Made

  

End of
Interest
Period

  

Amount of
Principal or
Interest Paid
This Date

  

Outstanding
Principal
Balance This
Date

  

Notation
Made By

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

    

 

     

 

     

 

     

 

     

 

     

 

  

 

B - 3

Form of Note

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

EXHIBIT C

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                     ,             

 

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of December 14,
2010 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the “Agreement;” the terms defined therein being used
herein as therein defined), among VONAGE AMERICA INC., a Delaware corporation
(“Vonage America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings”
and, together with Vonage America, the “Borrowers” and each a “Borrower”), the
lenders from time to time party thereto, and BANK OF AMERICA, N.A., as
Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                                                   of Holdings, and
that, as such, he/she is authorized to execute and deliver this Compliance
Certificate to the Administrative Agent on the behalf of the Borrowers, and
that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. Holdings has delivered the year-end audited financial statements required by
Section 6.01(a) of the Agreement for the fiscal year of Holdings ended as of the
above date, together with the report and opinion of an independent certified
public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. Holdings has delivered the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of Holdings ended as of
the above date. Such consolidated financial statements fairly present the
financial condition, results of operations and cash flows of Holdings and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. A review of the activities of the Borrowers during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Borrowers performed and observed all their
respective Obligations under the Loan Documents, and

[select one:]

[to the best knowledge of the undersigned, during such fiscal period the
Borrowers performed and observed each covenant and condition of the Loan
Documents applicable to them, and no Default has occurred and is continuing.]

 

C - 1

Form of Compliance Certificate

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

—or—

[to the best knowledge of the undersigned, the following covenants or conditions
have not been performed or observed and the following is a list of each such
Default and its nature and status:]

4. The representations and warranties of the Borrowers contained in Article V of
the Agreement and all representations and warranties of any Loan Party that are
contained in any document furnished at any time under or in connection with the
Loan Documents, are true and correct in all material respects (except that any
representation and warranty that is already qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects, subject to
such qualification) on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct in all material respects (except that any
representation and warranty that is already qualified as to “materiality” or
“Material Adverse Effect” shall be true and correct in all respects, subject to
such qualification) as of such earlier date, and except that for purposes of
this Compliance Certificate, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 of the Agreement shall be deemed to
refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements in
connection with which this Compliance Certificate is delivered.

5. The financial covenant analyses and information set forth on Schedules 1 [and
2] [through 3] attached hereto are true and accurate on and as of the date of
this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                    ,             .

 

VONAGE HOLDINGS CORP.

By:

 

 

Name:

 

 

Title:

 

 

 

C - 2

Form of Compliance Certificate

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

For the Quarter/Year ended                     ,         

                                                 (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

 

I.    Section 7.11(a) – Consolidated Leverage Ratio.       A.    Consolidated
Funded Indebtedness at Statement Date:    $                    B.   
Consolidated EBITDA for Measurement Period ending on above date (“Subject
Period”):          1.    Consolidated Net Income for Subject Period:    $
                      2.    Consolidated interest expense for Subject Period:   
$                       3.    Provisions for taxes based on income for Subject
Period:    $                       4.    Total depreciation expense for Subject
Period:    $                       5.    Total amortization expense (other than
amortization of deferred customer acquisitions costs) for Subject Period:    $
                      6.    Non-cash stock compensation expense arising during
such period from the granting of equity-based compensation, consistent with past
practice, and other non-cash stock expense for Subject Period:    $             
         7.    Any financial advisory fees, financing arrangement fees,
accountant fees, legal fees, rating agency fees, transfer or mortgage recording
taxes and other out-of-pocket expenses of Holdings or any of its subsidiaries
(including expenses of third parties paid or reimbursed by Holdings or any of
its subsidiaries) incurred directly in connection with the Loan Documents or any
amendments thereto, the Transaction, any acquisition permitted under the terms
of the Loan Documents or the issuance of any debt or equity securities, any
refinancing transaction or any amendment or other modification of any debt
instruments to the extent not prohibited by the terms of the Loan Documents for
Subject Period:    $                       8.    Amendment fees and consent fees
payable in connection with the Transaction and with amendments to any of the
Loan Documents for Subject Period:    $                

 

C - 3

Form of Compliance Certificate

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

 

    9.    Prepayment premiums and make-whole payments payable in connection with
the Refinancing and with any permitted repayments of Indebtedness in accordance
with the terms of such Indebtedness for Subject Period:    $                    
10.    Amortization of costs associated with permitted issuances of Indebtedness
for Subject Period:    $                     11.    Amortization of beneficial
conversions or original issue discount associated with any capital stock of
Holdings (other than Disqualified Capital Stock) for Subject Period:    $
                    12.    Non-cash loss attributable to the mark-to-market
movement in the valuation of obligations under Swap Contracts (to the extent the
cash impact resulting from such loss has not been realized) or other derivative
instruments pursuant to Accounting Standards Codification 815 for Subject
Period:    $                     13.    Non-recurring costs payable in
connection with the establishment of rate management transactions permitted
under the Loan Documents for Subject Period:    $                     14.   
Realized and unrealized losses on foreign currencies incurred in the ordinary
course of business (provided that any such loss that was added back while
unrealized shall not be added back when realized without a corresponding
reversal of such unrealized loss) for Subject Period    $                    
15.    Extraordinary losses (as determined in accordance with GAAP and reflected
below operating costs) for Subject Period:    $                     16.    Any
losses attributable to asset sales outside of the ordinary course of business
for Subject Period:    $                     17.    Any loss on early
extinguishment of Indebtedness for Subject Period:    $                     18.
   Interest income for Subject Period:    $                     19.   
Extraordinary gains and other extraordinary income (as determined in accordance
with GAAP and reflected below operating income) for Subject Period:    $
               

 

C - 4

Form of Compliance Certificate

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

 

     20.    Non-cash gains attributable to the mark-to-market movement in the
valuation of obligations under Swap Contracts (to the extent the cash impact
resulting from such loss has not been realized) or other derivative instruments
pursuant to Accounting Standards Codification 815 for Subject Period:    $
                     21.    Realized and unrealized gains on foreign currencies
incurred in the ordinary course of business (provided that any such gain that
was subtracted while unrealized shall not be deducted when realized without a
corresponding reversal of such unrealized gain)    $                      22.   
Any non-cash stock compensation income and other non-cash income or credits
arising from the granting of stock options or the granting of stock appreciation
rights (for example, those arising from the reversal of accruals or the reversal
of previously recorded non-cash expense) for Subject Period:    $             
        23.    Any gains attributable to asset sales outside of the ordinary
course of business for Subject Period:    $                      24.    Any gain
on early extinguishment of Indebtedness for Subject Period:    $                
     25.    Consolidated EBITDA (Lines I.B.1 + 2 + 3 + 4 + 5 + 6 +7 + 8 + 9 + 10
+ 11 + 12 + 13 +14 + 15 + 16 + 17 - 18 - 19 - 20 - 21 – 22 -23 -24):    $
                  C.    Consolidated Leverage Ratio (Line I.A ÷ Line I.B.25):   
         to 1         Consolidated Leverage Ratio is in compliance with Section
7.11(a)? Yes/No   

 

C - 5

Form of Compliance Certificate

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

 

II.    Section 7.11(b) - Consolidated Interest Coverage Ratio       A.   
Consolidated EBITDA for Subject Period (Line I.B.25 above):    $                
   B.    Consolidated Cash Interest Charges for Subject Period:          1.   
All interest, premium payments, debt discount, fees, charges and related
expenses in connection with borrowed money (including capitalized interest) or
in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP paid or currently payable in
cash, for Subject Period:    $                       2.    All interest paid or
payable with respect to discontinued operations paid or currently payable in
cash, for Subject Period:    $                       3.    The portion of rent
expense under Capitalized Leases that is treated as interest in accordance with
GAAP, in each case, of or by Holdings and its Subsidiaries on a consolidated
basis, paid or currently payable in cash, for Subject Period:    $             
         4.    Consolidated Cash Interest Charges (Lines II.B.1 + 2 + 3):    $
                   C.    Consolidated Interest Coverage Ratio (Line II.A ÷ Line
II.B.4):             to 1          Consolidated Interest Coverage Ratio is in
compliance with Section 7.11(b)? Yes/No    III.    Section 7.12 - Capital
Expenditures.       A.    Capital Expenditures made during fiscal year to date:
   $                    B.    Capital Expenditures permitted, but not expended,
in prior fiscal year (£ $55,000,000):    $                    C.    Maximum
permitted Capital Expenditures ($55,000,000 + Line III.B):    $                
   D.    Excess (deficit) for covenant compliance (Line III.C – III.A):    $
               

 

C - 6

Form of Compliance Certificate

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

For the Quarter/Year ended                                      (“Statement
Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

Consolidated EBITDA

(in accordance with the definition of Consolidated EBITDA

as set forth in the Agreement)

 

Consolidated

EBITDA

    

Quarter

Ended

    

Quarter

Ended

    

Quarter

Ended

    

Quarter

Ended

    

Twelve
Months

Ended

Consolidated Net Income

                        

+   consolidated interest expense

                        

+   provisions for taxes based on income

                        

+   total depreciation expense

                        

+   total amortization expense (other than amortization of deferred customer
acquisitions costs)

                        

 

C - 1

Form of Compliance Certificate

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

+   non-cash stock compensation expense arising during such period from the
granting of equity-based compensation, consistent with past practice, and other
non-cash stock expense

                        

+   any financial advisory fees, financing arrangement fees, accountant fees,
legal fees, rating agency fees, transfer or mortgage recording taxes and other
out-of-pocket expenses of Holdings or any of its subsidiaries (including
expenses of third parties paid or reimbursed by Holdings or any of its
subsidiaries) incurred directly in connection with the Loan Documents or any
amendments thereto, the Transaction, any acquisition permitted under the terms
of the Loan Documents or the issuance of any debt or equity securities, any
refinancing transaction or any amendment or other modification of any debt
instruments to the extent not prohibited by the terms of the Loan Documents for

                        

 

C - 2

Form of Compliance Certificate

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

+   amendment fees and consent fees payable in connection with the Transaction
and with amendments to any of the Loan Documents

                        

+   prepayment premiums and make-whole payments payable in connection with the
Refinancing and with any permitted repayments of Indebtedness in accordance with
the terms of such Indebtedness

                        

+   amortization of costs associated with permitted issuances of Indebtedness

                        

+   amortization of beneficial conversions or original issue discount associated
with any capital stock of Holdings (other than Disqualified Capital Stock)

                        

+   non-cash loss attributable to the mark-to-market movement in the valuation
of obligations under Swap Contracts (to the extent the cash impact resulting
from such loss has not been realized) or other derivative instruments pursuant
to Accounting Standards Codification 815

                        

 

C - 3

Form of Compliance Certificate

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

+   non-recurring costs payable in connection with the establishment of rate
management transactions permitted under the Loan Documents

                        

+   realized and unrealized losses on foreign currencies incurred in the
ordinary course of business (provided that any such loss that was added back
while unrealized shall not be added back when realized without a corresponding
reversal of such unrealized loss)

                        

+   extraordinary losses (as determined in accordance with GAAP and reflected
below operating costs)

                        

+   any losses attributable to asset sales outside of the ordinary course of
business

                        

+   any loss on early extinguishment of Indebtedness

                        

-    interest income

                        

-    extraordinary gains and other extraordinary income (as determined in
accordance with GAAP and reflected below operating income)

                        

 

C - 4

Form of Compliance Certificate

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

-    non-cash gains attributable to the mark-to-market movement in the valuation
of obligations under Swap Contracts (to the extent the cash impact resulting
from such loss has not been realized) or other derivative instrument pursuant to
Accounting Standards Codification 815

                        

-    realized and unrealized gains on foreign currencies incurred in the
ordinary course of business (provided that any such gain that was subtracted
while unrealized shall not be deducted when realized without a corresponding
reversal of such unrealized gain)

                        

-    any non-cash stock compensation income and other non-cash income or credits
arising from the granting of stock options or the granting of stock appreciation
rights (for example, those arising from the reversal of accruals or the reversal
of previously recorded non-cash expense)

                        

-    any gains attributable to asset sales outside of the ordinary course of
business

                        

 

C - 5

Form of Compliance Certificate

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

-    any gain on early extinguishment of Indebtedness

              

=   Consolidated EBITDA

              

 

C - 6

Form of Compliance Certificate

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Excess Cash Flow

(in accordance with the definition of Excess Cash Flow

as set forth in the Agreement)

 

Excess Cash Flow

   Twelve
Months
Ended  

Consolidated EBITDA

  

+   decreases in Consolidated Working Capital

  

+   all cash income or gain to the extent excluded from Consolidated Net Income
in the calculation thereof or subtracted from Consolidated Net Income in the
calculation of Consolidated EBITDA

  

-    Consolidated Cash Interest Charges

  

-    scheduled principal payments actually paid with Internally Generated Cash

  

-    income taxes paid in cash

  

-    Capital Expenditures to the extent funded with Internally Generated Cash

  

-    increase in Consolidated Working Capital

  

-    cash expenses or charges that were excluded from Consolidated Net Income in
the calculation thereof or added to Consolidated Net Income in the calculation
of Consolidated EBITDA

  

=   Excess Cash Flow

  

 

C - 1

Form of Compliance Certificate

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EXHIBIT D-1

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each]3 Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each]4 Assignee identified in item 2 below ([the][each, an]
“Assignee”). [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees]5 hereunder are several and not joint.]6
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (the “Credit Agreement”), receipt
of a copy of which is hereby acknowledged by the Assignee. The Standard Terms
and Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] under the Credit Agreement and
any other documents or instruments delivered pursuant thereto to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of [the Assignor][the respective Assignors]
under the respective facilities identified below and (ii) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of [the Assignor (in its capacity as a Lender)][the
respective Assignors (in their respective capacities as Lenders)] against any
Person, whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause
(i) above (the rights and obligations sold and assigned by [the][any] Assignor
to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to
herein collectively as [the][an] “Assigned Interest”). Each such sale and
assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by [the][any] Assignor.

 

3

For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language. If the assignment is from multiple Assignors, choose the
second bracketed language.

4

For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language. If the assignment is to multiple Assignees, choose the
second bracketed language.

5

Select as appropriate.

6

Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 

D-1 - 1

Form of Assignment and Assumption

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1.   Assignor[s]:  

 

     

 

  2.   Assignee[s]:  

 

     

 

   

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

3.   Borrowers:   Vonage America Inc. and       Vonage Holdings Corp.  

 

4. Administrative Agent: Bank of America, N.A., as the administrative agent
under the Credit Agreement

 

5. Credit Agreement: Credit Agreement, dated as of December 14, 2010, among
Vonage America Inc., a Delaware corporation (“Vonage America”), Vonage Holdings
Corp., a Delaware corporation (“Holdings” and, together with Vonage America, the
“Borrowers” and each a “Borrower”), the Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent

 

6.   Assigned Interest:    

 

Assignor[s]7

  Assignee[s]8     Aggregate
Amount of
Commitment/Loans
for all Lenders9     Amount of
Commitment/
Loans
Assigned     Percentage
Assigned of
Commitment/
Loans10     CUSIP
Number       $                           $                            
                     %        $                           $                     
                            %        $                           $
                                                 %   

 

[7.  

Trade Date:                     ]11

Effective Date:                     , 20     [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

 

 

7

List each Assignor, as appropriate.

8

List each Assignee, as appropriate.

9

Amounts in this column and in the column immediately to the right to be adjusted
by the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.

10

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

11

To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.

 

D-1 - 2

Form of Assignment and Assumption

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The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR [NAME OF ASSIGNOR] By:  

 

      Title: ASSIGNEE [NAME OF ASSIGNEE]

By:

 

 

      Title:

 

[Consented to and]12 Accepted:

BANK OF AMERICA, N.A., as
Administrative Agent

By:  

 

  Title:

[VONAGE AMERICA INC., as
Borrower

By:  

 

  Title:

VONAGE HOLDINGS CORP., as
Borrower

By:  

 

  Title:]13

 

12

To be added if consent of the Administrative Agent is required under
Section 10.06 of the Credit Agreement.

13

To be added if consent of the Borrowers is required under Section 10.06 of the
Credit Agreement.

 

D-1 - 3

Form of Assignment and Assumption

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ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1. Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of [the][[the relevant] Assigned Interest,
(ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or
other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 10.06(b)(iii) and
(v) of the Credit Agreement (subject to such consents, if any, as may be
required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of [the][the relevant]
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is
sophisticated with respect to decisions to acquire assets of the type
represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned
Interest, is experienced in acquiring assets of such type, (v) it has received a
copy of the Credit Agreement, and has received or has been accorded the
opportunity to receive copies of the most recent financial statements delivered
pursuant to Section 6.01 thereof, as applicable, and such other documents and
information as it deems appropriate to make its own credit analysis and decision
to enter into this Assignment and Assumption and to purchase [the][such]
Assigned Interest, (vi) if it is not already a Lender under the Credit
Agreement, attached to the Assignment and Assumption is an Administrative
Questionnaire in the form of Exhibit D-2 to the Credit Agreement, (vii) the
Administrative Agent has received a processing and recordation fee of $3,500 as
of the Effective Date, unless the Administrative Agent, in its sole discretion,
elects to waive such processing and recordation fee, (viii) 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 credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest, and (ix) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by
[the][such] Assignee; and (b) agrees that (i) it will, independently

 

D-1 - 4

Form of Assignment and Assumption

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and without reliance upon the Administrative Agent, [the][any] Assignor 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 decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of [the][each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the][the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

 

D-1 - 5

Form of Assignment and Assumption

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EXHIBIT D-2

FORM OF ADMINISTRATIVE QUESTIONNAIRE

FAX ALONG WITH COMMITMENT LETTER TO: FAX
#:                                                             

 

I. Borrower Name: Vonage America, Inc. and Vonage Holdings Corp.

 

II. Legal Name of Lender of Record for Signature Page:

 

  •  

Signing Credit Agreement                                  YES              NO

 

  •  

Coming in via Assignment                                  YES              NO

 

III.      Type of Lender:  

 

(Bank, Asset Manager, Broker/Dealer, CLOICDO, Finance Company, Hedge Fund,
Insurance, Mutual Fund, Pension Fund, Other Regulated Investment Fund, Special
Purpose Vehicle, Other - please specify)

 

IV.   Domestic Address:

    

V.     Eurodollar Address:

                                           

 

VI. Contact Information:

Syndicate level information (which may contain material non-public information
about the Borrower and its related parties or their respective securities will
be made available to the Credit Contact(s). The Credit Contacts identified must
be able to receive such information in accordance with his/her institution’s
compliance procedures and applicable laws, including Federal and State
securities laws.

 

   

Credit Contact

 

Primary

Operations Contact

 

Secondary

Credit Contact

Name:             Title:             Address:             Telephone:            
Facsimile:             E-Mail Address:             IntraLinks E-Mail Address:  
         

Does Secondary Operations Contact need copy of notices?          YES          NO

 

D-2 - 1

Form of Administrative Questionnaire

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

 

   

Letter of

Credit Contact

 

Draft

Documentation Contact

 

Legal Counsel

Name:             Title:             Address:             Telephone:            
Facsimile:             E-Mail Address:             IntraLinks E-Mail Address:  
         

 

VII. Lender’s Standby Letter of Credit, Commercial Letter of Credit, and
Bankers’ Acceptance Fed Wire Payment Instructions (if applicable):

Pay to:

 

 

 

                (Bank Name)    

 

                (ABA #)    

 

                (Account #)    

 

                (Attention)  

VIII. Lender’s Fed Wire Payment Instructions:

Pay to:

 

 

            (Bank Name)  

 

            (ABA #)   (City/State)

 

            (Account #)   (Account Name)

 

            (Attention)  

 

D-2 - 2

Form of Administrative Questionnaire

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IX. Organizational Structure and Tax Status

Please refer to the enclosed withholding tax instructions below and then
complete this section accordingly:

Lender Taxpayer Identification Number (TIN):          -                        
    

Tax Withholding Form Delivered to Bank of America*: W-9

 

 

    W-9

 

      W-8BEN

 

      W-8ECI

 

    W-8EXP

 

    W-81MY

 

  Tax Contact   Name:  

 

  Title:  

 

  Address:  

 

  Telephone:  

 

  Facsimile:  

 

  E-Mail Address:  

 

 

NON-U.S. LENDER INSTITUTIONS

 

1. Corporations:

If your institution is incorporated outside of the United States for U.S.
federal income tax purposes, and is the beneficial owner of the interest and
other income it receives, you must complete one of the following three tax
forms, as applicable to your institution: a.) Form W-8BEN (Certificate of
Foreign Status of Beneficial Owner), b.) Form W-8ECI (Income Effectively
Connected to a U.S. Trade or Business), or c.) Form W-BEXP (Certificate of
Foreign Government or Governmental Agency).

