Exhibit 10.1

EXECUTION COPY

 

 

 

LOGO [g215547ex10_cov001.jpg]

CREDIT AGREEMENT

dated as of

July 29, 2011

among

VONAGE AMERICA INC.

and

VONAGE HOLDINGS CORP.

as the Borrowers,

The Lenders Party Hereto

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and

RBS CITIZENS, N.A.,

as Syndication Agent

 

 

J.P. MORGAN SECURITIES LLC,

as Sole Bookrunner

and

J.P. MORGAN SECURITIES LLC and RBS CITIZENS, N.A.

as Joint Lead Arrangers

 

 

 

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TABLE OF CONTENTS

 

          Page   ARTICLE I Definitions      1   

SECTION 1.01.

   Defined Terms      1   

SECTION 1.02.

   Classification of Loans and Borrowings      30   

SECTION 1.03.

   Terms Generally      30   

SECTION 1.04.

   Accounting Terms; GAAP      31   

SECTION 1.05.

   Status of Obligations      31   

SECTION 1.06.

   Cumulative Retained Excess Cash Flow Amounts      31   

SECTION 1.07.

   Pro Forma Calculations      32    ARTICLE II The Credits      32   

SECTION 2.01.

   Commitments      32   

SECTION 2.02.

   Loans and Borrowings      32   

SECTION 2.03.

   Requests for Borrowings      33   

SECTION 2.04.

   Determination of Dollar Amounts      34   

SECTION 2.05.

   Swingline Loans      34   

SECTION 2.06.

   Letters of Credit      35   

SECTION 2.07.

   Funding of Borrowings      39   

SECTION 2.08.

   Interest Elections      40   

SECTION 2.09.

   Termination and Reduction of Commitments      41   

SECTION 2.10.

   Repayment and Amortization of Loans; Evidence of Debt      42   

SECTION 2.11.

   Prepayment of Loans      42   

SECTION 2.12.

   Fees      44   

SECTION 2.13.

   Interest      45   

SECTION 2.14.

   Alternate Rate of Interest      45   

SECTION 2.15.

   Increased Costs      46   

SECTION 2.16.

   Break Funding Payments      47   

SECTION 2.17.

   Taxes      48   

SECTION 2.18.

   Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of
Set-offs      50   

SECTION 2.19.

   Mitigation Obligations; Replacement of Lenders      52   

SECTION 2.20.

   Expansion Option      53   

SECTION 2.21.

   Judgment Currency      54   

SECTION 2.22.

   Defaulting Lenders      55    ARTICLE III Representations and Warranties     
56   

SECTION 3.01.

   Existence, Qualification and Power      56   

SECTION 3.02.

   Authorization; No Contravention      56   

SECTION 3.03.

   Governmental Authorization; Other Consents      57   

SECTION 3.04.

   Binding Effect      57   

SECTION 3.05.

   Financial Statements; No Material Adverse Effect      57   

SECTION 3.06.

   Litigation      58   

SECTION 3.07.

   No Default      58   

SECTION 3.08.

   Ownership of Property; Liens      58   

SECTION 3.09.

   Environmental Compliance      58   

SECTION 3.10.

   Insurance      59   

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Table of Contents

(continued)

 

          Page  

SECTION 3.11.

   Taxes      59   

SECTION 3.12.

   ERISA Compliance      59   

SECTION 3.13.

   Subsidiaries; Equity Interests; Loan Parties      60   

SECTION 3.14.

   Margin Regulations; Investment Company Act      60   

SECTION 3.15.

   Disclosure      60   

SECTION 3.16.

   Compliance with Laws      61   

SECTION 3.17.

   Intellectual Property/Proprietary Rights, Etc.      61   

SECTION 3.18.

   Solvency      62   

SECTION 3.19.

   Casualty, Etc.      62   

SECTION 3.20.

   Labor Matters      62   

SECTION 3.21.

   Collateral Documents      62   

SECTION 3.22.

   Anti-Terrorism Laws      63   

SECTION 3.23.

   Regulatory Matters      63    ARTICLE IV Conditions      64   

SECTION 4.01.

   Effective Date      64   

SECTION 4.02.

   Each Credit Event      65    ARTICLE V Affirmative Covenants      65   

SECTION 5.01.

   Financial Statements      65   

SECTION 5.02.

   Certificates; Other Information      66   

SECTION 5.03.

   Notices      68   

SECTION 5.04.

   Payment of Obligations      69   

SECTION 5.05.

   Preservation of Existence, Etc.      69   

SECTION 5.06.

   Maintenance of Properties      69   

SECTION 5.07.

   Maintenance of Insurance      69   

SECTION 5.08.

   Compliance with Laws      70   

SECTION 5.09.

   Books and Records      70   

SECTION 5.10.

   Inspection Rights      70   

SECTION 5.11.

   Use of Proceeds      70   

SECTION 5.12.

   Covenant to Guarantee Obligations and Give Security      70   

SECTION 5.13.

   Compliance with Environmental Laws      71   

SECTION 5.14.

   Further Assurances      72   

SECTION 5.15.

   Compliance with Terms of Leaseholds      72   

SECTION 5.16.

   Reserved      73   

SECTION 5.17.

   Information Regarding Collateral and Loan Documents      73   

SECTION 5.18.

   Post Closing Matters      73    ARTICLE VI Negative Covenants      73   

SECTION 6.01.

   Liens      73   

SECTION 6.02.

   Indebtedness      74   

SECTION 6.03.

   Investments      76   

SECTION 6.04.

   Fundamental Changes      77   

 

ii

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Table of Contents

(continued)

 

          Page  

SECTION 6.05.

   Dispositions      78   

SECTION 6.06.

   Restricted Payments      79   

SECTION 6.07.

   Change in Nature of Business      80   

SECTION 6.08.

   Transactions with Affiliates      80   

SECTION 6.09.

   Burdensome Agreements      80   

SECTION 6.10.

   Use of Proceeds      80   

SECTION 6.11.

   Financial Covenants      80   

SECTION 6.12.

   Capital Expenditures      80   

SECTION 6.13.

   Amendments of Organization Documents      81   

SECTION 6.14.

   Accounting Changes      81   

SECTION 6.15.

   Prepayments, Etc. of Indebtedness      81    ARTICLE VII Events of Default   
  81    ARTICLE VIII The Administrative Agent      84    ARTICLE IX
Miscellaneous      87   

SECTION 9.01.

   Notices      87   

SECTION 9.02.

   Waivers; Amendments      88   

SECTION 9.03.

   Expenses; Indemnity; Damage Waiver      90   

SECTION 9.04.

   Successors and Assigns      91   

SECTION 9.05.

   Survival      94   

SECTION 9.06.

   Counterparts; Integration; Effectiveness      95   

SECTION 9.07.

   Severability      95   

SECTION 9.08.

   Right of Setoff      95   

SECTION 9.09.

   Governing Law; Jurisdiction; Consent to Service of Process      95   

SECTION 9.10.

   WAIVER OF JURY TRIAL      96   

SECTION 9.11.

   Headings      96   

SECTION 9.12.

   Confidentiality      96   

SECTION 9.13.

   USA PATRIOT Act      97   

SECTION 9.14.

   Releases of Guarantors      97   

SECTION 9.15.

   Appointment for Perfection      97    ARTICLE X Cross-Guarantee.      97   

 

iii

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SCHEDULES:

 

Schedule 2.01    –    Commitments Schedule 2.02    –    Mandatory Cost Schedule
2.06    –    Existing Letters of Credit Schedule 3.06    –    Material
Litigation Schedule 3.17(d)    –    Infringed Proprietary Rights Schedule 5.12
   –    List of Guarantors Schedule 5.18    –    List of Deposit Account Control
Agreements Schedule 6.01(b)    –    Existing Liens Schedule 6.02(d)    –   
Existing Indebtedness Schedule 6.03(f)    –    Existing Investments Schedule
6.09    –    Burdensome Agreements EXHIBITS: Exhibit A    –    Form of
Assignment and Assumption Exhibit B    –    Form of Note Exhibit C    –    Form
of Borrowing Request Exhibit D    –    Form of Interest Election Request Exhibit
E    –    Form of Increasing Lender Supplement Exhibit F    –    Form of
Augmenting Lender Supplement Exhibit G    –    List of Closing Documents Exhibit
H-1    –    Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Not
Partnerships) Exhibit H-2    –    Form of U.S. Tax Certificate (Non-U.S. Lenders
That Are Partnerships) Exhibit H-3    –    Form of U.S. Tax Certificate
(Non-U.S. Participants That Are Not Partnerships) Exhibit H-4    –    Form of
U.S. Tax Certificate (Non-U.S. Participants That Are Partnerships) Exhibit I   
–    Form of Guaranty Exhibit J    –    Form of Security Agreement Exhibit K-1
   –    Form of Perfection Certificate Exhibit K-2    –    Form of Perfection
Certificate Supplement

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CREDIT AGREEMENT (this “Agreement”) dated as of July 29, 2011 among VONAGE
AMERICA INC., a Delaware corporation (“Vonage America”), VONAGE HOLDINGS CORP.,
a Delaware corporation (“Holdings” and, collectively with Vonage America, the
“Borrowers”), the LENDERS from time to time party hereto, JPMORGAN CHASE BANK,
N.A., as Administrative Agent and RBS CITIZENS, N.A., as Syndication Agent.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to a Loan, or the
Loans comprising such Borrowing, bearing interest at a rate determined by
reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the sum of (i) (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate plus, without duplication
(ii) in the case of Loans by a Lender from its office or branch in the United
Kingdom, the Mandatory Cost.

“Administrative Agent” means JPMorgan Chase Bank, N.A. (including its branches
and affiliates), in its capacity as administrative agent for the Lenders
hereunder.

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

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

“Agreed Currencies” means (i) Dollars, (ii) Canadian Dollars, (iii) euro,
(iv) Pounds Sterling and (v) any other Foreign Currency agreed to by the
Administrative Agent and each of the Revolving Lenders.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate for a
one month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such
page) at approximately 11:00 a.m. London time on such day. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively.

“Anti-Terrorism Laws” shall mean any Requirement of Law related to terrorism
financing or money laundering including the Uniting and Strengthening America by
Providing

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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, (a) with respect to
Revolving Loans, LC Exposure or Swingline Loans, the percentage equal to a
fraction the numerator of which is such Lender’s Revolving Commitment and the
denominator of which is the aggregate Revolving Commitments of all Revolving
Lenders (if the Revolving Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Revolving Commitments most
recently in effect, giving effect to any assignments); provided that in the case
of Section 2.22 when a Defaulting Lender shall exist, any such Defaulting
Lender’s Revolving Commitment shall be disregarded in the calculation and
(b) with respect to the Term Loans, a percentage equal to a fraction the
numerator of which is such Lender’s outstanding principal amount of the Term
Loans and the denominator of which is the aggregate outstanding principal amount
of the Term Loans of all Term Lenders; provided that in the case of Section 2.22
when a Defaulting Lender shall exist, any such Defaulting Lender’s Term Loan
Commitment shall be disregarded in the calculation.

“Applicable Rate” means, for any day, with respect to any Eurocurrency Revolving
Loan, any Eurocurrency Term Loans, any ABR Revolving Loan, any ABR Term Loan or
with respect to the commitment fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “Eurocurrency
Spread”, “ABR Spread” or “Commitment Fee Rate”, as the case may be, based upon
the Consolidated Leverage Ratio applicable on such date:

 

    

Consolidated

Leverage Ratio:

   Eurocurrency
Spread     ABR Spread     Commitment
Fee Rate  

Category 1:

   < 0.75 to 1.00      3.25 %      2.25 %      0.50 % 

Category 2:

  

³ 0.75 to 1.00 but

< 1.50 to 1.00

     3.50 %      2.50 %      0.50 % 

Category 3:

   ³ 1.50 to 1.00      3.75 %      2.75 %      0.50 % 

For purposes of the foregoing,

(i) if at any time the Borrowers fail to deliver the Financials on or before the
date the Financials are due pursuant to Section 5.01, Category 3 shall be deemed
applicable for the period commencing three (3) Business Days after the required
date of delivery and ending on the date which is three (3) Business Days after
the Financials are actually delivered, after which the Category shall be
determined in accordance with the table above as applicable;

(ii) adjustments, if any, to the Category then in effect shall be effective
three (3) Business Days after the Administrative Agent has received the
applicable Financials (it being understood and agreed that each change in
Category shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change); and

 

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(iii) notwithstanding the foregoing, Category 2 shall be deemed to be applicable
until the Administrative Agent’s receipt of the applicable Financials for
Holdings’ first fiscal quarter ending after the Effective Date (unless such
Financials demonstrate that Category 3 should have been applicable during such
period, in which case such other Category shall be deemed to be applicable
during such period) and adjustments to the Category then in effect shall
thereafter be effected in accordance with the preceding paragraphs.

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Assignment and Assumption” means an assignment and assumption agreement entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A 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, 2010, 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.

“Augmenting Lender” has the meaning assigned to such term in Section 2.20.

“Available Revolving Commitment” means, at any time with respect to any Lender,
the Revolving Commitment of such Lender then in effect minus the Revolving
Credit Exposure of such Lender at such time; it being understood and agreed that
any Lender’s Swingline Exposure shall not be deemed to be a component of the
Revolving Credit Exposure for purposes of calculating the commitment fee under
Section 2.12(a).

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Revolving Commitments.

“Banking Services” means each and any of the following bank services provided to
Holdings or any Subsidiary by any Lender or any of its Affiliates: (a) credit
cards for commercial customers (including, without limitation, commercial credit
cards and purchasing cards), (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

“Banking Services Agreement” means any agreement entered into by Holdings or any
Subsidiary in connection with Banking Services.

“Banking Services Obligations” means any and all obligations of Holdings or any
Subsidiary, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

 

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“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, so long as such
ownership interest does not result in or provide such Person with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

“Borrower” means Vonage America or Holdings.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect, (b) a Term Loan made on the same date and,
in the case of Eurocurrency Loans, as to which a single Interest Period is in
effect or (c) a Swingline Loan.

“Borrowing Request” means a request by any Borrower for a Borrowing in
accordance with Section 2.03, which, if in writing, shall be substantially in
the form of Exhibit C.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurocurrency Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in the relevant Agreed Currency in the London interbank market or
the principal financial center of such Agreed Currency (and, if the Borrowings
or LC Disbursements which are the subject of a borrowing, drawing, payment,
reimbursement or rate selection are denominated in euro, the term “Business Day”
shall also exclude any day on which the TARGET payment system is not open for
the settlement of payments in euro).

“Canadian Dollars” means the lawful currency of Canada.

“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 6.03(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;

 

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(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.

“CFC” means an entity that is a controlled foreign corporation within the
meaning of Section 957 of the Code and with respect to which any Borrower is a
“United States shareholder,” within the meaning of Section 951(b) of the Code.

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), 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, rules,
guideline, requirement or directive (whether or not having the force of law) by
any Governmental Authority; provided however, that notwithstanding anything
herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, issued in connection therewith or in implementation thereof, and
(ii) all requests, rules, guidelines, requirements and directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law” regardless of the date enacted,
adopted, issued or implemented.

“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 Exchange Act, 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 plan other than any
Permitted Holder, becomes the “beneficial owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, 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);

 

5

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(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);

(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.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term Loans or
Swingline Loans.

“Code” means the Internal Revenue Code of 1986.

“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, to secure the
Secured Obligations.

“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 Secured 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 to
secure the Secured Obligations.

“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, with respect to each Lender, the sum of such Lender’s
Revolving Commitment and Term Loan Commitment. The initial amount of each
Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and
Assumption or other documentation contemplated hereby pursuant to which such
Lender shall have assumed its Commitment, as applicable.

 

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“Computation Date” is defined in Section 2.04.

“Consolidated Cash Interest Charges” means, for any Measurement Period, all
Consolidated Interest Charges paid or 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, in each case 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

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

 

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(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

 

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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 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 Effective Date, Consolidated Interest Charges shall be
an amount equal to actual Consolidated Interest Charges from the Effective 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
Effective Date through the date of determination.

“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 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.

 

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“Consolidated Total Assets” means, as of the date of any determination thereof,
total assets of Holdings and its Subsidiaries calculated in accordance with GAAP
on a consolidated basis as of such date.

“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 Event” means a Borrowing, the issuance of a Letter of Credit, an LC
Disbursement or any of the foregoing.

“Credit Exposure” means, as to any Lender at any time, the sum of (a) such
Lender’s Revolving Credit Exposure at such time, plus (b) an amount equal to the
aggregate principal amount of its Term Loans outstanding at such time.

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

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline
Lender or any other Lender.

“Cumulative Retained Excess Cash Flow Amount” means, at any date, the sum of
(x) amount of Excess Cash Flow for each fiscal year commencing with the fiscal
year ending December 31, 2012 that has been calculated and included in a
Compliance Certificate delivered in accordance with Section 5.02(b), plus
(y) 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 Effective 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 Retained
Excess Cash Flow Amount, plus (z) 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 Effective Date, not otherwise applied for a
purpose other than use in the Cumulative Retained Excess Cash Flow Amount.

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

“Defaulting Lender” means any Lender that (a) has failed, within two
(2) Business Days of the date required to be funded or paid, to (i) fund any
portion of its Loans, (ii) fund any portion of its participations in Letters of
Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount
required to be paid by it hereunder, unless, in the case of clause (i) above,
such Lender notifies

 

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the Administrative Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied, (b) has notified Holdings or any Credit Party in writing, or has
made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three (3) Business Days
after request by a Credit Party, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations (and is financially able to meet such obligations)
to fund prospective Loans and participations in then outstanding Letters of
Credit and Swingline Loans under this Agreement, provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit
Party’s receipt of such certification in form and substance satisfactory to it
and the Administrative Agent, or (d) has become the subject of a Bankruptcy
Event.

“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 be required to redeem
any such Equity Interests pursuant to such provisions prior to the repayment in
full of the Obligations.

“Dollar Amount” of any currency at any date shall mean (i) the amount of such
currency if such currency is Dollars or (ii) the equivalent in such currency of
Dollars if such currency is a Foreign Currency, calculated on the basis of the
Exchange Rate for such currency, on or as of the most recent Computation Date
provided for in Section 2.04.

“Dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the United States of America other than a disregarded
entity whose assets consist solely of interests in one or more Foreign
Subsidiaries and a U.S. domestic entity that has no significant assets other
than CFCs.

 

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“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“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.

“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.

 

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“Equivalent Amount” of any currency with respect to any amount of Dollars at any
date shall mean the equivalent in such currency of such amount of Dollars,
calculated on the basis of the Exchange Rate for such other currency at
11:00 a.m., London time, on the date on or as of which such amount is to be
determined.

“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.

“euro” and/or “EUR” means the single currency of the participating member states
of the European Union.

“Eurocurrency”, when used in reference to a currency, means an Agreed Currency
and when used in reference to any Loan or Borrowing, means that such Loan, or
the Loans comprising such Borrowing, bears interest at a rate determined by
reference to the Adjusted LIBO Rate.

“Eurocurrency Payment Office” of the Administrative Agent shall mean, for each
Foreign Currency, the office, branch, affiliate or correspondent bank of the
Administrative Agent for such currency as specified from time to time by the
Administrative Agent to Holdings and each Lender.

“Event of Default” has the meaning assigned to such term in Article VII.

“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

 

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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.

“Exchange Rate” means, on any day, with respect to any Foreign Currency, the
rate at which such Foreign Currency may be exchanged into Dollars, as set forth
at approximately 11:00 a.m., Local Time, on such date on the Reuters World
Currency Page for such Foreign Currency. In the event that such rate does not
appear on any Reuters World Currency Page, the Exchange Rate with respect to
such Foreign Currency shall be determined by reference to such other publicly
available service for displaying exchange rates as may be reasonably selected by
the Administrative Agent or, in the event no such service is selected, such
Exchange Rate shall instead be calculated on the basis of the arithmetical mean
of the buy and sell spot rates of exchange of the Administrative Agent for such
Foreign Currency on the London market at 11:00 a.m., Local Time, on such date
for the purchase of Dollars with such Foreign Currency, for delivery two
Business Days later; provided, that if at the time of any such determination,
for any reason, no such spot rate is being quoted, the Administrative Agent,
after consultation with Holdings, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be conclusive
absent manifest error.

“Excluded Taxes” means, with respect to any payment made by any Loan Party under
any Loan Document, any of the following Taxes imposed on or with respect to a
Recipient:

(a) income or franchise taxes imposed on (or measured by) net income by the
United States of America, or by the jurisdiction under the laws of which such
Recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located or Other
Connection Taxes;

(b) any branch profits taxes imposed by the United States of America or any
similar Taxes imposed by any other jurisdiction in which any Borrower is
located; and

(c) in the case of a Non U.S. Lender (other than an assignee pursuant to a
request by any Borrower under Section 2.19(b)), any U.S. Federal withholding
taxes resulting from any law in effect (including FATCA) on the date that such
Non U.S. Lender becomes a party to this Agreement (or designates a new lending
office) (or, in the case of a Participant, on the date that such Participant
became a Participant hereunder) or is attributable to such Non U.S. Lender’s
failure to comply with Section 2.17(f), except to the extent that such Non
U.S. 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 taxes pursuant to Section 2.17(a).

“Existing Credit Agreement” means the Credit Agreement dated as of December 14,
2010 among Vonage America, Holdings, the lenders from time to time party thereto
and Bank of America, N.A., as administrative agent.

“Existing Letters of Credit” has the meaning assigned to such term in
Section 2.06(a).

“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

 

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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 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.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), and any regulations, published
administrative guidance or official interpretations thereof.

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

“Financials” means the annual or quarterly financial statements, and
accompanying certificates and other documents, of Holdings and its Subsidiaries
required to be delivered pursuant to Section 5.01(a) or 5.01(b).

“Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated EBITDA minus Restricted Payments minus unfinanced Capital
Expenditures (excluding intellectual property acquisitions, licensing and other
related costs), in each case on a consolidated basis for the most recently
completed Measurement Period to (b) Consolidated Cash Interest Charges, in each
case on a consolidated basis for the most recently completed Measurement Period
plus the aggregate amount of scheduled amortization payments by Holdings and its
Subsidiaries in respect of the principal amount of Indebtedness and income taxes
paid or payable in cash, on a consolidated basis for the applicable Forward
Looking Measurement Period.

“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 Currencies” means Agreed Currencies other than Dollars.

“Foreign Currency LC Exposure” means, at any time, the sum of (a) the Dollar
Amount of the aggregate undrawn and unexpired amount of all outstanding Foreign
Currency Letters of Credit at such time plus (b) the aggregate principal Dollar
Amount of all LC Disbursements in respect of Foreign Currency Letters of Credit
that have not yet been reimbursed at such time.

 

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“Foreign Currency Letter of Credit” means a Letter of Credit denominated in a
Foreign Currency.

“Foreign Currency Sublimit” means $5,000,000.

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

“Forward Looking Measurement Period” means, at any date of determination, the
first four fiscal quarters of Holdings occurring after such date.

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

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

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (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 5.12 and each other Subsidiary of Holdings that shall be required to
execute and deliver a guaranty or guaranty supplement pursuant to Section 5.12.

“Guaranty” means, collectively, the Guaranty made by the Guarantors in favor of
the Secured Parties, substantially in the form of Exhibit I, together with each
other guaranty and guaranty supplement delivered pursuant to Section 5.09.

 

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“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.

“Holdings” means Vonage Holdings Corp., a Delaware corporation.

“Increasing Lender” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan” has the meaning assigned to such term in Section 2.20.

“Incremental Term Loan Amendment” has the meaning assigned to such term in
Section 2.20.

“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 90 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 (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by any Loan Party under any Loan Document and
(b) Other Taxes.

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

“Interest Election Request” means a request by the applicable Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.08,
which, if in writing, shall be substantially in the form of Exhibit D.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December and
the Maturity Date, (b) with respect to any Eurocurrency Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurocurrency Borrowing with an Interest Period of more
than three months’ duration, each day prior to the last day of such Interest
Period that occurs at intervals of three months’ duration after the first day of
such Interest Period and the Maturity Date and (c) with respect to any Swingline
Loan, the day that such Loan is required to be repaid and the Maturity Date.

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

“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.

“IRS” means the United States Internal Revenue Service.

 

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“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.06(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.

“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.

“LC Collateral Account” has the meaning assigned to such term in
Section 2.06(j).

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn Dollar
Amount of all outstanding Letters of Credit at such time plus (b) the aggregate
Dollar Amount of all LC Disbursements that have not yet been reimbursed by or on
behalf of the Borrowers at such time. The LC Exposure of any Revolving Lender at
any time shall be its Applicable Percentage of the total LC Exposure at such
time.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption. Unless the context otherwise
requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate appearing on, in the case of Dollars, Reuters Screen LIBOR01
Page and, in the case of any Foreign Currency, the appropriate page of such
service which displays British Bankers Association Interest Settlement Rates for
deposits in such Foreign Currency (or, in each case, on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
deposits in the relevant Agreed Currency in the London interbank market) at
approximately 11:00 a.m., London time, two (2) Business Days prior to (or, in
the case of Loans denominated in Pounds Sterling, on the day of) the
commencement of such Interest Period, as the rate for deposits in the relevant
Agreed Currency with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the “LIBO
Rate” with respect to such Eurocurrency Borrowing for such Interest Period shall
be the rate at which deposits in the relevant Agreed Currency in an Equivalent
Amount of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two (2) Business Days prior to (or, in the case of
Loans denominated in Pounds Sterling, on the day of) the commencement of such
Interest Period.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or

 

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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 Documents” means this Agreement, any Notes issued pursuant to
Section 2.10(e) of this Agreement, any Letter of Credit applications, the
Collateral Documents, the Guaranty, and all other agreements, instruments,
documents and certificates identified in Section 4.01 executed and delivered to,
or in favor of, the Administrative Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Loan Party, or any employee of any
Loan Party, and delivered to the Administrative Agent or any Lender in
connection with this Agreement or the transactions contemplated hereby. Any
reference in this Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
this Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.

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

“Loans” means the loans made by the Lenders to the Borrowers pursuant to this
Agreement.

“Local Time” means (i) New York City time in the case of a Loan, Borrowing or LC
Disbursement denominated in Dollars and (ii) local time in the case of a Loan,
Borrowing or LC Disbursement denominated in a Foreign Currency (it being
understood that such local time shall mean London, England time unless otherwise
notified by the Administrative Agent).

“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.

“Mandatory Cost” is described in Schedule 2.02.

“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.

“Material Domestic Subsidiary” means each Domestic Subsidiary (i) which, as of
the most recent Measurement Period, for which financial statements have been
delivered pursuant to Section 5.01, contributed greater than five percent
(5%) of Consolidated EBITDA for such period, (ii) which contributed greater than
five percent (5%) of Consolidated Total Assets as of such date or (iii) which is
designated as a Material Domestic Subsidiary pursuant to the proviso in this
definition; provided that, if at any time the aggregate amount of Consolidated
EBITDA or Consolidated Total Assets attributable to all Domestic Subsidiaries
that are not Material Domestic Subsidiaries exceeds fifteen percent (15%) of
Consolidated EBITDA for any such period or fifteen percent (15%) of Consolidated

 

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Total Assets as of the end of any such fiscal quarter, Holdings (or, in the
event that Holdings has failed to do so within ten (10) Business Days, the
Administrative Agent) shall designate sufficient Domestic Subsidiaries as
“Material Domestic Subsidiaries” to eliminate such excess, and such designated
Subsidiaries shall for all purposes of this Agreement constitute Material
Domestic Subsidiaries.

“Material Foreign Subsidiary” means each Foreign Subsidiary (i) which, as of the
most recent Measurement Period, for which financial statements have been
delivered pursuant to Section 5.01, contributed greater than five percent
(5%) of Consolidated EBITDA for such period, (ii) which contributed greater than
five percent (5%) of Consolidated Total Assets as of such date or (iii) which is
designated as a Material Foreign Subsidiary pursuant to the proviso in this
definition; provided that, if at any time the aggregate amount of Consolidated
EBITDA or Consolidated Total Assets attributable to all Foreign Subsidiaries
that are not Material Foreign Subsidiaries exceeds fifteen percent (15%) of
Consolidated EBITDA for any such period or fifteen percent (15%) of Consolidated
Total Assets as of the end of any such fiscal quarter, Holdings (or, in the
event that Holdings has failed to do so within ten (10) Business Days, the
Administrative Agent) shall designate sufficient Foreign Subsidiaries as
“Material Foreign Subsidiaries” to eliminate such excess, and such designated
Subsidiaries shall for all purposes of this Agreement constitute Material
Foreign Subsidiaries.

“Maturity Date” means July 29, 2014.

“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., or any successor to the rating
agency business thereof.

“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 (including any disposition that is not a
“Disposition” solely by operation of the proviso contained in the definition of
“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) 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

 

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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.

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

“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 unpaid principal of and accrued and unpaid interest on
the Loans, all LC Exposure, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations and indebtedness (including
interest and fees accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), obligations and liabilities of any of Holdings
and its Subsidiaries to any of the Lenders, the Administrative Agent, the
Issuing Bank or any indemnified party, individually or collectively, existing on
the Effective Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents or
in respect of any of the Loans made or reimbursement or other obligations
incurred or any of the Letters of Credit or other instruments at any time
evidencing any thereof.

“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 Connection Taxes” means, with respect to any Recipient, taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such taxes (other than a connection arising from such
Recipient having executed, delivered, enforced, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, or engaged in any other transaction pursuant to, or enforced,
any Loan Document, or sold or assigned an interest in any Loan Document).

“Other Taxes” means any present or future stamp, court, documentary, intangible,
recording, filing or similar excise or property Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or
registration of, or from the registration, receipt or perfection of a security
interest under, or otherwise with respect to, any Loan Document, except any such
Taxes that are Other Connection Taxes imposed with respect to an assignment
(other than an assignment under Section 2.19(b)).

“Overnight Foreign Currency Rate” means, for any amount payable in a Foreign
Currency, the rate of interest per annum as determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation at
which overnight or weekend deposits in the relevant

 

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currency (or if such amount due remains unpaid for more than three (3) Business
Days, then for such other period of time as the Administrative Agent may elect)
for delivery in immediately available and freely transferable funds would be
offered by the Administrative Agent to major banks in the interbank market upon
request of such major banks for the relevant currency as determined above and in
an amount comparable to the unpaid principal amount of the related Credit Event,
plus any taxes, levies, imposts, duties, deductions, charges or withholdings
imposed upon, or charged to, the Administrative Agent by any relevant
correspondent bank in respect of such amount in such relevant currency.

“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“PBGC” means the Pension Benefit Guaranty Corporation.

“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 K-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 K-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, 2011, (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 6.01.

“Permitted Qualifying Indebtedness” means unsecured Indebtedness of the
Borrowers (including unsecured Subordinated Indebtedness to the extent
subordinated to the Secured Obligations on terms reasonably acceptable to the
Administrative Agent), to the extent not otherwise permitted under Section 6.01,
and any Indebtedness of the Borrowers constituting refinancings, renewals or
replacements of any such Indebtedness; provided that (1) both immediately prior
to and after giving effect (including on a Pro Forma Basis) thereto, the
Consolidated Leverage Ratio does not exceed 1.25 to 1.00, (2) such Indebtedness
matures after, and does not require any scheduled amortization or other
scheduled payments

 

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of principal prior to, the date that is 181 days after the Maturity Date (it
being understood that any provision requiring an offer to purchase such
Indebtedness as a result of change of control or asset sale or other fundamental
change), (3) such Indebtedness is not guaranteed by any Subsidiary of Holdings
other than the Subsidiary Guarantors (which guarantees, if such Indebtedness is
subordinated, shall be expressly subordinated to the Secured Obligations on
terms not less favorable to the Lenders than the subordination terms of such
Subordinated Indebtedness) and (4) the covenants applicable to such Indebtedness
are not more onerous or more restrictive in any material respect (taken as a
whole) than the applicable covenants set forth in this Agreement (as determined
by the Board of Directors of Holdings in good faith).

“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.

“Pounds Sterling” means the lawful currency of the United Kingdom.

“Prepayment Event” means:

(a) any sale, transfer or other disposition (including pursuant to a sale and
leaseback transaction) of any property or asset of Holdings or any Subsidiary,
other than dispositions described in Section 6.05(a), (b), (c), (d), (e) or (f);
or

(b) the receipt by Holdings or any Subsidiary of an Extraordinary Receipt.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

“Pro Forma Basis” means, with respect to any event, that Holdings is in
compliance on a pro forma basis with the applicable covenant, calculation or
requirement herein recomputed as if the event with respect to which compliance
on a Pro Forma Basis is being tested had occurred on the first day of the most
recent Measurement Period for which financial statements have been delivered
pursuant to Section 5.01.

“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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“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.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) the Issuing Bank.

“Register” has the meaning set forth in Section 9.04.

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

“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, at any time, Lenders having Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Credit
Exposures and unused Commitments at such time.

“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.

 

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“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, to make Revolving Loans and to acquire participations in Letters of Credit
and Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced or terminated from time to time pursuant to
Section 2.09, (b) increased from time to time pursuant to Section 2.20 and
(c) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial aggregate amount of the Revolving
Lenders’ Revolving Commitments is $35,000,000.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and its
LC Exposure and Swingline Exposure at such time.

“Revolving Lender” means, as of any date of determination, each Lender that has
a Revolving Commitment or, if the Revolving Commitments have terminated or
expired, a Lender with Revolving Credit Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business, or any successor to the ratings agency business thereof.

“Sale and Leaseback Transaction” means any sale or other transfer of any
property or asset by any Person with the intent to lease such property or asset
as lessee.

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

“Secured Obligations” means all Obligations, together with all Swap Obligations
and Banking Services Obligations owing to one or more Lenders or their
respective Affiliates.

“Secured Parties” means the holders of the Secured Obligations from time to time
and shall include (i) each Lender and the Issuing Bank in respect of its Loans
and LC Exposure respectively, (ii) the Administrative Agent, the Issuing Bank
and the Lenders in respect of all other present and future obligations and
liabilities of Holdings and each Subsidiary of every type and description
arising under or in connection with this Agreement or any other Loan Document,
(iii) each Lender and affiliate of such Lender in respect of Swap Contracts and
Banking Services Agreements entered into with such Person by Holdings or any
Subsidiary, (iv) each indemnified party under Section 9.03 in respect of the
obligations and liabilities of the Borrowers to such Person hereunder and under
the other Loan Documents, and (v) their respective successors and (in the case
of a Lender, permitted) transferees and assigns.

“Security Agreement” means that certain Security Agreement (including any and
all supplements thereto), dated as of the date hereof, between the Loan Parties
and the Administrative Agent, for the benefit of the Administrative Agent and
the other Secured Parties, and any other pledge or security agreement entered
into, after the date of this Agreement by any other Loan Party (as required by
this Agreement or any other Loan Document), or any other Person, as the same may
be amended, restated or otherwise modified from time to time, in substantially
the form of Exhibit J.

“Silver Point Refinancing” means the refinancing, on December 14, 2010, of the
Indebtedness of the Borrowers and the termination of all commitments with
respect thereto, under each of (i) 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

 

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Agent, (ii) 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 and (iii) that
certain Third Lien Note Purchase Agreement dated October 19, 2008 by and among
Borrowers, the other parties thereto and Silverpoint Finance, LLC.

“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 6.03(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 6.11 is by the terms of this
Agreement required to be calculated on a Pro Forma Basis.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve, liquid asset, fees or similar
requirements (including any marginal, special, emergency or supplemental
reserves or other requirements) established by any central bank, monetary
authority, the FRB, the Financial Services Authority, the European Central Bank
or other Governmental Authority for any category of deposits or liabilities
customarily used to fund loans in the applicable currency, expressed in the case
of each such requirement as a decimal. Such reserve, liquid asset, fees or
similar requirements shall, in the case of Dollar denominated Loans, include
those imposed pursuant to Regulation D of the FRB. Eurocurrency Loans shall be
deemed to be subject to such reserve, liquid asset, fee or similar requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under any applicable law, rule or
regulation, including Regulation D of the FRB. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in any
reserve, liquid asset or similar requirement.

“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.

 

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“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; provided that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
Holdings or the Subsidiaries shall be a Swap Contract.

“Swap Obligations” means any and all obligations of Holdings or any Subsidiary,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Contracts
permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any and
all cancellations, buy backs, reversals, terminations or assignments of any such
Swap Contract transaction.

“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).

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Syndication Agent” means RBS Citizens, N.A. in its capacity as syndication
agent for the credit facility evidenced by this Agreement.

“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.

 

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“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).

“TARGET” means the Trans-European Automated Real-time Gross Settlement Express
Transfer (TARGET) payment system (or, if such payment system ceases to be
operative, such other payment system (if any) reasonably determined by the
Administrative Agent to be a suitable replacement) for the settlement of
payments in euro.

“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.

“Term Lender” means, as of any date of determination, each Lender having a Term
Loan Commitment or that holds Term Loans.

“Term Loan Commitment” means (a) as to any Term Lender, the aggregate commitment
of such Term Lender to make Term Loans as set forth on Schedule 2.01 or in the
most recent Assignment Agreement or other documentation contemplated hereby
executed by such Term Lender and (b) as to all Term Lenders, the aggregate
commitment of all Term Lenders to make Term Loans, which aggregate commitment
shall be $85,000,000 on the date of this Agreement. After advancing the Term
Loan, each reference to a Term Lender’s Term Loan Commitment shall refer to that
Term Lender’s Applicable Percentage of the Term Loans.

“Term Loans” means the term loans made by the Term Lenders to the Borrowers
pursuant to Section 2.01.

“Threshold Amount” means $10.0 million.

“Transactions” 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 Agreement
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 Agreement).

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

“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.

 

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“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (ii) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (iii) an obligation to provide collateral to secure any of the foregoing
types of obligations.

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

“U.S. Tax Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(D)(2).

“Vonage America” means Vonage America Inc., a Delaware corporation.

“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.

“Withholding Agent” means any Loan Party and the Administrative Agent.

SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a
“Eurocurrency Revolving Loan”). Borrowings also may be classified and referred
to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurocurrency
Borrowing”) or by Class and Type (e.g., a “Eurocurrency Revolving Borrowing”).

SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”. The
word “law” shall be construed as referring to all statutes, rules, regulations,
codes and other laws (including official rulings and interpretations thereunder
having the force of law or with which affected Persons customarily comply), and
all judgments, orders and decrees, of all Governmental Authorities. Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended, restated,
supplemented or otherwise modified (subject to any restrictions on such
amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws),
(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignment set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this

 

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Agreement in its entirety and not to any particular provision hereof, (e) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (f) 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.

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if Holdings
notifies the Administrative Agent that Holdings requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Administrative Agent notifies Holdings that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith. Notwithstanding any other provision contained herein,
all terms of an accounting or financial nature used herein shall be construed,
and all computations of amounts and ratios referred to herein shall be made
(i) without giving effect to any election under Accounting Standards
Codification 825-10-25 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of Holdings or any Subsidiary at “fair value”,
as defined therein and (ii) without giving effect to any treatment of
Indebtedness in respect of convertible debt instruments under Accounting
Standards Codification 470-20 (or any other Accounting Standards Codification or
Financial Accounting Standard having a similar result or effect) to value any
such Indebtedness in a reduced or bifurcated manner as described therein, and
such Indebtedness shall at all times be valued at the full stated principal
amount thereof.

SECTION 1.05. Status of Obligations. In the event that Holdings or any other
Loan Party shall at any time issue or have outstanding any Subordinated
Indebtedness, Holdings shall take or cause such other Loan Party to take all
such actions as shall be necessary to cause the Secured Obligations to
constitute senior indebtedness (however denominated) in respect of such
Subordinated Indebtedness and to enable the Administrative Agent and the Lenders
to have and exercise any payment blockage or other remedies available or
potentially available to holders of senior indebtedness under the terms of such
Subordinated Indebtedness. Without limiting the foregoing, the Obligations are
hereby designated as “senior indebtedness” and as “designated senior
indebtedness” and words of similar import under and in respect of any indenture
or other agreement or instrument under which such Subordinated Indebtedness is
outstanding and are further given all such other designations as shall be
required under the terms of any such Subordinated Indebtedness in order that the
Lenders may have and exercise any payment blockage or other remedies available
or potentially available to holders of senior indebtedness under the terms of
such Subordinated Indebtedness.

SECTION 1.06. Cumulative Retained Excess Cash Flow Amounts. 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 Retained
Excess Cash Flow Amount 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.

 

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SECTION 1.07. Pro Forma Calculations.

(a) Notwithstanding anything to the contrary contained herein, financial ratios
and tests (including the Consolidated Leverage Ratio and the Fixed Charge
Coverage Ratio) pursuant to this Agreement shall be calculated in the manner
prescribed by this Section 1.07.

(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 Fixed Charge
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 Fixed Charge Coverage
Ratio and Consolidated Leverage Ratio for the purposes of Section 6.05(e) and
Section 6.11, the events described in Sections 1.07(b) and (c) above that
occurred subsequent to the end of the Measurement Period shall not be given pro
forma effect.

ARTICLE II

The Credits

SECTION 2.01. Commitments. Subject to the terms and conditions set forth herein,
(a) each Revolving Lender agrees to make Revolving Loans to the Borrowers in
Agreed Currencies from time to time during the Availability Period in an
aggregate principal amount that will not result in (i) subject to Sections 2.04
and 2.11(b), the Dollar Amount of such Lender’s Revolving Credit Exposure
exceeding such Lender’s Revolving Commitment, (ii) subject to Sections 2.04 and
2.11(b), the sum of the Dollar Amount of the total Revolving Credit Exposures
exceeding the aggregate Revolving Commitments or (iii) subject to Sections 2.04
and 2.11(b), the Dollar Amount of the total outstanding Revolving Loans and LC
Exposure, in each case denominated in Foreign Currencies, exceeding the Foreign
Currency Sublimit, and (b) each Term Lender with a Term Loan Commitment agrees
to make a Term Loan to the Borrowers in Dollars on the Effective Date, in an
amount equal to such Lender’s Term Loan Commitment by making immediately
available funds available to the Administrative Agent’s designated account, not
later than the time specified by the Administrative Agent. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrowers
may borrow, prepay and reborrow Revolving Loans. Amounts repaid or prepaid in
respect of Term Loans may not be reborrowed.

SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline Loan)
shall be made as part of a Borrowing consisting of Loans of the same Class and
Type made by the

 

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Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required. Any
Swingline Loan shall be made in accordance with the procedures set forth in
Section 2.05. The Term Loans shall amortize as set forth in Section 2.10.

(b) Subject to Section 2.14, each Revolving Borrowing and Term Loan Borrowing
shall be comprised entirely of ABR Loans or Eurocurrency Loans as the relevant
Borrower may request in accordance herewith; provided that, unless the Borrowers
have executed and delivered a funding indemnity letter in a form and substance
reasonably satisfactory to the Administrative Agent, all Borrowings made on the
Effective Date must be made as ABR Borrowings but may be converted into
Eurocurrency Borrowings in accordance with Section 2.08. Each ABR Loan shall
only be made in Dollars. Each Swingline Loan shall be an ABR Loan. Each Lender
at its option may make any Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan (and in the case of an
Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to
such Affiliate to the same extent as to such Lender); provided that any exercise
of such option shall not affect the obligation of the relevant Borrower to repay
such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurocurrency Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 (or, if such Borrowing is denominated in a Foreign
Currency, 1,000,000 units of such currency) and not less than $5,000,000 (or, if
such Borrowing is denominated in a Foreign Currency 2,000,000 units of such
currency). At the time that each ABR Revolving Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and
not less than $5,000,000; provided that an ABR Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the aggregate
Revolving Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in
an amount that is an integral multiple of $1,000,000 and not less than
$1,000,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of
seven (7) Eurocurrency Revolving Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, no Borrower shall be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

SECTION 2.03. Requests for Borrowings. To request a Borrowing, the applicable
Borrower shall notify the Administrative Agent of such request (a) by
irrevocable written notice (via a written Borrowing Request signed by the
applicable Borrower promptly followed by telephonic confirmation of such
request) in the case of a Eurocurrency Borrowing, not later than 1:00 p.m.,
Local Time, three (3) Business Days (in the case of a Eurocurrency Borrowing
denominated in Dollars) or by irrevocable written notice (via a written
Borrowing Request signed by such Borrower) not later than four (4) Business Days
(in the case of a Eurocurrency Borrowing denominated in a Foreign Currency), in
each case before the date of the proposed Borrowing or (b) by telephone in the
case of an ABR Borrowing, not later than 1:00 p.m., New York City time, one
(1) Business Day before the date of the proposed Borrowing; provided that any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e) may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request signed by the applicable Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

(i) the aggregate principal amount of the requested Borrowing;

 

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

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing;

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

(v) the location and number of the applicable Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Revolving Borrowing is specified, then, in the
case of a Borrowing denominated in Dollars, the requested Revolving Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurocurrency Revolving Borrowing, then the relevant Borrower shall
be deemed to have selected an Interest Period of one month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. Determination of Dollar Amounts. The Administrative Agent will
determine the Dollar Amount of:

(a) each Eurocurrency Borrowing as of the date two (2) Business Days prior to
the date of such Borrowing or, if applicable, the date of
conversion/continuation of any Borrowing as a Eurocurrency Borrowing,

(b) the LC Exposure as of the date of each request for the issuance, amendment,
renewal or extension of any Letter of Credit, and

(c) all outstanding Credit Events on and as of the last Business Day of each
calendar quarter and, during the continuation of an Event of Default, on any
other Business Day elected by the Administrative Agent in its discretion or upon
instruction by the Required Lenders.