A U.S. taxpayer identification number is required for any institution submitting
a Form W-8 ECI. It is also required on Form W-8BEN for certain institutions
claiming the benefits of a tax treaty with the U.S. Please refer to the
instructions when completing the form applicable to your institution. In
addition, please be advised that U.S. tax regulations do not permit the
acceptance of faxed forms. An original tax form must be submitted.

 

D-2 - 3

Form of Administrative Questionnaire

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2. Flow-Through Entities

If your institution is organized outside the U.S., and is classified for U.S.
federal income tax purposes as either a Partnership, Trust, Qualified or
Non-Qualified Intermediary, or other non-U.S. flow-through entity, an original
Form W-81MY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity,
or Certain U.S. branches for United States Tax Withholding) must be completed by
the intermediary together with a withholding statement. Flow-through entities
other than Qualified Intermediaries are required to include tax forms for each
of the underlying beneficial owners.

Please refer to the instructions when completing this form. In addition, please
be advised that U.S. tax regulations do not permit the acceptance of faxed
forms. Original tax form(s) must be submitted.

U.S. LENDER INSTITUTIONS:

If your institution is incorporated or organized within the United States, you
must complete and return Form W-9 (Request for Taxpayer Identification Number
and Certification). Please be advised that we require an original form W-9.

Pursuant to the language contained in the tax section of the Credit Agreement,
the applicable tax form for your institution must be completed and returned on
or prior to the date on which your institution becomes a lender under this
Credit Agreement. Failure to provide the proper tax form when requested will
subject your institution to U.S. tax withholding.

*Additional guidance and instructions as to where to submit this documentation
can be found at this link:

LOGO [g127642ex10_1bpg027.jpg]

 

X. Bank of America Payment Instructions:

 

Pay to:  

Bank of America, N.A.

New York, NY

ABA# 026009593

Account No. 1366212250600

Attn: Credit Services

Ref: Vonage America Inc

 

D-2 - 4

Form of Administrative Questionnaire

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EXHIBIT E

FORM OF GUARANTY

[See attached]

 

E - 1

Form of Guaranty

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Execution Version

GUARANTY

FOR VALUE RECEIVED, the sufficiency of which is hereby acknowledged, and in
consideration of credit and/or financial accommodation heretofore or hereafter
from time to time made or granted to VONAGE AMERICA INC., a Delaware corporation
(“Vonage America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings”
and, together with Vonage America, the “Borrowers” and each a “Borrower”) by
BANK OF AMERICA, N.A. (the “Administrative Agent”) and the other Secured
Parties, the undersigned Guarantor (whether one or more the “Guarantor,” and if
more than one jointly and severally) hereby furnishes its guaranty of the
Guaranteed Obligations (as hereinafter defined) as set forth below.

Reference is made to that certain Credit Agreement dated as of December 14, 2010
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”) among the Borrowers, the Administrative Agent, each lender from time
to time party thereto (the “Lenders”) and the other parties thereto. Capitalized
terms used and not defined herein are used with the meanings assigned to such
terms in the Credit Agreement.

1. Guaranty. The Guarantor hereby absolutely and unconditionally guarantees, as
a guaranty of payment and performance and not merely as a guaranty of
collection, prompt payment when due, whether at stated maturity, by required
prepayment, upon acceleration, demand or otherwise, and at all times thereafter,
of any and all of the Obligations whether for principal, interest, premiums,
fees indemnities, damages, costs, expenses or otherwise, of each Borrower to the
Secured Parties, and whether arising under the Credit Agreement or under any
other Loan Document, or under any Secured Cash Management Agreement or any
Secured Hedge Agreement (including all renewals, extensions, amendments,
refinancings and other modifications thereof and all reasonable out-of-pocket
costs, attorneys’ fees and expenses incurred by the Secured Parties in
connection with the collection or enforcement thereof), and whether recovery
upon such indebtedness and liabilities may be or hereafter become unenforceable
or shall be an allowed or disallowed claim under any proceeding or case
commenced by or against the Guarantor or any Borrower under Debtor Relief Laws,
and including interest that accrues after the commencement by or against any
Borrower of any proceeding under any Debtor Relief Laws (collectively, the
“Guaranteed Obligations”). The Administrative Agent’s books and records showing
the amount of the Guaranteed Obligations shall be admissible in evidence in any
action or proceeding, and shall be binding upon the Guarantor and conclusive for
the purpose of establishing the amount of the Guaranteed Obligations, absent a
showing of manifest error. This Guaranty shall not be affected by the
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations or any instrument or agreement evidencing any Guaranteed
Obligations, or by the existence, validity, enforceability, perfection,
non-perfection or extent of any collateral therefor, or by any fact or
circumstance relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of the Guarantor under this Guaranty
(other than payment in full of the Guaranteed Obligations), and the Guarantor
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to any or all of the foregoing.

 

1

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

2. Limitation of Guaranty. Any term or provision of this Guaranty or any other
Loan Document to the contrary notwithstanding, the maximum aggregate amount for
which the Guarantor shall be liable hereunder shall not exceed the maximum
amount for which the Guarantor can be liable without rendering this Guaranty or
any other Loan Document, as it relates to the Guarantor, subject to avoidance
under applicable Requirements of Law relating to fraudulent conveyance or
fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act and Section 548 of title 11 of the United States
Code or any applicable provisions of comparable Requirements of Law)
(collectively, “Fraudulent Transfer Laws”). Any analysis of the provisions of
this Guaranty for purposes of Fraudulent Transfer Laws shall take into account
the right of contribution established in Section 14 and, for purposes of such
analysis, give effect to any discharge of intercompany debt as a result of any
payment made under the Guaranty.

3. No Setoff or Deductions; Taxes; Payments. The Guarantor represents and
warrants that it is organized and resident in the United States of America or a
political subdivision thereof. The Guarantor shall make all payments hereunder
without setoff or counterclaim and free and clear of and without deduction for
any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Guarantor is compelled by law to
make such deduction or withholding. If any such obligation (other than one
arising with respect to Excluded Taxes) is imposed upon the Guarantor with
respect to any amount payable by it hereunder, the Guarantor will pay to such
Secured Party, on the date on which such amount is due and payable hereunder,
such additional amount in U.S. dollars as shall be necessary to enable such
Secured Party to receive the same net amount it would have received on such due
date had no such obligation been imposed upon the Guarantor. The Guarantor will
deliver promptly to the Administrative Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Guarantor hereunder. The obligations of the Guarantor under
this paragraph shall survive the payment in full of the Guaranteed Obligations
and termination of this Guaranty.

4. Rights of Lenders. The Guarantor consents and agrees that the Secured Parties
may, at any time and from time to time, without notice or demand, and without
affecting the enforceability or continuing effectiveness hereof: (a) amend,
extend, renew, compromise, discharge, accelerate or otherwise change the time
for payment or the terms of the Guaranteed Obligations or any part thereof;
(b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or
otherwise dispose of any security for the payment of this Guaranty or any
Guaranteed Obligations; (c) apply such security and direct the order or manner
of sale thereof as the Administrative Agent and the Lenders in their sole
discretion may determine; and (d) release or substitute one or more of any
endorsers or other guarantors of any of the Guaranteed Obligations. Without
limiting the generality of the foregoing, the Guarantor consents to the taking
of, or failure to take, any action which might in any manner or to any extent
vary the risks of the Guarantor under this Guaranty or which, but for this
provision, might operate as a discharge of the Guarantor.

5. Certain Waivers. The Guarantor waives (a) any defense arising by reason of
any disability or other defense of any Borrower or any other guarantor, or the
cessation from any cause whatsoever (including any act or omission of any
Secured Party) of the liability of any

 

2

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

Borrower; (b) any defense based on any claim that the Guarantor’s obligations
exceed or are more burdensome than those of the Borrowers; (c) the benefit of
any statute of limitations affecting the Guarantor’s liability hereunder;
(d) any right to proceed against any Borrower, proceed against or exhaust any
security for the Guaranteed Obligations, or pursue any other remedy in the power
of any Secured Party whatsoever; (e) any benefit of and any right to participate
in any security now or hereafter held by any Secured Party; and (f) to the
fullest extent permitted by law, any and all other defenses or benefits that may
be derived from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties. The Guarantor expressly waives all setoffs
and counterclaims and all presentments, demands for payment or performance,
notices of nonpayment or nonperformance, protests, notices of protest, notices
of dishonor and all other notices or demands of any kind or nature whatsoever
with respect to the Guaranteed Obligations, and all notices of acceptance of
this Guaranty or of the existence, creation or incurrence of new or additional
Guaranteed Obligations.

6. Obligations Independent. The obligations of the Guarantor hereunder are those
of primary obligor, and not merely as surety, and are independent of the
Guaranteed Obligations and the obligations of any other guarantor, and a
separate action may be brought against the Guarantor to enforce this Guaranty
whether or not any Borrower or any other person or entity is joined as a party.

7. Subrogation. The Guarantor shall not exercise any right of subrogation,
contribution, indemnity, reimbursement or similar rights with respect to any
payments it makes under this Guaranty until all of the Guaranteed Obligations
and any amounts payable under this Guaranty have been indefeasibly paid and
performed in full and the Commitments and the Facility are terminated. If any
amounts are paid to the Guarantor in violation of the foregoing limitation, then
such amounts shall be held in trust for the benefit of the Secured Parties and
shall forthwith be paid to the Secured Parties to reduce the amount of the
Guaranteed Obligations, whether matured or unmatured.

8. Termination; Reinstatement. This Guaranty is a continuing and irrevocable
guaranty of all Guaranteed Obligations now or hereafter existing and shall
remain in full force and effect until all Guaranteed Obligations are
indefeasibly paid in full in cash and the Commitments and the Facility with
respect to the Guaranteed Obligations are terminated. Notwithstanding the
foregoing, this Guaranty shall continue in full force and effect or be revived,
as the case may be, if any payment by or on behalf of any Borrower or the
Guarantor is made, or any of the Secured Parties exercises its right of setoff,
in respect of the Guaranteed Obligations and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into any of the Secured Parties in their discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Laws or otherwise, all as if such payment had
not been made or such setoff had not occurred and whether or not the Secured
Parties are in possession of or have released this Guaranty and regardless of
any prior revocation, rescission, termination or reduction. The obligations of
the Guarantor under this paragraph shall survive termination of this Guaranty.

9. Subordination. The Guarantor hereby subordinates the payment of all
obligations and indebtedness of any Borrower owing to the Guarantor, whether now
existing or hereafter

 

3

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

arising, including but not limited to any obligation of any Borrower to the
Guarantor as subrogee of the Secured Parties or resulting from the Guarantor’s
performance under this Guaranty, to the indefeasible payment in full in cash of
all Guaranteed Obligations. If the Secured Parties so request, any such
obligation or indebtedness of any Borrower to the Guarantor shall be enforced
and performance received by the Guarantor as trustee for the Secured Parties and
the proceeds thereof shall be paid over to the Secured Parties on account of the
Guaranteed Obligations, but without reducing or affecting in any manner the
liability of the Guarantor under this Guaranty.

10. Stay of Acceleration. In the event that acceleration of the time for payment
of any of the Guaranteed Obligations is stayed, in connection with any case
commenced by or against any Borrower under any Debtor Relief Laws, or otherwise,
all such amounts shall nonetheless be payable by the Guarantor immediately upon
demand by the Secured Parties.

11. Expenses. The Guarantor shall pay on demand all reasonable out-of-pocket
expenses (including reasonable attorneys’ fees and expenses) in any way relating
to the enforcement or protection of the Secured Parties’ rights under this
Guaranty or in respect of the Guaranteed Obligations, including any incurred
during any “workout” or restructuring in respect of the Guaranteed Obligations
and any incurred in the preservation, protection or enforcement of any rights of
the Secured Parties in any proceeding any Debtor Relief Laws. The obligations of
the Guarantor under this paragraph shall survive the payment in full of the
Guaranteed Obligations and termination of this Guaranty.

12. Miscellaneous. No provision of this Guaranty may be waived, amended,
supplemented or modified, except by a written instrument executed by the
Administrative Agent and the Guarantor (with the consent of the Lenders or the
Required Lenders if required under the Credit Agreement). No failure by the
Administrative Agent to exercise, and no delay in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy or power hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law or in equity. The unenforceability or invalidity of any
provision of this Guaranty shall not affect the enforceability or validity of
any other provision herein. Unless otherwise agreed by the Administrative Agent
and the Guarantor in writing, this Guaranty is not intended to supersede or
otherwise affect any other guaranty now or hereafter given by the Guarantor for
the benefit of the Secured Parties or any term or provision thereof.

13. Guarantor Supplements. Upon the execution and delivery by any Person of a
Joinder Agreement to the Security Agreement substantially in the form attached
as Exhibit 3 thereto (a “Guarantor Supplement”), (a) such Person shall be
referred to as an “Additional Guarantor” and shall become and be a Guarantor
hereunder, and each reference in this Guaranty to a “Guarantor” shall also mean
and be a reference to such Additional Guarantor, and each reference in any other
Loan Document to a “Guarantor” shall also mean and be a reference to such
Additional Guarantor, and (b) each reference herein to “this Guaranty,”
“hereunder,” “hereof” or words of like import referring to this Guaranty, and
each reference in any other Loan Document to the “Guaranty,” “thereunder,”
“thereof” or words of like import referring to this Guaranty, shall mean and be
a reference to this Guaranty as supplemented by such Guaranty Supplement

 

4

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14. Contribution. To the extent that any Guarantor shall be required hereunder
to pay a portion of the Guaranteed Obligations exceeding the greater of (a) the
amount of the economic benefit actually received by such Guarantor from the
Loans and (b) the amount such Guarantor would otherwise have paid if such
Guarantor had paid the aggregate amount of the Guaranteed Obligations (excluding
the amount thereof repaid by the Borrowers) in the same proportion as such
Guarantor’s net worth at the date enforcement is sought hereunder bears to the
aggregate net worth of all the Guarantors (taken together with the aggregate net
worth of all other “Guarantors” (as such term is defined in the Credit
Agreement) obligated with respect to the Guaranteed Obligations (the “Other
Guarantors”)) at the date of enforcement is sought hereunder, then each Other
Guarantor shall reimburse such other Guarantors for the amount of such excess,
pro rata, based on the respective net worths of such Other Guarantors at the
date enforcement hereunder is sought.

15. Condition of the Borrowers. The Guarantor acknowledges and agrees that it
has the sole responsibility for, and has adequate means of, obtaining from each
Borrower and any other guarantor such information concerning the financial
condition, business and operations of such Borrower and any such other guarantor
as the Guarantor requires, and that none of the Secured Parties has any duty,
and the Guarantor is not relying on the Secured Parties at any time, to disclose
to the Guarantor any information relating to the business, operations or
financial condition of any Borrower or any other guarantor (the Guarantor
waiving any duty on the part of the Secured Parties to disclose such information
and any defense relating to the failure to provide the same).

16. Setoff. If and to the extent any payment is not made when due hereunder, the
Administrative Agent may setoff and charge from time to time any amount so due
against any or all of the Guarantor’s accounts or deposits with the
Administrative Agent.

17. Representations and Warranties. The Guarantor represents and warrants that
(a) it is duly organized and in good standing under the laws of the jurisdiction
of its organization and has full capacity and right to make and perform this
Guaranty, and all necessary authority has been obtained; (b) this Guaranty
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms; (c) the making and performance of this Guaranty does not and
will not violate the provisions of any applicable law, regulation or order, and
does not and will not result in the breach of, or constitute a default or
require any consent under, any material agreement, instrument or document to
which it is a party or by which it or any of its property may be bound or
affected; and (d) all consents, approvals, licenses and authorizations of, and
filings and registrations with, any governmental authority required under
applicable law and regulations for the making and performance of this Guaranty
have been obtained or made and are in full force and effect.

18. Indemnification and Survival. Without limitation on any other obligations of
the Guarantor or remedies of the Administrative Agent under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless the Secured Parties from and against, and shall pay on
demand, any and all damages, losses, liabilities and expenses (including
reasonable attorneys’ fees and expenses and the allocated cost and disbursements
of internal legal counsel) that may be suffered or incurred by the Secured
Parties in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid

 

5

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and binding obligations of each Borrower enforceable against each Borrower in
accordance with their terms. The obligations of the Guarantor under this
paragraph shall survive the payment in full of the Guaranteed Obligations and
termination of this Guaranty.

19. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

20. SUBMISSION TO JURISDICTION. THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

21. WAIVER OF VENUE. THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
IN SECTION 20. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

22. SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 OF THE CREDIT
AGREEMENT. NOTHING IN THIS GUARANTY WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER

 

6

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PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.

 

7

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Executed this      day of December, 2010.

 

VONAGE NETWORK LLC

VONAGE MARKETING LLC

VONAGE WORLDWIDE INC.

VONAGE INTERNATIONAL INC.

NOVEGA VENTURE PARTNERS, INC.

VONAGE APPLICATIONS INC.,

as Guarantors

By:

 

 

  Name:   Kurt Rogers   Title:   Vice President & Secretary

DSP LLC,

as Guarantor

By:  

 

  Name:   Kurt Rogers   Title:   President

 

S-1

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Accepted and Agreed:

 

BANK OF AMERICA, N.A,

as Administrative Agent

By:

 

 

 

Name:

 

Title:

 

S-2

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EXHIBIT F

FORM OF SECURITY AGREEMENT

[See attached]

 

F - 1

Form of Security Agreement

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

Execution Version

 

 

 

SECURITY AGREEMENT

By

VONAGE AMERICA INC.

and

VONAGE HOLDINGS CORP.,

as the Borrowers

and

THE GUARANTORS PARTY HERETO

and

BANK OF AMERICA, N.A.,

as Administrative Agent

 

 

Dated as of December 14, 2010

 

 

 

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TABLE OF CONTENTS

 

          Page  

PREAMBLE

     1   

RECITALS

     1   

AGREEMENT

     2    ARTICLE I   

DEFINITIONS AND INTERPRETATION

  

SECTION 1.1.

   DEFINITIONS      2   

SECTION 1.2.

   INTERPRETATION      8   

SECTION 1.3.

   RESOLUTION OF DRAFTING AMBIGUITIES      8   

SECTION 1.4.

   PERFECTION CERTIFICATE      8    ARTICLE II   

GRANT OF SECURITY AND SECURED OBLIGATIONS

  

SECTION 2.1.

   GRANT OF SECURITY INTEREST      9   

SECTION 2.2.

   FILINGS      10    ARTICLE III   

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

  

  

SECTION 3.1.

   DELIVERY OF CERTIFICATED SECURITIES COLLATERAL      11   

SECTION 3.2.

   PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL      11   

SECTION 3.3.

   FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST      12   

SECTION 3.4.

   OTHER ACTIONS      12   

SECTION 3.5.

   JOINDER OF ADDITIONAL GUARANTORS      15   

SECTION 3.6.

   SUPPLEMENTS; FURTHER ASSURANCES      15    ARTICLE IV   

REPRESENTATIONS, WARRANTIES AND COVENANTS

  

SECTION 4.1.

   TITLE      16   

SECTION 4.2.

   VALIDITY OF SECURITY INTEREST      16   

 

-ii-

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SECTION 4.3.

   DEFENSE OF CLAIMS      17   

SECTION 4.4.

   OTHER FINANCING STATEMENTS      17   

SECTION 4.5.

   LOCATION OF INVENTORY AND EQUIPMENT      17   

SECTION 4.6.

   DUE AUTHORIZATION AND ISSUANCE      17   

SECTION 4.7.

   CONSENTS, ETC.      17   

SECTION 4.8.

   COLLATERAL      17   

SECTION 4.9.

   INSURANCE      18    ARTICLE V   

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

  

SECTION 5.1.

   PLEDGE OF ADDITIONAL SECURITIES COLLATERAL      18   

SECTION 5.2.

   VOTING RIGHTS; DISTRIBUTIONS; ETC.      18   

SECTION 5.3.

   DEFAULTS, ETC.      19   

SECTION 5.4.

   CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS   
  20    ARTICLE VI   

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

  

  

SECTION 6.1.    GRANT OF INTELLECTUAL PROPERTY LICENSE      20    SECTION 6.2.
   PROTECTION OF ADMINISTRATIVE AGENT’S SECURITY      21    SECTION 6.3.   
AFTER-ACQUIRED PROPERTY      21    SECTION 6.4.    LITIGATION      22   

ARTICLE VII

  

CERTAIN PROVISIONS CONCERNING RECEIVABLES

  

SECTION 7.1.

   MAINTENANCE OF RECORDS      22   

SECTION 7.2.

   LEGEND      23   

SECTION 7.3.

   MODIFICATION OF TERMS, ETC.      23   

SECTION 7.4.

   COLLECTION      23   

ARTICLE VIII

  

TRANSFERS

  

SECTION 8.1.

   TRANSFERS OF COLLATERAL      24   

 

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ARTICLE IX

  

REMEDIES

  

SECTION 9.1.

   REMEDIES      24   

SECTION 9.2.

   NOTICE OF SALE      26   

SECTION 9.3.

   WAIVER OF NOTICE AND CLAIMS      26   

SECTION 9.4.

   CERTAIN SALES OF COLLATERAL      26   

SECTION 9.5.

   NO WAIVER; CUMULATIVE REMEDIES      27   

SECTION 9.6.

   CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY      28    ARTICLE
X   

APPLICATION OF PROCEEDS

  

SECTION 10.1.

   APPLICATION OF PROCEEDS      28    ARTICLE XI   

MISCELLANEOUS

  

SECTION 11.1.

   CONCERNING ADMINISTRATIVE AGENT      28   

SECTION 11.2.

  

ADMINISTRATIVE AGENT MAY PERFORM; ADMINISTRATIVE AGENT APPOINTED
ATTORNEY-IN-FACT

     30   

SECTION 11.3.

   CONTINUING SECURITY INTEREST; ASSIGNMENT      30   

SECTION 11.4.

   TERMINATION; RELEASE      31   

SECTION 11.5.

   MODIFICATION IN WRITING      31   

SECTION 11.6.

   NOTICES      31   

SECTION 11.7.

  

GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL

     31   

SECTION 11.8.

   SEVERABILITY OF PROVISIONS      32   

SECTION 11.9.

   EXECUTION IN COUNTERPARTS      32   

SECTION 11.10.

   BUSINESS DAYS      32   

SECTION 11.11.

   NO CLAIMS AGAINST ADMINISTRATIVE AGENT      32   

SECTION 11.12.

   NO RELEASE      32   

SECTION 11.13.

   OBLIGATIONS ABSOLUTE      33   

SIGNATURES

        S-1   

 

EXHIBIT 1

   Form of Issuer’s Acknowledgment

EXHIBIT 2

   Form of Securities Pledge Amendment

EXHIBIT 3

   Form of Joinder Agreement

EXHIBIT 4

   Form of Copyright Security Agreement

EXHIBIT 5

   Form of Patent Security Agreement

EXHIBIT 6

   Form of Trademark Security Agreement

 

-iv-

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SECURITY AGREEMENT

This SECURITY AGREEMENT dated as of December 14, 2010 (as amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof, this “Agreement”) made by VONAGE AMERICA INC., a
Delaware corporation (“Vonage America”), VONAGE HOLDINGS CORP., a Delaware
corporation (“Holdings” and, together with Vonage America, the “Borrowers” and
each a “Borrower”), and the Guarantors from to time to time party hereto (the
“Guarantors”), as pledgors, assignors and debtors (the Borrowers and the
Guarantors, in such capacities and together with any successors in such
capacities, the “Pledgors,” and each, a “Pledgor”), in favor of BANK OF AMERICA,
N.A., in its capacity as administrative agent pursuant to the Credit Agreement
(as hereinafter defined), as pledgee, assignee and secured party (in such
capacities and together with any successors in such capacities, the
“Administrative Agent”).

R E C I T A L S :

A. The Borrowers, the Administrative Agent and the lending institutions listed
therein have, in connection with the execution and delivery of this Agreement,
entered into that certain credit agreement, dated as of December 14, 2010 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; which term shall also include and refer to any
increase in the amount of indebtedness under the Credit Agreement).

B. Each Guarantor has, pursuant to the Credit Agreement, entered into that
certain guaranty agreement, dated as of December 14, 2010 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
“Guaranty Agreement”), and unconditionally guaranteed the Obligations.

C. Each Borrower and each Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Credit
Agreement and the other Loan Documents and each is, therefore, willing to enter
into this Agreement.

D. This Agreement is given by each Pledgor in favor of the Administrative Agent
for the benefit of the Secured Parties to secure the payment and performance of
all of the Obligations.

F. It is a condition to (i) the obligations of the Lenders to make the Loans
under the Credit Agreement and (ii) the performance of the obligations of the
Secured Parties under Secured Hedge Agreements and Secured Cash Management
Agreements that constitute Obligations that each Pledgor execute and deliver the
applicable Loan Documents, including this Agreement.

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

A G R E E M E N T :

NOW THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Pledgor and the Administrative Agent hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

SECTION 1.1. Definitions.

(a) Unless otherwise defined herein or in the Credit Agreement, capitalized
terms used herein that are defined in the UCC shall have the meanings assigned
to them in the UCC; provided that in any event, the following terms shall have
the meanings assigned to them in the UCC:

“Accounts”; “Bank”; “Chattel Paper”; “Commercial Tort Claim”; “Commodity
Account”; “Commodity Contract”; “Commodity Intermediary”; “Documents”;
“Electronic Chattel Paper”; “Entitlement Order”; “Equipment”; “Financial Asset”;
“Fixtures”; “General Intangibles”, “Goods”, “Inventory”; “Letter-of-Credit
Rights”; “Letters of Credit”; “Money”; “Payment Intangibles”; “Proceeds”; “
Records”; “Securities Account”; “Securities Intermediary”; “Security
Entitlement”; “Supporting Obligations”; and “Tangible Chattel Paper.”

(b) Terms used but not otherwise defined herein that are defined in the Credit
Agreement shall have the meanings given to them in the Credit Agreement.
Section 1.02 of the Credit Agreement shall apply herein mutatis mutandis.

(c) The following terms shall have the following meanings:

“Account Debtor” shall mean each person who is obligated on a Receivable or
Supporting Obligation related thereto.

“Administrative Agent” shall have the meaning assigned to such term in the
Preamble hereof.

“Agreement” shall have the meaning assigned to such term in the Preamble hereof.

“Borrowers” shall have the meaning assigned to such term in the Preamble hereof.

“Collateral” shall have the meaning assigned to such term in Section 2.1 hereof.

 

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“Collateral Support” shall mean all property (real or personal) assigned,
hypothecated or otherwise securing any Collateral and shall include any security
agreement or other agreement granting a lien or security interest in such real
or personal property.

“Commodity Account Control Agreement” shall mean a control agreement in a form
that is reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Commodity Account.

“Contracts” shall mean, collectively, with respect to each Pledgor, all sale,
service, performance, equipment or property lease contracts, agreements and
grants and all other contracts, agreements or grants (in each case, whether
written or oral, or third party or intercompany), between such Pledgor and any
third party, and all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications thereof.

“Control” shall mean (i) in the case of each Deposit Account, “control,” as such
term is defined in Section 9-104 of the UCC, (ii) in the case of any Security
Entitlement, “control,” as such term is defined in Section 8-106 of the UCC, and
(iii) in the case of any Commodity Contract, “control,” as such term is defined
in Section 9-106 of the UCC.

“Control Agreements” shall mean, collectively, the Deposit Account Control
Agreement, the Securities Account Control Agreement and the Commodity Account
Control Agreement.

“Copyrights” shall mean, collectively, with respect to each Pledgor, all
copyrights (whether statutory or common law, whether established or registered
in the United States or any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished) and all
copyright registrations and applications made by such Pledgor, in each case,
whether now owned or hereafter created or acquired by or assigned to such
Pledgor, together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor’s use of such copyrights,
(ii) reissues, renewals, continuations and extensions thereof and amendments
thereto, (iii) income, fees, royalties, damages, claims and payments now or
hereafter due and/or payable with respect thereto, including damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present or future infringements thereof.

“Copyright Security Agreement” shall mean an agreement substantially in the form
of Exhibit 4 hereto.

“Credit Agreement” shall have the meaning assigned to such term in Recital A
hereof.

“Deposit Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Deposit Account.

 

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“Deposit Accounts” shall mean, collectively, with respect to each Pledgor,
(i) all “deposit accounts” as such term is defined in the UCC and in any event
shall include all accounts and sub-accounts relating to any of the foregoing
accounts and (ii) all cash, funds, checks, notes and instruments from time to
time on deposit in any of the accounts or sub-accounts described in clause
(i) of this definition.

“Distributions” shall mean, collectively, with respect to each Pledgor, all
dividends, cash, options, warrants, rights, instruments, distributions, returns
of capital or principal, income, interest, profits and other property, interests
(debt or equity) or proceeds, including as a result of a split, revision,
reclassification or other like change of the Pledged Securities, from time to
time received, receivable or otherwise distributed to such Pledgor in respect of
or in exchange for any or all of the Pledged Securities or Intercompany Notes.

“Excluded Deposit Account” shall mean (i) zero balance Deposit Accounts the
funds of which are transferred at the end of each Business Day to a Deposit
Account subject to the Administrative Agent’s Control, (ii) Deposit Accounts
which are exclusively used to fund payroll so long as the funds on deposit in
all such payroll accounts of the Pledgors do not at any time exceed the then
aggregate accrued payroll obligations of the Pledgors and their Subsidiaries and
(iii) each Deposit Account holding at all times less than $250,000 in the
aggregate together with all such other Deposit Accounts excluded pursuant to
this clause (iii).

“Excluded Property” shall mean

(a) any permit or license issued by a Governmental Authority to any Pledgor or
any agreement to which any Pledgor is a party, in each case, only to the extent
and for so long as the terms of such permit, license or agreement or any
Requirement of Law applicable thereto, validly prohibit the creation by such
Pledgor of a security interest in such permit, license or agreement in favor of
the Administrative Agent (after giving effect to Sections 9-406(d), 9-407(a),
9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any
other applicable law (including the Bankruptcy Code) or principles of equity);

(b) assets owned by any Pledgor on the date hereof or hereafter acquired and any
proceeds thereof that are subject to a Lien permitted by Section 7.01(i) of the
Credit Agreement to the extent and for so long as the contract or other
agreement in which such Lien is granted (or the documentation providing for the
Capitalized Lease Obligation, Synthetic Lease Obligations or purchase money
obligation subject to such Lien) validly prohibits the creation of any other
Lien on such assets and proceeds;

(c) any property of a person existing at the time such person is acquired or
merged with or into or consolidated with any Pledgor that is subject to a Lien
permitted by Section 7.01(j) of the Credit Agreement to the extent and for so
long as the contract or other agreement pursuant to which such Lien is granted
validly prohibits the creation of any other Lien on such property;

 

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(d) any Equity Interests of the type not required to be pledged pursuant to
Section 6.12(b) of the Credit Agreement;

(e) any intent-to-use trademark application to the extent and for so long as
creation by a Pledgor of a security interest therein would result in the loss by
such Pledgor of any material rights therein; and

(f) any property or assets in circumstances where the cost, burden or
consequences (including adverse tax consequences) of obtaining or perfecting a
security interest in such property or assets, as reasonably determined in
writing by the Administrative Agent, is excessive in relation to the practical
benefit to the Secured Parties afforded thereby;

provided, however, that Excluded Property shall not include any Proceeds,
substitutions or replacements of any Excluded Property referred to in clause
(a), (b), (c), (d), (e) of (f) (unless such Proceeds, substitutions or
replacements would constitute Excluded Property referred to in clauses (a), (b),
(c), (d), (e) of (f)).

“Goodwill” shall mean, collectively, with respect to each Pledgor, the goodwill
connected with such Pledgor’s business including all goodwill connected with
(i) the use of and symbolized by any Trademark or Intellectual Property License
with respect to any Trademark in which such Pledgor has any interest, (ii) all
know-how, trade secrets, customer and supplier lists, proprietary information,
inventions, methods, procedures, formulae, descriptions, compositions, technical
data, drawings, specifications, name plates, catalogs, confidential information
and the right to limit the use or disclosure thereof by any person, pricing and
cost information, business and marketing plans and proposals, consulting
agreements, engineering contracts and such other assets which relate to such
goodwill and (iii) all product lines of such Pledgor’s business.

“Guarantors” shall have the meaning assigned to such term in the Preamble
hereof.

“Instruments” shall mean, collectively, with respect to each Pledgor, all
“instruments,” as such term is defined in Article 9, rather than Article 3, of
the UCC.

“Intellectual Property Collateral” shall mean, collectively, the Patents,
Trademarks, Copyrights, Intellectual Property Licenses and Goodwill.

“Intellectual Property Licenses” shall mean, collectively, with respect to each
Pledgor, all license and distribution agreements with, and covenants not to sue,
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to sue for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trademarks or Copyrights or any other
patent, trademark or copyright.

 

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“Intercompany Notes” shall mean, with respect to each Pledgor, all intercompany
notes described in Schedule 10 to the Perfection Certificate and intercompany
notes hereafter acquired by such Pledgor and all certificates, instruments or
agreements evidencing such intercompany notes, and all assignments, amendments,
restatements, supplements, extensions, renewals, replacements or modifications
thereof to the extent permitted pursuant to the terms hereof except, in each
case, to extent constituting Excluded Property.

“Investment Property” shall mean a security, whether certificated or
uncertificated, Security Entitlement, Securities Account, Commodity Contract or
Commodity Account, excluding, however, the Securities Collateral.

“Joinder Agreement” shall mean an agreement substantially in the form of
Exhibit 3 hereto.

“Material Intellectual Property Collateral” shall mean any Intellectual Property
Collateral that is material (i) to the use and operation of the Collateral or
Mortgaged Property or (ii) to the business, results of operations, or financial
condition of any Pledgor.

“Mortgaged Property” shall have the meaning assigned to such term in the
Mortgages.

“Patents” shall mean, collectively, with respect to each Pledgor, all patents
issued or assigned to, and all patent applications and registrations made by,
such Pledgor (whether established or registered or recorded in the United States
or any other country or any political subdivision thereof), together with any
and all (i) rights and privileges arising under applicable law with respect to
such Pledgor’s use of any patents, (ii) inventions and improvements claimed
therein, (iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof and amendments thereto, (iv) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable
thereunder and with respect thereto including damages and payments for past,
present or future infringements thereof, (v) rights corresponding thereto
throughout the world and (vi) rights to sue for past, present or future
infringements thereof.

“Patent Security Agreement” shall mean an agreement substantially in the form of
Exhibit 5 hereto.

“Perfection Certificate” shall mean that certain perfection certificate dated
December 14, 2010, executed and delivered by each Pledgor in favor of the
Administrative Agent for the benefit of the Secured Parties, and each other
Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Administrative Agent) executed and delivered by the applicable
Guarantor in favor of the Administrative Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement.

 

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“Pledge Amendment” shall have the meaning assigned to such term in Section 5.1
hereof.

“Pledged Securities” shall mean, collectively, with respect to each Pledgor,
(i) all issued and outstanding Equity Interests of each issuer set forth on
Schedules 9(a) and 9(b) to the Perfection Certificate as being owned by such
Pledgor and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and
powers of such Pledgor relating to such Equity Interests in each such issuer or
under any Organization Document of each such issuer, and the certificates,
instruments and agreements representing such Equity Interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such Equity Interests, excluding, in each case, to
the extent constituting Excluded Property, (ii) all Equity Interests of any
issuer, which Equity Interests are hereafter acquired by such Pledgor (including
by issuance) and all options, warrants, rights, agreements and additional Equity
Interests of whatever class of any such issuer acquired by such Pledgor
(including by issuance), together with all rights, privileges, authority and
powers of such Pledgor relating to such Equity Interests or under any
Organization Document of any such issuer, and the certificates, instruments and
agreements representing such Equity Interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such Equity Interests, from time to time acquired by such Pledgor in any manner,
except, in each case, to the extent constituting Excluded Property, and
(iii) all Equity Interests issued in respect of the Equity Interests referred to
in clause (i) or (ii) upon any consolidation or merger of any issuer of such
Equity Interests.

“Pledgor” shall have the meaning assigned to such term in the Preamble hereof.

“Receivables” shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment
Intangibles, (iv) General Intangibles, (v) Instruments and (vi) all other rights
to payment, whether or not earned by performance, for goods or other property
sold, leased, licensed, assigned or otherwise disposed of, or services rendered
or to be rendered, regardless of how classified under the UCC together with all
of Pledgors’ rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Records relating thereto.

“Securities Account Control Agreement” shall mean an agreement in a form that is
reasonably satisfactory to the Administrative Agent establishing the
Administrative Agent’s Control with respect to any Securities Account.

“Securities Collateral” shall mean, collectively, the Pledged Securities, the
Intercompany Notes and the Distributions.

 

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“Trademarks” shall mean, collectively, with respect to each Pledgor, all
trademarks (including service marks), slogans, logos, certification marks, trade
dress, uniform resource locations (URL’s), domain names, corporate names and
trade names, whether registered or unregistered, owned by or assigned to such
Pledgor and all registrations and applications for the foregoing (whether
statutory or common law and whether established or registered in the United
States or any other country or any political subdivision thereof), together with
any and all (i) rights and privileges arising under applicable law with respect
to such Pledgor’s use of any trademarks, (ii) reissues, continuations,
extensions and renewals thereof and amendments thereto, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including damages, claims and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to sue for past, present and future
infringements thereof.

“Trademark Security Agreement” shall mean an agreement substantially in the form
of Exhibit 6 hereto.

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that, at any time, if by reason of
mandatory provisions of law, any or all of the perfection or priority of the
Administrative Agent’s and the Secured Parties’ security interest in any item or
portion of the Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect, at such time, in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or priority and for purposes of definitions relating to such provisions.

SECTION 1.2. Interpretation. The rules of interpretation specified in the Credit
Agreement shall be applicable to this Agreement.

SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor acknowledges and
agrees that it was represented by counsel in connection with the execution and
delivery hereof, that it and its counsel reviewed and participated in the
preparation and negotiation hereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party (i.e., the
Administrative Agent) shall not be employed in the interpretation hereof.