Each day upon or as of which the Administrative Agent determines Dollar Amounts
as described in the preceding clauses (a), (b) and (c) is herein described as a
“Computation Date” with respect to each Credit Event for which a Dollar Amount
is determined on or as of such day.

SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans in Dollars to the
Borrowers from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $5,000,000
or (ii) the Dollar Amount of the total Revolving Credit Exposures exceeding the
aggregate Revolving Commitments; provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrowers may borrow, prepay and reborrow Swingline Loans.

 

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(b) To request a Swingline Loan, the applicable Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from a Borrower. The Swingline Lender shall make each Swingline
Loan available to the relevant Borrower by means of a credit to the general
deposit account of such Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.

(c) The Swingline Lender may by written notice given to the Administrative Agent
not later than 10:00 a.m., New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above, to pay to the Administrative Agent, for the account of the Swingline
Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.
Each Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever. Each Revolving
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.07 with
respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the relevant
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from a Borrower (or other party on behalf of a
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to any Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrowers of any default in the payment thereof.

SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, each Borrower may request the issuance of Letters
of Credit denominated in Agreed Currencies for its own account, in a form
reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period, in support of
obligations of such Borrower or any of its Subsidiaries. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by a Borrower to, or entered into by a Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control. The letters of credit identified on Schedule 2.06 (the “Existing
Letters of Credit”) shall be deemed to be “Letters of Credit” issued on the
Effective Date for all purposes of the Loan Documents.

 

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(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), a Borrower shall hand deliver or
telecopy (or transmit by electronic communication, if arrangements for doing so
have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the Agreed Currency applicable thereto, the name and address
of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, a Borrower also shall submit a letter of credit application on the
Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
relevant Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) subject to
Sections 2.04 and 2.11(b), the Dollar Amount of the LC Exposure shall not exceed
$15,000,000, (ii) subject to Sections 2.04 and 2.11(b), the sum of the Dollar
Amount of the total Revolving Credit Exposures shall not exceed the aggregate
Revolving Commitments and (iii) subject to Sections 2.04 and 2.11(b), the Dollar
Amount of the total outstanding Revolving Loans and LC Exposure, in each case
denominated in Foreign Currencies, shall not exceed the Foreign Currency
Sublimit.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five (5) Business Days prior to the Maturity Date.

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate Dollar Amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the relevant Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be
refunded to any Borrower for any reason. Each Revolving Lender acknowledges and
agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the relevant Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent in Dollars the Dollar Amount
equal to such LC Disbursement, calculated as of the date the Issuing Bank made
such LC Disbursement (or if the Issuing Bank shall so elect in its sole
discretion by notice to such Borrower, in such other Agreed Currency which was
paid by the Issuing Bank pursuant to such LC Disbursement in an amount equal to
such LC Disbursement) not later than 3:00 p.m., Local Time, on the date that
such LC Disbursement is made, if such Borrower shall have received notice of
such LC Disbursement prior to 10:00 a.m., Local Time, on such date, or, if such
notice has not been received by such Borrower prior to such time on such date,
then not later than 3:00 p.m., Local

 

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Time, on (i) the Business Day that such Borrower receives such notice, if such
notice is received prior to 10:00 a.m., Local Time, on the day of receipt or
(ii) the Business Day immediately following the day that such Borrower receives
such notice, if such notice is not received prior to such time on the day of
receipt; provided that, such Borrower may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent Dollar Amount of such LC Disbursement and, to the extent so financed,
such Borrower’s obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing or Swingline Loan. If any Borrower
fails to make such payment when due, the Administrative Agent shall notify each
Revolving Lender of the applicable LC Disbursement, the payment then due from
the relevant Borrower in respect thereof and such Lender’s Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving Lender shall
pay to the Administrative Agent its Applicable Percentage of the payment then
due from the relevant Borrower, in the same manner as provided in Section 2.07
with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from any Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan
as contemplated above) shall not constitute a Loan and shall not relieve any
Borrower of its obligation to reimburse such LC Disbursement. If a Borrower’s
reimbursement of, or obligation to reimburse, any amounts in any Foreign
Currency would subject the Administrative Agent, the Issuing Bank or any Lender
to any stamp duty, ad valorem charge or similar tax that would not be payable if
such reimbursement were made or required to be made in Dollars, such Borrower
shall, at its option, either (x) pay the amount of any such tax requested by the
Administrative Agent, the Issuing Bank or the relevant Lender or (y) reimburse
each LC Disbursement made in such Foreign Currency in Dollars, in an amount
equal to the Equivalent Amount, calculated using the applicable Exchange Rates,
on the date such LC Disbursement is made, of such LC Disbursement.

(f) Obligations Absolute. Each Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, such Borrower’s obligations hereunder.
Neither the Administrative Agent, the Revolving Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to any Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the

 

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Borrowers to the extent permitted by applicable law) suffered by such Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the relevant Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve any Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the relevant Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that such Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans (or in the case such
LC Disbursement is denominated in a Foreign Currency, at the Overnight Foreign
Currency Rate for such Agreed Currency plus the then effective Applicable Rate
with respect to Eurocurrency Revolving Loans); provided that, if such Borrower
fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of
this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.

(i) Replacement of Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among Holdings, the Administrative Agent, the replaced Issuing
Bank and the successor Issuing Bank. The Administrative Agent shall notify the
Revolving Lenders of any such replacement of the Issuing Bank. At the time any
such replacement shall become effective, the Borrowers shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to
Section 2.12(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit then
outstanding and issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that any Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral

 

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pursuant to this paragraph, such Borrower shall deposit in an account maintained
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Issuing Bank and the Revolving Lenders (the “LC Collateral
Account”), an amount in cash equal to 105% of the Dollar Amount of the LC
Exposure as of such date plus any accrued and unpaid interest thereon; provided
that (i) the portions of such amount attributable to undrawn Foreign Currency
Letters of Credit or LC Disbursements in a Foreign Currency that such Borrower
is not late in reimbursing shall be deposited in the applicable Foreign
Currencies in the actual amounts of such undrawn Letters of Credit and LC
Disbursements and (ii) the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Borrower described in clause (f) or (g) of
Article VII. For the purposes of this paragraph, the Foreign Currency LC
Exposure shall be calculated using the applicable Exchange Rate on the date
notice demanding cash collateralization is delivered to the relevant Borrower.
The Borrowers also shall deposit cash collateral pursuant to this paragraph as
and to the extent required by Section 2.11(b). Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account and each
Borrower hereby grants the Administrative Agent a security interest in the LC
Collateral Account. Other than any interest earned on the investment of such
deposits (in the event any such investment is made pursuant to the following
sentence), which investments shall be made at the option and sole discretion of
the Administrative Agent, such deposits shall not bear interest. The
Administrative Agent shall not be required to invest any such deposits; provided
that if the Administrative Agent elects to invest any such deposits, the
Administrative Agent shall invest such deposits in one or more types of Cash
Equivalents, and such investments shall be at each Borrower’s risk and expense.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrowers for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 50% of
the total LC Exposure), be applied to satisfy other Secured Obligations. If any
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the relevant Borrower within three
(3) Business Days after all Events of Default have been cured or waived.

SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds (i) in the case of Loans denominated in Dollars, by
12:00 noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders and (ii) in
the case of each Loan denominated in a Foreign Currency, by 12:00 noon, Local
Time, in the city of the Administrative Agent’s Eurocurrency Payment Office for
such currency and at such Eurocurrency Payment Office for such currency;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the relevant Borrower by
promptly crediting the amounts so received, in like funds, to (x) an account of
the relevant Borrower designated by such Borrower in the applicable Borrowing
Request, in the case of Loans denominated in Dollars and (y) an account of such
Borrower in the relevant jurisdiction and designated by such Borrower in the
applicable Borrowing Request, in the case of Loans denominated in a Foreign
Currency; provided that ABR Revolving Loans made to finance the reimbursement of
an LC Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any 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

 

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has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to the
relevant Borrower 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 such Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to such Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation (including
without limitation the Overnight Foreign Currency Rate in the case of Loans
denominated in a Foreign Currency) or (ii) in the case of such Borrower, the
interest rate applicable to ABR Loans. If such Borrower 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 such Borrower the
amount of such interest paid by such Borrower for such period. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing. Any payment by such Borrower
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.

SECTION 2.08. Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurocurrency Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the relevant Borrower may elect to convert
such Borrowing to a different Type or to continue such Borrowing and, in the
case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as
provided in this Section. A Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued.

(b) To make an election pursuant to this Section, a Borrower shall notify the
Administrative Agent of such election (by telephone or irrevocable written
notice in the case of a Borrowing denominated in Dollars or by irrevocable
written notice (via an Interest Election Request signed by such Borrower) in the
case of a Borrowing denominated in a Foreign Currency) by the time that a
Borrowing Request would be required under Section 2.03 if such Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request signed by the relevant Borrower. Notwithstanding any contrary provision
herein, this Section shall not be construed to permit any Borrower to (i) change
the currency of any Borrowing, (ii) elect an Interest Period for Eurocurrency
Loans that does not comply with Section 2.02(d) or (iii) convert any Borrowing
to a Borrowing of a Type not available under the Class of Commitments pursuant
to which such Borrowing was made.

(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

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

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

 

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(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing; and

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

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

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

(e) If the relevant Borrower fails to deliver a timely Interest Election Request
with respect to a Eurocurrency Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period (i) in the case of a Borrowing denominated in
Dollars, such Borrowing shall be converted to an ABR Borrowing and (ii) in the
case of a Borrowing denominated in a Foreign Currency in respect of which the
applicable Borrower shall have failed to deliver an Interest Election Request
prior to the third (3rd) Business Day preceding the end of such Interest Period,
such Borrowing shall automatically continue as a Eurocurrency Borrowing in the
same Agreed Currency with an Interest Period of one month unless such
Eurocurrency Borrowing is or was repaid in accordance with Section 2.11.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies Holdings, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall
be converted to an ABR Borrowing (and any such Eurocurrency Borrowing
denominated in a Foreign Currency shall be redenominated in Dollars at the time
of such conversion) at the end of the Interest Period applicable thereto.

SECTION 2.09. Termination and Reduction of Commitments. (a) Unless previously
terminated pursuant to the terms of this Agreement, (i) the Term Loan
Commitments shall terminate at 3:00 p.m. (New York City time) on the Effective
Date and (ii) all other Commitments shall terminate on the Maturity Date.

(b) Holdings may at any time terminate, or from time to time reduce, the
Revolving Commitments; provided that (i) each reduction of the Revolving
Commitments shall be in an amount that is an integral multiple of $1,000,000 and
not less than $5,000,000 and (ii) Holdings shall not terminate or reduce the
Revolving Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 2.11, the Dollar Amount of the sum of the
Revolving Credit Exposures would exceed the aggregate Revolving Commitments.

(c) Holdings shall notify the Administrative Agent of any election to terminate
or reduce the Commitments under paragraph (b) of this Section at least three
(3) Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by Holdings pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments
delivered by Holdings may state that such notice is conditioned upon the
effectiveness of other credit facilities or the closing of one or more
securities offerings, in which case such notice may be revoked by Holdings (by
notice to the

 

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Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

SECTION 2.10. Repayment and Amortization of Loans; Evidence of Debt. (a) Each
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Revolving Lender the then unpaid principal amount of
each Revolving Loan on the Maturity Date in the currency of such Loan and
(ii) to the Swingline Lender the then unpaid principal amount of each Swingline
Loan on the earlier of the Maturity Date and the first date after such Swingline
Loan is made that is the 15th or last day of a calendar month and is at least
two (2) Business Days after such Swingline Loan is made; provided that on each
date that a Revolving Borrowing is made, the Borrowers shall repay all Swingline
Loans then outstanding. The Borrowers shall repay Term Loans on the last day of
each of March, June, September and December in a principal amount equal to
$7,083,333 (as adjusted from time to time pursuant to Section 2.11(a) and
Section 2.11(e)). To the extent not previously repaid, all unpaid Term Loans
shall be paid in full in Dollars by the Borrowers on the Maturity Date.

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

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

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

(e) Any Lender may request that Loans made by it to any Borrower be evidenced by
a promissory note. In such event, each Borrower shall prepare, execute and
deliver to such Lender a Note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns).
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after assignment pursuant to Section 9.04) be represented by
one or more Notes payable to the order of the payee named therein (or, if any
such Note is a registered note, to such payee and its registered assigns).

SECTION 2.11. Prepayment of Loans.

(a) Any Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, subject to prior notice in accordance
with the provisions of this Section 2.11(a). The applicable Borrower shall
notify the Administrative Agent (and, in the case of prepayment of a Swingline
Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurocurrency Revolving
Borrowing, not later than 1:00 p.m., Local Time, three (3) Business Days (in the
case of a Eurocurrency Borrowing denominated in Dollars) or four (4) Business
Days (in the case of a Eurocurrency Borrowing denominated in a Foreign
Currency), in each case before the date of prepayment, (ii) in the case of
prepayment of an

 

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ABR Borrowing, not later than 1:00 p.m., New York City time, one (1) Business
Day before the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.09. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Revolving
Loans included in the prepaid Revolving Borrowing, and each prepayment of a Term
Loan Borrowing shall be applied in accordance with the terms hereof. Prepayments
shall be accompanied by (i) accrued interest to the extent required by
Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

(b) If at any time, (i) other than as a result of fluctuations in currency
exchange rates, (A) the sum of the aggregate principal Dollar Amount of all of
the Revolving Credit Exposures (calculated, with respect to those Credit Events
denominated in Foreign Currencies, as of the most recent Computation Date with
respect to each such Credit Event) exceeds the aggregate Revolving Commitments
or (B) the sum of the aggregate principal Dollar Amount of all of the
outstanding Revolving Credit Exposures denominated in Foreign Currencies (the
“Foreign Currency Exposure”) (calculated as of the most recent Computation Date
with respect to each such Credit Event), exceeds the Foreign Currency Sublimit
or (ii) solely as a result of fluctuations in currency exchange rates, (A) the
sum of the aggregate principal Dollar Amount of all of the Revolving Credit
Exposures (calculated, with respect to those Credit Events denominated in
Foreign Currencies, as of the most recent Computation Date with respect to each
such Credit Event) exceeds 105% of the aggregate Revolving Commitments or
(B) the Foreign Currency Exposure (calculated as of the most recent Computation
Date with respect to each such Credit Event), exceeds 105% of the Foreign
Currency Sublimit, the Borrowers shall in each case immediately repay Borrowings
or cash collateralize LC Exposure in an LC Collateral Account, as applicable, in
an aggregate principal amount sufficient to cause (x) the aggregate Dollar
Amount of all Revolving Credit Exposures (calculated, with respect to those
Credit Events denominated in Foreign Currencies, as of the most recent
Computation Date with respect to each such Credit Event) to be less than or
equal to the aggregate Revolving Commitments and (y) the Foreign Currency
Exposure (calculated as of the most recent Computation Date with respect to each
such Credit Event) to be less than or equal to the Foreign Currency Sublimit, as
applicable.

(c) In the event and on each occasion that any Net Cash Proceeds are received by
or on behalf of Holdings or any of its Subsidiaries in respect of any Prepayment
Event, the Borrowers shall, immediately after such Net Cash Proceeds are
received, prepay the Term Loans as set forth in Section 2.11(e) below in an
aggregate amount equal to 100% of such Net Cash Proceeds; provided that, if
Holdings shall deliver to the Administrative Agent a certificate of a
Responsible Officer to the effect that Holdings or its relevant Subsidiaries
intend to apply the Net Cash Proceeds from such event (or a portion thereof
specified in such certificate), within 180 days after receipt of such Net Cash
Proceeds, to acquire (or replace or rebuild) real property, equipment or other
tangible assets (excluding inventory) to be used in the business of Holdings
and/or its Subsidiaries, and certifying that no Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in
respect of the Net Cash Proceeds specified in such certificate; provided further
that to the extent of any such Net Cash Proceeds therefrom that have not been so
applied by the end of such 180 day period, at which time a prepayment shall be
required in an amount equal to such Net Cash Proceeds that have not been so
applied.

(d) [Intentionally Omitted].

 

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(e) All such amounts pursuant to Section 2.11(c) shall be applied ratably to the
Term Loans and shall be applied to reduce the then-remaining installments of the
Term Loans on a pro rata basis based upon the remaining principal amounts
thereof.

(f) Notwithstanding any of the other provisions of paragraph (c) of this
Section 2.11, 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 paragraph (c), the aggregate amount of Net Cash Proceeds required by
paragraph (c) to be applied to prepay Term Loans on such date is less than or
equal to $2,500,000, the Borrowers may defer such prepayment until the first
date on which the aggregate amount of Net Cash Proceeds or other amounts
otherwise required under paragraph (c) 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 Term 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 paragraph (c) (without giving
effect to the first and second sentences of this paragraph (f)) but which have
not previously been so applied.

SECTION 2.12. Fees. (a) The Borrowers agree to pay to the Administrative Agent
for the account of each Revolving Lender a commitment fee, which shall accrue at
the Applicable Rate on the daily amount of the Available Revolving Commitment of
such Lender during the period from and including the Effective Date to but
excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the date on which the Revolving Commitments
terminate, commencing on the first such date to occur after the date hereof. All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

(b) The Borrowers agree to pay (i) to the Administrative Agent for the account
of each Revolving Lender in accordance with its Applicable Percentage, a
participation fee with respect to its participations in Letters of Credit, which
shall accrue at the same Applicable Rate used to determine the interest rate
applicable to Eurocurrency Revolving Loans on the average daily Dollar Amount of
such Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Revolving
Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure and (ii) to the Issuing Bank for its own account
a fronting fee, which shall accrue at the rate of 0.125% per annum on the
average daily Dollar Amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) attributable to Letters of Credit
issued by the Issuing Bank during the period from and including the Effective
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any LC Exposure, as well as
the Issuing Bank’s standard fees and commissions with respect to the issuance,
amendment, cancellation, negotiation, transfer, presentment, renewal or
extension of any Letter of Credit or processing of drawings thereunder. Unless
otherwise specified above, participation fees and fronting fees accrued through
and including the last day of March, June, September and December of each year
shall be payable on the third (3rd) Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
ten (10) Business Days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).

 

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

(d) All fees payable hereunder shall be paid on the dates due, in Dollars
(except as otherwise expressly provided in this Section 2.12) and immediately
available funds, to the Administrative Agent (or to the Issuing Bank, in the
case of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the applicable Lenders. Fees paid shall not be refundable
under any circumstances.

SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.

(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c) Notwithstanding the foregoing, if any principal of or interest on any Loan
or any fee or other amount payable by any Borrower hereunder is not paid when
due, whether at stated maturity, upon acceleration or otherwise, such overdue
amount shall bear interest, after as well as before judgment, at a rate per
annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.

(d) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (c) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurocurrency Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

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

SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing:

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

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

 

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then the Administrative Agent shall give written notice thereof to the
applicable Borrower and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the
applicable Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurocurrency Borrowing shall be ineffective and (x) any such Eurocurrency
Borrowing denominated in a Dollars shall be converted to an ABR Borrowing on the
last day of the then current Interest Period applicable thereto and (y) any such
Eurocurrency Borrowing denominated in a Foreign Currency shall be repaid on the
last day of the then current Interest Period applicable thereto, and (ii) if any
Borrowing Request requests a Eurocurrency Borrowing in Dollars, such Borrowing
shall be made as an ABR Borrowing (and if any Borrowing Request requests a
Eurocurrency Revolving Borrowing denominated in a Foreign Currency, such
Borrowing Request shall be ineffective); provided that if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other
Type of Borrowings shall be permitted.

SECTION 2.15. Increased Costs. (a) 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 by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;

(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition, cost or expense affecting this Agreement or Eurocurrency Loans
made by such Lender or any Letter of Credit or participation therein; or

(iii) subject any Recipient to any Taxes on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto (other than (A) Indemnified Taxes,
(B) Excluded Taxes and (C) Other Connection Taxes on gross or net income,
profits or revenue (including value-added or similar Taxes) , which Taxes shall
be governed by Section 2.17);

and the result of any of the foregoing shall be to increase the cost to such
Person of making or maintaining any Loan or of maintaining its obligation to
make any such Loan (including, without limitation, pursuant to any conversion of
any Borrowing denominated in an Agreed Currency into a Borrowing denominated in
any other Agreed Currency) or to increase the cost to such Person of
participating in, issuing or maintaining any Letter of Credit (including,
without limitation, pursuant to any conversion of any Borrowing denominated in
an Agreed Currency into a Borrowing denominated in any other Agreed Currency) or
to reduce the amount of any sum received or receivable by such Person hereunder,
whether of principal, interest or otherwise (including, without limitation,
pursuant to any conversion of any Borrowing denominated in an Agreed Currency
into a Borrowing denominated in any other Agreed Currency), then, subject to
paragraphs (c) and (d) of this Section, the Borrowers will pay to such Person,
such additional amount or amounts as will compensate such Person, for such
additional costs incurred or reduction suffered as reasonably determined by such
Person (which determination shall be made in good faith (and not on an arbitrary
or capricious basis) and consistent with similarly situated customers of the
applicable Person under agreements having provisions similar to this
Section 2.15 after consideration of such factors as such Person then reasonably
determines to be relevant).

 

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(b) If any Lender or the Issuing Bank determines in good faith that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Bank’s capital or on the
capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time, subject to paragraphs
(c) and (d) of this Section, the Borrowers will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered as reasonably determined
by such Lender or the Issuing Bank (which determination shall be made in good
faith (and not on an arbitrary or capricious basis) and consistent with
similarly situated customers of the applicable Lender or the Issuing Bank under
agreements having provisions similar to this Section 2.15 after consideration of
such factors as such Lender or the Issuing Bank then reasonably determines to be
relevant).

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section, including in reasonable detail a description of the basis for such
claim for compensation and a calculation of such amount or amounts, shall be
delivered to Holdings and shall be conclusive absent manifest error. The
Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within ten (10) Business Days after
receipt thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation; provided that
the Borrowers shall not be required to compensate a Lender or the Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 180 days prior to the date that such Lender or the Issuing Bank, as the
case may be, notifies Holdings in writing of the Change in Law giving rise to
such increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.

SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurocurrency Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.11(a) and is revoked in
accordance therewith) or (d) the assignment of any Eurocurrency Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by a Borrower pursuant to Section 2.19, then, in any such event, the
Borrowers shall compensate each Lender for the loss, cost and expense
attributable to such event in accordance with the terms of this Section. Such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue

 

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on such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for deposits in
the relevant currency of a comparable amount and period from other banks in the
eurocurrency market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section,
including in reasonable detail a description of the basis for such compensation
and a calculation of such amount or amounts, shall be delivered to the
applicable Borrower and shall be conclusive absent manifest error. The Borrowers
shall pay such Lender the amount shown as due on any such certificate within ten
(10) Business Days after receipt thereof.

SECTION 2.17. Taxes. (a) Withholding of Taxes; Gross-Up. Each payment by any
Loan Party under any Loan Document shall be made without withholding for any
Taxes, unless such withholding is required by any law. If any Withholding Agent
determines, in its sole discretion exercised in good faith, that it is so
required to withhold Taxes, then such Withholding Agent may so withhold and
shall timely pay the full amount of withheld Taxes to the relevant Governmental
Authority in accordance with applicable law. If such Taxes are Indemnified
Taxes, then the amount payable by such Loan Party shall be increased as
necessary so that, net of such withholding (including such withholding
applicable to additional amounts payable under this Section), the applicable
Recipient receives the amount it would have received had no such withholding
been made.

(b) Payment of Other Taxes by the Borrowers. The relevant Borrower shall timely
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

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

(d) Indemnification by the Borrowers. The Borrowers shall indemnify each
Recipient for any Indemnified Taxes that are paid or payable by such Recipient
in connection with any Loan Document (including amounts paid or payable under
this Section 2.17(d)) and any actual and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. The
indemnity under this Section 2.17(d) shall be paid within ten (10) days after
the Recipient delivers to the relevant Borrower a certificate stating the amount
of any Indemnified Taxes so paid or payable by such Recipient and describing the
basis for the indemnification claim. Such certificate shall be conclusive of the
amount so paid or payable absent manifest error. Such Recipient shall deliver a
copy of such certificate to the Administrative Agent.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes,
only to the extent that any Loan Party has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Loan Parties to do so) attributable to such Lender that are
paid or payable by the Administrative Agent or the applicable Loan Party (as
applicable) in connection with any Loan Document and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
The indemnity under this Section 2.17(e) shall be paid within ten (10) days
after the Administrative Agent delivers to the applicable Lender a certificate
stating the amount of Taxes so paid or payable by the Administrative Agent. Such
certificate shall be conclusive of the amount so paid or payable absent manifest
error.

 

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(f) Status of Lenders. (i) Any Lender that is entitled to an exemption from, or
reduction of, any applicable withholding tax with respect to any payments under
any Loan Document shall deliver to the Borrowers and the Administrative Agent,
at the time or times reasonably requested by the Borrowers or the Administrative
Agent, such properly completed and executed documentation reasonably requested
by Holdings or the Administrative Agent as will permit such payments to be made
without, or at a reduced rate of, withholding. In addition, any Lender, if
requested by the Borrowers or the Administrative Agent, shall deliver such other
documentation prescribed by law or reasonably requested by the Borrowers or the
Administrative Agent as will enable the Borrowers or the Administrative Agent to
determine whether or not such Lender is subject to any withholding (including
backup withholding) or information reporting requirements. Upon the reasonable
request of any Borrower or the Administrative Agent, any Lender shall update any
form or certification previously delivered pursuant to this Section 2.17(f). If
any form or certification previously delivered pursuant to this Section expires
or becomes obsolete or inaccurate in any respect with respect to a Lender, such
Lender shall promptly (and in any event within ten (10) days after such
expiration, obsolescence or inaccuracy) notify Holdings and the Administrative
Agent in writing of such expiration, obsolescence or inaccuracy and update the
form or certification if it is legally eligible to do so.

(ii) Without limiting the generality of the foregoing, if any Borrower is a
U.S. Person, any Lender with respect to such Borrower shall, if it is legally
eligible to do so, deliver to such Borrower and the Administrative Agent (in
such number of copies reasonably requested by such Borrower and the
Administrative Agent) on or prior to the date on which such Lender becomes a
party hereto, duly completed and executed copies of whichever of the following
is applicable:

(A) in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that
such Lender is exempt from U.S. Federal backup withholding tax;

(B) in the case of a Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States is a party (1) with respect to payments of
interest under any Loan Document, IRS Form W-8BEN establishing an exemption
from, or reduction of, U.S. Federal withholding tax pursuant to the “interest”
article of such tax treaty and (2) with respect to any other applicable payments
under any Loan Document, IRS Form W-8BEN establishing an exemption from, or
reduction of, U.S. Federal withholding tax pursuant to the “business profits” or
“other income” article of such tax treaty;

(C) in the case of a Non-U.S. Lender for whom payments under any Loan Document
constitute income that is effectively connected with such Lender’s conduct of a
trade or business in the United States, IRS Form W-8ECI;

(D) in the case of a Non-U.S. Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN and
(2) a certificate substantially in the form of Exhibit H (a “U.S. Tax
Certificate”) to the effect that such Lender is not (a) a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of
such Borrower within the meaning of Section 881(c)(3)(B) of the Code, (c) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
and (d) conducting a trade or business in the United States with which the
relevant interest payments are effectively connected;

(E) in the case of a Non-U.S. Lender that is not the beneficial owner of
payments made under this Agreement (including a partnership or a participating

 

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Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms
prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f)(ii) that
would be required of each such beneficial owner or partner of such partnership
if such beneficial owner or partner were a Lender; provided, however, that if
the Lender is a partnership and one or more of its partners are claiming the
exemption for portfolio interest under Section 881(c) of the Code, such Lender
may provide a U.S. Tax Certificate on behalf of such partners; or

(F) any other form prescribed by law as a basis for claiming exemption from, or
a reduction of, U.S. Federal withholding tax together with such supplementary
documentation necessary to enable such Borrower or the Administrative Agent to
determine the amount of tax (if any) required by law to be withheld.

(iii) If a payment made to a Lender under any Loan Document would be subject to
U.S. Federal withholding tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Withholding Agent, at the time or times prescribed by law
and at such time or times reasonably requested by the Withholding Agent, such
documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Withholding Agent as may be necessary for the
Withholding Agent to comply with its obligations under FATCA, to determine that
such Lender has or has not complied with such Lender’s obligations under FATCA
and, as necessary, to determine the amount to deduct and withhold from such
payment. For purposes of this Section 2.17(f)(iii), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.17 (including
additional amounts paid pursuant to this Section 2.17), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including any Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid to such indemnified party pursuant to the
previous sentence (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. This
Section 2.17(g) shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes which
it deems confidential) to the indemnifying party or any other Person.

(h) Issuing Bank. For purposes of Section 2.17(e) and (f), the term “Lender”
includes the Issuing Bank.

SECTION 2.18. Payments Generally; Allocations of Proceeds; Pro Rata Treatment;
Sharing of Set-offs.

(a) Except as provided in Section 2.06(e), each Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees, or
of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to
(i) in the case of payments denominated in Dollars, 2:00 p.m., New York City
time and (ii) in the case of payments denominated in a Foreign Currency, 2:00
p.m., Local Time, in the city of the Administrative Agent’s Eurocurrency Payment
Office for such currency, in

 

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each case on the date when due, in immediately available funds, without set-off
or counterclaim. Each Borrower shall make each reimbursement of LC Disbursements
required to be made by it prior to the time for such payments set forth in
Section 2.06(e). Any amounts received after the time set forth above or in
Section 2.06(e), as applicable, on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made (i) in the same currency in which the applicable Credit Event was
made (or where such currency has been converted to euro, in euro) and (ii) to
the Administrative Agent at its offices at 10 South Dearborn Street, 7th Floor,
Chicago, Illinois 60603 or, in the case of a Credit Event denominated in a
Foreign Currency, the Administrative Agent’s Eurocurrency Payment Office for
such currency, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
denominated in the same currency received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. Notwithstanding the foregoing provisions of this
Section, if, after the making of any Credit Event in any Foreign Currency,
currency control or exchange regulations are imposed in the country which issues
such currency with the result that the type of currency in which the Credit
Event was made (the “Original Currency”) no longer exists or any Borrower is not
able to make payment to the Administrative Agent for the account of the Lenders
in such Original Currency, then all payments to be made by such Borrower
hereunder in such currency shall instead be made when due in Dollars in an
amount equal to the Dollar Amount (as of the date of repayment) of such payment
due, it being the intention of the parties hereto that the Borrowers take all
risks of the imposition of any such currency control or exchange regulations.

(b) Any proceeds of Collateral received by the Administrative Agent (i) not
constituting (A) a specific payment of principal, interest, fees or other sum
payable under the Loan Documents (which shall be applied as specified by the
relevant Borrower) or (B) a mandatory prepayment (which shall be applied in
accordance with Section 2.11) or (ii) after an Event of Default has occurred and
is continuing and the Administrative Agent (with the consent of the Required
Lenders) so elects or the Required Lenders so direct, such funds shall be
applied ratably first, to pay any fees, indemnities, or expense reimbursements
including amounts then due to the Administrative Agent and the Issuing Bank from
any Borrower, second, to pay any fees or expense reimbursements then due to the
Lenders from any Borrower, third, to pay interest then due and payable on the
Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC
Disbursements and any other amounts owing with respect to Banking Services
Obligations and Swap Obligations ratably, fifth, to pay an amount to the
Administrative Agent equal to one hundred five percent (105%) of the aggregate
undrawn face amount of all outstanding Letters of Credit and the aggregate
amount of any unpaid LC Disbursements, to be held as cash collateral for such
Obligations, and sixth, to the payment of any other Secured Obligation due to
the Administrative Agent or any Lender by any Borrower. Notwithstanding anything
to the contrary contained in this Agreement, unless so directed by Holdings, or
unless a Default is in existence, none of the Administrative Agent or any Lender
shall apply any payment which it receives to any Eurocurrency Loan of a Class,
except (a) on the expiration date of the Interest Period applicable to any such
Eurocurrency Loan or (b) in the event, and only to the extent, that there are no
outstanding ABR Loans of the same Class and, in any event, the Borrowers shall
pay the break funding payment required in accordance with Section 2.16. The
Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.

(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or participations in LC Disbursements or Swingline Loans resulting in
such Lender receiving payment of a greater proportion

 

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of the aggregate amount of its Loans and participations in LC Disbursements and
Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans and participations in LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and participations in LC Disbursements and Swingline
Loans; 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 paragraph shall not
be construed to apply to any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements and Swingline Loans to any
assignee or participant, other than to Holdings or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each
Borrower 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 Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Borrower in the amount of such
participation.

(d) Unless the Administrative Agent shall have received notice from the relevant
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the relevant Lenders or the Issuing Bank hereunder that
such Borrower will not make such payment, the Administrative Agent may assume
that such Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the relevant Lenders or the
Issuing Bank, as the case may be, the amount due. In such event, if such
Borrower has not in fact made such payment, then each of the relevant Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank 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 Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation (including without limitation the
Overnight Foreign Currency Rate in the case of Loans denominated in a Foreign
Currency).

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such
Lender’s obligations to it under such Section until all such unsatisfied
obligations are fully paid and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender under any such Section; in the case of each of
clauses (i) and (ii) above, in any order as determined by the Administrative
Agent in its discretion.

SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.15, or if any Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall 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 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrowers hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

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(b) If (i) any Lender requests compensation under Section 2.15, (ii) any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17 or
(iii) any Lender becomes a Defaulting Lender, then Holdings may, at its 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 Section 9.04), all its interests,
rights and obligations under the Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) Holdings shall have received the prior written
consent of the Administrative Agent (and if a Revolving Commitment is being
assigned to an assignee that is not a Revolving Lender, the Issuing Bank) with
respect to any assignee that is a Revolving Lender, which consent shall not
unreasonably be withheld, (y) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or Holdings (in the
case of all other amounts) and (z) in the case of any such assignment resulting
from a claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling Holdings to require such
assignment and delegation cease to apply.

SECTION 2.20. Expansion Option. Holdings may from time to time elect to increase
the Revolving Commitments or enter into one or more tranches of term loans (each
an “Incremental Term Loan”), in each case in minimum increments of $5,000,000 so
long as, after giving effect thereto, the aggregate amount of such increases and
all such Incremental Term Loans does not exceed the sum of (i) $60,000,000 plus
(ii) the aggregate principal amount of Term Loans repaid as of the date of such
election. Holdings may arrange for any such increase or tranche to be provided
by one or more Lenders (each Lender so agreeing to an increase in its Revolving
Commitment, or to participate in such Incremental Term Loans, an “Increasing
Lender”), or by one or more new banks, financial institutions or other entities
(each such new bank, financial institution or other entity, an “Augmenting
Lender”), to increase their existing Revolving Commitments, or to participate in
such Incremental Term Loans, or extend Revolving Commitments, as the case may
be; provided that (i) each Augmenting Lender, shall be subject to the approval
of Holdings and the Administrative Agent (such approvals not to be unreasonably
withheld or delayed) and (ii) (x) in the case of an Increasing Lender, Holdings
and such Increasing Lender execute an agreement substantially in the form of
Exhibit E hereto, and (y) in the case of an Augmenting Lender, Holdings and such
Augmenting Lender execute an agreement substantially in the form of Exhibit F
hereto. No consent of any Lender (other than the Lenders participating in the
increase or any Incremental Term Loan) shall be required for any increase in
Revolving Commitments or Incremental Term Loans pursuant to this Section 2.20.
Increases and new Revolving Commitments and Incremental Term Loans created
pursuant to this Section 2.20 shall become effective on the date agreed by
Holdings, the Administrative Agent and the relevant Increasing Lenders or
Augmenting Lenders, and the Administrative Agent shall notify each Lender
thereof. Notwithstanding the foregoing, no increase in the Revolving Commitments
(or in the Revolving Commitment of any Lender) or tranche of Incremental Term
Loans shall become effective under this paragraph unless, (i) on the proposed
date of the effectiveness of such increase or Incremental Term Loans, (A) the
conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be
satisfied or waived by the Required Lenders and the Administrative Agent shall
have received a certificate to that effect dated such date and executed by a
Responsible Officer of Holdings and (B) Holdings shall be in compliance (on a
Pro Forma Basis) with the covenants contained in Section 6.12 and (ii) the
Administrative Agent shall have received documents consistent with those

 

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delivered on the Effective Date as to the corporate power and authority of the
Borrowers to borrow hereunder after giving effect to such increase. On the
effective date of any increase in the Revolving Commitments, (i) each relevant
Increasing Lender and Augmenting Lender shall make available to the
Administrative Agent such amounts in immediately available funds as the
Administrative Agent shall determine, for the benefit of the other Lenders, as
being required in order to cause, after giving effect to such increase and the
use of such amounts to make payments to such other Lenders, each Lender’s
portion of the outstanding Revolving Loans of all the Lenders to equal its
Applicable Percentage of such outstanding Revolving Loans, and (ii) the
Borrowers shall be deemed to have repaid and reborrowed all outstanding
Revolving Loans as of such date (with such reborrowing to consist of the Types
of Revolving Loans, with related Interest Periods if applicable, specified in a
notice delivered by the applicable Borrower in accordance with the requirements
of Section 2.03). The deemed payments made pursuant to clause (ii) of the
immediately preceding sentence shall be accompanied by payment of all accrued
interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall
be subject to indemnification by the Borrowers pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods. The Incremental Term Loans (a) shall rank pari passu
in right of payment with the Revolving Loans and the initial Term Loans,
(b) shall not mature earlier than the Maturity Date (but may have amortization
prior to such date) and (c) shall be treated substantially the same as (and in
any event no more favorably than) the Revolving Loans and the initial Term
Loans; provided that (i) the terms and conditions applicable to any tranche of
Incremental Term Loans maturing after the Maturity Date may provide for material
additional or different financial or other covenants or prepayment requirements
applicable only during periods after the Maturity Date and (ii) the Incremental
Term Loans may be priced differently than the Revolving Loans and the initial
Term Loans. Incremental Term Loans may be made hereunder pursuant to an
amendment or restatement (an “Incremental Term Loan Amendment”) of this
Agreement and, as appropriate, the other Loan Documents, executed by the
Borrowers, each Increasing Lender participating in such tranche (if any), each
Augmenting Lender participating in such tranche, if any, and the Administrative
Agent. The Incremental Term Loan Amendment 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 2.20. Nothing
contained in this Section 2.20 shall constitute, or otherwise be deemed to be, a
commitment on the part of any Lender to increase its Revolving Commitment
hereunder, or provide Incremental Term Loans, at any time.

SECTION 2.21. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from any Borrower hereunder in
the currency expressed to be payable herein (the “specified currency”) into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the specified currency with such other currency at the Administrative
Agent’s main New York City office on the Business Day preceding that on which
final, non-appealable judgment is given. The obligations of each Borrower in
respect of any sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or the Administrative Agent (as the case may be) of any
sum adjudged to be so due in such other currency such Lender or the
Administrative Agent (as the case may be) may in accordance with normal,
reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the
sum originally due to such Lender or the Administrative Agent, as the case may
be, in the specified currency, each Borrower agrees, to the fullest extent that
it may effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender or the Administrative Agent, as the case may
be, against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to any Lender or the Administrative Agent, as
the case may be, in the specified currency and (b) any amounts shared with other
Lenders as a result of allocations of such excess as a disproportionate payment
to such Lender under Section 2.18, such Lender or the Administrative Agent, as
the case may be, agrees to remit such excess to such Borrower.

 

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SECTION 2.22. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.12(a);

(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall
not be included in determining whether the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 9.02); provided that this clause (b)
shall not apply to the vote of a Defaulting Lender in the case of an amendment,
waiver or other modification requiring the consent of such Lender or each Lender
affected thereby;

(c) if any Swingline Exposure or LC Exposure exists at the time such Lender
becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting
Lender shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Applicable Percentages but only to the extent the sum of all
non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s
Swingline Exposure and LC Exposure does not exceed the total of all
non-Defaulting Lenders’ Revolving Commitments;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrowers shall within two (2) Business Days
following notice by the Administrative Agent (x) first, prepay such Swingline
Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank
only the Borrowers’ obligations corresponding to such Defaulting Lender’s LC
Exposure (after giving effect to any partial reallocation pursuant to clause (i)
above) in accordance with the procedures set forth in Section 2.06(j) for so
long as such LC Exposure is outstanding;

(iii) if the Borrowers cash collateralize any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrowers shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any other
Lender hereunder, all letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing
Bank until and to the extent that such LC Exposure is reallocated and/or cash
collateralized;

 

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(d) so long as such Lender is a Defaulting Lender, the Swingline Lender shall
not be required to fund any Swingline Loan and the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Revolving Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrowers
in accordance with Section 2.22(c), and participating interests in any such
newly made Swingline Loan or any newly issued or increased Letter of Credit
shall be allocated among non-Defaulting Lenders in a manner consistent with
Section 2.22(c)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur
following the date hereof and for so long as such event shall continue or
(ii) the Swingline Lender or the Issuing Bank has a good faith belief that any
Lender has defaulted in fulfilling its obligations under one or more other
agreements in which such Lender commits to extend credit, the Swingline Lender
shall not be required to fund any Swingline Loan and the Issuing Bank shall not
be required to issue, amend or increase any Letter of Credit, unless the
Swingline Lender or the Issuing Bank, as the case may be, shall have entered
into arrangements with the Borrowers or such Lender, satisfactory to the
Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to
it in respect of such Lender hereunder;

(e) In the event that the Administrative Agent, Holdings, the Swingline Lender
and the Issuing Bank each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders (other than Swingline
Loans) as the Administrative Agent shall determine may be necessary in order for
such Lender to hold such Loans in accordance with its Applicable Percentage; and

(f) the rights and remedies against, and with respect to, a Defaulting Lender
under this Section 2.22 are in addition to, and cumulative and not in limitation
of, all other rights and remedies that the Administrative Agent and each Lender,
Issuing Bank, Swingline Lender, Borrower or any other Loan Party may at any time
have against, or with respect to, such Defaulting Lender.

ARTICLE III

Representations and Warranties

Each Borrower represents and warrants to the Lenders that:

SECTION 3.01. 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 Transactions, 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 clauses (a) (solely with respect to good standing), (b)(i)
or (c), to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect.

SECTION 3.02. 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

 

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(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.

SECTION 3.03. Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or (except as
contemplated by Section 3.21) 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 Effective 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.

SECTION 3.04. 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).

SECTION 3.05. 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 March 31, 2011, 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.

 

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(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
Effective Date or delivered pursuant to Section 5.01(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.

SECTION 3.06. Litigation. Except as set forth on Schedule 3.06, 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.

SECTION 3.07. 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.

SECTION 3.08. 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.

SECTION 3.09. 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.

 

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SECTION 3.10. Insurance. The properties of Holdings and its Subsidiaries are
insured with financially sound and reputable insurance companies that are 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 and its Subsidiaries
operate.

SECTION 3.11. 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, 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 of 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.

SECTION 3.12. 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 IRS 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 IRS. To the knowledge of the
Responsible Officers of Holdings, nothing has occurred that would prevent or
cause the loss of such tax-qualified status.

(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

 

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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.

SECTION 3.13. Subsidiaries; Equity Interests; Loan Parties. (a) As of the
Effective 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 Effective Date, the number of
shares covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the Effective 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.

SECTION 3.14. 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.

(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.

SECTION 3.15. 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

 

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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).

SECTION 3.16. 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.

SECTION 3.17. 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. As of the Effective Date, 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 Effective 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 material 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 3.17(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, except in such
instances in which such demand, claim, notice or inquiry, either individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.

 

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(e) Except in such instances, either individually or in the aggregate, as could
not reasonably be expected to have a Material Adverse Effect, to the knowledge
of the Borrowers and their respective Subsidiaries, 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) To the extent that any of the Proprietary Rights of the Borrowers or any of
their respective Subsidiaries are material to the operation of Holdings or any
of its Subsidiaries, Borrowers and their respective Subsidiaries have the right
to grant Holdings or such Subsidiary the rights to use such Proprietary Rights.

SECTION 3.18. 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.

SECTION 3.19. 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.

SECTION 3.20. 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 Effective 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 Effective
Date.

SECTION 3.21. 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 Effective 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.

 

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SECTION 3.22. 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.

(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.

SECTION 3.23. 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 material
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 PUC Licenses, or the imposition of any penalty or fine by any
Governmental Authority with respect to any of the FCC Licenses, State PUC
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 PUC 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 PUCs 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.

 

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(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.

ARTICLE IV

Conditions

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received (i) from each
party hereto either (A) a counterpart of this Agreement signed on behalf of such
party or (B) written evidence reasonably satisfactory to the Administrative
Agent (which may include telecopy or electronic transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and (ii) duly executed copies of the Loan Documents and such
other legal opinions, certificates, documents, instruments and agreements as the
Administrative Agent shall reasonably request in connection with the
Transactions, all in form and substance reasonably satisfactory to the
Administrative Agent and its counsel and as further described in the list of
closing documents attached as Exhibit G.

(b) The Administrative Agent shall have received a favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Weil, Gotshal & Manges LLP, counsel for the Loan Parties, reasonably
satisfactory to the Administrative Agent. Holdings hereby requests such counsel
to deliver such opinion.