SECTION 1.4. Perfection Certificate. The Administrative Agent and each Secured
Party agree that the Perfection Certificate and all descriptions of Collateral,
schedules, amendments and supplements thereto are and shall at all times remain
a part of this Agreement.

 

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ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

SECTION 2.1. Grant of Security Interest. As collateral security for the payment
and performance in full of all the Obligations, each Pledgor hereby pledges and
grants to the Administrative Agent for the benefit of the Secured Parties, a
lien on and security interest in all of the right, title and interest of such
Pledgor in, to and under the following property, wherever located, and whether
now existing or hereafter arising or acquired from time to time (collectively,
the “Collateral”):

 

  (i) all Accounts;

 

  (ii) all Equipment, Goods, Inventory and Fixtures;

 

  (iii) all Documents, Instruments and Chattel Paper;

 

  (iv) all Letters of Credit and Letter-of-Credit Rights;

 

  (v) all Securities Collateral;

 

  (vi) all Investment Property;

 

  (vii) all Intellectual Property Collateral;

 

  (viii) the Commercial Tort Claims described on Schedule 12 to the Perfection
Certificate;

 

  (ix) all General Intangibles;

 

  (x) all Money and all Deposit Accounts;

 

  (xi) all Supporting Obligations;

 

  (xii) all books and records relating to the Collateral; and

 

  (xiii) to the extent not covered by clauses (i) through (xii) of this
sentence, all other personal property of such Pledgor, whether tangible or
intangible, and all Proceeds and products of each of the foregoing and all
accessions to, substitutions and replacements for, and rents, profits and
products of, each of the foregoing, any and all Proceeds of any insurance,
indemnity, warranty or guaranty payable to such Pledgor from time to time with
respect to any of the foregoing.

 

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Notwithstanding anything to the contrary contained in clauses (i) through
(xiii) above, the security interest created by this Agreement shall not extend
to, and the term “Collateral” shall not include, any Excluded Property. The
Pledgors shall from time to time at the request of the Administrative Agent
(which, so long as no Default or Event of Default exists, request shall not be
made more frequently than once in any period of twelve (12) consecutive months)
give written notice to the Administrative Agent identifying in reasonable detail
the Excluded Property and shall provide to the Administrative Agent such other
information regarding the Excluded Property as the Administrative Agent may
reasonably request. From and after the Closing Date, no Pledgor shall permit to
become effective in any document creating, governing or providing for any
permit, license or agreement a provision that would prohibit the creation of a
Lien on such permit, license or agreement in favor of the Administrative Agent
unless such Pledgor believes, in its reasonable judgment, that such prohibition
is usual and customary in transactions of such type.

SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably authorizes the
Administrative Agent at any time and from time to time to file in any relevant
jurisdiction any financing statements (including fixture filings) and amendments
thereto that contain the information required by Article 9 of the Uniform
Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment relating to the Collateral, including (i) whether such
Pledgor is an organization, the type of organization and any organizational
identification number issued to such Pledgor, (ii) any financing or continuation
statements or other documents without the signature of such Pledgor where
permitted by law, including the filing of a financing statement describing the
Collateral as “all assets now owned or hereafter acquired by the Pledgor or in
which Pledgor otherwise has rights” and (iii) in the case of a financing
statement filed as a fixture filing or covering Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Collateral relates. Each Pledgor agrees to provide
all information described in the immediately preceding sentence to the
Administrative Agent promptly upon request by the Administrative Agent.

(b) Each Pledgor hereby ratifies its authorization for the Administrative Agent
to file in any relevant jurisdiction any financing statements relating to the
Collateral if filed prior to the date hereof.

(c) Each Pledgor hereby further authorizes the Administrative Agent to file
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country), including the Copyright Security Agreement, the Patent Security
Agreement and the Trademark Security Agreement, or other documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
security interest granted by such Pledgor hereunder, without the signature of
such Pledgor, and naming such Pledgor, as debtor, and the Administrative Agent,
as secured party.

 

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ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

SECTION 3.1. Delivery of Certificated Securities Collateral. Each Pledgor
represents and warrants that all certificates, agreements or instruments
representing or evidencing the Securities Collateral in existence on the date
hereof have been delivered to the Administrative Agent in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that, subject to the Administrative Agent maintaining
possession thereof in the State of New York or another state, the Administrative
Agent has a perfected first priority security interest therein. Each Pledgor
hereby agrees that all certificates, agreements or instruments representing or
evidencing Securities Collateral acquired by such Pledgor after the date hereof
shall promptly (but in any event within ten days (or such longer period as may
be acceptable to the Administrative Agent) after receipt thereof by such
Pledgor) be delivered to and held by or on behalf of the Administrative Agent
pursuant hereto. All certificated Securities Collateral shall be in suitable
form for transfer by delivery or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent
shall have the right, at any time upon the occurrence and during the continuance
of any Event of Default, to endorse, assign or otherwise transfer to or to
register in the name of the Administrative Agent or any of its nominees or
endorse for negotiation any or all of the Securities Collateral, without any
indication that such Securities Collateral is subject to the security interest
hereunder. In addition, upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent shall have the right at any time to
exchange certificates representing or evidencing Securities Collateral for
certificates of smaller or larger denominations.

SECTION 3.2. Perfection of Uncertificated Securities Collateral. Each Pledgor
represents and warrants that the Administrative Agent has a perfected first
priority security interest in all uncertificated Pledged Securities pledged by
it hereunder that are in existence on the date hereof. Each Pledgor hereby
agrees that if any of the Pledged Securities that are “securities” for purposes
of the UCC are at any time not evidenced by certificates of ownership, then each
applicable Pledgor shall, to the extent permitted by applicable law, (i) cause
the issuer to execute and deliver to the Administrative Agent an acknowledgment
of the pledge of such Pledged Securities substantially in the form of Exhibit 1
hereto or such other form that is reasonably satisfactory to the Administrative
Agent, (ii) if necessary or desirable to perfect a security interest in such
Pledged Securities, cause such pledge to be recorded on the equityholder
register or the books of the issuer, execute any customary pledge forms or other
documents necessary or appropriate to complete the pledge and give the
Administrative Agent the right to transfer such Pledged Securities under the
terms hereof, and (iii) after the occurrence and during the continuance of any
Event of Default, upon request by the Administrative Agent, (A) cause the
Organization Documents of each such issuer that is a Subsidiary of any Borrower
to be amended to provide that such Pledged Securities shall be treated as
“securities” for purposes of the UCC and (B) cause such Pledged Securities to
become certificated and delivered to the Administrative Agent in accordance with
the provisions of Section 3.1.

 

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SECTION 3.3. Financing Statements and Other Filings; Maintenance of Perfected
Security Interest. Each Pledgor agrees that at the sole cost and expense of the
Pledgors, such Pledgor will maintain the security interest created by this
Agreement in the Collateral as a perfected first priority security interest
subject only to Permitted Liens.

SECTION 3.4. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Administrative Agent to
enforce, the Administrative Agent’s security interest in the Collateral, each
Pledgor represents and warrants (as to itself) as follows and agrees, in each
case at such Pledgor’s own expense, to take the following actions with respect
to the following Collateral:

(a) Instruments and Tangible Chattel Paper. As of the date hereof, no amounts
payable under or in connection with any of the Collateral are evidenced by any
Instrument or Tangible Chattel Paper other than such Instruments and Tangible
Chattel Paper listed in Schedule 10 to the Perfection Certificate. Each
Instrument and each item of Tangible Chattel Paper listed in Schedule 10 to the
Perfection Certificate has been properly endorsed, assigned and delivered to the
Administrative Agent, accompanied by instruments of transfer or assignment duly
executed in blank. If any amount then payable exceeding $250,000 under or in
connection with any of the Collateral shall be evidenced by any Instrument or
Tangible Chattel Paper, and such amount, together with all amounts payable
evidenced by any Instrument or Tangible Chattel Paper not previously delivered
to the Administrative Agent exceeds $500,000 in the aggregate for all Pledgors,
the Pledgor acquiring such Instrument or Tangible Chattel Paper shall promptly
(but in any event within ten days (or such longer period as may be acceptable to
the Administrative Agent) after receipt thereof) endorse, assign and deliver the
same to the Administrative Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Administrative Agent may from time to
time specify.

(b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit Accounts
other than the accounts listed in Schedule 13 to the Perfection Certificate. The
Administrative Agent has a first priority security interest in each such Deposit
Account, other than Excluded Deposit Accounts, which security interest is
perfected by Control (unless otherwise agreed by the Administrative Agent). No
Pledgor shall hereafter establish and maintain any Deposit Account unless (1) it
shall have given the Administrative Agent 10 days’ prior written notice of its
intention to establish such new Deposit Account with a Bank (or such other or
shorter notice as may be acceptable to the Administrative Agent) and (2) if such
Deposit Account is not an Excluded Deposit Account, such Bank and such Pledgor
shall have duly executed and delivered to the Administrative Agent a Deposit
Account Control Agreement with respect to such Deposit Account. The
Administrative Agent agrees with each Pledgor that the Administrative Agent
shall not give any instructions directing the disposition of funds from time to
time credited to any Deposit Account or withhold any withdrawal rights from such
Pledgor with respect to funds from

 

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time to time credited to any Deposit Account unless an Event of Default has
occurred and is continuing. Each Pledgor agrees that once the Administrative
Agent sends an instruction or notice to a Bank exercising its Control over any
Deposit Account such Pledgor shall not give any instructions or orders with
respect to such Deposit Account including, without limitation, instructions for
distribution or transfer of any funds in such Deposit Account. No Pledgor shall
grant Control of any Deposit Account to any person other than the Administrative
Agent.

(c) Securities Accounts and Commodity Accounts. (i) As of the date hereof, no
Pledgor has any Securities Accounts or Commodity Accounts other than those
listed in Schedule 13 to the Perfection Certificate. The Administrative Agent
has a first priority security interest in each such Securities Account and
Commodity Account, which security interest is perfected by Control. No Pledgor
shall hereafter establish and maintain any Securities Account or Commodity
Account with any Securities Intermediary or Commodity Intermediary unless (1) it
shall have given the Administrative Agent ten days’ prior written notice of its
intention to establish such new Securities Account or Commodity Account with
such Securities Intermediary or Commodity Intermediary (or such other or shorter
notice as may be acceptable to the Administrative Agent, (2) such Securities
Intermediary or Commodity Intermediary shall be reasonably acceptable to the
Administrative Agent and (3) such Securities Intermediary or Commodity
Intermediary, as the case may be, and such Pledgor shall have duly executed and
delivered a Control Agreement with respect to such Securities Account or
Commodity Account, as the case may be. Each Pledgor shall promptly deposit any
and all cash and Investment Property received by it into a Deposit Account or
Securities Account subject to Administrative Agent’s Control, except with
respect to Investment Property with an aggregate value not exceeding $250,000 at
any time. The Administrative Agent agrees with each Pledgor that the
Administrative Agent shall not give any Entitlement Orders or instructions or
directions to any issuer of uncertificated securities, Securities Intermediary
or Commodity Intermediary, and shall not withhold its consent to the exercise of
any withdrawal or dealing rights by such Pledgor, unless an Event of Default has
occurred and is continuing or, after giving effect to any such investment and
withdrawal rights, would occur. Each Pledgor agrees that once the Administrative
Agent sends an instruction or notice to a Securities Intermediary or Commodity
Intermediary exercising its Control over any Securities Account and Commodity
Account such Pledgor shall not give any instructions or orders with respect to
such Securities Account and Commodity Account including, without limitation,
instructions for investment, distribution or transfer of any Investment Property
or financial asset maintained in such Securities Account or Commodity Account.
No Pledgor shall grant Control over any Investment Property to any person other
than the Administrative Agent.

(ii) As between the Administrative Agent and the Pledgors, the Pledgors shall
bear the investment risk with respect to the Investment Property and Pledged
Securities, whether in the possession of, or maintained as a Security
Entitlement or deposit by, or subject to the Control of, the Administrative
Agent, a Securities Intermediary, a Commodity Intermediary, any Pledgor or any
other person.

 

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(d) Electronic Chattel Paper and Transferable Records. As of the date hereof, no
amount under or in connection with any of the Collateral is evidenced by any
Electronic Chattel Paper or any “transferable record” (as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction) other than such Electronic Chattel Paper
and transferable records listed in Schedule 10 to the Perfection Certificate. If
any amount payable under or in connection with any of the Collateral shall be
evidenced by any Electronic Chattel Paper or any transferable record, the
Pledgor acquiring such Electronic Chattel Paper or transferable record shall
promptly notify the Administrative Agent thereof and shall take such action as
the Administrative Agent may reasonably request to vest in the Administrative
Agent control of such Electronic Chattel Paper under Section 9-105 of the UCC or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The requirement in the preceding sentence shall not apply
to the extent that such amount, together with all amounts payable evidenced by
Electronic Chattel Paper or any transferable record in which the Administrative
Agent has not been vested control within the meaning of the statutes described
in the immediately preceding sentence, does not exceed $500,000 in the aggregate
for all Pledgors. The Administrative Agent agrees with such Pledgor that the
Administrative Agent will arrange, pursuant to procedures satisfactory to the
Administrative Agent and so long as such procedures will not result in the
Administrative Agent’s loss of control, for the Pledgor to make alterations to
the Electronic Chattel Paper or transferable record permitted under
Section 9-105 of the UCC or, as the case may be, Section 201 of the Federal
Electronic Signatures in Global and National Commerce Act or Section 16 of the
Uniform Electronic Transactions Act for a party in control to allow without loss
of control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Pledgor with respect to such
Electronic Chattel Paper or transferable record.

(e) Letter-of-Credit Rights. If any Pledgor is at any time a beneficiary under a
Letter of Credit now or hereafter issued, such Pledgor shall notify the
Administrative Agent within 30 days thereof and such Pledgor shall, at the
request of the Administrative Agent, pursuant to an agreement in form and
substance reasonably satisfactory to the Administrative Agent, either
(i) arrange for the issuer and any confirmer of such Letter of Credit to consent
to an assignment to the Administrative Agent of the proceeds of any drawing
under the Letter of Credit or (ii) arrange for the Administrative Agent to
become the transferee beneficiary of such Letter of Credit, with the
Administrative Agent agreeing, in each case, that the proceeds of any drawing
under the Letter of Credit are to be applied as provided in the Credit
Agreement. The actions in the preceding sentence shall not be required to the
extent that the amount of any such Letter of Credit, together with

 

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the aggregate amount of all other Letters of Credit for which the actions
described above in clause (i) and (ii) have not been taken, does not exceed
$250,000 individually or $1,000,000 in the aggregate for all Pledgors.

(f) Commercial Tort Claims. As of the date hereof, each Pledgor hereby
represents and warrants that it holds no Commercial Tort Claims other than those
listed in Schedule 12 to the Perfection Certificate. If any Pledgor shall at any
time hold or acquire a Commercial Tort Claim, such Pledgor shall, within 10
business days, notify the Administrative Agent in writing signed by such Pledgor
of the brief details thereof and grant to the Administrative Agent in such
writing a security interest therein and in the Proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Administrative Agent. The requirement in the
preceding sentence shall not apply to the extent that the amount of such
Commercial Tort Claim, together with the amount of all other Commercial Tort
Claims held by any Pledgor in which the Administrative Agent does not have a
security interest, does not exceed $1,000,000 in the aggregate for all Pledgors.

SECTION 3.5. Joinder of Additional Guarantors. The Pledgors shall cause each
Subsidiary of any Borrower which, from time to time, after the date hereof shall
be required to pledge any assets to the Administrative Agent for the benefit of
the Secured Parties pursuant to the provisions of the Credit Agreement to
execute and deliver to the Administrative Agent (i) a Joinder Agreement
substantially in the form of Exhibit 3 hereto and (ii) a Perfection Certificate,
in each case, within thirty (30) days of the date on which it was acquired or
created (or such longer period as may be acceptable to the Administrative
Agent), upon such execution and delivery, such Subsidiary shall constitute a
“Guarantor” and a “Pledgor” for all purposes hereunder with the same force and
effect as if originally named as a Guarantor and Pledgor herein. The execution
and delivery of such Joinder Agreement shall not require the consent of any
Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall
remain in full force and effect notwithstanding the addition of any new
Guarantor and Pledgor as a party to this Agreement.

SECTION 3.6. Supplements; Further Assurances. Each Pledgor shall take such
further actions, and execute and/or deliver to the Administrative Agent such
additional financing statements, amendments, assignments, agreements,
supplements, powers and instruments, as the Administrative Agent may in its
reasonable judgment deem necessary or appropriate in order to create, perfect,
preserve and protect the security interest in the Collateral as provided herein
and the rights and interests granted to the Administrative Agent hereunder, to
carry into effect the purposes hereof or better to assure and confirm the
validity, enforceability and priority of the Administrative Agent’s security
interest in the Collateral or permit the Administrative Agent to exercise and
enforce its rights, powers and remedies hereunder with respect to any
Collateral, including the filing of financing statements, continuation
statements and other documents (including this Agreement) under the Uniform
Commercial Code (or other similar laws) in effect in any jurisdiction with
respect to the security interest created hereby and the execution and delivery
of Control Agreements, all in form reasonably satisfactory to the Administrative
Agent and in such offices (including the United States Patent and Trademark
Office and the United States

 

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Copyright Office) wherever required by law to perfect, continue and maintain the
validity, enforceability and priority of the security interest in the Collateral
as provided herein and to preserve the other rights and interests granted to the
Administrative Agent hereunder, as against third parties, with respect to the
Collateral. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or refile and/or deliver to the
Administrative Agent from time to time upon reasonable request by the
Administrative Agent such lists, schedules, descriptions and designations of the
Collateral, copies of warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, supplements, additional security agreements,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments as the Administrative
Agent shall reasonably request. If an Event of Default has occurred and is
continuing, the Administrative Agent may institute and maintain, in its own name
or in the name of any Pledgor, such suits and proceedings as the Administrative
Agent may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the
Collateral. All of the foregoing shall be at the sole cost and expense of the
Pledgors.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

Each Pledgor represents, warrants and covenants as follows:

SECTION 4.1. Title. Except for the security interest granted to the
Administrative Agent for the benefit of the Secured Parties pursuant to this
Agreement and Permitted Liens, such Pledgor has rights and, as to Collateral
acquired by it from time to time after the date hereof, will have rights in each
item of Collateral pledged by it hereunder, free and clear of any and all Liens
or claims of others.

SECTION 4.2. Validity of Security Interest. The security interest in and Lien on
the Collateral granted to the Administrative Agent for the benefit of the
Secured Parties hereunder constitutes (a) a legal and valid security interest in
all the Collateral securing the payment and performance of the Obligations, and
(b) subject to the filing of financing statements in the applicable
jurisdictions, the Copyright Security Agreement in the United States Copyright
Office, and the Patent Security Agreement and Trademark Security Agreement with
the United States Patent and Trademark Office, a perfected security interest in
all the Collateral to the extent such security interest and Lien can be
perfected by filing in the applicable jurisdictions, the United States Copyright
Office, and the United States Patent and Trademark Office, or by possession or
by control to the extent such possession or control are required herein. The
security interest and Lien granted to the Administrative Agent for the benefit
of the Secured Parties pursuant to this Agreement in and on the Collateral will
at all times constitute a perfected, continuing security interest therein, prior
to all other Liens on the Collateral except for Permitted Liens. Notwithstanding
anything to the contrary herein or in the Credit Agreement, the Pledgors make no
representation

 

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regarding the attachment, perfection or priority of any lien on or security
interest in any of the Intercompany Notes executed by a Foreign Subsidiary
except to the extent the UCC is applicable thereto.

SECTION 4.3. Defense of Claims. Each Pledgor shall, at its own cost and expense,
defend title to the Collateral pledged by it hereunder and the security interest
therein and Lien thereon granted to the Administrative Agent and the priority
thereof against all claims and demands of all persons, at its own cost and
expense, at any time claiming any interest therein adverse to the Administrative
Agent or any other Secured Party other than Permitted Liens.

SECTION 4.4. Other Financing Statements. It has not filed, nor authorized any
third party to file (nor will there be), any valid or effective financing
statement (or similar statement, instrument of registration or public notice
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Collateral, except such as have been filed in favor of the
Administrative Agent pursuant to this Agreement or in favor of any holder of a
Permitted Lien with respect to such Permitted Lien. No Pledgor shall execute,
authorize or permit to be filed in any public office any financing statement (or
similar statement, instrument of registration or public notice under the law of
any jurisdiction) relating to any Collateral, except financing statements and
other statements and instruments filed or to be filed in respect of and covering
the interests granted by such Pledgor to the holder of the Permitted Liens.

SECTION 4.5. Location of Inventory and Equipment. It shall not move any
Equipment or Inventory to any location outside of the continental United States
other than in the ordinary course of business.

SECTION 4.6. Due Authorization and Issuance. All of the Pledged Securities
existing on the date hereof have been, and to the extent any Pledged Securities
are hereafter issued, such Pledged Securities will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable to the extent
applicable. There is no amount or other obligation owing by any Pledgor to any
issuer of the Pledged Securities in exchange for or in connection with the
issuance of the Pledged Securities or any Pledgor’s status as a partner or a
member of any issuer of the Pledged Securities.

SECTION 4.7. Consents, etc. In the event that the Administrative Agent desires
to exercise any remedies, voting or consensual rights or attorney-in-fact powers
set forth in this Agreement and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other person therefor, then,
upon the reasonable request of the Administrative Agent, such Pledgor agrees to
use its commercially reasonable efforts to assist and aid the Administrative
Agent to obtain as soon as practicable any necessary approvals or consents for
the exercise of any such remedies, rights and powers.

SECTION 4.8. Collateral. All information set forth herein, including the
schedules hereto, and all information contained in any documents, schedules and
lists heretofore delivered to any Secured Party, including the Perfection
Certificate and the schedules thereto, in connection with this Agreement, in
each case, relating to the Collateral, is accurate and complete

 

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in all material respects. The Collateral described on the schedules to the
Perfection Certificate constitutes all of the property of such type of
Collateral owned or held by the Pledgors, other than Collateral acquired since
delivery of the immediately preceding Perfection Certificate Supplement pursuant
to Section 6.02(j) of the Credit Agreement.

SECTION 4.9. Insurance. In the event that the proceeds of any insurance claim
are paid to any Pledgor after the Administrative Agent has exercised its right
to foreclose after an Event of Default, such Net Cash Proceeds shall be held in
trust for the benefit of the Administrative Agent and promptly after receipt
thereof shall be paid to the Administrative Agent for application in accordance
with the Credit Agreement.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

SECTION 5.1. Pledge of Additional Securities Collateral. Each Pledgor shall,
upon obtaining any Pledged Securities or Intercompany Notes of any person,
except in each case to the extent constituting Excluded Property and except with
respect to Pledged Securities with an aggregate value not exceeding $250,000 at
any time, accept the same in trust for the benefit of the Administrative Agent
and promptly (but in any event within ten days after receipt thereof, or such
longer period as may be acceptable to the Administrative Agent) deliver to the
Administrative Agent a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 hereto (each, a “Pledge Amendment”), and the
certificates and other documents required under Section 3.1 and Section 3.2
hereof in respect of the additional Pledged Securities or Intercompany Notes
which are required to be pledged pursuant to this Agreement, and confirming the
attachment of the Lien hereby created on and in respect of such additional
Pledged Securities or Intercompany Notes. Each Pledgor hereby authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement and
agrees that all Pledged Securities or Intercompany Notes listed on any Pledge
Amendment delivered to the Administrative Agent shall for all purposes hereunder
be considered Collateral except to the extent constituting Excluded Property.

SECTION 5.2. Voting Rights; Distributions; etc.

(a) So long as no Event of Default shall have occurred and be continuing:

(i) Each Pledgor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Securities Collateral or any part thereof
for any purpose not inconsistent with the terms or purposes hereof, the Credit
Agreement or any other document evidencing the Obligations; provided, however,
that no Pledgor shall in any event exercise such rights in any manner which
would reasonably be expected to have a Material Adverse Effect.

 

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(ii) Each Pledgor shall be entitled to receive and retain, and to utilize free
and clear of the Lien hereof, any and all Distributions, but only if and to the
extent made in accordance with the provisions of the Credit Agreement; provided,
however, that any and all such Distributions consisting of rights or interests
in the form of securities shall be forthwith delivered to the Administrative
Agent to the extent and as required by this Agreement to hold as Collateral.

(b) So long as no Event of Default shall have occurred and be continuing, the
Administrative Agent shall be deemed without further action or formality to have
granted to each Pledgor all necessary consents relating to voting rights and
shall, if necessary, upon written request of any Pledgor and at the sole cost
and expense of the Pledgors, from time to time execute and deliver (or cause to
be executed and delivered) to such Pledgor all such instruments as such Pledgor
may reasonably request in order to permit such Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to Section 5.2(a)(i)
hereof and to receive the Distributions which it is authorized to receive and
retain pursuant to Section 5.2(a)(ii) hereof.

(c) Upon the occurrence and during the continuance of any Event of Default and
after notice to the Borrowers:

(i) All rights of each Pledgor to exercise the voting and other consensual
rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i)
hereof shall immediately cease, and all such rights shall thereupon become
vested in the Administrative Agent, which shall thereupon have the sole right to
exercise such voting and other consensual rights.

(ii) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii)
hereof shall immediately cease and all such rights shall thereupon become vested
in the Administrative Agent, which shall thereupon have the sole right to
receive and hold as Collateral such Distributions.

(d) Each Pledgor shall, at its sole cost and expense, from time to time execute
and deliver to the Administrative Agent appropriate instruments as the
Administrative Agent may reasonably request in order to permit the
Administrative Agent to exercise the voting and other rights which it may be
entitled to exercise pursuant to Section 5.2(c)(i) hereof and to receive all
Distributions which it may be entitled to receive under Section 5.2(c)(ii)
hereof.

(e) All Distributions which are received by any Pledgor contrary to the
provisions of Section 5.2(a)(ii) hereof shall be received in trust for the
benefit of the Administrative Agent, shall be segregated from other funds of
such Pledgor and shall promptly be paid over to the Administrative Agent as
Collateral in the same form as so received (with any necessary endorsement).

SECTION 5.3. Defaults, etc. Each Pledgor hereby represents and warrants that, to
the knowledge of the Responsible Officers of such Pledgor, (i) such Pledgor is
not in

 

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default in the payment of any material portion of any mandatory capital
contribution, if any, required to be made under any agreement to which such
Pledgor is a party relating to the Pledged Securities pledged by it, and such
Pledgor is not in violation of any other material provisions of any such
agreement to which such Pledgor is a party, (ii) no Securities Collateral
pledged by such Pledgor is subject to any defense, material offset or material
counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any person with respect thereto, and (iii) as of the date
hereof, there are no certificates, instruments, or similar writings (other than
the Organization Documents and certificates representing such Pledged Securities
that have been delivered to the Administrative Agent) which evidence any Pledged
Securities of such Pledgor.

SECTION 5.4. Certain Agreements of Pledgors As Issuers and Holders of Equity
Interests.

(a) In the case of each Pledgor which is an issuer of Securities Collateral,
such Pledgor agrees to be bound by the terms of this Agreement relating to the
Securities Collateral issued by it and will comply with such terms insofar as
such terms are applicable to it.

(b) In the case of each Pledgor which is a partner, shareholder or member, as
the case may be, in a partnership, limited liability company or other entity,
such Pledgor hereby consents to the extent required by the applicable
Organization Document to the pledge by each other Pledgor, pursuant to the terms
hereof, of the Pledged Securities in such partnership, limited liability company
or other entity and, upon the occurrence and during the continuance of an Event
of Default, to the transfer of such Pledged Securities to the Administrative
Agent or its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner, shareholder or member in such partnership,
limited liability company or other entity with all the rights, powers and duties
of a general partner, limited partner, shareholder or member, as the case may
be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

SECTION 6.1. Grant of Intellectual Property License. For the purpose of enabling
the Administrative Agent, during the continuance of an Event of Default, to
exercise rights and remedies under Article IX hereof at such time as the
Administrative Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, each Pledgor hereby grants to the
Administrative Agent effective upon the occurrence of an Event of Default, to
the extent assignable, an irrevocable, non-exclusive license to use, assign,
license or sublicense any of the Intellectual Property Collateral now owned or
hereafter acquired by such Pledgor, wherever the same may be located. Such
license shall include access to all media in which any of the licensed items may
be recorded or stored and to all computer programs used for the

 

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compilation or printout hereof. In the event the Administrative Agent uses,
licenses, or sublicenses any of the Trademarks, such usage and/or licenses must
conform with all of Pledgor’s standards and quality control requirements and any
licensees and/or sublicensees must enter into written agreements whereby they
agree to comply with all of Pledgor’s standards and quality control requirements
in form and substance reasonably satisfactory to the Administrative Agent.

SECTION 6.2. Protection of Administrative Agent’s Security. On a continuing
basis, each Pledgor shall, at its sole cost and expense, (i) promptly following
its becoming aware thereof, notify the Administrative Agent of any final,
non-appealable material adverse determination in any proceeding or the
institution of any proceeding in any federal, state or local court or
administrative body or in the United States Patent and Trademark Office or the
United States Copyright Office regarding any Material Intellectual Property
Collateral, such Pledgor’s right to register such Material Intellectual Property
Collateral or its right to keep and maintain such registration in full force and
effect, (ii) maintain all Material Intellectual Property Collateral in
accordance with the requirements of the Credit Agreement, (iii) not permit to
lapse or become abandoned any Material Intellectual Property Collateral, and not
settle or compromise any pending or future litigation or administrative
proceeding with respect to any such Material Intellectual Property Collateral,
in either case except as shall be consistent with commercially reasonable
business judgment, (iv) upon such Pledgor obtaining knowledge thereof, promptly
notify the Administrative Agent in writing of any event which may be reasonably
expected to materially and adversely affect the value or utility of any Material
Intellectual Property Collateral or the rights and remedies of the
Administrative Agent in relation thereto including a levy or any legal process
against any Material Intellectual Property Collateral, (v) not license any
Material Intellectual Property Collateral other than licenses entered into by
such Pledgor in, or incidental to, the ordinary course of business, or amend or
permit the amendment of any of the licenses in a manner that materially and
adversely affects the right to receive payments thereunder, or in any manner
that would materially impair the value of any Material Intellectual Property
Collateral or the Lien on and security interest in the Material Intellectual
Property Collateral created therein hereby, without the consent of the
Administrative Agent, which consent will not unreasonably withheld, or as
otherwise permitted by the Credit Agreement (vi) diligently keep adequate
records respecting all Intellectual Property Collateral and (vii) furnish to the
Administrative Agent from time to time upon the Administrative Agent’s
reasonable request therefor reasonably detailed statements and amended schedules
further identifying and describing the Intellectual Property Collateral and such
other materials evidencing or reports pertaining to any Intellectual Property
Collateral as the Administrative Agent may from time to time request.

SECTION 6.3. After-Acquired Property. If any Pledgor shall at any time after the
date hereof (i) obtain any rights to any additional Intellectual Property
Collateral or (ii) become entitled to the benefit of any additional Intellectual
Property Collateral or any renewal or extension thereof, including any reissue,
division, continuation, or continuation-in-part of any Intellectual Property
Collateral, or any improvement on any Intellectual Property Collateral, or if
any intent-to use trademark application becomes registered or becomes an “actual
use” application, and is thus no longer subject to clause (e) of the definition
of Excluded Property, the provisions hereof shall automatically apply thereto
and any such item enumerated in the preceding

 

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clause (i) or (ii) shall automatically constitute Intellectual Property
Collateral as if such would have constituted Intellectual Property Collateral at
the time of execution hereof and be subject to the Lien and security interest
created by this Agreement without further action by any party. Each Pledgor
shall promptly provide to the Administrative Agent written notice of any of the
foregoing (in connection with delivery of the Perfection Certificate Supplement
pursuant to Section 6.02(j) of the Credit Agreement) and confirm the attachment
of the Lien and security interest created by this Agreement to any rights
described in clauses (i) and (ii) above by execution of an instrument in form
reasonably acceptable to the Administrative Agent and the filing of any
instruments or statements as shall be reasonably necessary to create, preserve,
protect or perfect the Administrative Agent’s security interest in such
Intellectual Property Collateral. Further, each Pledgor authorizes the
Administrative Agent to modify this Agreement by amending Schedules 11(a), 11(b)
and 11(c) to the Perfection Certificate to include any Intellectual Property
Collateral of such Pledgor acquired or arising after the date hereof.

SECTION 6.4. Litigation. Unless there shall occur and be continuing any Event of
Default, each Pledgor shall have the right to commence and prosecute in its own
name, as the party in interest, for its own benefit and at the sole cost and
expense of the Pledgors, such applications for protection of the Intellectual
Property Collateral and suits, proceedings or other actions to prevent the
infringement, counterfeiting, unfair competition, dilution, diminution in value
or other damage as are necessary to protect the Intellectual Property
Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall have the right but shall in no way be
obligated to file applications for protection of the Intellectual Property
Collateral and/or bring suit in the name of any Pledgor, the Administrative
Agent or the Secured Parties to enforce the Intellectual Property Collateral and
any license thereunder. In the event of such suit, each Pledgor shall, at the
reasonable request of the Administrative Agent, do any and all lawful acts and
execute any and all documents reasonably requested by the Administrative Agent
in aid of such enforcement and the Pledgors shall promptly reimburse and
indemnify the Administrative Agent for all costs and expenses incurred by the
Administrative Agent in the exercise of its rights under this Section 6.4 in
accordance with Section 11.04 of the Credit Agreement.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

SECTION 7.1. Maintenance of Records. Each Pledgor shall keep and maintain at its
own cost and expense complete records of each Receivable, in a manner consistent
with past or otherwise prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor’s sole
cost and expense, upon the Administrative Agent’s demand made at any time after
the occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Receivables, including all documents evidencing Receivables
and any books and records relating thereto to the Administrative Agent or to its
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which evidence and books and records may be retained by such Pledgor). Upon the
occurrence and during the continuance of any Event of Default, the
Administrative Agent may transfer a full and complete copy of any Pledgor’s
books, records, credit information, reports, memoranda and all other writings
relating to the Receivables to and for the use by any person that has acquired
or is contemplating acquisition of an interest in the Receivables or the
Administrative Agent’s security interest therein without the consent of any
Pledgor.

SECTION 7.2. Legend. Each Pledgor shall legend, at the reasonable request of the
Administrative Agent and in form and manner reasonably satisfactory to the
Administrative Agent, the Receivables and the other books, records and documents
of such Pledgor evidencing or pertaining to the Receivables with an appropriate
reference to the fact that the Receivables have been assigned to the
Administrative Agent for the benefit of the Secured Parties and that the
Administrative Agent has a security interest therein.

SECTION 7.3. Modification of Terms, etc. No Pledgor shall rescind or cancel any
obligations evidenced by any Receivable or modify any term thereof or make any
adjustment with respect thereto except in the ordinary course of business
consistent with past or otherwise prudent business practice, or extend or renew
any such obligations except in the ordinary course of business consistent with
past or otherwise prudent business practice or compromise or settle any dispute,
claim, suit or legal proceeding relating thereto or sell any Receivable or
interest therein except in the ordinary course of business consistent with
prudent business practice without the prior written consent of the
Administrative Agent. Each Pledgor shall timely fulfill all obligations on its
part to be fulfilled under or in connection with the Receivables.

SECTION 7.4. Collection. Each Pledgor shall cause to be collected from the
Account Debtor of each of the Receivables, as and when due in the ordinary
course of business and consistent with past or otherwise prudent business
practice (including Receivables that are delinquent, such Receivables to be
collected in accordance with generally accepted commercial collection
procedures), any and all amounts owing under or on account of such Receivable,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable, except that any Pledgor may, with
respect to a Receivable, allow in the ordinary course of business (i) a refund
or credit due as a result of returned or damaged or defective merchandise and
(ii) such extensions of time to pay amounts due in respect of Receivables and
such other modifications of payment terms or settlements in respect of
Receivables as shall be commercially reasonable in the circumstances, all in
accordance with such Pledgor’s ordinary course of business consistent with its
collection practices as in effect from time to time. The costs and expenses
(including attorneys’ fees) of collection, in any case, whether incurred by any
Pledgor, the Administrative Agent or any Secured Party, shall be paid by the
Pledgors.

 

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ARTICLE VIII

TRANSFERS

SECTION 8.1. Transfers of Collateral. No Pledgor shall sell, convey, assign or
otherwise dispose of, or grant any option with respect to, any of the Collateral
pledged by it hereunder except as expressly permitted by the Credit Agreement.

ARTICLE IX

REMEDIES

SECTION 9.1. Remedies. Upon the occurrence and during the continuance of any
Event of Default, the Administrative Agent may from time to time exercise in
respect of the Collateral, in addition to the other rights and remedies provided
for herein or otherwise available to it, the following remedies to the extent
permitted by applicable law:

(i) Personally, or by agents or attorneys, immediately take possession of the
Collateral or any part thereof, from any Pledgor or any other person who then
has possession of any part thereof with or without notice or process of law, and
for that purpose may enter upon any Pledgor’s premises where any of the
Collateral is located, remove such Collateral, remain present at such premises
to receive copies of all communications and remittances relating to the
Collateral and use in connection with such removal and possession any and all
services, supplies, aids and other facilities of any Pledgor;

(ii) Demand, sue for, collect or receive any money or property at any time
payable or receivable in respect of the Collateral including instructing the
obligor or obligors on any agreement, instrument or other obligation
constituting part of the Collateral to make any payment required by the terms of
such agreement, instrument or other obligation directly to the Administrative
Agent, and in connection with any of the foregoing, compromise, settle, extend
the time for payment and make other modifications with respect thereto;
provided, however, that in the event that any such payments are made directly to
any Pledgor, after Administrative Agent has notified Pledgor that it has given
such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Administrative Agent and shall promptly
(but in no event later than five (5) Business Day after receipt thereof) pay
such amounts to the Administrative Agent;

(iii) Sell, assign, grant a license to use or otherwise liquidate, or direct any
Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and
all investments made in whole or in part with the Collateral or any part
thereof, and take possession of the proceeds of any such sale, assignment,
license or liquidation;

 

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(iv) Take possession of the Collateral or any part thereof, by directing any
Pledgor in writing to deliver the same to the Administrative Agent at any
reasonable place or places so designated by the Administrative Agent, in which
event such Pledgor shall at its own expense: (A) forthwith cause the same to be
moved to the place or places designated by the Administrative Agent and
therewith delivered to the Administrative Agent, (B) store and keep any
Collateral so delivered to the Administrative Agent at such place or places
pending further action by the Administrative Agent and (C) while the Collateral
shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor’s obligation to deliver the Collateral as contemplated
in this Section 9.1(iv) is of the essence hereof. Upon application to a court of
equity having jurisdiction, the Administrative Agent shall be entitled to a
decree requiring specific performance by any Pledgor of such obligation;

(v) Withdraw all moneys, instruments, securities and other property in any bank,
financial securities, deposit or other account of any Pledgor constituting
Collateral for application to the Obligations as provided in Article X hereof;

(vi) Retain and apply the Distributions to the Obligations as provided in
Article X hereof;

(vii) Exercise any and all rights as beneficial and legal owner of the
Collateral, including perfecting assignment of and exercising any and all
voting, consensual and other rights and powers with respect to any Collateral;
and

(viii) Exercise all the rights and remedies of a secured party on default under
the UCC, and the Administrative Agent may also in its sole discretion, without
notice except as specified in Section 9.2 hereof, sell, assign or grant a
license to use the Collateral or any part thereof in one or more parcels at
public or private sale, at any exchange, broker’s board or at any of the
Administrative Agent’s offices or elsewhere, for cash, on credit or for future
delivery, and at such price or prices and upon such other commercially
reasonable terms as the Administrative Agent may deem appropriate in its
discretion. The Administrative Agent or any other Secured Party or any of their
respective Affiliates may be the purchaser, licensee, assignee or recipient of
the Collateral or any part thereof at any such sale and shall be entitled, for
the purpose of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold, assigned or licensed at such
sale, to use and apply any of the Obligations owed to such person as a credit on
account of the purchase price of the Collateral or any part thereof payable by
such person at such sale. Each purchaser, assignee, licensee or recipient at any
such sale shall acquire the property sold, assigned or licensed absolutely free
from any claim or right on the part of any Pledgor, and each Pledgor hereby
waives, to the fullest extent permitted by law, all rights of redemption, stay
and/or appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. The Administrative
Agent shall not be obligated to make any sale of the Collateral or any part
thereof regardless of notice of sale having been given. The Administrative Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. Each Pledgor hereby
waives,

 

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to the fullest extent permitted by law, any claims against the Administrative
Agent arising by reason of the fact that the price at which the Collateral or
any part thereof may have been sold, assigned or licensed at such a private sale
was less than the price which might have been obtained at a public sale.

SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and agrees that, to the
extent notice of sale or other disposition of the Collateral or any part thereof
shall be required by law, ten (10) days’ prior notice to such Pledgor of the
time and place of any public sale or of the time after which any private sale or
other intended disposition is to take place shall be commercially reasonable
notification of such matters. No notification need be given to any Pledgor if it
has signed, after the occurrence of an Event of Default, a statement renouncing
or modifying any right to notification of sale or other intended disposition.

SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby waives, to the
fullest extent permitted by applicable law, notice or judicial hearing in
connection with, after and during the continuance of an Event of Default, the
Administrative Agent’s taking possession or the Administrative Agent’s
disposition of the Collateral or any part thereof, including any and all prior
notice and hearing for any prejudgment remedy or remedies and any such right
which such Pledgor would otherwise have under law, and each Pledgor hereby
further waives, to the fullest extent permitted by applicable law: (i) all
damages occasioned by such taking of possession, (ii) all other requirements as
to the time, place and terms of sale or other requirements with respect to the
enforcement of the Administrative Agent’s rights hereunder and (iii) all rights
of redemption, appraisal, valuation, stay, extension or moratorium now or
hereafter in force under any applicable law. The Administrative Agent shall not
be liable for any incorrect or improper payment made pursuant to this Article IX
in the absence of gross negligence or willful misconduct on the part of the
Administrative Agent. Any sale of, or the grant of options to purchase, or any
other realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the applicable
Pledgor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Pledgor and against any and all persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through or under such Pledgor.

SECTION 9.4. Certain Sales of Collateral.

(a) Each Pledgor recognizes that, by reason of certain prohibitions contained in
law, rules, regulations or orders of any Governmental Authority, the
Administrative Agent may be compelled, with respect to any sale of all or any
part of the Collateral, to limit purchasers to those who meet the requirements
of such Governmental Authority. Each Pledgor acknowledges that any such sales
may be at prices and on terms less favorable to the Administrative Agent than
those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale shall
be deemed to have been made in a commercially reasonable manner and that, except
as may be required by applicable law, the Administrative Agent shall have no
obligation to engage in public sales.

 

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(b) Each Pledgor recognizes that, by reason of certain prohibitions contained in
the Securities Act, and applicable state securities laws, the Administrative
Agent may be compelled, with respect to any sale of all or any part of the
Securities Collateral and Investment Property, to limit purchasers to persons
who will agree, among other things, to acquire such Securities Collateral or
Investment Property for their own account, for investment and not with a view to
the distribution or resale thereof. Each Pledgor acknowledges that any such
private sales may be at prices and on terms less favorable to the Administrative
Agent than those obtainable through a public sale without such restrictions
(including a public offering made pursuant to a registration statement under the
Securities Act), and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Administrative Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Securities Collateral or
Investment Property for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.

(c) [Reserved]

(d) If the Administrative Agent determines to exercise its right to sell any or
all of the Securities Collateral or Investment Property, upon written request,
the applicable Pledgor shall from time to time furnish to the Administrative
Agent all such information as the Administrative Agent may request in order to
determine the number of securities included in the Securities Collateral or
Investment Property which may be sold by the Administrative Agent as exempt
transactions under the Securities Act and the rules of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.

(e) Each Pledgor further agrees that a breach of any of the covenants contained
in this Section 9.4 will cause irreparable injury to the Administrative Agent
and the other Secured Parties, that the Administrative Agent and the other
Secured Parties have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 9.4 shall
be specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.

SECTION 9.5. No Waiver; Cumulative Remedies.

(a) No failure on the part of the Administrative Agent to exercise, no course of
dealing with respect to, and no delay on the part of the Administrative Agent in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power,
privilege or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power, privilege or remedy; nor shall the
Administrative Agent be required to look first to, enforce or exhaust any other
security, collateral or guaranties. All rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies provided by law or
otherwise available.

 

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(b) In the event that the Administrative Agent shall have instituted any
proceeding to enforce any right, power, privilege or remedy under this Agreement
or any other Loan Document by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Administrative Agent, then and in every
such case, the Pledgors, the Administrative Agent and each other Secured Party
shall be restored to their respective former positions and rights hereunder with
respect to the Collateral, and all rights, remedies, privileges and powers of
the Administrative Agent and the other Secured Parties shall continue as if no
such proceeding had been instituted.

SECTION 9.6. Certain Additional Actions Regarding Intellectual Property. If any
Event of Default shall have occurred and be continuing, upon the written demand
of the Administrative Agent, each Pledgor shall execute and deliver to the
Administrative Agent an assignment or assignments of the registered Patents,
Trademarks and/or Copyrights and Goodwill and such other documents as are
necessary or appropriate to carry out the intent and purposes hereof. Within ten
(10) Business Days of written notice thereafter from the Administrative Agent,
each Pledgor shall make available to the Administrative Agent, to the extent
within such Pledgor’s power and authority, such personnel in such Pledgor’s
employ on the date of the Event of Default as the Administrative Agent may
reasonably designate to permit such Pledgor to continue, directly or indirectly,
to produce, advertise and sell the products and services sold by such Pledgor
under the registered Patents, Trademarks and/or Copyrights, and such persons
shall be available to perform their prior functions on the Administrative
Agent’s behalf.

ARTICLE X

APPLICATION OF PROCEEDS

SECTION 10.1. Application of Proceeds. The proceeds received by the
Administrative Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Administrative Agent of its remedies shall be applied, together with any
other sums then held by the Administrative Agent pursuant to this Agreement, in
accordance with the Credit Agreement.

ARTICLE XI

MISCELLANEOUS

SECTION 11.1. Concerning Administrative Agent.

(a) The Administrative Agent has been appointed as administrative agent pursuant
to the Credit Agreement. The actions of the Administrative Agent hereunder are
subject to the provisions of the Credit Agreement. The Administrative Agent
shall have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take

 

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or refrain from taking action (including the release or substitution of the
Collateral), in accordance with this Agreement and the Credit Agreement. The
Administrative Agent may employ agents and attorneys-in-fact in connection
herewith. The Administrative Agent may resign and a successor Administrative
Agent may be appointed in the manner provided in the Credit Agreement. Upon the
acceptance of any appointment as the Administrative Agent by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent under this Agreement, and the retiring
Administrative Agent shall thereupon be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent’s
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement while it was the
Administrative Agent.

(b) The Administrative Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if such
Collateral is accorded treatment substantially equivalent to that which the
Administrative Agent, in its individual capacity, accords its own property
consisting of similar instruments or interests, it being understood that neither
the Administrative Agent nor any of the Secured Parties shall have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Securities Collateral, whether or not the Administrative Agent or any other
Secured Party has or is deemed to have knowledge of such matters or (ii) taking
any necessary steps to preserve rights against any person with respect to any
Collateral.

(c) The Administrative Agent shall be entitled to rely upon any written notice,
statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel reasonably selected
by it.

(d) If any item of Collateral also constitutes collateral granted to the
Administrative Agent under any other deed of trust, mortgage, security
agreement, pledge or instrument of any type, in the event of any conflict
between the provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, the Administrative Agent, in its sole discretion, shall select
which provision or provisions shall control.

(e) The Administrative Agent may rely on advice of counsel as to whether any or
all UCC financing statements of the Pledgors need to be amended as a result of
any of the changes described in Section 6.18 of the Credit Agreement. If any
Pledgor fails to provide information to the Administrative Agent about such
changes on a timely basis, the Administrative Agent shall not be liable or
responsible to any party for any failure to maintain a perfected security
interest in such Pledgor’s property constituting Collateral, for which the
Administrative Agent needed to have information relating to such changes. The
Administrative Agent shall have no duty to inquire about such changes if any
Pledgor does not inform the Administrative Agent of such changes, the parties
acknowledging and agreeing that it would not be feasible or practical for the
Administrative Agent to search for information on such changes if such
information is not provided by any Pledgor.

 

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SECTION 11.2. Administrative Agent May Perform; Administrative Agent Appointed
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
in this Agreement or the Credit Agreement (including such Pledgor’s covenants to
(i) pay the premiums in respect of all required insurance policies hereunder,
(ii) pay and discharge any material taxes, assessments and special assessments,
levies, fees and governmental charges imposed upon or assessed against, and
landlords’, carriers’, mechanics’, workmen’s, repairmen’s, laborers’,
materialmen’s, suppliers’ and warehousemen’s Liens and other claims arising by
operation of law against, all or any portion of the Collateral, (iii) make
repairs, (iv) discharge Liens or (v) pay or perform any obligations of such
Pledgor under any Collateral) or if any representation or warranty on the part
of any Pledgor contained herein shall be breached beyond any applicable notice
or cure period, the Administrative Agent may (but shall not be obligated to) do
the same or cause it to be done or remedy any such breach, and may expend funds
for such purpose; provided, however, that the Administrative Agent shall in no
event be bound to inquire into the validity of any tax, Lien, imposition or
other obligation which such Pledgor fails to pay or perform as and when required
hereby and which such Pledgor does not contest in accordance with the provisions
of the Credit Agreement. Any and all amounts so expended by the Administrative
Agent shall be paid by the Pledgors in accordance with the provisions of
Section 10.04 of the Credit Agreement. Neither the provisions of this
Section 11.2 nor any action taken by the Administrative Agent pursuant to the
provisions of this Section 11.2 shall prevent any such failure to observe any
covenant contained in this Agreement nor any breach of representation or
warranty from constituting an Event of Default. Each Pledgor hereby appoints the
Administrative Agent its attorney-in-fact, with full power and authority in the
place and stead of such Pledgor and in the name of such Pledgor, or otherwise,
from time to time in the Administrative Agent’s discretion to take any action
and to execute any instrument consistent with the terms of the Credit Agreement,
this Agreement and the other Security Documents which the Administrative Agent
may deem necessary or advisable to accomplish the purposes hereof (but the
Administrative Agent shall not be obligated to and shall have no liability to
such Pledgor or any third party for failure to so do or take action). The
foregoing grant of authority is a power of attorney coupled with an interest and
such appointment shall be irrevocable for the term hereof. Each Pledgor hereby
ratifies all that such attorney shall lawfully do or cause to be done by virtue
hereof.

SECTION 11.3. Continuing Security Interest; Assignment. This Agreement shall
create a continuing security interest in the Collateral and shall (i) be binding
upon the Pledgors, their respective successors and assigns and (ii) inure,
together with the rights and remedies of the Administrative Agent hereunder, to
the benefit of the Administrative Agent and the other Secured Parties and each
of their respective successors, transferees and assigns. No other persons
(including any other creditor of any Pledgor) shall have any interest herein or
any right or benefit with respect hereto. Without limiting the generality of the
foregoing clause (ii), any Secured Party may assign or otherwise transfer any
indebtedness held by it secured by this Agreement to any other person, and such
other person shall thereupon become vested with all the benefits in respect
thereof granted to such Secured Party, herein or otherwise, subject however, to
the

 

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provisions of the Credit Agreement and, in the case of a Secured Party that is a
party to a Secured Hedge Agreement or a Secured Cash Management Agreements, such
Secured Hedge Agreement or Secured Cash Management Agreement, as applicable.
Each of the Pledgors agrees that its obligations hereunder and the security
interest created hereunder shall continue to be effective or be reinstated, as
applicable, if at any time payment, or any part thereof, of all or any part of
the Obligations is rescinded or must otherwise be restored by the Secured Party
upon the bankruptcy or reorganization of any Pledgor or otherwise.

SECTION 11.4. Termination; Release. Upon termination of the Aggregate
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations), this Agreement shall terminate. Upon termination
of this Agreement the Collateral shall be released from the Lien of this
Agreement. Upon such release or any release of Collateral or any part thereof in
accordance with the provisions of the Credit Agreement, the Administrative Agent
shall, upon the request and at the sole cost and expense of the Pledgors,
assign, transfer and deliver to Pledgor, against receipt and without recourse to
or warranty by the Administrative Agent except as to the fact that the
Administrative Agent has not encumbered the released assets, such of the
Collateral or any part thereof to be released (in the case of a release) as may
be in possession of the Administrative Agent and as shall not have been sold or
otherwise applied pursuant to the terms hereof, and, with respect to any other
Collateral, proper documents and instruments (including UCC-3 termination
financing statements or releases) acknowledging the termination hereof or the
release of such Collateral, as the case may be.

SECTION 11.5. Modification in Writing. No amendment, modification, supplement,
termination or waiver of or to any provision hereof, nor consent to any
departure by any Pledgor therefrom, shall be effective unless the same shall be
made in accordance with the terms of the Credit Agreement and unless in writing
and signed by the Administrative Agent. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by any Pledgor from the terms of any provision
hereof in each case shall be effective only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement or any other document evidencing the Obligations, no
notice to or demand on any Pledgor in any case shall entitle any Pledgor to any
other or further notice or demand in similar or other circumstances.

SECTION 11.6. Notices. Unless otherwise provided herein or in the Credit
Agreement, any notice or other communication herein required or permitted to be
given shall be given in the manner and become effective as set forth in the
Credit Agreement, as to any Pledgor, addressed to it at the address of the
Borrowers set forth in the Credit Agreement and as to the Administrative Agent,
addressed to it at the address set forth in the Credit Agreement, or in each
case at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section 11.6.

SECTION 11.7. Governing Law, Consent to Jurisdiction and Service of Process;
Waiver of Jury Trial. Sections 10.14 and 10.15 of the Credit Agreement are
incorporated herein, mutatis mutandis, as if a part hereof.

 

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SECTION 11.8. Severability of Provisions. Any provision hereof which is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating the remaining provisions hereof or affecting the validity,
legality or enforceability of such provision in any other jurisdiction.

SECTION 11.9. Execution in Counterparts. This Agreement and any amendments,
waivers, consents or supplements hereto may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original, but all
such counterparts together shall constitute one and the same agreement. Delivery
of any executed counterpart of a signature page of this Agreement by facsimile
or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.

SECTION 11.10. Business Days. In the event any time period or any date provided
in this Agreement ends or falls on a day other than a Business Day, then such
time period shall be deemed to end and such date shall be deemed to fall on the
next succeeding Business Day, and performance herein may be made on such
Business Day, with the same force and effect as if made on such other day.

SECTION 11.11. No Claims Against Administrative Agent. Nothing contained in this
Agreement shall constitute any consent or request by the Administrative Agent,
express or implied, for the performance of any labor or services or the
furnishing of any materials or other property in respect of the Collateral or
any part thereof, nor as giving any Pledgor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Administrative Agent in respect thereof or
any claim that any Lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the Lien
hereof.

SECTION 11.12. No Release. Nothing set forth in this Agreement or any other Loan
Document, nor the exercise by the Administrative Agent of any of the rights or
remedies hereunder, shall relieve any Pledgor from the performance of any term,
covenant, condition or agreement on such Pledgor’s part to be performed or
observed under or in respect of any of the Collateral or from any liability to
any person under or in respect of any of the Collateral or shall impose any
obligation on the Administrative Agent or any other Secured Party to perform or
observe any such term, covenant, condition or agreement on such Pledgor’s part
to be so performed or observed or shall impose any liability on the
Administrative Agent or any other Secured Party for any act or omission on the
part of such Pledgor relating thereto or for any breach of any representation or
warranty on the part of such Pledgor contained in this Agreement, the Credit
Agreement or the other Loan Documents, or under or in respect of the Collateral
or made in connection herewith or therewith. Anything herein to the contrary
notwithstanding, neither the Administrative Agent nor any other Secured Party
shall have any obligation or liability under any contracts, agreements and other
documents included in the Collateral by reason of this Agreement, nor shall the
Administrative Agent or any other Secured Party be obligated to perform any of
the obligations or duties of any Pledgor thereunder or to take any action to
collect or enforce any such contract, agreement or other document included in
the Collateral hereunder.

 

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SECTION 11.13. Obligations Absolute. All obligations of each Pledgor hereunder
shall be absolute and unconditional irrespective of:

(i) any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or the like of any other Pledgor;

(ii) any lack of validity or enforceability of the Credit Agreement, any Secured
Hedge Agreement, any Secured Cash Management Agreement or any other Loan
Document, or any other agreement or instrument relating thereto;

(iii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Credit Agreement, any Secured Hedge
Agreement, Secured Cash Management Agreement or any other Loan Document or any
other agreement or instrument relating thereto;

(iv) any pledge, exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Obligations;

(v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement, any Secured Hedge
Agreement, any Secured Cash Management Agreement or any other Loan Document
except as specifically set forth in a waiver granted pursuant to the provisions
of Section 11.5 hereof; or

(vi) any other circumstances which might otherwise constitute a defense
available to, or a discharge of, any Pledgor.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, each Pledgor and the Administrative Agent have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

VONAGE HOLDINGS CORP.,

as Pledgor

By:  

 

 

Name:

  Barry Rowan  

Title:

  Executive Vice President, Chief Financial Officer, Chief Administrative
Officer & Treasurer

VONAGE AMERICA INC.

VONAGE NETWORK LLC

VONAGE MARKETING LLC

VONAGE WORLDWIDE INC.

VONAGE INTERNATIONAL INC.

VONAGE APPLICATIONS INC.

NOVEGA VENTURE PARTNERS, INC.,

as Pledgors

By:  

 

 

Name:

  Kurt Rogers  

Title:

  Vice President & Secretary

DSP LLC,

as Pledgor

By:  

 

 

Name:

  Kurt Rogers  

Title:

  President

 

S-1

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BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

S-2

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EXHIBIT 1

[Form of]

ISSUER’S ACKNOWLEDGMENT

The undersigned hereby (i) acknowledges receipt of the Security Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the “Security Agreement;” capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of December 14, 2010, made by VONAGE AMERICA INC., a
Delaware corporation (“Vonage America”), VONAGE HOLDINGS CORP., a Delaware
corporation (“Holdings” and, together with Vonage America, the “Borrowers” and
each a “Borrower”), the Guarantors party thereto and BANK OF AMERICA, N.A., as
administrative agent (in such capacity and together with any successors in such
capacity, the “Administrative Agent”), (ii) agrees promptly to note on its books
the security interests granted to the Administrative Agent and confirmed under
the Security Agreement, (iii) agrees that it will comply with instructions of
the Administrative Agent with respect to the applicable Securities Collateral
(including all Pledged Securities issued by the undersigned) without further
consent by the applicable Pledgor, (iv) agrees to notify the Administrative
Agent upon obtaining knowledge of any interest in favor of any person in the
applicable Securities Collateral that is adverse to the interest of the
Administrative Agent therein and (v) waives any right or requirement at any time
hereafter to receive a copy of the Security Agreement in connection with the
registration of any Securities Collateral thereunder in the name of the
Administrative Agent or its nominee or the exercise of voting rights by the
Administrative Agent or its nominee.