(c) The Lenders shall have received (i) satisfactory audited consolidated
financial statements of Holdings for the two most recent fiscal years ended
prior to the Effective Date as to which such financial statements are available,
(ii) satisfactory unaudited interim consolidated financial statements of
Holdings for each quarterly period ended subsequent to the date of the latest
financial statements delivered pursuant to clause (i) of this paragraph as to
which such financial statements are publicly available and (iii) satisfactory
financial statement projections through and including Holdings’ 2014 fiscal
year, together with such information as the Administrative Agent and the Lenders
shall reasonably request (including, without limitation, a detailed description
of the assumptions used in preparing such projections).

(d) The Administrative Agent shall have received such documents and certificates
as the Administrative Agent or its counsel may reasonably request relating to
the organization, existence and good standing of the initial Loan Parties, the
authorization of the Transactions and any other legal matters relating to such
Loan Parties, the Loan Documents or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel and as
further described in the list of closing documents attached as Exhibit G.

 

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(e) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by a Responsible Officer of Holdings, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02.

(f) The Administrative Agent shall have received evidence reasonably
satisfactory to it that the Existing Credit Agreement shall have been terminated
and cancelled and all indebtedness thereunder shall have been (or concurrently
with the Effective Date shall be) fully repaid and any and all liens thereunder
shall have been (or concurrently with the Effective Date are being) terminated.

(g) The Administrative Agent shall have received evidence reasonably
satisfactory to it that all governmental and third party approvals necessary or,
in the reasonable discretion of the Administrative Agent, advisable in
connection with the Transactions have been obtained and are in full force and
effect.

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

The Administrative Agent shall notify Holdings and the Lenders of the Effective
Date, and such notice shall be conclusive and binding.

SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

(a) The representations and warranties of the Borrowers set forth in this
Agreement shall be true and correct in all material respects on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or extension
of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct as of such
specified earlier date; provided, that the materiality qualifier set forth in
this paragraph (a) shall not be applicable (i) to any representations and
warranties that already are qualified or modified by materiality in the text
thereof or (ii) to any representations and warranties made on the Effective
Date.

(b) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default or Event of Default shall have occurred and be
continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrowers on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.

ARTICLE V

Affirmative Covenants

So long as any Lender shall have any Commitment hereunder, or 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 5.01, 5.02, 5.03, 5.11 and 5.17)
cause each Subsidiary to:

SECTION 5.01. 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;

 

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(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 5.02(d), the Borrowers shall not be separately required to furnish such
information under Section 5.01(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 5.01(a) and (b) above at the times specified
therein.

SECTION 5.02. 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 5.01(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 6.11 (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;

 

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(b) concurrently with the delivery of the financial statements referred to in
Sections 5.01(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);

(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 5.01(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

 

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(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 5.01(a) or (b) or
Section 5.02(d) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrowers publicly
file such documents with the SEC, or provide a link thereto on the Borrowers’
website at www.vonage.com (or to such other website as the Borrowers may notify
the Administrative Agent; 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 copies of such documents to 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 (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.

SECTION 5.03. 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 that 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 2.11(c) and (ii) receipt of any Extraordinary Receipt for which the
Borrowers are required to make a mandatory prepayment pursuant to
Section 2.11(c).

Each notice pursuant to this Section 5.03 (other than Section 5.03(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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SECTION 5.04. 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.

SECTION 5.05. 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 6.04 or 6.05; provided, however, that
Holdings and its Subsidiaries may consummate any merger or consolidation
permitted under Section 6.04; (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.

SECTION 5.06. 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.

SECTION 5.07. Maintenance of Insurance.

(a) Maintain with financially sound and reputable insurance companies that are
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

 

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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.

SECTION 5.08. 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.

SECTION 5.09. 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.

SECTION 5.10. 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.

SECTION 5.11. 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.

SECTION 5.12. 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 5.12(d)) 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

 

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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 the
stock of any Foreign Subsidiary (other than 65% of the total outstanding Voting
Stock in any first-tier Material Foreign Subsidiary) be required to be so
pledged and (2) no Foreign Subsidiary and no Domestic Subsidiary that is not a
Material Domestic 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 5.12(b). Notwithstanding the foregoing, no Mortgages shall be required
until the date that is sixty (60) days after the applicable Person becomes a
Subsidiary (or such later date as is agreed upon by the Administrative Agent in
its reasonable discretion).

(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 any requirements to deliver Equity Interests of such Foreign
Subsidiary pursuant to Section 5.12(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 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 Effective 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 Secured Obligations (unless
the subject property is already mortgaged to a third party to the extent
permitted by Section 6.01). 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).

SECTION 5.13. 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

 

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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.

SECTION 5.14. 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 reasonably require.

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.

SECTION 5.15. 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.

 

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SECTION 5.16. Reserved.

SECTION 5.17. 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.

SECTION 5.18. Post Closing Matters. Within thirty (30) days of the Effective
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 5.18.

ARTICLE VI

Negative Covenants

So long as any Lender shall have any Commitment hereunder, or 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:

SECTION 6.01. 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 6.01(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 6.02(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 6.04), and (iv) any
renewal or extension of the obligations secured or benefited thereby is
permitted by Section 6.02(d);

(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;

 

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(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 7.01(h);

(i) Liens securing Indebtedness permitted under Section 6.02(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 principal amount of 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 6.02(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 6.02(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 6.02(d)) or change in any direct or contingent obligor)
of the Indebtedness secured thereby.

SECTION 6.02. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:

 

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(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 Secured Obligations on
customary terms and (iii) be otherwise permitted under the provisions of
Section 6.03;

(c) Indebtedness under the Loan Documents;

(d) Indebtedness outstanding on the date hereof and listed on Schedule 6.02(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 6.04); 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 6.01(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding under this clause
(f) shall not exceed $20.0 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 6.03(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 $10.0 million at any time outstanding so long as
no Default or Event of Default shall have occurred and be continuing or would
result therefrom; provided that (A) the aggregate

 

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outstanding principal amount of Indebtedness permitted by this clause (i) that
is secured by any asset or property shall not exceed $5.0 million and (B) the
foregoing $10.0 million limitation shall not apply in the case of Permitted
Qualifying Indebtedness;

(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

(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 claims, health,
disability or other employee benefits; provided that any reimbursement
obligations in respect thereof are reimbursed within thirty (30) days following
the date thereof.

SECTION 6.03. 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 6.02;

(f) Investments existing on the date hereof and set forth on Schedule 6.03(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 6.03(g):

(i) any such newly-created or acquired Subsidiary shall comply with the
requirements of Section 5.12;

 

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(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) (A) the aggregate amount of total cash consideration and indebtedness
assumed in accordance with the terms of Section 6.02(g) in respect of purchases
or other acquisitions of Persons that do become Loan Parties at the time of such
purchase or acquisition from the date hereof shall not exceed (when taken
together with the aggregate amount of Investments made in reliance on the $50.0
million allowance under Section 6.03(h) at such time) $50.0 million (provided
that the foregoing $50.0 million limitation shall not apply so long as both
immediately prior to and after giving effect (on a Pro Forma Basis) to any such
purchase or acquisition, the Consolidated Leverage Ratio does not exceed 1.25 to
1.00) and (B) the total cash consideration in respect of purchases or other
acquisitions of Persons that do not become Loan Parties at the time of such
purchase or acquisition from the date hereof shall not exceed $25.0 million;

(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 6.11, such compliance to be
determined on the basis of the financial information most recently delivered to
the Administrative Agent and the Lenders pursuant to Section 5.01(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 (when taken
together with the aggregate amount of Investments made in reliance on the $50.0
million allowance under Section 6.03(g)(iii) at such time) $50.0 million
(provided that the foregoing $50.0 million limitation shall not apply so long as
both immediately prior to and after giving effect (on a Pro Forma Basis) to any
such cash Investments, the Consolidated Leverage Ratio does not exceed 1.25 to
1.00);

(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.

SECTION 6.04. 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

 

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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 5.12 and 5.15 (subject to
Article VIII):

(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 6.03, 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.

SECTION 6.05. 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 6.04;

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

 

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(g) Dispositions by Holdings and its Subsidiaries not otherwise permitted under
this Section 6.05; 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 6.05(g).

provided, however, that any Disposition pursuant to Section 6.05(a) through
Section 6.05(h) shall be for fair market value.

SECTION 6.06. 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 descendents) 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;

(e) so long as no Default has occurred and is continuing or would result
therefrom, Restricted Payments in an aggregate amount not to exceed $10.0
million (provided that the foregoing $10.0 million limitation shall not apply so
long as both immediately prior to and after giving effect (on a Pro Forma Basis)
to any such Restricted Payment, the Consolidated Leverage Ratio does not exceed
1.25 to 1.00); 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.

 

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SECTION 6.07. 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.

SECTION 6.08. 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,
transaction 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 6.06 and
Investments permitted under Section 6.03.

SECTION 6.09. 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 6.09 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 6.02(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.

SECTION 6.10. 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.

SECTION 6.11. Financial Covenants.

(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter of Holdings, commencing with the fiscal quarter
ending September 30, 2011, to be greater than 2.00 to 1.00.

(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of
the end of any fiscal quarter of Holdings, commencing with the fiscal quarter
ending September 30, 2011, to be less than 1.75 to 1.00.

(c) Minimum Cash. Permit the sum of (i) unrestricted and unencumbered cash and
Cash Equivalents of Holdings and its Subsidiaries and (ii) the unused portion of
the Revolving Credit Facility to be less than $25,000,000.

SECTION 6.12. Capital Expenditures. (a) Beginning on the Effective Date, make or
become legally obligated to make any Capital Expenditure, except for Capital
Expenditures in the

 

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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.

(b) In addition to the Capital Expenditures permitted pursuant to the preceding
paragraph (a), Holdings and its Subsidiaries may make additional Capital
Expenditures in an amount not to exceed the portion, if any, of the Cumulative
Retained Excess Cash Flow Amount (not to exceed in any event, together with the
aggregate amount of Cumulative Retained Excess Cash Flow utilized under
Section 6.15(c), $8,000,000 for any fiscal year) on the date of such Capital
Expenditure that Holdings elects to make in reliance on this Section 6.12(b).

SECTION 6.13. Amendments of Organization Documents. Amend any of its
Organization Documents in a manner materially adverse to the Lenders.

SECTION 6.14. Accounting Changes. Make any material change in (a) accounting
policies or reporting practices, except as required by GAAP, or (b) its fiscal
year.

SECTION 6.15. 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 Agreement, (b) regularly scheduled or required repayments
or redemptions of Indebtedness and refinancings and refundings of Indebtedness
in compliance with Section 6.02(d) and (c) if Holdings shall be in compliance on
a Pro Forma Basis with the covenants set forth in Section 6.11 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 Retained
Excess Cash Flow Amount (not to exceed in any event, together with the aggregate
amount of Cumulative Retained Excess Cash Flow utilized under Section 6.12(b),
$8,000,000 for any fiscal year) on the date of such prepayment, redemption,
purchase, defeasance or other payment that Holdings elects to make in reliance
on this Section 6.15(c).

ARTICLE VII

Events of Default

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

(a) 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 three Business Days after notice to the
Borrowers that the same becomes due, any other amount payable hereunder or under
any other Loan Document;

(b) (i) The Borrowers fail to perform or observe any term, covenant or agreement
contained in any of Section 5.01, 5.03, 5.05, 5.07, 5.11, 5.12 or Article VI 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;

 

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(c) Any Loan Party fails to perform or observe any other covenant or agreement
(not specified in Section 7.01(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;

(d) 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;

(e) (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 “Early 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;

(f) 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 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;

(g) (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;

(h) 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
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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;

(i) 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;

(j) 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;

(k) There occurs any Change of Control; or

(l) Any Collateral Document after delivery thereof pursuant to Section 4.01 or
5.12 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;

then, and in every such event (other than an event with respect to any of the
Borrowers described in clause (f) or (g) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent shall,
at the request of, or may, with the consent of, the Required Lenders, by notice
to Holdings, take either or both of the following actions, at the same or
different times: (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter (at any time during the
continuance of such event) be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other Secured Obligations of the Borrowers
accrued hereunder and under the other Loan Documents, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers; and in case of any event
with respect to any of the Borrowers described in clause (f) of this Article,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
Secured Obligations accrued hereunder and under the other Loan Documents, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers. Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent shall at the request, or may with the consent of the
Required Lenders, exercise any rights and remedies provided to the
Administrative Agent under the Loan Documents or at law or equity, including all
remedies provided under the UCC.

 

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ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf, including execution of the other Loan
Documents, and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

The bank 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 such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with Holdings or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Holdings or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or 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 written notice thereof is given to the
Administrative Agent by Holdings or a Lender, and 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 any Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, (v) the creation, perfection or priority of Liens on the
Collateral or the existence of the Collateral or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
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 believed by it to be genuine
and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for Holdings), 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.

 

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The Administrative Agent may perform any and all its duties and exercise its
rights and powers 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 its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs 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.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and Holdings. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor approved by
Holdings (such approval not to be unreasonably withheld, conditioned or
delayed); provided that no such approval shall be required if an Event of
Default has occurred and is continuing. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Administrative Agent gives notice of
its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by any Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between such Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article and
Section 9.03 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 it was
acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own 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 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.

None of the Lenders, if any, identified in this Agreement as a Syndication Agent
shall have any right, power, obligation, liability, responsibility or duty under
this Agreement other than those applicable to all Lenders as such. Without
limiting the foregoing, none of such Lenders shall have or be deemed to have a
fiduciary relationship with any Lender. Each Lender hereby makes the same
acknowledgments with respect to the relevant Lenders in its capacity as
Syndication Agent as it makes with respect to the Administrative Agent in the
preceding paragraph.

The Lenders are not partners or co-venturers, and no Lender shall be liable for
the acts or omissions of, or (except as otherwise set forth herein in case of
the Administrative Agent) authorized to act for, any other Lender. The
Administrative Agent shall have the exclusive right on behalf of the Lenders to
enforce the payment of the principal of and interest on any Loan after the date
such principal or interest has become due and payable pursuant to the terms of
this Agreement.

In such capacity, the Administrative Agent is a “representative” of the Secured
Parties within the meaning of the term “secured party” as defined in the New
York Uniform Commercial Code. Each Lender authorizes the Administrative Agent to
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it is a party and to take all action contemplated by such documents. Each Lender
agrees that no Secured Party (other than the Administrative Agent) shall have
the right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Administrative Agent for the benefit of
the Secured Parties upon the terms of the Collateral Documents. In the event
that any Collateral is hereafter pledged by any Person as collateral security
for the Secured Obligations, the Administrative Agent is hereby authorized, and
hereby granted a power of attorney, to execute and deliver on behalf of the
Secured Parties any Loan Documents necessary or appropriate to grant and perfect
a Lien on such Collateral in favor of the Administrative Agent on behalf of the
Secured Parties. The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) as described in Section 9.02(d);
(ii) as permitted by, but only in accordance with, the terms of the applicable
Loan Document; or (iii) if approved, authorized or ratified in writing by the
Required Lenders, unless such release is required to be approved by all of the
Lenders hereunder. Upon request by the Administrative Agent at any time, the
Lenders will confirm in writing the Administrative Agent’s authority to release
particular types or items of Collateral pursuant hereto. Upon any sale or
transfer of assets constituting Collateral which is permitted pursuant to the
terms of any Loan Document, or consented to in writing by the Required Lenders
or all of the Lenders, as applicable, and upon at least five (5) Business Days’
prior written request by Holdings to the Administrative Agent, the
Administrative Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Administrative Agent for the benefit of the Secured Parties
herein or pursuant hereto upon the Collateral that was sold or transferred;
provided, however, that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent’s opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations or any Liens upon (or obligations of Holdings or
any Subsidiary in respect of) all interests retained by Holdings or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral.

Each Borrower, on its behalf and on behalf of its Subsidiaries, and each Lender,
on its behalf and on the behalf of its affiliated Secured Parties, hereby
irrevocably constitute the Administrative Agent as the holder of an irrevocable
power of attorney (fondé de pouvoir within the meaning of Article 2692 of the
Civil Code of Québec) in order to hold hypothecs and security granted by each
Borrower or any Subsidiary on property pursuant to the laws of the Province of
Quebec to secure obligations of any Borrower or any Subsidiary under any bond,
debenture or similar title of indebtedness issued by any Borrower or any
Subsidiary in connection with this Agreement, and agree that the Administrative
Agent may act as the bondholder and mandatary with respect to any bond,
debenture or similar title of indebtedness that may be issued by any Borrower or
any Subsidiary and pledged in favor of the Secured Parties in connection with
this Agreement. Notwithstanding the provisions of Section 32 of the An Act
respecting the special powers of legal persons (Quebec), JPMorgan Chase Bank,
N.A. as Administrative Agent may acquire and be the holder of any bond issued by
any Borrower or any Subsidiary in connection with this Agreement (i.e., the
fondé de pouvoir may acquire and hold the first bond issued under any deed of
hypothec by any Borrower or any Subsidiary).

The Administrative Agent is hereby authorized to execute and deliver any
documents necessary or appropriate to create and perfect the rights of pledge
for the benefit of the Secured Parties including a right of pledge with respect
to the entitlements to profits, the balance left after winding up and the voting
rights of Holdings as ultimate parent of any subsidiary of Holdings which is
organized under the laws of the Netherlands and the Equity Interests of which
are pledged in connection herewith (a “Dutch Pledge”). Without prejudice to the
provisions of this Agreement and the other Loan Documents, the parties hereto
acknowledge and agree with the creation of parallel debt obligations of Holdings
or any

 

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relevant Subsidiary as will be described in any Dutch Pledge (the “Parallel
Debt”), including that any payment received by the Administrative Agent in
respect of the Parallel Debt will - conditionally upon such payment not
subsequently being avoided or reduced by virtue of any provisions or enactments
relating to bankruptcy, insolvency, preference, liquidation or similar laws of
general application - be deemed a satisfaction of a pro rata portion of the
corresponding amounts of the Obligations, and any payment to the Secured Parties
in satisfaction of the Obligations shall - conditionally upon such payment not
subsequently being avoided or reduced by virtue of any provisions or enactments
relating to bankruptcy, insolvency, preference, liquidation or similar laws of
general application - be deemed as satisfaction of the corresponding amount of
the Parallel Debt. The parties hereto acknowledge and agree that, for purposes
of a Dutch Pledge, any resignation by the Administrative Agent is not effective
until its rights under the Parallel Debt are assigned to the successor
Administrative Agent.

The parties hereto acknowledge and agree for the purposes of taking and ensuring
the continuing validity of German law governed pledges (Pfandrechte) with the
creation of parallel debt obligations of Holdings and its Subsidiaries as will
be further described in a separate German law governed parallel debt
undertaking. The Administrative Agent shall (i) hold such parallel debt
undertaking as fiduciary agent (Treuhaender) and (ii) administer and hold as
fiduciary agent (Treuhaender) any pledge created under a German law governed
Collateral Document which is created in favor of any Secured Party or
transferred to any Secured Party due to its accessory nature (Akzessorietaet),
in each case in its own name and for the account of the Secured Parties. Each
Lender, on its own behalf and on behalf of its affiliated Secured Parties,
hereby authorizes the Administrative Agent to enter as its agent in its name and
on its behalf into any German law governed Collateral Document, to accept as its
agent in its name and on its behalf any pledge under such Collateral Document
and to agree to and execute as agent its in its name and on its behalf any
amendments, supplements and other alterations to any such Collateral Document
and to release any such Collateral Document and any pledge created under any
such Collateral Document in accordance with the provisions herein and/or the
provisions in any such Collateral Document.

ARTICLE IX

Miscellaneous

SECTION 9.01. Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (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 telecopy, as follows:

(i) if to the Borrowers, to them at Vonage Holdings Corp., 23 Main Street,
Holmdel, New Jersey 07733, Attention of Barry Rowan, Chief Financial Officer,
(Telecopy No. (732) 817-0293; Telephone No. (732) 444-2767); e-mail
barry.rowan@vonage.com, with a copy to Vonage Holdings Corp., 23 Main Street,
Holmdel, New Jersey 07733, Attention of Chief Legal Officer, (Telecopy No. (732)
202-5221; Telephone No. (732) 444-2364; e-mail kurt.rogers@vonage.com;

(ii) if to the Administrative Agent, (A) in the case of Borrowings denominated
in Dollars, to JPMorgan Chase Bank, N.A., 10 South Dearborn Street, Chicago, IL
60603, Attention of Muoy Lim (Telecopy No. (888) 303-9732;
jpm.agency.services.1@jpmchase.com) and (B) in the case of Borrowings
denominated in Foreign Currencies, to J.P. Morgan Europe Limited, 125 London
Wall, London EC2Y 5AJ, Attention of The Manager (Telecopy No. 44 207 777 2360),
and in each case with a copy to JPMorgan Chase Bank, N.A., 695 Route 46 West,
Fairfield, NJ 07004, Attention of Lawrence Normile (Telecopy No. (973)
439-5011);

 

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(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 10 South
Dearborn Street, Chicago, IL 60603, Attention of Cassandra Groves (Telecopy
No. (312) 385-7107);

(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 10 South
Dearborn Street, Chicago, IL 60603, Attention of Muoy Lim (Telecopy No. (888)
303-9732; jpm.agency.services.1@jpmchase.com); and

(v) if to any other Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or Holdings may, in its
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.

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

SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.

(b) Except as provided (x) in Section 2.20 with respect to an Incremental Term
Loan Amendment or (y) Section 2.22(b) with respect to any Defaulting Lender,
neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrowers and the Required Lenders or by the Borrowers and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender directly affected
thereby, (iii) postpone the scheduled date of payment or amortization of the
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Disbursement (other than any reduction of the amount of, or any extension of the
payment date for, the mandatory prepayments required under Section 2.11, in each
case which shall only require the approval of the Required Lenders), or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment or amortization, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
directly affected thereby, (iv) change Section 2.18(b) or (c) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender (it being understood that, solely
with the consent of the parties prescribed by Section 2.20 to be parties to an
Incremental Term Loan Amendment, Incremental Term Loans may be included in the
determination of Required Lenders on substantially the same basis as the
Commitments and the Revolving Loans are included on the Effective Date),
(vi) release Holdings or all or substantially all of the Guarantors from their
obligations under the Guaranty without the written consent of each Lender, or
(vii) except as provided in clause (d) of this Section or in any Collateral
Document, release all or substantially all of the Collateral, without the
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be.

(c) Notwithstanding the foregoing, this Agreement and any other Loan Document
may be amended (or amended and restated) with the written consent of the
Required Lenders, the Administrative Agent and the Borrowers to each relevant
Loan Document (x) to add one or more credit facilities (in addition to the
Incremental Term Loans pursuant to an Incremental Term Loan Amendment) to this
Agreement and to permit extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof to share ratably
in the benefits of this Agreement and the other Loan Documents with the
Revolving Loans, the initial Term Loans, Incremental Term Loans and the accrued
interest and fees in respect thereof and (y) to include appropriately the
Lenders holding such credit facilities in any determination of the Required
Lenders and Lenders.