 

[                                         ]

By:  

 

  Name:   Title:

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EXHIBIT 2

[Form of]

SECURITIES PLEDGE AMENDMENT

This Securities Pledge Amendment, dated as of [            ], 20[    ], is
delivered pursuant to Section 5.1 of the Security Agreement (as amended, amended
and restated, supplemented or otherwise modified from time to time, the
“Security Agreement;” capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Security Agreement), dated
as of December 14, 2010, made by VONAGE AMERICA INC., a Delaware corporation
(“Vonage America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings”
and, together with Vonage America, the “Borrowers” and each a “Borrower”), the
Guarantors party thereto and BANK OF AMERICA, N.A., as administrative agent (in
such capacity and together with any successors in such capacity, the
“Administrative Agent”). The undersigned hereby agrees that this Securities
Pledge Amendment may be attached to the Security Agreement and that the Pledged
Securities and/or Intercompany Notes listed on this Securities Pledge Amendment
shall be deemed to be and shall become part of the Collateral and shall secure
all Obligations.

PLEDGED SECURITIES

 

ISSUER

  

CLASS

OF STOCK

OR

INTERESTS

  

PAR

VALUE

  

CERTIFICATE NO(S).

  

NUMBER OF

SHARES

OR

INTERESTS

  

PERCENTAGE OF
ALL ISSUED CAPITAL

OR OTHER EQUITY
INTERESTS OF ISSUER

                                                                                
                                                                    

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INTERCOMPANY NOTES

 

ISSUER

  

PRINCIPAL

AMOUNT

  

DATE OF

ISSUANCE

  

INTEREST

RATE

  

MATURITY

DATE

                                   

 

[                                         ],

as Pledgor

By:  

 

 

Name:

 

Title:

AGREED TO AND ACCEPTED:

 

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

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EXHIBIT 3

[Form of]

JOINDER AGREEMENT

[Name of New Pledgor]

[Address of New Pledgor]

[Date]

                                         

                                         

                                         

                                         

Ladies and Gentlemen:

Reference is made to (i) the Security Agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Security
Agreement;” capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Security Agreement), dated as of
December 14, 2010, made by VONAGE AMERICA INC., a Delaware corporation (“Vonage
America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings” and,
together with Vonage America, the “Borrowers” and each a “Borrower”), the
Guarantors party thereto and BANK OF AMERICA, N.A., as administrative agent (in
such capacity and together with any successors in such capacity, the
“Administrative Agent”) and (ii) the Guaranty Agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Guaranty”),
dated as of December 14, 2010, made by the Guarantors party thereto.

This Joinder Agreement supplements (i) the Security Agreement and (ii) the
Guaranty, and is delivered by the undersigned, [                    ] (the “New
Pledgor”), pursuant to Section 3.5 of the Security Agreement and Section 6.12(b)
of the Credit Agreement. The New Pledgor hereby agrees to be bound as a
Guarantor and as a Pledgor party to the Security Agreement by all of the terms,
covenants and conditions set forth in the Security Agreement to the same extent
that it would have been bound if it had been a signatory to the Security
Agreement on the date of the Security Agreement. The New Pledgor also hereby
agrees to be bound as a party by all of the terms, covenants and conditions
applicable to it set forth in the Guaranty as to the same extent that it would
have been bound if it had been a signatory to the Guaranty on the

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date of the Guaranty. Without limiting the generality of the foregoing, the New
Pledgor hereby (i) grants and pledges to the Administrative Agent, as collateral
security for the full, prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Obligations, a
Lien on and security interest in, all of its right, title and interest in, to
and under the Collateral and expressly assumes all obligations and liabilities
of a Guarantor and Pledgor thereunder and (ii) absolutely, unconditionally,
irrevocably, jointly and severally guarantees, as a guaranty of payment and
performance, as a primary obligor and not as a surety, and not merely as a
guaranty of collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand or otherwise, and at all times
thereafter, of any and all of the Obligations. The New Pledgor hereby makes each
of the representations and warranties and agrees to each of the covenants
applicable to the Pledgors contained in the Security Agreement and the Guaranty.

Annexed hereto are supplements to each of the schedules to the Security
Agreement and the Credit Agreement, as applicable, with respect to the New
Pledgor. Such supplements shall be deemed to be part of the Security Agreement
or the Credit Agreement, as applicable.

This Joinder Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original, but all such counterparts together shall
constitute one and the same agreement.

All notices, requests and demands to or upon the New Pledgor, the Administrative
Agent or any Lender shall be governed by the terms of Section 10.02 of the
Credit Agreement.

THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.

 

[NEW PLEDGOR] By:  

 

  Name:   Title:

AGREED TO AND ACCEPTED:

 

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

[Schedules to be attached]

 

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EXHIBIT 4

[Form of]

Copyright Security Agreement

Copyright Security Agreement, dated as of [            ], 20[    ], by
[                    ] and [                    ] (individually, a “Pledgor”,
and, collectively, the “Pledgors”), in favor of BANK OF AMERICA, N.A., in its
capacity as administrative agent pursuant to the Credit Agreement (in such
capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement of even date herewith
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security Agreement”) in favor of the Administrative Agent pursuant
to which the Pledgors are required to execute and deliver this Copyright
Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Copyright Collateral. Each Pledgor
hereby pledges and grants to the Administrative Agent for the benefit of the
Secured Parties a lien on and security interest in and to all of its right,
title and interest in, to and under all the following Collateral of such
Pledgor:

(a) Copyrights of such Pledgor listed on Schedule I attached hereto; and

(b) all Proceeds of any and all of the foregoing (other than Excluded Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interest granted to the Administrative Agent pursuant to the Security Agreement
and Pledgors hereby acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Copyrights
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein. In the event that any provision of this Copyright Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control unless the Administrative Agent shall
otherwise determine.

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SECTION 4. Termination. Upon the payment in full of the Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Copyrights under this Copyright Security Agreement.

SECTION 5. Counterparts. This Copyright Security Agreement may be executed in
any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Copyright Security Agreement
by signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Copyright Security Agreement and the transactions
contemplated hereby, and all disputes between the parties under or relating to
this Copyright Security Agreement or the facts or circumstances leading to its
execution, whether in contract, tort or otherwise, shall be construed in
accordance with and governed by the laws (including statutes of limitation) of
the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.

[signature page follows]

 

-2-

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

IN WITNESS WHEREOF, each Pledgor has caused this Copyright Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

Very truly yours,

[PLEDGORS]

By:  

 

  Name:   Title:

Accepted and Agreed:

 

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

-3-

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

SCHEDULE I

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

 

OWNER

   REGISTRATION
NUMBER      TITLE  

    

     

Copyright Applications:

 

OWNER

   TITLE  

    

  

 

-4-

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

EXHIBIT 5

[Form of]

Patent Security Agreement

Patent Security Agreement, dated as of [            ], 20[    ], by
[                    ] and [                    ] (individually, a “Pledgor”,
and, collectively, the “Pledgors”), in favor of BANK OF AMERICA, N.A., in its
capacity as administrative agent pursuant to the Credit Agreement (in such
capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement of even date herewith
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security Agreement”) in favor of the Administrative Agent pursuant
to which the Pledgors are required to execute and deliver this Patent Security
Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Patent Collateral. Each Pledgor hereby
pledges and grants to the Administrative Agent for the benefit of the Secured
Parties a lien on and security interest in and to all of its right, title and
interest in, to and under all the following Collateral of such Pledgor:

(a) Patents of such Pledgor listed on Schedule I attached hereto; and

(b) all Proceeds of any and all of the foregoing (other than Excluded Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interest
granted to the Administrative Agent pursuant to the Security Agreement and
Pledgors hereby acknowledge and affirm that the rights and remedies of the
Administrative Agent with respect to the security interest in the Patents made
and granted hereby are more fully set forth in the Security Agreement,

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

the terms and provisions of which are incorporated by reference herein as if
fully set forth herein. In the event that any provision of this Patent Security
Agreement is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall control unless the Administrative Agent shall
otherwise determine.

SECTION 4. Termination. Upon the payment in full of the Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Patents under this Patent Security Agreement.

SECTION 5. Counterparts. This Patent Security Agreement may be executed in any
number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Patent Security Agreement by
signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Patent Security Agreement and the transactions
contemplated hereby, and all disputes between the parties under or relating to
this Patent Security Agreement or the facts or circumstances leading to its
execution, whether in contract, tort or otherwise, shall be construed in
accordance with and governed by the laws (including statutes of limitation) of
the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.

[signature page follows]

 

-2-

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

IN WITNESS WHEREOF, each Pledgor has caused this Patent Security Agreement to be
executed and delivered by its duly authorized officer as of the date first set
forth above.

 

Very truly yours,

[PLEDGORS]

By:  

 

  Name:   Title:

Accepted and Agreed:

 

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

-3-

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

SCHEDULE I

to

PATENT SECURITY AGREEMENT

PATENT REGISTRATIONS AND PATENT APPLICATIONS

Patent Registrations:

 

OWNER

   REGISTRATION
NUMBER      NAME        

Patent Applications:

 

OWNER

   APPLICATION
NUMBER      NAME        

 

-4-

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

EXHIBIT 6

[Form of]

Trademark Security Agreement

Trademark Security Agreement, dated as of [            ], 20[    ], by
[                    ] and [                    ] (individually, a “Pledgor”,
and, collectively, the “Pledgors”), in favor of BANK OF AMERICA, N.A., in its
capacity as administrative agent pursuant to the Credit Agreement (in such
capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Pledgors are party to a Security Agreement of even date herewith
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the “Security Agreement”) in favor of the Administrative Agent pursuant
to which the Pledgors are required to execute and deliver this Trademark
Security Agreement;

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, for the benefit of the Secured Parties, to enter into the
Credit Agreement, the Pledgors hereby agree with the Administrative Agent as
follows:

SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Security Agreement and used herein have the meaning given to them in the
Security Agreement.

SECTION 2. Grant of Security Interest in Trademark Collateral. Each Pledgor
hereby pledges and grants to the Administrative Agent for the benefit of the
Secured Parties a lien on and security interest in and to all of its right,
title and interest in, to and under all the following Collateral of such
Pledgor:

(a) Trademarks of such Pledgor listed on Schedule I attached hereto;

(b) all Goodwill associated with such Trademarks; and

(c) all Proceeds of any and all of the foregoing (other than Excluded Property).

SECTION 3. Security Agreement. The security interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interest granted to the Administrative Agent pursuant to the Security Agreement
and Pledgors hereby acknowledge and

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

affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademarks made and granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein. In the event that
any provision of this Trademark Security Agreement is deemed to conflict with
the Security Agreement, the provisions of the Security Agreement shall control
unless the Administrative Agent shall otherwise determine.

SECTION 4. Termination. Upon the payment in full of the Obligations and
termination of the Security Agreement, the Administrative Agent shall execute,
acknowledge, and deliver to the Pledgors an instrument in writing in recordable
form releasing the collateral pledge, grant, assignment, lien and security
interest in the Trademarks under this Trademark Security Agreement.

SECTION 5. Counterparts. This Trademark Security Agreement may be executed in
any number of counterparts, all of which shall constitute one and the same
instrument, and any party hereto may execute this Trademark Security Agreement
by signing and delivering one or more counterparts.

SECTION 6. Governing Law. This Trademark Security Agreement and the transactions
contemplated hereby, and all disputes between the parties under or relating to
this Trademark Security Agreement or the facts or circumstances leading to its
execution, whether in contract, tort or otherwise, shall be construed in
accordance with and governed by the laws (including statutes of limitation) of
the State of New York, without regard to conflicts of law principles that would
require the application of the laws of another jurisdiction.

[signature page follows]

 

-2-

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

IN WITNESS WHEREOF, each Pledgor has caused this Trademark Security Agreement to
be executed and delivered by its duly authorized officer as of the date first
set forth above.

 

Very truly yours,

[PLEDGORS]

By:  

 

  Name:   Title:

Accepted and Agreed:

 

BANK OF AMERICA, N.A.,

as Administrative Agent

By:  

 

  Name:   Title:

 

-3-

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

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS

Trademark Registrations:

 

OWNER

   REGISTRATION
NUMBER      TRADEMARK        

Trademark Applications:

 

OWNER

   APPLICATION
NUMBER      TRADEMARK        

 

-4-

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

EXHIBIT G-1

FORM OF PERFECTION CERTIFICATE

[See attached]

 

G-1- 1

Form of Perfection Certificate

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

PERFECTION CERTIFICATE

Reference is hereby made to (i) that certain Security Agreement dated as of
December 14, 2010 (the “Security Agreement”), among Vonage America Inc., a
Delaware corporation (“Vonage America”), Vonage Holdings Corp., a Delaware
corporation (“Holdings” and, together with Vonage America, collectively, jointly
and severally, the “Borrowers” and each individually a “Borrower”), the
Guarantors party thereto (collectively, the “Guarantors”) and Bank of America,
N.A., as administrative agent (in such capacity, the “Agent”), and (ii) that
certain Credit Agreement dated as of December 14, 2010 (the “Credit Agreement”)
among the Borrowers, the Guarantors, certain other parties thereto and the
Agent. Capitalized terms used but not defined herein have the meanings assigned
in the Credit Agreement.

As used herein, the term “Companies” means Holdings and each of its U.S.
Subsidiaries, and “Company” means Holdings or any of its U.S. Subsidiaries.

The undersigned hereby certify to the Agents as follows:

1. Names.

(a) The exact legal name of each Company, as such name appears in its respective
certificate of incorporation or any other organizational document, is set forth
in Schedule 1(a). Each Company is (i) the type of entity disclosed next to its
name in Schedule 1(a) and (ii) a registered organization except to the extent
disclosed in Schedule 1(a). Also set forth in Schedule 1(a) is the
organizational identification number, if any, of each Company that is a
registered organization, the Federal Taxpayer Identification Number of each
Company and the jurisdiction of formation of each Company.

(b) Set forth in Schedule 1(b) hereto is a list of any other corporate or
organizational names each Company has had in the past five years, together with
the date of the relevant change.

(c) Set forth in Schedule 1(c) is a list of all other names used by each
Company, or any other business or organization to which each Company became the
successor by merger, consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, on any filings with the Internal
Revenue Service at any time within the five years preceding the date hereof.
Except as set forth in Schedule 1(c), no Company has changed its jurisdiction of
organization at any time during the past four months.

2. Current Locations. The chief executive office of each Company is located at
the address set forth in Schedule 2 hereto.

3. Extraordinary Transactions. Except for those purchases, acquisitions and
other transactions described in Schedule 3 attached hereto, all of the
Collateral has been originated by each Company in the ordinary course of
business or consists of goods which have been acquired by such Company in the
ordinary course of business from a person in the business of selling goods of
that kind.

4. File Search Reports. Attached hereto as Schedule 4 are true and complete file
search reports from the Uniform Commercial Code filing offices (i) in each
jurisdiction identified in Schedule 1(a) or Schedule 2 with respect to each
legal name set forth in Schedules 1(a), (b) and (c) and (ii) in each
jurisdiction described in Schedule 1(c) or Schedule 3 relating to any of the
transactions described in Schedule (1)(c) or Schedule 3 with respect to each
legal name of the person or entity from which each Company purchased or
otherwise acquired any of the Collateral. A true copy of each financing
statement, including judgment and tax liens, bankruptcy and pending lawsuits or
other filing identified in such file search reports has been delivered to the
Agent.

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

5. UCC Filings. The financing statements (duly authorized by each Company
constituting the debtor therein), including the indications of the collateral,
attached as Schedule 5 relating to the Security Agreement are in the appropriate
forms for filing in the filing offices in the jurisdictions identified in
Schedule 6 hereof.

6. Schedule of Filings. Attached hereto as Schedule 6 is a schedule of (i) the
appropriate filing offices for the financing statements attached hereto as
Schedule 5 and (ii) the appropriate filing offices for the Patent Security
Agreement, the Trademark Security Agreement and the Copyright Security
Agreement.

7. Real Property. (a) Attached hereto as Schedule 7(a) is a list of all real
property owned or leased by each Company located in the United States as of the
Closing Date. Except as described in Schedule 7(b) attached hereto: (i) no
Company has entered into any leases, subleases, tenancies, franchise agreements,
licenses or other occupancy arrangements as owner, lessor, sublessor, licensor,
franchisor or grantor with respect to any of the real property described in
Schedule 7(a) and (ii) no Company has any Leases which require the consent of
the landlord, tenant or other party thereto to the Transactions.

8. Termination Statements. Attached hereto as Schedule 8(a) are the duly
authorized termination statements.

9. Stock Ownership and Other Equity Interests. Attached hereto as Schedule 9(a)
is a true and correct list of all of the authorized, and the issued and
outstanding, stock, partnership interests, limited liability company membership
interests or other equity interest held by each Company and its Subsidiaries,
setting forth the percentage of such equity interests pledged under the Security
Agreement. Also set forth in Schedule 9(b) is each equity investment of each
Company that represents 50% or less of the equity of the entity in which such
investment was made setting forth the percentage of such equity interests
pledged under the Security Agreement.

10. Instruments and Tangible Chattel Paper. Attached hereto as Schedule 10 is a
true and correct list of all promissory notes, instruments (other than checks to
be deposited in the ordinary course of business), tangible chattel paper,
electronic chattel paper and other evidence of indebtedness held by each Company
as of the date hereof, including all intercompany notes between or among any two
or more Companies or any of their Subsidiaries, stating if such instruments,
chattel paper or other evidence of indebtedness is pledged under the Security
Agreement.

11. Intellectual Property. (a) Attached hereto as Schedule 11(a) is a schedule
setting forth all of each Company’s Patents and Trademarks (each as defined in
the Security Agreement) applied for or registered with the United States Patent
and Trademark Office (the “USPTO”), and all other Patents and Trademarks (each
as defined in the Security Agreement), including the name of the registered
owner or applicant and the registration, application, or publication number, as
applicable, of each Patent or Trademark owned by each Company.

(b) Attached hereto as Schedule 11(b) is a schedule setting forth all of each
Company’s United States Copyrights (each as defined in the Security Agreement),
and all other Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by each Company.

(c) Attached hereto as Schedule 11(c) is a schedule setting forth all
Intellectual Property Licenses, whether or not recorded with the USPTO or the
United States Copyright Office (the “USCO”),

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

as applicable, including, but not limited to, the relevant signatory parties to
each license along with the date of execution thereof and, if applicable, a
recordation number or other such evidence of recordation. Notwithstanding the
foregoing, Schedule 11(c) shall not include Intellectual Property Licenses
between the Company and its marketing partners made in the ordinary course of
business.

12. Commercial Tort Claims. Attached hereto as Schedule 12 is a true and correct
list of all Commercial Tort Claims (as defined in the Security Agreement) held
by each Company, including a brief description thereof and stating if such
commercial tort claims are required to be pledged under the Security Agreement.

13. Deposit Accounts, Securities Accounts and Commodity Accounts. Attached
hereto as Schedule 13 is a true and complete list of all Deposit Accounts,
Securities Accounts and Commodity Accounts (each as defined in the Security
Agreement) maintained by each Company, including the name of each institution
where each such account is held, the name of each such account, the name of each
entity that holds each account and stating if such account is required to be
subject to a control agreement pursuant to the Security Agreement and the reason
for such account to be excluded from the control agreement requirement.