(d) The Lenders hereby irrevocably authorize the Administrative Agent, at its
option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (i) upon the
termination of all the Commitments, payment and satisfaction in full in cash of
all Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of, or issuance of backup letter(s) of credit with respect to,
all Unliquidated Obligations in a manner reasonably satisfactory to the
Administrative Agent, (ii) constituting property being sold or disposed of if
(x) Holdings certifies to the Administrative Agent that the sale or disposition
is made in compliance with the terms of this Agreement (and the Administrative
Agent may rely conclusively on any such certificate, without further inquiry) or
such sale or disposition is made pursuant to a waiver or consent hereunder,
(iii) constituting property leased to Holdings or any Subsidiary under a lease
which has expired or been terminated in a transaction permitted under this
Agreement, or (iv) as required to effect any sale or other disposition of such
Collateral in connection with any exercise of remedies of the Administrative
Agent and the Lenders pursuant to Article VII. Any such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of the Loan Parties in
respect of) all interests retained by the Loan Parties, including the proceeds
of any sale, all of which shall continue to constitute part of the Collateral.

(e) If, in connection with any proposed amendment, waiver or consent requiring
the consent of “each Lender” or “each Lender directly affected thereby,” the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is

 

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necessary but not obtained being referred to herein as a “Non-Consenting
Lender”), then Holdings may elect to replace any such Non-Consenting Lender as a
Lender party to this Agreement, provided that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to Holdings and, if such bank or other entity is not already a Lender hereunder,
the Administrative Agent shall agree, as of such date, (A) to purchase for cash
the Loans and other Obligations due to such Non-Consenting Lender pursuant to an
Assignment and Assumption, (B) if applicable, to become a Lender for all
purposes under this Agreement, (C) to assume all obligations of the
Non-Consenting Lender to be terminated as of such date and (D) to comply with
the requirements of clause (b) of Section 9.04, and (ii) each Borrower shall pay
to such Non-Consenting Lender in same day funds on the day of such replacement
(1) all interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by such Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting
Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the
payment which would have been due to such Non-Consenting Lender on the day of
such replacement under Section 2.16 had the Loans of such Non-Consenting Lender
been prepaid on such date rather than sold to the replacement Lender.

(f) Notwithstanding anything to the contrary herein the Administrative Agent
may, with the consent of the Borrowers only, amend, modify or supplement this
Agreement or any of the other Loan Documents to cure any ambiguity, omission,
mistake, defect or inconsistency.

SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers shall pay
(i) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication and distribution (including, without limitation, via the
internet or through a service such as Intralinks) of the credit facilities
provided for herein, the preparation 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), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of one U.S. counsel and one additional local counsel
and regulatory counsel in each applicable jurisdiction for the Administrative
Agent and one additional counsel for all the Lenders other than the
Administrative Agent and additional counsel in light of actual or potential
conflicts of interest or the availability of different claims or defenses for
the Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement and
any other Loan Document, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit. For the avoidance of
doubt and notwithstanding anything to the contrary herein, this Section 9.03(a)
shall not apply with respect to Taxes.

(b) The Borrowers shall indemnify the Administrative Agent, the Issuing Bank and
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 fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee arising out of, in connection
with, or as a result of (i) the execution or delivery of any Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
hereto of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or
Letter of Credit or the use of the proceeds therefrom (including any refusal by
the Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand

 

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do not strictly comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by Holdings or any of its Subsidiaries, or any
Environmental Liability related in any way to Holdings or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by Holdings or any of
its Subsidiaries, and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from (x) the gross negligence or willful misconduct of
such Indemnitee or (y) a material breach by such Indemnitee of its express
obligations under the Loan Documents pursuant to a claim made by the Borrowers.
For the avoidance of doubt and notwithstanding anything to the contrary herein,
this Section 9.03(b) shall not apply with respect to Taxes other than any Taxes
that represent losses or damages arising from any non-Tax claim.

(c) To the extent that the Borrowers fail to pay any amount required to be paid
by it to the Administrative Agent, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, and each Revolving Lender severally agrees to pay
to the Issuing Bank or the Swingline Lender, 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 (it
being understood that the Borrowers’ failure to pay any such amount shall not
relieve the Borrowers of any default in the payment thereof); 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, the Issuing Bank or the Swingline Lender in its capacity
as such.

(d) To the extent permitted by applicable law, no Borrower shall assert, and
each Borrower hereby waives, any claim against any Indemnitee (i) for any
damages arising from the use by others of information or other materials
obtained through telecommunications, electronic or other information
transmission systems (including the Internet), or (ii) 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 or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen
(15) days after written demand therefor.

SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) no Borrower
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by any Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

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(b) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of:

(A) Holdings (provided that Holdings shall be deemed to have consented to any
such assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof); provided, further, that no consent of Holdings shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing, any other assignee;

(B) the Administrative Agent; provided that no consent of the Administrative
Agent shall be required for an assignment of all or any portion of a Term Loan
to a Lender, an Affiliate of a Lender or an Approved Fund; and

(C) the Issuing Bank; provided that no consent of the Issuing Bank shall be
required for an assignment of all or any portion of a Term Loan.

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

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or 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) shall not be less than
$5,000,000 (in the case of Revolving Commitments and Revolving Loans) or
$1,000,000 (in the case of a Term Loan) unless each of Holdings and the
Administrative Agent otherwise consent, provided that no such consent of
Holdings shall be required if an Event of Default has occurred and is
continuing;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500, such fee to be paid by either the assigning
Lender or the assignee Lender or shared between such Lenders; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about Holdings and its
affiliates and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

 

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For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:

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

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto 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 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 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
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of each
Borrower, shall maintain at one of its offices 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 Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent, the Issuing Bank 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 Holdings, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e),
2.07(b), 2.18(e) or 9.03(c), the Administrative Agent shall have no obligation
to accept such Assignment and Assumption and record the information therein in
the Register unless and until such payment shall have been made in full,
together with all accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.

(c) Any Lender may, without the consent of any Borrower, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged; (B) such Lender shall
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responsible to the other parties hereto for the performance of such obligations;
and (C) the Borrowers, the Administrative Agent, the Issuing Bank and the other
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, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17
(subject to the requirements and limitations therein, including the requirements
under Section 2.17(f) (it being understood that the documentation required under
Section 2.17(f) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant
(A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it
were an assignee under paragraph (b) of this Section; and (B) shall not be
entitled to receive any greater payment under Sections 2.15 or 2.17, with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent that such entitlement to receive a
greater payment results from a Change in Law that occurs after such Participant
acquired its applicable participation. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as though it
were a Lender, provided that such Participant agrees to be subject to
Section 2.18(d) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of each
Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement
(the “Participant Register”); provided that no Lender shall have any obligation
to disclose all or any portion of the Participant Register to any Person
(including the identity of any Participant or any information relating to a
Participant’s interest in any Commitments, Loans, Letters of Credit or its other
obligations under any this Agreement) except to the extent that such disclosure
is necessary to establish that such Commitment, Loan, Letter of Credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. 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.

(d) Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and
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regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any other Loan
Document or any provision hereof or thereof.

SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent 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 which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or other electronic imaging
shall be effective as delivery of a manually executed counterpart of this
Agreement.

SECTION 9.07. Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final and in whatever currency denominated) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of any Borrower or any Guarantor against any of and all of the
Secured Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Supreme Court 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 any Loan Document, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement or any other Loan Document against any Loan Party or its
properties in the courts of any jurisdiction.

 

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(c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or 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 law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

(d) Each party to this Agreement irrevocably consents to service of process in
the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.

SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, 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 PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (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 (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 to this Agreement, (e) in
connection with the exercise of any remedies under this Agreement or any other
Loan Document or any suit, 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 any Borrower and its
obligations, (g) with the consent of Holdings 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, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than Holdings.
For the purposes of this Section, “Information” means all information received
from Holdings or any of its Subsidiaries relating to Holdings or any of its
Subsidiaries or their business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by Holdings or such Subsidiary. 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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SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies each Loan Party that pursuant to the
requirements of the Act, it is required to obtain, verify and record information
that identifies such Loan Party, which information includes the name and address
of such Loan Party and other information that will allow such Lender to identify
such Loan Party in accordance with the Act.

SECTION 9.14. Releases of Guarantors.

(a) A Guarantor shall automatically be released from its obligations under the
Guaranty upon the consummation of any transaction permitted by this Agreement as
a result of which such Guarantor ceases to be a Subsidiary; provided that, if so
required by this Agreement, the Required Lenders shall have consented to such
transaction and the terms of such consent shall not have provided otherwise. In
connection with any termination or release pursuant to this Section, the
Administrative Agent shall (and is hereby irrevocably authorized by each Lender
to) execute and deliver to any Loan Party, at such Loan Party’s expense, all
documents that such Loan Party shall reasonably request to evidence such
termination or release. Any execution and delivery of documents pursuant to this
Section shall be without recourse to or warranty by the Administrative Agent.

(b) Further, the Administrative Agent may (and is hereby irrevocably authorized
by each Lender to), upon the request of Holdings, release any Guarantor from its
obligations under the Guaranty if such Guarantor is no longer a Material
Domestic Subsidiary.

(c) At such time as the principal and interest on the Loans, all LC
Disbursements, the fees, expenses and other amounts payable under the Loan
Documents and the other Obligations (other than Banking Services Obligations,
Swap Obligations, and other Obligations expressly stated to survive such payment
and termination) shall have been paid in full, the Commitments shall have been
terminated and no Letters of Credit shall be outstanding, the Guaranty and all
obligations (other than those expressly stated to survive such termination) of
each Guarantor thereunder shall automatically terminate, all without delivery of
any instrument or performance of any act by any Person.

SECTION 9.15. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Secured Parties, in assets which, in accordance
with Article 9 of the UCC or any other applicable law can be perfected only by
possession. Should any Lender (other than the Administrative Agent) obtain
possession of any such Collateral, such Lender shall notify the Administrative
Agent thereof, and, promptly upon the Administrative Agent’s request therefor
shall deliver such Collateral to the Administrative Agent or otherwise deal with
such Collateral in accordance with the Administrative Agent’s instructions.

ARTICLE X

Cross-Guarantee.

In order to induce the Lenders to extend credit to the Borrowers hereunder, but
subject to the last sentence of this Article X, each Borrower hereby irrevocably
and unconditionally guarantees, as a primary obligor and not merely as a surety,
the payment when and as due of the Secured Obligations. Each Borrower further
agrees that the due and punctual payment of such Secured Obligations may be

 

97

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

extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee hereunder
notwithstanding any such extension or renewal of any such Obligation.

Each Borrower waives presentment to, demand of payment from and protest to any
Borrower of any of the Secured Obligations, and also waives notice of acceptance
of its Secured Obligations and notice of protest for nonpayment. The Secured
Obligations of each Borrower hereunder shall not be affected by (a) the failure
of the Administrative Agent, the Issuing Bank or any Lender to assert any claim
or demand or to enforce any right or remedy against any Borrower under the
provisions of this Agreement, any other Loan Document or otherwise; (b) any
extension or renewal of any of the Secured Obligations; (c) any rescission,
waiver, amendment or modification of, or release from, any of the terms or
provisions of this Agreement, or any other Loan Document or agreement; (d) any
default, failure or delay, willful or otherwise, in the performance of any of
the Secured Obligations; (e) the failure of the Administrative Agent to take any
steps to perfect and maintain any security interest in, or to preserve any
rights to, any security or collateral for the Secured Obligations, if any;
(f) any change in the corporate, partnership or other existence, structure or
ownership of any Borrower or any other guarantor of any of the Secured
Obligations; (g) the enforceability or validity of the Secured Obligations or
any part thereof or the genuineness, enforceability or validity of any agreement
relating thereto or with respect to any collateral securing the Secured
Obligations or any part thereof, or any other invalidity or unenforceability
relating to or against any Borrower or any other guarantor of any of the Secured
Obligations, for any reason related to this Agreement, any Swap Contract, any
Banking Services Agreement, any other Loan Document, or any provision of
applicable law, decree, order or regulation of any jurisdiction purporting to
prohibit the payment by such Borrower or any other guarantor of the Secured
Obligations, of any of the Secured Obligations or otherwise affecting any term
of any of the Secured Obligations; or (h) any other act, omission or delay to do
any other act which may or might in any manner or to any extent vary the risk of
such Borrower or otherwise operate as a discharge of a guarantor as a matter of
law or equity or which would impair or eliminate any right of such Borrower to
subrogation.

Each Borrower further agrees that its agreement hereunder constitutes a
guarantee of payment when due (whether or not any bankruptcy or similar
proceeding shall have stayed the accrual or collection of any of the Secured
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by the Administrative
Agent, the Issuing Bank or any Lender to any balance of any deposit account or
credit on the books of the Administrative Agent, the Issuing Bank or any Lender
in favor of any Borrower or any other Person.

The Secured Obligations of each Borrower hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of any
of the Secured Obligations, any impossibility in the performance of any of the
Secured Obligations or otherwise.

Each Borrower further agrees that its Secured Obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by the Administrative Agent, the Issuing Bank or any Lender upon the
bankruptcy or reorganization of any Borrower or otherwise.

In furtherance of the foregoing and not in limitation of any other right which
the Administrative Agent, the Issuing Bank or any Lender may have at law or in
equity against any Borrower by virtue hereof, upon the failure of any other
Borrower to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each
Borrower

 

98

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

hereby promises to and will, upon receipt of written demand by the
Administrative Agent, the Issuing Bank or any Lender, forthwith pay, or cause to
be paid, to the Administrative Agent, the Issuing Bank or any Lender in cash an
amount equal to the unpaid principal amount of the Secured Obligations then due,
together with accrued and unpaid interest thereon. Each Borrower further agrees
that if payment in respect of any Obligation shall be due in a currency other
than Dollars and/or at a place of payment other than New York, Chicago or any
other Eurocurrency Payment Office and if, by reason of any Change in Law,
disruption of currency or foreign exchange markets, war or civil disturbance or
other event, payment of such Obligation in such currency or at such place of
payment shall be impossible or, in the reasonable judgment of the Administrative
Agent, the Issuing Bank or any Lender, disadvantageous to the Administrative
Agent, the Issuing Bank or any Lender in any material respect, then, at the
election of the Administrative Agent, such Borrower shall make payment of such
Obligation in Dollars (based upon the applicable Equivalent Amount in effect on
the date of payment) and/or in New York, Chicago or such other Eurocurrency
Payment Office as is designated by the Administrative Agent and, as a separate
and independent obligation, shall indemnify the Administrative Agent, the
Issuing Bank and any Lender against any losses or reasonable out-of-pocket
expenses that it shall sustain as a result of such alternative payment.

Upon payment by any Borrower of any sums as provided above, all rights of such
Borrower against any Borrower arising as a result thereof by way of right of
subrogation or otherwise shall in all respects be subordinated and junior in
right of payment to the prior indefeasible payment in full in cash of all the
Secured Obligations owed by such Borrower to the Administrative Agent, the
Issuing Bank and the Lenders.

Nothing shall discharge or satisfy the liability of any Borrower hereunder
except the full performance and payment in cash of the Secured Obligations.

[Signature Pages Follow]

 

99

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

 

VONAGE AMERICA INC., as a Borrower By  

/s/  Kurt Rogers

  Name:  Kurt Rogers   Title:  Vice President & Secretary

VONAGE HOLDINGS CORP.,

as a Borrower

By  

/s/  Barry Rowan

  Name:  Barry Rowan   Title:  Executive Vice President, Chief Financial
Officer, Chief Administrative Officer & Treasurer

 

Signature Page to Credit Agreement

Vonage America Inc. and Vonage Holdings Corp.

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

JPMORGAN CHASE BANK, N.A., individually as a Lender, as the Swingline Lender, as
the Issuing Bank and as Administrative Agent By  

/s/  Richard J. Baldwin

  Name:  Richard J. Baldwin   Title:  Authorized Officer

 

Signature Page to Credit Agreement

Vonage America Inc. and Vonage Holdings Corp.

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

RBS CITIZENS, N.A., individually as

a Lender and as Syndication Agent

By  

/s/  William M. Clossey

  Name:  William M. Clossey   Title:  Vice President

 

Signature Page to Credit Agreement

Vonage America Inc. and Vonage Holdings Corp.

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

KEYBANK NATIONAL ASSOCIATION, as

a Lender

By  

/s/  Jeff Kalinowski

  Name:  Jeff Kalinowski   Title:  Senior Vice President

 

Signature Page to Credit Agreement

Vonage America Inc. and Vonage Holdings Corp.

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

SILICON VALLEY BANK, as

a Lender

By  

/s/  Larisa B. Chilton

  Name:  Larisa B. Chilton   Title:  Director

 

Signature Page to Credit Agreement

Vonage America Inc. and Vonage Holdings Corp.

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

SCHEDULE 2.01

COMMITMENTS

 

LENDER

   REVOLVING
COMMITMENT      TERM LOAN
COMMITMENT  

JPMORGAN CHASE BANK, N.A.

   $ 11,666,666.66       $ 28,333,333.34   

RBS CITIZENS, N.A.

   $ 8,750,000.00       $ 21,250,000.00   

KEYBANK NATIONAL ASSOCIATION

   $ 7,291,666.67       $ 17,708,333.33   

SILICON VALLEY BANK

   $ 7,291,666.67       $ 17,708,333.33   

AGGREGATE COMMITMENTS

   $ 35,000,000       $ 85,000,000   

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

SCHEDULE 2.02

MANDATORY COST

 

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other authority
which replaces all or any of its functions) or (b) the requirements of the
European Central Bank.

 

2. On the first day of each Interest Period (or as soon as possible thereafter)
the Administrative Agent shall calculate, as a percentage rate, a rate (the
“Associated Costs Rate”) for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Administrative Agent as
a weighted average of the Lenders’ Associated Costs Rates (weighted in
proportion to the percentage participation of each Lender in the relevant Loan)
and will be expressed as a percentage rate per annum.

 

3. The Associated Costs Rate for any Lender lending from a Facility Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent. This percentage will be certified by that Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender’s participation in all Loans made
from that Facility Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of loans made from that Facility Office.

 

4. The Associated Costs Rate for any Lender lending from a Facility Office in
the United Kingdom will be calculated by the Administrative Agent as follows:

 

  (a) in relation to a Loan in Pounds Sterling:

 

LOGO [g215547ex10_1pg106a.jpg]

  

per cent. per annum

 

  (b) in relation to a Loan in any currency other than Pounds Sterling:

 

LOGO [g215547ex10_1pg106b.jpg]

  

per cent. per annum.

Where:

 

  A is the percentage of Eligible Liabilities (assuming these to be in excess of
any stated minimum) which that Lender is from time to time required to maintain
as an interest free cash ratio deposit with the Bank of England to comply with
cash ratio requirements.

 

  B is the percentage rate of interest (excluding the Applicable Rate and the
Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of
interest specified in Section 2.13(c)) payable for the relevant Interest Period
on the Loan.

 

  C is the percentage (if any) of Eligible Liabilities which that Lender is
required from time to time to maintain as interest bearing Special Deposits with
the Bank of England.

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

  D is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.

 

  E is designed to compensate Lenders for amounts payable under the Fees Rules
and is calculated by the Administrative Agent as being the average of the most
recent rates of charge supplied by the Reference Banks to the Administrative
Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 

5. For the purposes of this Schedule:

 

  (a) “Eligible Liabilities” and “Special Deposits” have the meanings given to
them from time to time under or pursuant to the Bank of England Act 1998 or (as
may be appropriate) by the Bank of England;

 

  (b) “Facility Office” means the office or offices notified by a Lender to the
Administrative Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five Business Days’ written notice) as the
office or offices through which it will perform its obligations under this
Agreement.

 

  (c) “Fees Rules” means the rules on periodic fees contained in the Financial
Services Authority Fees Manual or such other law or regulation as may be in
force from time to time in respect of the payment of fees for the acceptance of
deposits;

 

  (d) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable
discount rate);

 

  (e) “Participating Member State” means any member state of the European Union
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Union relating to economic and monetary union.

 

  (f) “Reference Banks” means, in relation to Mandatory Cost, the principal
London offices of JPMorgan Chase Bank, N.A.

 

  (g) “Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.

 

  (h) “Unpaid Sum” means any sum due and payable but unpaid by any Borrower
under the Loan Documents.

 

6. In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5 per cent. will be included in the formula as 5
and not as 0.05). A negative result obtained by subtracting D from B shall be
taken as zero. The resulting figures shall be rounded to four decimal places.

 

7. If requested by the Administrative Agent, each Reference Bank shall, as soon
as practicable after publication by the Financial Services Authority, supply to
the Administrative Agent, the rate of charge payable by that Reference Bank to
the Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated for this
purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of that Reference Bank.

 

2

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

8. Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Associated Costs Rate. In particular, but
without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:

 

  (a) the jurisdiction of its Facility Office; and

 

  (b) any other information that the Administrative Agent may reasonably require
for such purpose.

Each Lender shall promptly notify the Administrative Agent of any change to the
information provided by it pursuant to this paragraph.

 

9. The percentages of each Lender for the purpose of A and C above and the rates
of charge of each Reference Bank for the purpose of E above shall be determined
by the Administrative Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.

 

10. The Administrative Agent shall have no liability to any person if such
determination results in an Associated Costs Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above
is true and correct in all respects.

 

11. The Administrative Agent shall distribute the additional amounts received as
a result of the Mandatory Cost to the Lenders on the basis of the Associated
Costs Rate for each Lender based on the information provided by each Lender and
each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

 

12. Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Mandatory Cost, an Associated Costs Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all parties hereto.

 

13. The Administrative Agent may from time to time, after consultation with
Holdings and the relevant Lenders, determine and notify to all parties hereto
any amendments which are required to be made to this Schedule 2.02 in order to
comply with any change in law, regulation or any requirements from time to time
imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any other authority which replaces all or any of
its functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all parties hereto.

 

3

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

SCHEDULE 2.06

EXISTING LETTERS OF CREDIT

None.

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

SCHEDULE 3.06

MATERIAL 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, and Vonage has met with Alcatel-Lucent on a number of occasions to
discuss this licensing opportunity. If Vonage determines that these patents are
applicable to its business and valid, Vonage may incur expense in licensing
them. If Vonage determine that these patents are not applicable to its business
or invalid, it may incur expense and damages if there is litigation.

2. j2 Global Communications. 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
communications technologies, and inviting Vonage to enter into licensing
negotiations with j2. j2 has not sent any additional letters since this initial
letter.

3. 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. On January 27, 2011, Vonage met with Hitachi to discuss an
opportunity for Vonage to obtain a non-exclusive patent license to the Hitachi
patents that Hitachi believes may be relevant to Vonage’s business. Vonage is
currently analyzing the applicability of such patents to its business. If Vonage
determines that these patents are applicable to its business and valid, Vonage
may incur expense in licensing them. If Vonage determines that these patents are
not applicable to its business or invalid, Vonage may incur expense and damages
if there is litigation.