14. Letter-of-Credit Rights. Attached hereto as Schedule 14 is a true and
correct list of all Letters of Credit issued in favor of each Company, as
beneficiary thereunder, stating if letter-of-credit rights with respect to such
Letters of Credit are required to be subject to a control arrangement pursuant
to the Security Agreement.

[The Remainder of this Page has been intentionally left blank]

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IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
this      day of December, 2010.

 

Vonage Holdings Corp. By:  

 

Name:   Barry Rowan Title:     Executive Vice President, Chief Financial
Officer, Chief Administrative Officer & Treasurer

Vonage America Inc.

Vonage Network LLC

Vonage Marketing LLC

Vonage Worldwide Inc.

Vonage International Inc.

Vonage Applications Inc.

Novega Venture Partners, Inc.

By:  

 

Name:   Kurt Rogers Title:     Vice President & Secretary

DSP LLC

By:  

 

Name:   Kurt Rogers Title:     President

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

Schedules

[Attachments omitted]

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

EXHIBIT G-2

FORM OF PERFECTION CERTIFICATE SUPPLEMENT

Reference is hereby made to (i) that certain Security Agreement dated as of
December 14, 2010 (the “Security Agreement”), among Vonage America Inc., a
Delaware corporation (“Vonage America”), Vonage Holdings Corp., a Delaware
corporation (“Holdings” and, together with Vonage America, collectively, jointly
and severally, the “Borrowers” and each individually a “Borrower”), the
Guarantors party thereto (collectively, the “Guarantors”) and Bank of America,
N.A., as collateral agent (in such capacity, the “Collateral Agent”), and
(ii) that certain Credit Agreement dated as of December 14, 2010 (the “Credit
Agreement”) among the Borrowers, the Guarantors, certain other parties thereto
and Bank of America, N.A., as Administrative Agent (in such capacity, the
“Administrative Agent” and, together with the Collateral Agent, the “Agents”).
This Perfection Certificate Supplement, dated as of [                    ],
20[    ] is delivered pursuant to Section 6.02(j) of the Credit Agreement.
Capitalized terms used but not defined herein have the meanings assigned in the
Credit Agreement. As used herein, the term “Companies” means Holdings and each
of its U.S. Subsidiaries, and the terms “Patent”, “Trademark”, “Copyright” and
“Intellectual Property License” each have the meaning specified in the Security
Agreement.

The undersigned, the [                    ] of each of the Borrowers, hereby
certifies (in his/her capacity as [                    ] and not in his/her
individual capacity) to the Agents and each of the other Secured Parties that,
as of the date hereof, there has been no change in the information described in
the Perfection Certificate delivered on the Closing Date (as supplemented by any
perfection certificate supplements delivered prior to the date hereof, the
“Prior Perfection Certificate”), other than as follows:

1. Names.

(a) Except as listed in Schedule 1(a) attached hereto and made a part hereof,
(x) Schedule 1(a) to the Prior Perfection Certificate sets forth the exact legal
name of each Company, as such name appears in its respective certificate of
incorporation or any other organizational document; (y) each Company is (i) the
type of entity disclosed next to its name in Schedule 1(a) to the Prior
Perfection Certificate and (ii) a registered organization except to the extent
disclosed in Schedule 1(a) to the Prior Perfection Certificate and (z) set forth
in Schedule 1(a) to the Prior Perfection Certificate is the organizational
identification number, if any, of each Company that is a registered
organization, the Federal Taxpayer Identification Number of each Company and the
jurisdiction of formation of each Company.

(b) Except as listed in Schedule 1(b) attached hereto and made a part hereof,
Schedule 1(b) to the Prior Perfection Certificate is a list of any other
corporate or organizational names each Company has had in the past five years,
together with the date of the relevant change.

(c) Except as listed in Schedule 1(c) attached hereto and made a part hereof,
Schedule 1(c) to the Prior Perfection Certificate is a list of all other names
used by each

 

G-2 - 1

Form of Perfection Certificate Supplement

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

Company, or any other business or organization to which each Company became the
successor by merger, consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, on any filings with the Internal
Revenue Service at any time within the five years preceding the date hereof.
Except as set forth in Schedule 1(c), no Company has changed its jurisdiction of
organization at any time during the past four months

2. Current Locations. Except as listed in Schedule 2 attached hereto and made a
part hereof, the chief executive office of each Company is located at the
address set forth in Schedule 2 of the Prior Perfection Certificate.

3. Extraordinary Transactions. Except for those purchases, acquisitions and
other transactions described in Schedule 3 attached hereto and in Schedule 3 to
the Prior Perfection Certificate, all of the Collateral has been originated by
each Company in the ordinary course of business or consists of goods which have
been acquired by such Company in the ordinary course of business from a person
in the business of selling goods of that kind.

4. [Intentionally omitted].

5. UCC Filings. Except as listed in Schedule 5 attached hereto and made a part
hereof, the financing statements (duly authorized by each Company constituting
the debtor therein), including the indications of the collateral relating to the
Security Agreement, are set forth in Schedule 5 of the Prior Perfection
Certificate and are in the appropriate forms for filing in the filing offices in
the jurisdictions identified in Schedule 6 hereto and thereto.

6. Schedule of Filings. Except as listed in Schedule 6 attached hereto and made
a part hereof, attached to the Prior Perfection Certificate as Schedule 6 is a
schedule of (i) the appropriate filing offices for the financing statements
attached hereto and thereto as Schedule 5 and (ii) the appropriate filing
offices for the Patent Security Agreement, the Trademark Security Agreement and
the Copyright Security Agreement.

7. Real Property. Except as listed in Schedule 7(a) attached hereto and made a
part hereof, Schedule 7(a) to the Prior Perfection Certificate is a list of all
real property owned, leased or otherwise held by each Company located in the
United States. Except as described in Schedule 7(b) attached hereto: (i) no
Company has entered into any leases, subleases, tenancies, franchise agreements,
licenses or other occupancy arrangements as owner, lessor, sublessor, licensor,
franchisor or grantor with respect to any of the real property described in
Schedule 7(a) or Schedule 7(a) of the Prior Perfection Certificate, other than
those listed in Schedule 7(b) of the Prior Perfection Certificate, and (ii) no
Company has any Leases which require the consent of the landlord, tenant or
other party thereto to the Transactions other than those listed in Schedule 7(b)
of the Prior Perfection Certificate.

8. Stock Ownership and Other Equity Interests. Except as listed in Schedule 8(a)
attached hereto and made a part hereof, Schedule 8(a) to the Prior Perfection
Certificate is a true and correct list of all of the issued and outstanding,
stock, partnership interests, limited liability company membership interests or
other equity interest held by each Company and its Subsidiaries, setting forth
the percentage of such equity interests pledged under the Security

 

G-2 - 2

Form of Perfection Certificate Supplement

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

Agreement. Except as set forth in Schedule 8(b) attached hereto and made a part
hereof, Schedule 8(b) to the Prior Perfection Certificate sets forth each equity
investment of each Company that represents 50% or less of the equity of the
entity in which such investment was made setting forth the percentage of such
equity interests pledged under the Security Agreement.

9. Instruments and Tangible Chattel Paper. Except as listed in Schedule 9
attached hereto and made a part hereof, Schedule 9 to the Prior Perfection
Certificate is a true and correct list of all promissory notes, instruments
(other than checks to be deposited in the ordinary course of business), tangible
chattel paper, electronic chattel paper and other evidence of indebtedness held
by each Company as of the date hereof, including all intercompany notes between
or among any two or more Companies or any of their Subsidiaries, stating if such
instruments, chattel paper or other evidence of indebtedness is pledged under
the Security Agreement.

10. Intellectual Property.

(a) Except as listed in Schedule 10(a) attached hereto and made a part hereof,
Schedule 10(a) to the Prior Perfection Certificate is a schedule setting forth
all of each Company’s Patents and Trademarks (each as defined in the Security
Agreement) applied for or registered with the United States Patent and Trademark
Office (the “USPTO”), and all other Patents and Trademarks (each as defined in
the Security Agreement), including the name of the registered owner or applicant
and the registration, application, or publication number, as applicable, of each
Patent or Trademark owned by each Company.

(b) Except as listed in Schedule 10(b) attached hereto and made a part hereof,
Schedule 10(b) to the Prior Perfection Certificate is a schedule setting forth
all of each Company’s United States Copyrights (each as defined in the Security
Agreement), and all other Copyrights, including the name of the registered owner
and the registration number of each Copyright owned by each Company.

(c) Except as listed in Schedule 10(c) attached hereto and made a part hereof,
Schedule 10(c) to the Prior Perfection Certificate is a schedule setting forth
all Intellectual Property Licenses (as defined in the Security Agreement),
whether or not recorded with the USPTO or United States Copyright Office (the
“USCO”), as applicable, including, but not limited to, the relevant signatory
parties to each license along with the date of execution thereof and, if
applicable, a recordation number or other such evidence of recordation.

11. Commercial Tort Claims. Except as listed in Schedule 11 attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule 11
is a true and correct list of all Commercial Tort Claims (as defined in the
Security Agreement) held by each Company, including a brief description thereof
and stating if such commercial tort claims are required to be pledged under the
Security Agreement.

12. Deposit Accounts, Securities Accounts and Commodity Accounts. Except as
listed in Schedule 12 attached hereto and made a part hereof, attached to the
Prior

 

G-2 - 3

Form of Perfection Certificate Supplement

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

Perfection Certificate as Schedule 12 is a true and complete list of all Deposit
Accounts, Securities Accounts and Commodity Accounts (each as defined in the
Security Agreement) maintained by each Company, including the name of each
institution where each such account is held, the name of each such account, the
name of each entity that holds each account and stating if such account is
required to be subject to a control agreement pursuant to the Security Agreement
and the reason for such account to be excluded from the control agreement
requirement.

13. Letter-of-Credit Rights. Except as listed in Schedule 13 attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule 13
is a true and correct list of all Letters of Credit issued in favor of each
Company, as beneficiary thereunder, stating if letter-of-credit rights with
respect to such Letters of Credit are required to be subject to a control
arrangement pursuant to the Security Agreement.

[The Remainder of this Page has been intentionally left blank]

 

G-2 - 4

Form of Perfection Certificate Supplement

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

IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as of
this      day of                     , 20[    ].

 

VONAGE AMERICA INC. By:  

 

  Name:   Title: VONAGE HOLDINGS CORP. By:  

 

  Name:  

Title:

[Each of the Guarantors] By:  

 

  Name:   Title:

 

G-2 - 5

Form of Perfection Certificate Supplement

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

EXHIBIT H-1

FORM OF

UNITED STATES TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the CREDIT AGREEMENT (“Agreement”) entered into as of
December 14, 2010, among VONAGE AMERICA INC., a Delaware corporation (“Vonage
America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings” and,
together with Vonage America, the “Borrowers” and each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.
Capitalized terms used herein but not otherwise defined shall have the meaning
given to such term in the Agreement.

Pursuant to the provisions of Section 3.01(e) of the Agreement, the undersigned
hereby certifies that (i) it is the sole record and beneficial owner of the
Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it
is providing this certificate, (ii) it is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended, (the
“Code”), (iii) it is not a ten percent shareholder of the Borrowers within the
meaning of Code Section 881(c)(3)(B), (iv) it is not a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code, and (v) no payments
in connection with any Loan Document are effectively connected with a United
States trade or business conducted by the undersigned.

The undersigned has furnished the Administrative Agent and the Borrowers with a
certificate of its non-U.S. person status on Internal Revenue Service Form
W-8BEN. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrowers and the Administrative Agent in writing and (2) the
undersigned shall furnish the Borrowers and the Administrative Agent with a
properly completed and currently effective certificate in either the calendar
year in which payment is to be made by the Borrowers or the Administrative Agent
to the undersigned, or in either of the two calendar years preceding such
payment.

[Signature Page Follows]

 

H - 1

Tax Certificate

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      [Lender] By:  

 

  Name:   Title:       [Address]

Dated:                     , 20[    ]

 

H - 2

Tax Certificate

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EXHIBIT H-2

FORM OF

UNITED STATES TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the CREDIT AGREEMENT (“Agreement”) entered into as of
December 14, 2010, among VONAGE AMERICA INC., a Delaware corporation (“Vonage
America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings” and,
together with Vonage America, the “Borrowers” and each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.
Capitalized terms used herein but not otherwise defined shall have the meaning
given to such term in the Agreement.

Pursuant to the provisions of Section 3.01(e) of the Agreement, the undersigned
hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as
any Note(s) evidencing such Loan(s)) in respect of which it is providing this
certificate, (ii) its partners/members are the sole beneficial owners of such
Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) neither the
undersigned nor any of its partners/members is a bank within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended, (the
“Code”), (iv) none of its partners/members is a ten percent shareholder of the
Borrowers within the meaning of Code Section 881(c)(3)(B), (v) none of its
partners/members is a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code, and (vi) no payments in connection with any
Loan Document are effectively connected with the a United States trade or
business conducted by the undersigned or its partners/members.

The undersigned has furnished the Administrative Agent and the Borrowers with
Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service
Form W-8BEN from each of its partners/members claiming the portfolio interest
exemption, provided that, for the avoidance of doubt, the foregoing shall not
limit the obligation of the Lender to provide, in the case of a partner/member
not claiming the portfolio interest exemption, a Form W-8ECI, Form W-9 or Form
W-8IMY (including appropriate underlying certificates from each interest holder
of such partner/member), in each case establishing such partner/member’s
available exemption from U.S. federal withholding tax. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Borrowers and
the Administrative Agent and (2) the undersigned shall have at all times
furnished the Borrowers and the Administrative Agent in writing with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

[Signature Page Follows]

 

H - 3

Tax Certificate

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[Lender]

By:  

 

  Name:   Title:       [Address]

Dated:                     , 20[    ]

 

H - 4

Tax Certificate

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EXHIBIT H-3

FORM OF

UNITED STATES TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the CREDIT AGREEMENT (“Agreement”) entered into as of
December 14, 2010, among VONAGE AMERICA INC., a Delaware corporation (“Vonage
America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings” and,
together with Vonage America, the “Borrowers” and each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.
Capitalized terms used herein but not otherwise defined shall have the meaning
given to such term in the Agreement.

Pursuant to the provisions of Section 3.01(e) and Section 10.06(d) of the
Agreement, the undersigned hereby certifies that (i) it is the sole record and
beneficial owner of the participation in respect of which it is providing this
certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended, (the “Code”), (iii) it is not a
ten percent shareholder of the Borrowers within the meaning of Code
Section 881(c)(3)(B), (iv) it is not a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code, and (v) no payments in connection
with any Loan Document are effectively connected with a United States trade or
business conducted by the undersigned.

The undersigned has furnished its participating non-U.S. Lender with a
certificate of its non-U.S. person status on Internal Revenue Service Form
W-8BEN. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such non-U.S. Lender in writing and (2) the undersigned shall have at
all times furnished such non-U.S. Lender with a properly completed and currently
effective certificate in either the calendar year in which each payment is to be
made to the undersigned, or in either of the two calendar years preceding such
payments.

[Signature Page Follows]

 

H - 5

Tax Certificate

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[Participant]

By:  

 

  Name:   Title:       [Address]

Dated:                     , 20[    ]

 

H - 6

Tax Certificate

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EXHIBIT H-4

FORM OF

UNITED STATES TAX COMPLIANCE CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the CREDIT AGREEMENT (“Agreement”) entered into as of
December 14, 2010, among VONAGE AMERICA INC., a Delaware corporation (“Vonage
America”), VONAGE HOLDINGS CORP., a Delaware corporation (“Holdings” and,
together with Vonage America, the “Borrowers” and each a “Borrower”), each
lender from time to time party thereto (collectively, the “Lenders” and
individually, a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent.
Capitalized terms used herein but not otherwise defined shall have the meaning
given to such term in the Agreement.

Pursuant to the provisions of Section 3.01(e) and Section 10.06(d) of the
Agreement, the undersigned hereby certifies that (i) it is the sole record owner
of the participation in respect of which it is providing this certificate,
(ii) its partners/members are the sole beneficial owners of such participation,
(iii) neither the undersigned nor any of its partners/members is a “bank” within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended, (the “Code”), (iv) none of its partners/members is a ten percent
shareholder of the Borrowers within the meaning of Code Section 881(c)(3)(B),
(v) none of its partners/members is a “controlled foreign corporation” described
in Section 881(c)(3)(C) of the Code, and (vi) no payments in connection with any
Loan Document are effectively connected with a United States trade or business
conducted by the undersigned’s or its partners/members.

The undersigned has furnished its participating non-U.S. Lender with Internal
Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form
W-8BEN from each of its partners/members claiming the portfolio interest
exemption, provided that, for the avoidance of doubt, the foregoing shall not
limit the obligation of the undersigned to provide, in the case of a
partner/member not claiming the portfolio interest exemption, a Form W-8ECI,
Form W-9 or Form W-8IMY (including appropriate underlying certificates from each
interest holder of such partner/member), in each case establishing such
partner/member’s available exemption from U.S. federal withholding tax. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such non-U.S. Lender in writing and (2) the undersigned shall have at all times
furnished such non-U.S. Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

[Signature Page Follows]

 

H - 7

Tax Certificate

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[Participant]

By:  

 

  Name:   Title:       [Address]

Dated:                     , 20[    ]

 

H - 8

Tax Certificate

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EXHIBIT I

FORM OF SOLVENCY CERTIFICATE

This certificate is furnished pursuant to Section 4.01(a)(x) of the Credit
Agreement, dated as of December 14, 2010 (the “Credit Agreement”; unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement), among Vonage
Holdings Corp., a Delaware corporation (“Holdings”), Vonage America Inc., a
Delaware corporation (“Vonage America”, and together with Holdings, the
“Borrowers”), Bank of America, N.A., as administrative agent for the Lenders
(the “Administrative Agent”), and the other parties from time to time party
thereto.

I, Barry Rowan, the Executive Vice President, Chief Financial Officer, Chief
Administrative Officer and Treasurer of Holdings, hereby certify, solely in my
capacity as an officer of Holdings, and not in an individual capacity, on behalf
of Holdings, that both immediately prior to and immediately following the
consummation of the Transaction and the incurrence of the Indebtedness related
thereto:

 

  A. the fair value of the property of the Borrowers and their respective
Subsidiaries, taken as a whole, is greater than the total amount of liabilities,
including contingent liabilities, of the Borrowers and their respective
Subsidiaries, taken as a whole;

 

  B. the present fair salable value of the assets of the Borrowers and their
respective Subsidiaries, taken as a whole, is not less than the amount that will
be required to pay the probable liability of the Borrowers and their respective
Subsidiaries, taken as a whole, on their debts as they become absolute and
matured;

 

  C. the Borrowers and their respective Subsidiaries do not intend to, and do
not believe that they will, incur debts or liabilities beyond the Borrowers’ and
their respective Subsidiaries’ ability, taken as a whole, to pay such debts and
liabilities as they mature;

 

  D. the Borrowers and their respective Subsidiaries are not engaged in business
or a transaction, and are not about to engage in business or a transaction, for
which the Borrowers’ and their respective Subsidiaries’ property, taken as a
whole, would constitute an unreasonably small capital; and

 

  E. the Borrowers and their respective Subsidiaries, taken as a whole, are able
to pay their debts and liabilities, contingent obligations and other commitments
as they mature in the ordinary course of business.

[Signature Page Follows]

 

I - 1

Form of Solvency Certificate

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IN WITNESS WHEREOF, I have hereunto set my hand this     th day of December,
2010.

 

VONAGE HOLDINGS CORP. By:  

 

  Name:  Barry Rowan   Title:    Executive Vice President, Chief Financial
Officer, Chief Accounting Officer and Treasurer

 

I - 2

Form of Solvency Certificate