4. Bear Creek Technologies, Inc. On February 22, 2011, Bear Creek Technologies,
Inc. (“Bear Creek”) filed a lawsuit against Vonage Holdings Corp., Vonage
America Inc., and Vonage Marketing LLC in the United States District Court for
the Eastern District of Virginia (Norfolk Division) alleging that Vonage’s
products and services are covered by United States Patent No. 7,899,722 (the
‘“722 patent”), entitled “System for Interconnecting Standard Telephony
Communications Equipment to Internet Protocol Networks.”

The suit also named numerous other defendants, including Verizon Communications,
Inc., Comcast Corporation, Time-Warner Cable, Inc., AT&T, Inc., T-Mobile USA
Inc., Cox Communications, Inc., 8x8, Inc., Cablevisions Systems Corp., and Qwest
Communications Int’l, Inc. On April 26, 2011, Bear Creek amended its complaint
adding several defendants, dropping Vonage Communications (a non-existent
entity) from the suit, and adding allegations of induced infringement and
willful infringement. On May 9, 2011, Vonage filed a Motion to Sever Plaintiff’s
Claims against Vonage from the other defendants and Transfer the case to New
Jersey; that motion is now fully briefed. On May 27, 2011, Vonage filed a Motion
to Dismiss Bear

 

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
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.

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

Creek’s Claims of Induced and Willful Infringement; that motion also is now
fully briefed. On June 8, 2011, Vonage sent a letter to Bear Creek asserting its
belief that Bear Creek has no reasonable basis to maintain its claims against
Vonage (a “Rule 11” letter). To date, Bear Creek has not responded. A hearing on
the pending motions is scheduled for August 12, 2011.

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

SCHEDULE 3.17(d)

INFRINGED PROPRIETARY RIGHTS1

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, and Vonage has met with Alcatel-Lucent on a number of occasions
to discuss this licensing opportunity. If Vonage determines that these patents
are applicable to its business and valid, Vonage may incur expense in licensing
them. If Vonage determine that these patents are not applicable to its business
or invalid, it may incur expense and damages if there is litigation.

2. j2 Global Communications. 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
communications technologies, and inviting Vonage to enter into licensing
negotiations with j2. j2 has not sent any additional letters since this initial
letter.

3. 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. On January 27, 2011, Vonage met with Hitachi to discuss an
opportunity for Vonage to obtain a non-exclusive patent license to the Hitachi
patents that Hitachi believes may be relevant to Vonage’s business. Vonage is
currently analyzing the applicability of such patents to its business. If Vonage
determines that these patents are applicable to its business and valid, Vonage
may incur expense in licensing them. If Vonage determines that these patents are
not applicable to its business or invalid, Vonage may incur expense and damages
if there is litigation.

4. Bear Creek Technologies. Inc. On February 22, 2011, Bear Creek Technologies,
Inc. (“Bear Creek”) filed a lawsuit against Vonage Holdings Corp., Vonage
America Inc., and Vonage Marketing LLC in the United States District Court for
the Eastern District of Virginia (Norfolk Division) alleging that Vonage’s
products and services are covered by United States Patent No. 7,899,722 (the
‘“722 patent”), entitled “System for Interconnecting Standard Telephony
Communications Equipment to Internet Protocol Networks.”

The suit also named numerous other defendants, including Verizon Communications,
Inc., Comcast Corporation, Time-Warner Cable, Inc., AT&T, Inc., T-Mobile USA
Inc., Cox Communications, Inc., 8x8, Inc., Cablevisions Systems Corp., and Qwest
Communications Int’I, Inc. On April 26, 2011, Bear Creek amended its complaint
adding several defendants, dropping Vonage Communications (a non-existent
entity) from the suit, and adding allegations of induced infringement and
willful infringement. On May 9, 2011, Vonage filed a Motion to Sever Plaintiff’s
Claims against Vonage from the other defendants and Transfer the case to New
Jersey; that motion is now fully briefed. On May 27, 2011, Vonage filed a Motion
to Dismiss Bear Creek’s Claims of Induced and Willful Infringement; that motion
also is now fully briefed. On

 

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
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.

 

4

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

June 8, 2011, Vonage sent a letter to Bear Creek asserting its belief that Bear
Creek has no reasonable basis to maintain its claims against Vonage (a “Rule 11”
letter). To date, Bear Creek has not responded. A hearing on the pending motions
is scheduled for August 12, 2011.

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

SCHEDULE 5.12

LIST OF GUARANTORS

Entity

Vonage Network LLC

Vonage Marketing LLC

Vonage Worldwide Inc.

Vonage International Inc.

Novega Venture Partners, Inc.

DSP LLC

Vonage Applications Inc.

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

SCHEDULE 5.18

DEPOSIT ACCOUNT CONTROL AGREEMENTS

 

Owner

  

Bank

  

Account Numbers

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

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

SCHEDULE 6.0 l(b)

EXISTING LIENS

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

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

SCHEDULE 6.02(d)

EXISTING INDEBTEDNESS

Letters of Credit:

 

Beneficiary

  

Issuer

   Instrument
Number   

Liability Amount (USD)

  

Expiry Dale

Mack-Cali Holmdel L.L.C.

  

JPMorgan

Chase

Bank,

N.A.

   T623110    $6,300,000.00    9/14/2011

Hess Corporation

  

JPMorgan

Chase

Bank,

N.A.

   2950713459    $$535,000.00    07/01/2012

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

SCHEDULE 6.03(f)

EXISTING INVESTMENTS

None.

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

SCHEDULE 6.09

BURDENSOME AGREEMENTS

None.

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

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, 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 Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, 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 rights and
obligations in its capacity as a Lender 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 under the respective facilities
identified below (including any letters of credit, guarantees, and swingline
loans included in such facilities) 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) 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 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 pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

1. Assignor:

   ____________________________

2. Assignee:

  

____________________________

[and is an Affiliate/Approved Fund of [identify Lender]1]

3. Borrowers:

   Vonage America Inc., a Delaware corporation (“Vonage America”) and Vonage
Holdings Corp., a Delaware corporation (“Holdings” and together with Vonage
America, the “Borrowers” and each a “Borrower”)

4. Administrative Agent:

   JPMorgan Chase Bank, N.A., as the administrative agent under the Credit
Agreement

5. Credit Agreement:

   The Credit Agreement dated as of July 29, 2011 among Vonage America,
Holdings, the Lenders from time to time party hereto, and JPMorgan Chase Bank,
N.A., as Administrative Agent

 

1 

Select as applicable.

 

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

6. Assigned Interest:

 

Facility Assigned2

   Aggregate Amount of
Commitment/Loans for all
Lenders      Amount of
Commitment/
Loans Assigned      Percentage Assigned
of
Commitment/Loans3      $         $           %       $         $           %   
   $         $           %   

Effective Date:                 , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

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 Accepted:

 

JPMORGAN CHASE BANK, N.A., as Administrative Agent and Issuing Bank

By:       Title:

 

[Consented to:]4

 

VONAGE HOLDINGS CORP.,

as a Borrower

By:       Title:

 

2

Fill in the appropriate terminology for the types of facilities under the Credit
Agreement that are being assigned under this Assignment (e.g., “Revolving
Commitment”, “Term Loan Commitment”, etc.)

3 

Set forth, so at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

4

To be added only if the consent of the Company is required by the terms of the
Credit Agreement.

 

2

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ANNEX I

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the 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
Holdings, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by Holdings,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

1.2. Assignee. The 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 satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(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 Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) if it is a Non-U.S. Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Administrative Agent, the 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 Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the 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.

 

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

EXHIBIT B

FORM OF NOTE

[            ], 2011

FOR VALUE RECEIVED, the undersigned (the “Borrowers”), HEREBY UNCONDITIONALLY
PROMISE TO PAY to the order of [LENDER] (the “Lender”) the aggregate unpaid
Dollar Amount of all Loans made by the Lender to the Borrowers pursuant to the
“Credit Agreement” (as defined below), on the Maturity Date or on such earlier
date as may be required by the terms of the Credit Agreement. Capitalized terms
used herein and not otherwise defined herein are as defined in the Credit
Agreement.

The undersigned Borrowers jointly and severally promise to pay interest on the
unpaid principal amount of each Loan made to them from the date of such Loan
until such principal amount is paid in full at a rate or rates per annum
determined in accordance with the terms of the Credit Agreement. Interest
hereunder is due and payable at such times and on such dates as set forth in the
Credit Agreement.

At the time of each Loan, and upon each payment or prepayment of principal of
each Loan, the Lender shall make a notation either on the schedule attached
hereto and made a part hereof, or in such Lender’s own books and records, in
each case specifying the amount of such Loan, the respective Interest Period
thereof (in the case of Eurocurrency Loans) or the amount of principal paid or
prepaid with respect to such Loan, as applicable; provided that the failure of
the Lender to make any such recordation or notation shall not affect the
Obligations of the undersigned Company hereunder or under the Credit Agreement.

This Note is one of the notes referred to in, and is entitled to the benefits
of, that certain Credit Agreement dated as of July 29, 2011 by and among the
Borrowers, the Lenders from time to time party thereto and JPMorgan Chase Bank,
N.A., as Administrative Agent (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”).
The Credit Agreement, among other things, (i) provides for the making of Loans
by the Lender to the undersigned Borrowers from time to time in an aggregate
amount not to exceed at any time outstanding the Dollar Amount of such Lender’s
Commitment, the indebtedness of the undersigned Borrowers resulting from each
such Loan to them being evidenced by this Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments of the principal hereof prior to the maturity hereof
upon the terms and conditions therein specified.

This Note is secured by the Collateral Documents. Reference is hereby made to
the Collateral Documents for a description of the collateral thereby mortgaged,
warranted, bargained, sold, released, conveyed, assigned, transferred, pledged
and hypothecated, the nature and extent of the security for this Note, the
rights of the holder of this Note, the Administrative Agent in respect of such
security and otherwise.

Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by the Borrowers.

Whenever in this Note reference is made to the Administrative Agent, the Lender
or the Borrowers, such reference shall be deemed to include, as applicable, a
reference to their respective successors and assigns. The provisions of this
Note shall be binding upon and shall inure to the benefit of said successors and
assigns. The successors and assigns of either Borrower shall include, without
limitation, a receiver, trustee or debtor in possession of or for such Borrower.

 

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

This Note shall be construed in accordance with and governed by the law of the
State of New York.

 

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

VONAGE HOLDINGS CORP.,

as a Borrower

By:     Name:   Title:  

 

VONAGE AMERICA INC.,

as a Borrower

By:     Name:   Title:  

 

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

SCHEDULE OF LOANS AND PAYMENTS OR PREPAYMENTS

 

Date

   Amount of
Loan    Type of
Loan Currency    Interest
Period/Rate    Amount of
Principal
Paid or
Prepaid    Unpaid
Principal
Balance    Notation
Made By                  

 

2

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

EXHIBIT C

FORM OF BORROWING REQUEST

JPMorgan Chase Bank, N.A.,

as Administrative Agent

for the Lenders referred to below

[            ]

[            ]

Attention: [            ]

Fax: [            ]

Re: Vonage America Inc. and Vonage Holdings Corp.

[Date]

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of July 29, 2011 (as the same
may be amended, restated, supplemented or otherwise modified from time to time),
among Vonage America Inc., a Delaware corporation (“Vonage America”), Vonage
Holdings Corp., a Delaware corporation (“Holdings” and, collectively with Vonage
America, the “Borrowers” and, each a “Borrower”), the financial institutions
party thereto from time to time as Lenders (the “Lenders”) and JPMorgan Chase
Bank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders. The undersigned Borrower hereby gives you notice
pursuant to Section 2.03 of the Credit Agreement that it requests a Revolving
Borrowing under the Credit Agreement, and in that connection the Borrower
specifies the following information with respect to such Revolving Borrowing
requested hereby:

 

1.

Aggregate principal amount of Borrowing:1                 

 

2. Date of Borrowing (which shall be a Business Day):                 

 

3. Type of Borrowing (ABR or Eurocurrency):                 

 

4.

Interest Period and the last day thereof (if a Eurocurrency Borrowing):2
                

 

5. Agreed Currency:                 

 

6. Location and number of Borrower’s account or any other account agreed upon by
the Administrative Agent and the Borrower to which proceeds of Borrowing are to
be disbursed:                 

The undersigned Borrower hereby represents and warrants that the conditions to
lending specified in Section[s] [4.01 and] 3 4.02 of the Credit Agreement are
satisfied as of the date hereof.

 

1 

Not less than applicable amounts specified in Section 2.02(c).

2 

Which must comply with the definition of “Interest Period” and end not later
than the Maturity Date.

3 

To be included only upon Effective Date.

 

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

Very truly yours,

 

[Vonage Holdings Corp.] [Vonage America Inc.]4,

as a Borrower

By:     Name:   Title:  

 

4

Insert Vonage America Inc. or Vonage Holdings Corp., as applicable.

 

2

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

EXHIBIT D

FORM OF INTEREST ELECTION REQUEST

JPMorgan Chase Bank, N.A.,

as Administrative Agent

for the Lenders referred to below

[            ]

[            ]

Attention: [            ]

Fax: [            ]

Re: Vonage America Inc. and Vonage Holdings Corp.

[Date]

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of July 29, 2011 (as the same
may be amended, restated, supplemented or otherwise modified from time to time),
among Vonage America Inc., a Delaware corporation (“Vonage America”), Vonage
Holdings Corp., a Delaware corporation (“Holdings” and, collectively with Vonage
America, the “Borrowers” and, each a “Borrower”), the financial institutions
party thereto from time to time as Lenders (the “Lenders”) and JPMorgan Chase
Bank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders. The undersigned Borrower hereby gives you notice
pursuant to Section 2.08 of the Credit Agreement that it requests to [continue
the Borrowing listed below, or a portion thereof as described below] [convert
the Borrowing listed below, or a portion thereof as described below, to a
different Type], and in that connection such Borrower specifies the following
information with respect to such [conversion] [continuation] requested hereby:

 

1. The applicable Borrowing is a Borrowing of [$]                      in
principal amount of presently outstanding [Revolving][Term] Loans that are [ABR
Loans] [Eurodollar Loans having an Interest Period ending on                 ,
20    ].

 

2.

Aggregate principal amount of resulting Borrowing: 1                 

 

3. Effective date of interest election (which shall be a Business Day):
                

 

4. Type of Borrowing following [conversion] [continuation] (ABR or
Eurocurrency):                 

 

5.

Interest Period and the last day thereof (if a Eurocurrency Borrowing):2
                

 

6. Agreed Currency:                 

 

 

1 

If different options are being elected with respect to different portions of
such Borrowing, specify the portions thereof to be allocated to each resulting
Borrowing and specify the information requested in clauses 3, 4 and 5 for each
resulting Borrowing.

2 

Which must comply with the definition of “Interest Period” and end not later
than the Maturity Date.

 

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

Very truly yours,

 

[Vonage Holdings Corp.] [Vonage America Inc.]3,

as a Borrower

By:     Name:   Title:  

 

3 

Insert Vonage America Inc. or Vonage Holdings Corp., as applicable.

 

2

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EXHIBIT E

FORM OF INCREASING LENDER SUPPLEMENT

INCREASING LENDER SUPPLEMENT, dated             , 20         (this
“Supplement”), by and among each of the signatories hereto, to the Credit
Agreement, dated as of July 29, 2011 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), Vonage America
Inc., a Delaware corporation, Vonage Holdings Corp., a Delaware corporation
(“Holdings”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, Holdings has the
right, subject to the terms and conditions thereof, to effectuate from time to
time an increase in the aggregate Revolving Commitments and/or one or more
tranches of Incremental Term Loans under the Credit Agreement by requesting one
or more Lenders to increase the amount of its Revolving Commitment and/or to
participate in such a tranche;

WHEREAS, Holdings has given notice to the Administrative Agent of its intention
to [increase the aggregate Revolving Commitments] [and] [enter into a tranche of
Incremental Term Loans] pursuant to such Section 2.20; and

WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the undersigned
Increasing Lender now desires to [increase the amount of its Revolving
Commitment] [and] [participate in a tranche of Incremental Term Loans] under the
Credit Agreement by executing and delivering to Holdings and the Administrative
Agent this Supplement;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Increasing Lender agrees, subject to the terms and conditions
of the Credit Agreement, that on the date of this Supplement it shall [have its
Revolving Commitment increased by $[            ], thereby making the aggregate
amount of its total Revolving Commitments equal to $[            ]] [and]
[participate in a tranche of Incremental Term Loans with a commitment amount
equal to $[            ] with respect thereto].

2. Holdings hereby represents and warrants that no Default or Event of Default
has occurred and is continuing on and as of the date hereof.

3. Terms defined in the Credit Agreement shall have their defined meanings when
used herein.

4. This Supplement shall be governed by, and construed in accordance with, the
laws of the State of New York.

5. This Supplement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document.

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

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

 

[INSERT NAME OF INCREASING LENDER] By:     Name: Title:

Accepted and agreed to as of the date first written above:

 

VONAGE HOLDINGS CORP. By:     Name: Title:

Acknowledged as of the date first written above:

 

JPMORGAN CHASE BANK, N.A. as

Administrative Agent

By:     Name: Title:

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

EXHIBIT F

FORM OF AUGMENTING LENDER SUPPLEMENT

AUGMENTING LENDER SUPPLEMENT, dated                 , 20      (this
“Supplement”), to the Credit Agreement, dated as of July 29, 2011 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Vonage America Inc., a Delaware corporation, Vonage Holdings
Corp., a Delaware corporation (“Holdings”), the Lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the
“Administrative Agent”).

W I T N E S S E T H

WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any bank,
financial institution or other entity may [extend Revolving Commitments] [and]
[participate in tranches of Incremental Term Loans] under the Credit Agreement
subject to the approval of Holdings and the Administrative Agent, by executing
and delivering to Holdings and the Administrative Agent a supplement to the
Credit Agreement in substantially the form of this Supplement; and

WHEREAS, the undersigned Augmenting Lender was not an original party to the
Credit Agreement but now desires to become a party thereto;

NOW, THEREFORE, each of the parties hereto hereby agrees as follows:

1. The undersigned Augmenting Lender agrees to be bound by the provisions of the
Credit Agreement and agrees that it shall, on the date of this Supplement,
become a Lender for all purposes of the Credit Agreement to the same extent as
if originally a party thereto, with a [Revolving Commitment of $[            ]]
[and] [a commitment with respect to Incremental Term Loans of $[            ]].

2. The undersigned Augmenting Lender (a) represents and warrants that it is
legally authorized to enter into this Supplement; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and has reviewed such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Supplement; (c) agrees that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement or
any other instrument or document furnished pursuant hereto or thereto;
(d) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Credit
Agreement or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (e) agrees that it will
be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender.

3. The undersigned’s address for notices for the purposes of the Credit
Agreement is as follows:

[            ]

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

4. Holdings hereby represents and warrants that no Default or Event of Default
has occurred and is continuing on and as of the date hereof.

5. Terms defined in the Credit Agreement shall have their defined meanings when
used herein.

6. This Supplement shall be governed by, and construed in accordance with, the
laws of the State of New York.

7. This Supplement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same document.

[remainder of this page intentionally left blank]

 

2

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

IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

 

[INSERT NAME OF AUGMENTING LENDER] By:     Name: Title:

Accepted and agreed to as of the date first written above:

 

VONAGE HOLDINGS CORP. By:     Name: Title:

Acknowledged as of the date first written above:

 

JPMORGAN CHASE BANK, N.A. as

Administrative Agent

By:     Name: Title:

 

3

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EXHIBIT G

VONAGE AMERICA INC.

VONAGE HOLDINGS CORP.

CREDIT FACILITIES

July 29, 2011

LIST OF CLOSING DOCUMENTS1

A. LOAN DOCUMENTS

 

1. Credit Agreement (the “Credit Agreement”) by and 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 institutions from time to time parties thereto as
Lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as
Administrative Agent for itself and the other Lenders (the “Administrative
Agent”), evidencing a revolving credit facility to the Borrowers from the
Lenders in an initial aggregate principal amount of $35,000,000 and a term loan
facility to the Borrowers from the Lenders in an initial aggregate principal
amount of $85,000,000.

SCHEDULES

 

Schedule 2.01

     —         Commitments

Schedule 2.02

     —         Mandatory Costs

Schedule 2.06

     —         Existing Letters of Credit

Schedule 3.06

     —         Material Litigation

Schedule 3.17(d)

     —         Infringed Proprietary Rights

Schedule 5.12

     —         List of Guarantors

Schedule 5.18

     —         List of Deposit Account Control Agreements

Schedule 6.01(b)

     —         Existing Liens

Schedule 6.02(d)

     —         Existing Indebtedness

Schedule 6.03(f)

     —         Existing Investments

Schedule 6.09

     —         Burdensome Agreements

EXHIBITS

 

Exhibit A

     —         Form of Assignment and Assumption

Exhibit B

     —         Form of Note

Exhibit C

     —         Form of Borrowing Request

Exhibit D

     —         Form of Interest Election Request

Exhibit E

     —         Form of Increasing Lender Supplement

Exhibit F

     —         Form of Augmenting Lender Supplement

Exhibit G

     —         List of Closing Documents

Exhibit H-1

     —         Form of U.S. Tax Certificate (Non-U.S. Lenders That Are Not
Partnerships)

 

1 

Each capitalized term used herein and not defined herein shall have the meaning
assigned to such term in the above-defined Credit Agreement. Items appearing in
bold and italics shall be prepared and/or provided by the Borrowers and/or
Borrowers’ counsel.

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

Exhibit H-2

     —         Form of U.S. Tax Certificate (Non-U.S. Lenders That Are
Partnerships)

Exhibit H-3

     —         Form of U.S. Tax Certificate (Non-U.S. Participants That Are Not
Partnerships)

Exhibit H-4

     —         Form of U.S. Tax Certificate (Non-U.S. Participants That Are
Partnerships)

Exhibit I

     —         Form of Guaranty

Exhibit J

     —         Form of Security Agreement

Exhibit K-1

     —         Form of Perfection Certificate

Exhibit K-2

     —         Form of Perfection Certificate Supplement

 

2. Notes executed by the Borrowers in favor of each of the Lenders, if any,
which has requested a note pursuant to Section 2.10(e) of the Credit Agreement.

 

3. Guaranty executed by the initial Guarantors (collectively with the Borrowers,
the “Loan Parties”) in favor of the Administrative Agent.

 

4. Security Agreement executed by the Loan Parties, together with pledged
instruments and allonges, stock certificates, stock powers executed in blank,
pledge instructions and acknowledgments, as appropriate.

 

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

 

5. Copyright Security Agreement made by certain of the Loan Parties in favor of
the Administrative Agent for the benefit of the Secured Parties.

 

Schedule I

     —         Copyright Registrations and Copyright Applications

 

6. Patent Security Agreement made by certain of the Loan Parties in favor of the
Administrative Agent for the benefit of the Secured Parties.

 

Schedule I

     —         Patent Registrations and Patent Applications

 

7. Trademark Security Agreement made by certain of the Loan Parties in favor of
the Administrative Agent for the benefit of the Secured Parties.

 

Schedule I

     —         Trademark Registrations and Trademark Applications

 

8. Perfection Certificate executed by the Loan Parties.

 

9. Certificates of Insurance listing the Administrative Agent as (x) lender loss
payee for the property casualty insurance policies of the Loan Parties, together
with long-form lender loss payable endorsements, as appropriate, and
(y) additional insured with respect to the liability insurance of the Loan
Parties, together with additional insured endorsements.

 

2

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

B. UCC DOCUMENTS

 

10. UCC, tax lien and name variation search reports naming each Loan Party from
the appropriate offices in relevant jurisdictions.

 

11. UCC financing statements naming each Loan Party as debtor and the
Administrative Agent as secured party as filed with the appropriate offices in
applicable jurisdictions.

C. CORPORATE DOCUMENTS

 

12. Certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying (i) that there have been no changes in the Certificate of
Incorporation or other charter document of such Loan Party, as attached thereto
and as certified as of a recent date by the Secretary of State (or analogous
governmental entity) of the jurisdiction of its organization, since the date of
the certification thereof by such governmental entity, (ii) the By-Laws or other
applicable organizational document, as attached thereto, of such Loan Party as
in effect on the date of such certification, (iii) resolutions of the Board of
Directors or other governing body of such Loan Party authorizing the execution,
delivery and performance of each Loan Document to which it is a party, and
(iv) the names and true signatures of the incumbent officers of each Loan Party
authorized to sign the Loan Documents to which it is a party, and (in the case
of each Borrower) authorized to request a Borrowing or the issuance of a Letter
of Credit under the Credit Agreement.

 

13. Good Standing Certificate (or analogous documentation if applicable) for
each Loan Party from the Secretary of State (or analogous governmental entity)
of the jurisdiction of its organization, to the extent generally available in
such jurisdiction.

D. OPINIONS

 

14. Opinion of Weil, Gotshal & Manges LLP, counsel for the Loan Parties.

E. CLOSING CERTIFICATES AND MISCELLANEOUS

 

15. A Certificate signed by the President, a Vice President or a Financial
Officer of Holdings compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02 of the Credit Agreement.

 

16. A Certificate of the chief financial officer of Holdings in form and
substance satisfactory to the Administrative Agent supporting the conclusions
that 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 with the Credit Agreement will be, individually and
together with its Subsidiaries on a consolidated basis, Solvent.

 

17. Payoff documentation providing evidence satisfactory to the Administrative
Agent that the Credit Agreement dated as of December 14, 2010 among the
Borrowers, the lenders from time to time party thereto and Bank of America, as
administrative agent, has been terminated and cancelled (along with all of the
agreements, documents and instruments delivered in connection therewith) and all
Indebtedness owing thereunder has been repaid and any and all liens thereunder
have been terminated.

 

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F. POST-CLOSING DOCUMENTS

 

18. Blocked Account Control Agreements among the relevant Loan Parties, the
Administrative Agent and JPMorgan Chase Bank, N.A., as depositary.

 

4

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EXHIBIT H-1

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Vonage America Inc., a Delaware corporation (“Vonage
America”), Vonage Holdings Corp., a Delaware corporation (“Holdings” and,
collectively with Vonage America, the “Borrowers” and, each a “Borrower”), the
Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.17 of the Credit 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 Code, (iii) it is not a ten percent shareholder
of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it
is not a controlled foreign corporation related to any Borrower as described in
Section 881(c)(3)(C) of the Code and (v) the interest payments in question are
not effectively connected with the undersigned’s conduct of a U.S. trade or
business.

The undersigned has furnished the Administrative Agent and the Borrowers with a
certificate of its non-U.S. person status on IRS 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 and (2) the undersigned shall have at all times
furnished the Borrowers and the Administrative Agent 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.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:     Name: Title:

Date:             , 20[        ]

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EXHIBIT H-2

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Vonage America Inc., a Delaware corporation (“Vonage
America”), Vonage Holdings Corp., a Delaware corporation (“Holdings” and,
collectively with Vonage America, the “Borrowers” and, each a “Borrower”), the
Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.17 of the Credit 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) with respect to the extension of credit pursuant to this Credit Agreement,
neither the undersigned nor any of its partners/members is a bank extending
credit pursuant to a loan agreement entered into in the ordinary course of its
trade or business within the meaning of Section 881(c)(3)(A) of the Code,
(iv) none of its partners/members is a ten percent shareholder of any Borrower
within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its
partners/members is a controlled foreign corporation related to any Borrower as
described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in
question are not effectively connected with the undersigned’s or its
partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrowers with
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of its
partners/members claiming the portfolio interest exemption. 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 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.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:     Name: Title:

Date:             , 20[        ]

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EXHIBIT H-3

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Vonage America Inc., a Delaware corporation (“Vonage
America”), Vonage Holdings Corp., a Delaware corporation (“Holdings” and,
collectively with Vonage America, the “Borrowers” and, each a “Borrower”), the
Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.17 of the Credit 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 Code,
(iii) it is not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code, and (v) the interest payments in question are not effectively connected
with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its
non- U.S. person status on IRS 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 Lender in writing and
(2) the undersigned shall have at all times furnished such 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.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:     Name: Title:

Date:             , 20[        ]

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EXHIBIT H-4

FORM OF U.S. TAX CERTIFICATE

(For Non-U.S. Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is hereby made to the Credit Agreement dated as of July 29, 2011 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Vonage America Inc., a Delaware corporation (“Vonage
America”), Vonage Holdings Corp., a Delaware corporation (“Holdings” and,
collectively with Vonage America, the “Borrowers” and, each a “Borrower”), the
Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”).

Pursuant to the provisions of Section 2.17 of the Credit 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) with respect such participation, neither the undersigned nor any of its
partners/members is a bank extending credit pursuant to a loan agreement entered
into in the ordinary course of its trade or business within the meaning of
Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten
percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B)
of the Code, (v) none of its partners/members is a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code, and (vi) the interest payments in question are not effectively connected
with the undersigned’s or its partners/members’ conduct of a U.S. trade or
business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by an IRS Form W-8BEN from each of its partners/members claiming the
portfolio interest exemption. By executing this certificate, the undersigned
agrees that (1) if the information provided on this certificate changes, the
undersigned shall promptly so inform such Lender and (2) the undersigned shall
have at all times furnished such 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.

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER] By:     Name: Title:

Date:             , 20[        ]

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EXHIBIT I

FORM OF GUARANTY

[Attached.]

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EXECUTION COPY

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
JPMORGAN CHASE BANK, 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 July 29, 2011 (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 Secured 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 Banking Services Agreement or any Swap
Contract (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.

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.

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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 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.

 

2

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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 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

 

3

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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

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

 

4

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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 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 9.01 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

 

5

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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 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.

[Signature Pages Follow]

 

6

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IN WITNESS WHEREOF, each Guarantor and the Administrative Agent have caused this
Guaranty to be duly executed and delivered by their duly authorized officers as
of the date first above written.

 

[EACH GUARANTOR], as Guarantor By:       Name:   Title:

Signature Page to Guaranty

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

Accepted and Agreed:

JPMORGAN CHASE BANK, N.A,

as Administrative Agent

By:       Name:   Title:

Signature Page to Guaranty

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

EXHIBIT J

FORM OF SECURITY AGREEMENT

[Attached.]

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

EXECUTION COPY

 

 

 

SECURITY AGREEMENT

By

VONAGE AMERICA INC.

and

VONAGE HOLDINGS CORP.,

as the Borrowers

and

THE GUARANTORS PARTY HERETO

and

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

 

Dated as of July 29, 2011

 

 

 

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TABLE OF CONTENTS

 

          Page  

PREAMBLE

        1    RECITALS         1   

AGREEMENT

        1       ARTICLE I       DEFINITIONS AND INTERPRETATION   

SECTION 1.1.

   DEFINITIONS      2   

SECTION 1.2.

   INTERPRETATION      7   

SECTION 1.3.

   RESOLUTION OF DRAFTING AMBIGUITIES      7   

SECTION 1.4.

   PERFECTION CERTIFICATE      7       ARTICLE II       GRANT OF SECURITY AND
SECURED OBLIGATIONS   

SECTION 2.1.

   GRANT OF SECURITY INTEREST      7   

SECTION 2.2.

   FILINGS      9       ARTICLE III      

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;

USE OF COLLATERAL

  

SECTION 3.1.

   DELIVERY OF CERTIFICATED SECURITIES COLLATERAL      9   

SECTION 3.2.

   PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL      10   

SECTION 3.3.

   FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY
INTEREST      10   

SECTION 3.4.

   OTHER ACTIONS      10   

SECTION 3.5.

   JOINDER OF ADDITIONAL GUARANTORS      13   

SECTION 3.6.

   SUPPLEMENTS; FURTHER ASSURANCES      13       ARTICLE IV      
REPRESENTATIONS, WARRANTIES AND COVENANTS   

SECTION 4.1.

   TITLE      14   

SECTION 4.2.

   VALIDITY OF SECURITY INTEREST      14   

SECTION 4.3.

   DEFENSE OF CLAIMS      14   

SECTION 4.4.

   OTHER FINANCING STATEMENTS      14   

SECTION 4.5.

   LOCATION OF INVENTORY AND EQUIPMENT      14   

SECTION 4.6.

   DUE AUTHORIZATION AND ISSUANCE      15   

SECTION 4.7.

   CONSENTS, ETC.      15   

SECTION 4.8.

   COLLATERAL      15   

SECTION 4.9.

   INSURANCE      15   

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

   ARTICLE V       CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL   

SECTION 5.1.

   PLEDGE OF ADDITIONAL SECURITIES COLLATERAL      15   

SECTION 5.2.

   VOTING RIGHTS; DISTRIBUTIONS; ETC.      16   

SECTION 5.3.

   DEFAULTS, ETC.      17   

SECTION 5.4.

   CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS   
  17       ARTICLE VI      

CERTAIN PROVISIONS CONCERNING INTELLECTUAL

PROPERTY COLLATERAL

  

SECTION 6.1.

   GRANT OF INTELLECTUAL PROPERTY LICENSE      17   

SECTION 6.2.

   PROTECTION OF ADMINISTRATIVE AGENT’S SECURITY      18   

SECTION 6.3.

   AFTER-ACQUIRED PROPERTY      18   

SECTION 6.4.

   LITIGATION      19       ARTICLE VII       CERTAIN PROVISIONS CONCERNING
RECEIVABLES   

SECTION 7.1.

   MAINTENANCE OF RECORDS      19   

SECTION 7.2.

   LEGEND      19   

SECTION 7.3.

   MODIFICATION OF TERMS, ETC.      19   

SECTION 7.4.

   COLLECTION      20       ARTICLE VIII       TRANSFERS   

SECTION 8.1.

   TRANSFERS OF COLLATERAL      20       ARTICLE IX       REMEDIES   

SECTION 9.1.

   REMEDIES      20   

SECTION 9.2.

   NOTICE OF SALE      22   

SECTION 9.3.

   WAIVER OF NOTICE AND CLAIMS      22   

SECTION 9.4.

   CERTAIN SALES OF COLLATERAL      22   

SECTION 9.5.

   NO WAIVER; CUMULATIVE REMEDIES      23   

SECTION 9.6.

   CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY      24   

 

-iii-

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   ARTICLE X       APPLICATION OF PROCEEDS   

SECTION 10.1.

   APPLICATION OF PROCEEDS      24       ARTICLE XI       MISCELLANEOUS   

SECTION 11.1.

   CONCERNING ADMINISTRATIVE AGENT      24   

SECTION 11.2.

   ADMINISTRATIVE AGENT MAY PERFORM; ADMINISTRATIVE AGENT APPOINTED
ATTORNEY-IN-FACT      25   

SECTION 11.3.

   CONTINUING SECURITY INTEREST; ASSIGNMENT      26   

SECTION 11.4.

   TERMINATION; RELEASE      26   

SECTION 11.5.

   MODIFICATION IN WRITING      26   

SECTION 11.6.

   NOTICES      27   

SECTION 11.7.

   GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL      27   

SECTION 11.8.

   SEVERABILITY OF PROVISIONS      27   

SECTION 11.9.

   EXECUTION IN COUNTERPARTS      27   

SECTION 11.10.

   BUSINESS DAYS      27   

SECTION 11.11.

   NO CLAIMS AGAINST ADMINISTRATIVE AGENT      27   

SECTION 11.12.

   NO RELEASE      27   

SECTION 11.13.

   OBLIGATIONS ABSOLUTE      28   

 

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 July 29, 2011 (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 JPMORGAN CHASE
BANK, 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 July 29, 2011 (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 July 29, 2011 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Guaranty
Agreement”), and unconditionally guaranteed the Secured 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 Secured 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 Swap Contracts and Banking Services Agreements that
constitute Secured 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:

 

1

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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 1.03 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.

“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.

 

2

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“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.

“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.

 

3

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“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 6.01(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 6.01(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;

(d) any Equity Interests of the type not required to be pledged pursuant to
Section 5.12(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

 

4

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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.

“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.

 

5

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“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
July 29, 2011, 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.

“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
Schedule 8(a) 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.

 

6

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“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.

“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” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

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.

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 Secured 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

 

7

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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 11 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.

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.

 

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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.

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

 

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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 hereof.

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 9 to the Perfection Certificate. Each
Instrument and each item of Tangible Chattel Paper listed in Schedule 9 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.

 

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(b) Deposit Accounts. As of the date hereof, no Pledgor has any Deposit Accounts
other than the accounts listed in Schedule 12 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 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 12 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.

 

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(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.

(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 9 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 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 11 to

 

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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 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.

 

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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 Secured
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 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.

 

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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 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 5.02(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.

 

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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 Secured 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.

(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).

 

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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 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 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.

 

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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 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 5.02(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 10(a), 10(b) and 10(c) to the Perfection Certificate to
include any Intellectual Property Collateral of such Pledgor acquired or arising
after the date hereof.

 

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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 9.03 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
representatives (copies of 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.

 

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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.

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

 

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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 Days 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;

(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 Secured Obligations as provided in Article X
hereof;

(vi) Retain and apply the Distributions to the Secured 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 Secured 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

 

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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, 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.

(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

 

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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.

(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.

 

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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 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

 

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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 5.17 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.

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 9.03 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

 

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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 provisions of the Credit Agreement and, in the case of a Secured Party that
is a party to a Swap Contract or a Banking Services Agreements, such Swap
Contract or Banking Services 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 Secured
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 Secured 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 Secured
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.

 

26

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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 9.09 and 9.10 of the Credit Agreement are
incorporated herein, mutatis mutandis, as if a part hereof.

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

 

27

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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.

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 Swap
Contract, any Banking Services 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 Secured Obligations, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement, any Swap Contract,
Banking Services 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 Secured Obligations;

(v) any exercise, non-exercise or waiver of any right, remedy, power or
privilege under or in respect hereof, the Credit Agreement, any Swap Contract,
any Banking Services 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.]

 

28

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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 AMERICA INC., as Pledgor By:       Name:   Title: VONAGE HOLDINGS CORP.,
as Pledgor By:       Name:   Title: [EACH GUARANTOR], as Pledgor By:       Name:
  Title:

Signature Page to Security Agreement

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

JPMORGAN CHASE BANK, N.A., as Administrative Agent By:       Name:   Title:

Signature Page to Security Agreement

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

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 July 29, 2011, 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 JPMORGAN CHASE BANK, 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:

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

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 July 29, 2011, 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 JPMORGAN CHASE BANK, 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 Secured 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

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

INTERCOMPANY NOTES

 

ISSUER

   PRINCIPAL
AMOUNT    DATE OF
ISSUANCE    INTEREST
RATE    MATURITY
DATE

 

[                             ], as Pledgor By:       Name:   Title:

 

AGREED TO AND ACCEPTED:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:       Name:   Title:

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

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
July 29, 2011, 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 JPMORGAN CHASE BANK, 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 July 29, 2011, 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 5.12(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 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 Secured
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 Secured 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 9.01 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.

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

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:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:       Name:   Title:

[Schedules to be attached]

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

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 JPMORGAN CHASE BANK, 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;

(b) all Proceeds of any and all of the foregoing (other than Excluded Property);
and

(c) all causes of action arising prior to or after the date hereof for
infringement of such Copyrights or unfair competition regard the same.

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.

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

SECTION 4. Termination. Upon the payment in full of the Secured 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]

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

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:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:       Name:   Title:

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

SCHEDULE I

to

COPYRIGHT SECURITY AGREEMENT

COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

 

OWNER

   REGISTRATION
NUMBER    TITLE

Copyright Applications:

 

OWNER

   TITLE

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

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 JPMORGAN CHASE BANK, 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;

(b) all Proceeds of any and all of the foregoing (other than Excluded Property);
and

(c) all causes of action arising prior to or after the date hereof for
infringement of such Patents or unfair competition regarding the same.

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 Secured 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]

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

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:

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:      

Name:

Title:

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

SCHEDULE I

to

PATENT SECURITY AGREEMENT

PATENT REGISTRATIONS AND PATENT APPLICATIONS

Patent Registrations:

 

OWNER

 

REGISTRATION

NUMBER

 

NAME

Patent Applications:

 

OWNER

 

APPLICATION NUMBER

 

NAME

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

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 JPMORGAN CHASE BANK, 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;

(c) all Proceeds of any and all of the foregoing (other than Excluded Property);
and

(d) all causes of action arising prior to or after the date hereof for
infringement of such Trademarks or unfair competition regarding the same.

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 Secured 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]

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

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:

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

By:       Name:     Title:  

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

SCHEDULE I

to

TRADEMARK SECURITY AGREEMENT

TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS

Trademark Registrations:

 

OWNER

   REGISTRATION
NUMBER    TRADEMARK

Trademark Applications:

 

OWNER

   APPLICATION
NUMBER    TRADEMARK

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

EXHIBIT K-1

FORM OF PERFECTION CERTIFICATE

[Attached.]

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

PERFECTION CERTIFICATE

July 29, 2011

Reference is hereby made to (i) that certain Security Agreement dated as of
July 29, 2011 (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 JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”), and
(ii) that certain Credit Agreement dated as of July 29, 2011 (the “Credit
Agreement”) among the Borrowers, the lenders party thereto from time to time and
the Administrative Agent. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement, or the Security Agreement, as
applicable.

As used herein, the term “Companies” means Holdings and each of its Domestic
Subsidiaries, and “Company” means Holdings or any of its Domestic Subsidiaries.

The undersigned hereby certify to the Administrative Agent 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. UCC Filings. The financing statements (duly authorized by each Company
constituting the debtor therein), including the indications of the collateral,
attached as Schedule 4 relating to the Security Agreement are in the appropriate
forms for filing in the filing offices in the jurisdictions identified in
Schedule 6 hereof.

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5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule of (i) the
appropriate filing offices for the financing statements attached hereto as
Schedule 4 and (ii) the appropriate filing offices for the Patent Security
Agreement, the Trademark Security Agreement and the Copyright Security
Agreement.

6. Real Property. (a) Attached hereto as Schedule 6(a) is a list of all real
property owned or leased by each Company located in the United States as of the
Effective Date. Except as described in Schedule 6(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 6(a) and (ii) no Company has any leases which require the consent of
the landlord, tenant or other party thereto to the Transactions.

7. Termination Statements. Attached hereto as Schedule 7(a) are the duly
authorized termination statements.

8. Stock Ownership and Other Equity Interests. Attached hereto as Schedule 8(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 in its Subsidiaries,
setting forth the percentage of such equity interests pledged under the Security
Agreement. Also set forth in Schedule 8(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 held
by such Company and the percentage of such equity interest pledged under the
Security Agreement.

9. Instruments and Tangible Chattel Paper. Attached hereto as Schedule 9 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) Attached hereto as Schedule 10(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, and a schedule
setting forth all domain names owned by each Company.

(b) Attached hereto as Schedule 10(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 10(c) is a schedule setting forth all
Intellectual Property Licenses (each as defined in the Security Agreement),
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 10(c) shall not include Intellectual
Property Licenses between the Company and its marketing partners or vendors made
in the ordinary course of business.

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11. Commercial Tort Claims. Attached hereto as Schedule 11 is a true and correct
list of all Commercial Tort Claims 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. Attached
hereto as Schedule 12 is a true and complete list of all Deposit Accounts,
Securities Accounts and Commodity Accounts 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. Attached hereto as Schedule 13 is a true and
correct list of all Letters of Credit (as defined in the Security Agreement)
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.

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IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate as the
date first above written.

 

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

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Schedules

[Attachments omitted]

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EXHIBIT K-2

FORM OF PERFECTION CERTIFICATE SUPPLEMENT

Reference is hereby made to (i) that certain Security Agreement dated as of
July 29, 2011 (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 JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”), and
(ii) that certain Credit Agreement dated as of July 29, 2011 (the “Credit
Agreement”) among the Borrowers, the Lenders parties thereto from time to time
and the Administrative Agent. This Perfection Certificate Supplement, dated as
of [                    ], 20[    ] is delivered pursuant to Section 5.02(j) of
the Credit Agreement. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement or the Security Agreement, as
applicable. As used herein, the term “Companies” means Holdings and each of its
Material Domestic Subsidiaries.

The undersigned, the [                    ] of each of the Borrowers, hereby
certifies (in his/her capacity as [                    ] and not in his/her
individual capacity) to the Administrative Agent 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 Effective 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 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.

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4. UCC Filings. Except as listed in Schedule 4 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 4 of the Prior Perfection
Certificate and are in the appropriate forms for filing in the filing offices in
the jurisdictions identified in Schedule 5 hereto and thereto.

5. Schedule of Filings. Except as listed in Schedule 5 attached hereto and made
a part hereof, attached to the Prior Perfection Certificate as Schedule 5 is a
schedule of (i) the appropriate filing offices for the financing statements
attached hereto and thereto as Schedule 4 and (ii) the appropriate filing
offices for the Patent Security Agreement, the Trademark Security Agreement and
the Copyright Security Agreement.

6. Real Property. Except as listed in Schedule 6(a) attached hereto and made a
part hereof, Schedule 6(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 6(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 6(a) or Schedule 6(a) of the Prior Perfection Certificate, other than
those listed in Schedule 6(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 6(b)
of the Prior Perfection Certificate.

7. [Intentionally Omitted].

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 in its Subsidiaries, setting forth
the percentage of such equity interests pledged under the Security 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 held by such Company and the percentage of such equity interest
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

 

2

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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, and a schedule setting forth all domain
names 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 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 Perfection Certificate as Schedule 12 is a true and complete list of all
Deposit Accounts, Securities Accounts and Commodity Accounts 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.

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3

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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: