Exhibit 10.9


 


$40,000,000  REVOLVING CREDIT FACILITY


 


CREDIT AGREEMENT


 


by and among


 


ALARM FUNDING, LLC,


LENDERS PARTY HERETO


 


and


 


FCC, LLC, As Agent


 


Dated as of May 25, 2007


 

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  CERTAIN DEFINITIONS

  	
   

  	
  1

  
	
   

  	
  1.1

  	
  Certain Definitions

  	
   

  	
  1

  
	
   

  	
  1.2

  	
  Construction

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.1

  	
  Number; Inclusion

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.2

  	
  Determination

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.3

  	
  Discretion and Consent

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.4

  	
  Documents Taken as a Whole

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.5

  	
  Headings

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.6

  	
  Implied References

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.7

  	
  Persons

  	
   

  	
  20

  
	
   

  	
   

  	
  1.2.8

  	
  Modifications to Documents, Notes and Laws

  	
   

  	
  21

  
	
   

  	
   

  	
  1.2.9

  	
  From, To and Through

  	
   

  	
  21

  
	
   

  	
   

  	
  1.2.10

  	
  Shall; Will

  	
   

  	
  21

  
	
   

  	
  1.3

  	
  Accounting Principles

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  REVOLVING CREDIT FACILITY

  	
   

  	
  21

  
	
   

  	
  2.1

  	
  Revolving Credit Commitments

  	
   

  	
  21

  
	
   

  	
  2.2

  	
  Nature of Lenders’ Obligations with Respect to Revolving
  Credit Loans

  	
   

  	
  22

  
	
   

  	
  2.3

  	
  Annual Fees

  	
   

  	
  22

  
	
   

  	
  2.4

  	
  Origination Fees

  	
   

  	
  22

  
	
   

  	
  2.5

  	
  Revolving Credit Loan Requests

  	
   

  	
  22

  
	
   

  	
  2.6

  	
  Making Revolving Credit Loans

  	
   

  	
  23

  
	
   

  	
  2.7

  	
  Revolving Credit Notes

  	
   

  	
  23

  
	
   

  	
  2.8

  	
  Use of Proceeds

  	
   

  	
  23

  
	
   

  	
  2.9

  	
  Increase in Revolving Credit Commitments

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  INTEREST RATES

  	
   

  	
  24

  
	
   

  	
  3.1

  	
  Interest Rates

  	
   

  	
  24

  
	
   

  	
   

  	
  3.1.1

  	
  Revolving Credit Interest Rate

  	
   

  	
  25

  
	
   

  	
   

  	
  3.1.2

  	
  Rate Quotations

  	
   

  	
  25

  
	
   

  	
  3.2

  	
  Interest Periods

  	
   

  	
  25

  
	
   

  	
  3.3

  	
  Interest After Default

  	
   

  	
  25

  
	
   

  	
   

  	
  3.3.1

  	
  Interest Rate

  	
   

  	
  25

  
	
   

  	
   

  	
  3.3.2

  	
  Other Obligations

  	
   

  	
  25

  
	
   

  	
   

  	
  3.3.3

  	
  Acknowledgment

  	
   

  	
  25

  
	
   

  	
  3.4

  	
  Euro-Rate Unascertainable; Illegality; Increased Costs;
  Deposits Not Available

  	
   

  	
  26

  
	
   

  	
   

  	
  3.4.1

  	
  Unascertainable

  	
   

  	
  26

  
	
   

  	
   

  	
  3.4.2

  	
  Illegality; Increased Costs; Deposits Not Available

  	
   

  	
  26

  
	
   

  	
   

  	
  3.4.3

  	
  Agent’s and Lenders’ Rights

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PAYMENTS

  	
   

  	
  27

  
	
   

  	
  4.1

  	
  Payments

  	
   

  	
  27

  



 


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TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.2

  	
  Pro Rata Treatment of Lenders

  	
   

  	
  27

  
	
   

  	
  4.3

  	
  Interest Payment Dates

  	
   

  	
  27

  
	
   

  	
  4.4

  	
  Voluntary Prepayments

  	
   

  	
  28

  
	
   

  	
   

  	
  4.4.1

  	
  Right to Prepay

  	
   

  	
  28

  
	
   

  	
   

  	
  4.4.2

  	
  [Reserved.]

  	
   

  	
  28

  
	
   

  	
   

  	
  4.4.3

  	
  Prepayment Fee

  	
   

  	
  28

  
	
   

  	
   

  	
  4.4.4

  	
  Change of Lending Office

  	
   

  	
  29

  
	
   

  	
  4.5

  	
  Mandatory Prepayments

  	
   

  	
  29

  
	
   

  	
   

  	
  4.5.1

  	
  Euro-Rate

  	
   

  	
  29

  
	
   

  	
   

  	
  4.5.2

  	
  Borrowing Base Exceeded

  	
   

  	
  29

  
	
   

  	
  4.6

  	
  Additional Compensation in Certain Circumstances

  	
   

  	
  29

  
	
   

  	
   

  	
  4.6.1

  	
  Increased Costs or Reduced Return Resulting from Taxes,
  Reserves, Capital Adequacy Requirements, Expenses, Etc.

  	
   

  	
  29

  
	
   

  	
   

  	
  4.6.2

  	
  Indemnity

  	
   

  	
  30

  
	
   

  	
  4.7

  	
  Interbank Market Presumption

  	
   

  	
  31

  
	
   

  	
  4.8

  	
  Taxes

  	
   

  	
  31

  
	
   

  	
   

  	
  4.8.1

  	
  No Deductions

  	
   

  	
  31

  
	
   

  	
   

  	
  4.8.2

  	
  Stamp Taxes

  	
   

  	
  31

  
	
   

  	
   

  	
  4.8.3

  	
  Indemnification for Taxes Paid by a Lender

  	
   

  	
  32

  
	
   

  	
   

  	
  4.8.4

  	
  Certificate

  	
   

  	
  32

  
	
   

  	
   

  	
  4.8.5

  	
  Survival

  	
   

  	
  32

  
	
   

  	
  4.9

  	
  Judgment Currency

  	
   

  	
  32

  
	
   

  	
   

  	
  4.9.1

  	
  Currency Conversion Procedures for Judgments

  	
   

  	
  32

  
	
   

  	
   

  	
  4.9.2

  	
  Indemnity in Certain Events

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  33

  
	
   

  	
  5.1

  	
  Representations and Warranties

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.1

  	
  Organization and Qualification

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.2

  	
  Capitalization and Ownership

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.3

  	
  Subsidiaries

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.4

  	
  Power and Authority

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.5

  	
  Validity and Binding Effect

  	
   

  	
  33

  
	
   

  	
   

  	
  5.1.6

  	
  No Conflict

  	
   

  	
  34

  
	
   

  	
   

  	
  5.1.7

  	
  Litigation

  	
   

  	
  34

  
	
   

  	
   

  	
  5.1.8

  	
  Title to Properties

  	
   

  	
  34

  
	
   

  	
   

  	
  5.1.9

  	
  Financial Statements

  	
   

  	
  34

  
	
   

  	
   

  	
  5.1.10

  	
  Use of Proceeds; Margin Stock; Section 20 Subsidiaries

  	
   

  	
  35

  
	
   

  	
   

  	
  5.1.11

  	
  Full Disclosure

  	
   

  	
  35

  
	
   

  	
   

  	
  5.1.12

  	
  Taxes

  	
   

  	
  35

  
	
   

  	
   

  	
  5.1.13

  	
  Consents and Approvals

  	
   

  	
  36

  
	
   

  	
   

  	
  5.1.14

  	
  No Event of Default; Compliance with Instruments

  	
   

  	
  36

  
	
   

  	
   

  	
  5.1.15

  	
  Patents, Trademarks, Copyrights, Licenses, Etc.

  	
   

  	
  36

  
	
   

  	
   

  	
  5.1.16

  	
  Security Interests

  	
   

  	
  36

  
	
   

  	
   

  	
  5.1.17

  	
  Anti-Terrorism Laws

  	
   

  	
  37

  



 


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TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1.18

  	
  Status of the Pledged Collateral

  	
   

  	
  38

  
	
   

  	
   

  	
  5.1.19

  	
  Insurance

  	
   

  	
  38

  
	
   

  	
   

  	
  5.1.20

  	
  Compliance with Laws

  	
   

  	
  38

  
	
   

  	
   

  	
  5.1.21

  	
  Material Contracts; Burdensome Restrictions

  	
   

  	
  38

  
	
   

  	
   

  	
  5.1.22

  	
  Investment Companies; Regulated Entities

  	
   

  	
  39

  
	
   

  	
   

  	
  5.1.23

  	
  [Reserved.]

  	
   

  	
  39

  
	
   

  	
   

  	
  5.1.24

  	
  Employment Matters

  	
   

  	
  39

  
	
   

  	
   

  	
  5.1.25

  	
  [Reserved.]

  	
   

  	
  39

  
	
   

  	
   

  	
  5.1.26

  	
  Security Alarm Contracts

  	
   

  	
  39

  
	
   

  	
   

  	
  5.1.27

  	
  Alarm Systems

  	
   

  	
  40

  
	
   

  	
   

  	
  5.1.28

  	
  Telephone Numbers

  	
   

  	
  40

  
	
   

  	
   

  	
  5.1.29

  	
  Solvency

  	
   

  	
  40

  
	
   

  	
   

  	
  5.1.30

  	
  Affiliates

  	
   

  	
  40

  
	
   

  	
   

  	
  5.1.31

  	
  Prior Acquisitions

  	
   

  	
  41

  
	
   

  	
   

  	
  5.1.32

  	
  Alarm Licenses

  	
   

  	
  41

  
	
   

  	
  5.2

  	
  Updates to Schedules

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  CONDITIONS OF LENDING

  	
   

  	
  41

  
	
   

  	
  6.1

  	
  First Revolving Credit Loans

  	
   

  	
  41

  
	
   

  	
   

  	
  6.1.1

  	
  Officer’s Certificate

  	
   

  	
  41

  
	
   

  	
   

  	
  6.1.2

  	
  Managing Director Certificate

  	
   

  	
  42

  
	
   

  	
   

  	
  6.1.3

  	
  Delivery of Credit Documents

  	
   

  	
  42

  
	
   

  	
   

  	
  6.1.4

  	
  Opinion of Counsel

  	
   

  	
  42

  
	
   

  	
   

  	
  6.1.5

  	
  Legal Details

  	
   

  	
  42

  
	
   

  	
   

  	
  6.1.6

  	
  Payment of Fees

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.7

  	
  Background Checks; Anti-Fraud Guaranty

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.8

  	
  Consents

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.9

  	
  Managing Director’s Certificate Regarding No Material
  Adverse Changes

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.10

  	
  No Violation of Laws

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.11

  	
  No Actions or Proceedings

  	
   

  	
  43

  
	
   

  	
   

  	
  6.1.12

  	
  Insurance Policies; Certificates of Insurance; Endorsements

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.13

  	
  Financial Information

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.14

  	
  Filing Receipts

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.15

  	
  SAI Servicer Agreement; Put-Call Agreement; Subordinated
  Debt Documents

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.16

  	
  Closing Date Compliance Certificate

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.17

  	
  Due Diligence; Appraisal

  	
   

  	
  44

  
	
   

  	
   

  	
  6.1.18

  	
  Account Control Agreements

  	
   

  	
  45

  
	
   

  	
   

  	
  6.1.19

  	
  Senior Funded Debt

  	
   

  	
  45

  
	
   

  	
   

  	
  6.1.20

  	
  Assignment and Bill of Sale

  	
   

  	
  45

  
	
   

  	
   

  	
  6.1.21

  	
  Alarm Call Holdings LLC

  	
   

  	
  45

  
	
   

  	
  6.2

  	
  Each Additional Revolving Credit Loan

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  COVENANTS

  	
   

  	
  46

  



 


iii

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Affirmative Covenants

  	
   

  	
  46

  
	
   

  	
   

  	
  7.1.1

  	
  Preservation of Existence, Etc.

  	
   

  	
  46

  
	
   

  	
   

  	
  7.1.2

  	
  Payment of Liabilities, Including Taxes, Etc.

  	
   

  	
  46

  
	
   

  	
   

  	
  7.1.3

  	
  Maintenance of Insurance

  	
   

  	
  46

  
	
   

  	
   

  	
  7.1.4

  	
  Maintenance of Properties and Leases

  	
   

  	
  47

  
	
   

  	
   

  	
  7.1.5

  	
  Maintenance of Patents, Trademarks, Etc.

  	
   

  	
  47

  
	
   

  	
   

  	
  7.1.6

  	
  Visitation Rights

  	
   

  	
  48

  
	
   

  	
   

  	
  7.1.7

  	
  Keeping of Records and Books of Account

  	
   

  	
  48

  
	
   

  	
   

  	
  7.1.8

  	
  Customer Service

  	
   

  	
  48

  
	
   

  	
   

  	
  7.1.9

  	
  Compliance with Laws

  	
   

  	
  48

  
	
   

  	
   

  	
  7.1.10

  	
  Use of Proceeds

  	
   

  	
  49

  
	
   

  	
   

  	
  7.1.11

  	
  Further Assurances

  	
   

  	
  49

  
	
   

  	
   

  	
  7.1.12

  	
  Increasing Revolving Credit Commitments

  	
   

  	
  49

  
	
   

  	
   

  	
  7.1.13

  	
  Anti-Terrorism Laws

  	
   

  	
  49

  
	
   

  	
   

  	
  7.1.14

  	
  Trade Payables

  	
   

  	
  49

  
	
   

  	
   

  	
  7.1.15

  	
  Storage of Security Alarm Contract Documents

  	
   

  	
  50

  
	
   

  	
   

  	
  7.1.16

  	
  Account Control Agreements

  	
   

  	
  50

  
	
   

  	
   

  	
  7.1.17

  	
  Establishment of a Lockbox Account, Dominion Account

  	
   

  	
  50

  
	
   

  	
   

  	
  7.1.18

  	
  Single Purpose Entities

  	
   

  	
  50

  
	
   

  	
   

  	
  7.1.19

  	
  Alarm Licenses

  	
   

  	
  52

  
	
   

  	
   

  	
  7.1.20

  	
  Servicer Insolvency

  	
   

  	
  52

  
	
   

  	
   

  	
  7.1.21

  	
  Compliance with FCC Mandate

  	
   

  	
  53

  
	
   

  	
   

  	
  7.1.22

  	
  Assignments and Bills of Sale

  	
   

  	
  53

  
	
   

  	
  7.2

  	
  Negative Covenants

  	
   

  	
  53

  
	
   

  	
   

  	
  7.2.1

  	
  Indebtedness

  	
   

  	
  53

  
	
   

  	
   

  	
  7.2.2

  	
  Liens

  	
   

  	
  54

  
	
   

  	
   

  	
  7.2.3

  	
  Guaranties

  	
   

  	
  54

  
	
   

  	
   

  	
  7.2.4

  	
  Revolving Credit Loans and Investments

  	
   

  	
  54

  
	
   

  	
   

  	
  7.2.5

  	
  Dividends and Related Distributions

  	
   

  	
  54

  
	
   

  	
   

  	
  7.2.6

  	
  Liquidations, Mergers, Consolidations, Acquisitions

  	
   

  	
  54

  
	
   

  	
   

  	
  7.2.7

  	
  Dispositions of Assets

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.8

  	
  Affiliate Transactions

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.9

  	
  Subsidiaries, Partnerships and Joint Ventures

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.10

  	
  Continuation of or Change in Business

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.11

  	
  [Reserved.]

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.12

  	
  Fiscal Year

  	
   

  	
  56

  
	
   

  	
   

  	
  7.2.13

  	
  Issuance of Ownership Interests

  	
   

  	
  57

  
	
   

  	
   

  	
  7.2.14

  	
  Changes in Documents

  	
   

  	
  57

  
	
   

  	
   

  	
  7.2.15

  	
  Capital Expenditures and Leases

  	
   

  	
  57

  
	
   

  	
   

  	
  7.2.16

  	
  Minimum Cash Receipts

  	
   

  	
  57

  
	
   

  	
   

  	
  7.2.17

  	
  Minimum Fixed Charge Coverage Ratio

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.18

  	
  Maximum Funded Debt to Tangible Net Worth Ratio; Senior
  Funded Debt

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.19

  	
  Minimum Tangible Net Worth

  	
   

  	
  58

  



 


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TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.2.20

  	
  Maximum Attrition Rate

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.21

  	
  Dealer Programs

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.22

  	
  Underwriting Guidelines

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.23

  	
  Alarm Licenses

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.24

  	
  Compensation; Employees

  	
   

  	
  58

  
	
   

  	
   

  	
  7.2.25

  	
  Sale-Leasebacks; Real Property

  	
   

  	
  59

  
	
   

  	
   

  	
  7.2.26

  	
  Cancellation of Indebtedness

  	
   

  	
  59

  
	
   

  	
  7.3

  	
  Reporting Requirements.

  	
   

  	
  59

  
	
   

  	
   

  	
  7.3.1

  	
  Monthly Financial Statements

  	
   

  	
  59

  
	
   

  	
   

  	
  7.3.2

  	
  [Reserved.]

  	
   

  	
  59

  
	
   

  	
   

  	
  7.3.3

  	
  Annual Financial Statements

  	
   

  	
  59

  
	
   

  	
   

  	
  7.3.4

  	
  Certificate of Borrower

  	
   

  	
  60

  
	
   

  	
   

  	
  7.3.5

  	
  Borrowing Base Certificate

  	
   

  	
  60

  
	
   

  	
   

  	
  7.3.6

  	
  [Reserved.]

  	
   

  	
  61

  
	
   

  	
   

  	
  7.3.7

  	
  Notice of Default

  	
   

  	
  61

  
	
   

  	
   

  	
  7.3.8

  	
  Notice of Litigation

  	
   

  	
  61

  
	
   

  	
   

  	
  7.3.9

  	
  Certain Events

  	
   

  	
  61

  
	
   

  	
   

  	
  7.3.10

  	
  Budgets, Forecasts, Other Reports and Information

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  DEFAULT

  	
   

  	
  62

  
	
   

  	
  8.1

  	
  Events of Default.

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.1

  	
  Payments Under Credit Documents

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.2

  	
  Breach of Warranty

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.3

  	
  Breach of Negative Covenants or Visitation Rights or
  Account Control Agreements

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.4

  	
  Breach of Other Covenants

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.5

  	
  Defaults in Other Agreements or Indebtedness

  	
   

  	
  62

  
	
   

  	
   

  	
  8.1.6

  	
  Final Judgments or Orders

  	
   

  	
  63

  
	
   

  	
   

  	
  8.1.7

  	
  Credit Document Unenforceable

  	
   

  	
  63

  
	
   

  	
   

  	
  8.1.8

  	
  Uninsured Losses; Proceedings Against Assets

  	
   

  	
  63

  
	
   

  	
   

  	
  8.1.9

  	
  Notice of Lien or Assessment

  	
   

  	
  63

  
	
   

  	
   

  	
  8.1.10

  	
  Insolvency

  	
   

  	
  63

  
	
   

  	
   

  	
  8.1.11

  	
  Separateness Assumptions

  	
   

  	
  64

  
	
   

  	
   

  	
  8.1.12

  	
  Central Monitoring

  	
   

  	
  64

  
	
   

  	
   

  	
  8.1.13

  	
  Cessation of Business

  	
   

  	
  64

  
	
   

  	
   

  	
  8.1.14

  	
  Change of Control; Change of Management

  	
   

  	
  64

  
	
   

  	
   

  	
  8.1.15

  	
  Involuntary Proceedings

  	
   

  	
  64

  
	
   

  	
   

  	
  8.1.16

  	
  Voluntary Proceedings

  	
   

  	
  65

  
	
   

  	
  8.2

  	
  Consequences of Event of Default

  	
   

  	
  65

  
	
   

  	
   

  	
  8.2.1

  	
  Events of Default Other Than Bankruptcy, Insolvency or
  Reorganization Proceedings

  	
   

  	
  65

  
	
   

  	
   

  	
  8.2.2

  	
  Bankruptcy, Insolvency or Reorganization Proceedings

  	
   

  	
  65

  
	
   

  	
   

  	
  8.2.3

  	
  Set-off

  	
   

  	
  65

  
	
   

  	
   

  	
  8.2.4

  	
  Suits, Actions, Proceedings

  	
   

  	
  66

  



 


v

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  8.2.5

  	
  Application of Proceeds; Collateral Sharing

  	
   

  	
  66

  
	
   

  	
   

  	
  8.2.6

  	
  Other Rights and Remedies

  	
   

  	
  67

  
	
   

  	
  8.3

  	
  Notice of Sale

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  AGENT

  	
   

  	
  67

  
	
   

  	
  9.1

  	
  Appointment

  	
   

  	
  67

  
	
   

  	
  9.2

  	
  Delegation of Duties

  	
   

  	
  68

  
	
   

  	
  9.3

  	
  Nature of Duties; Independent Credit Investigation

  	
   

  	
  68

  
	
   

  	
  9.4

  	
  Actions in Discretion of Agent; Instructions From Lenders

  	
   

  	
  68

  
	
   

  	
  9.5

  	
  Reimbursement and Indemnification of Agent by Borrower

  	
   

  	
  69

  
	
   

  	
  9.6

  	
  Exculpatory Provisions; Limitation of Liability

  	
   

  	
  69

  
	
   

  	
  9.7

  	
  Reimbursement and Indemnification of Agent by Lenders

  	
   

  	
  70

  
	
   

  	
  9.8

  	
  Reliance by Agent

  	
   

  	
  70

  
	
   

  	
  9.9

  	
  Notice of Default

  	
   

  	
  71

  
	
   

  	
  9.10

  	
  Notices

  	
   

  	
  71

  
	
   

  	
  9.11

  	
  Lenders in Their Individual Capacities; Agent in its
  Individual Capacity

  	
   

  	
  71

  
	
   

  	
  9.12

  	
  Holders of Notes

  	
   

  	
  71

  
	
   

  	
  9.13

  	
  Equalization of Lenders

  	
   

  	
  72

  
	
   

  	
  9.14

  	
  Successor Agent

  	
   

  	
  72

  
	
   

  	
  9.15

  	
  Beneficiaries

  	
   

  	
  72

  
	
   

  	
  9.16

  	
  Availability of Funds

  	
   

  	
  73

  
	
   

  	
  9.17

  	
  Calculations

  	
   

  	
  73

  
	
   

  	
  9.18

  	
  No Reliance on Agent’s Customer Identification Program

  	
   

  	
  73

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  MISCELLANEOUS

  	
   

  	
  74

  
	
   

  	
  10.1

  	
  Modifications, Amendments or Waivers

  	
   

  	
  74

  
	
   

  	
   

  	
  10.1.1

  	
  Increase of Commitment; Extension of Expiration Date

  	
   

  	
  74

  
	
   

  	
   

  	
  10.1.2

  	
  Extension of Payment; Reduction of Principal Interest or
  Fees; Modification of Terms of Payment

  	
   

  	
  74

  
	
   

  	
   

  	
  10.1.3

  	
  Release of Collateral or Guarantor (Anti-Fraud)

  	
   

  	
  74

  
	
   

  	
   

  	
  10.1.4

  	
  Miscellaneous

  	
   

  	
  74

  
	
   

  	
  10.2

  	
  No Implied Waivers; Cumulative Remedies; Writing Required

  	
   

  	
  75

  
	
   

  	
  10.3

  	
  Reimbursement and Indemnification of Lenders by Borrower;
  Taxes

  	
   

  	
  75

  
	
   

  	
  10.4

  	
  Holidays

  	
   

  	
  76

  
	
   

  	
  10.5

  	
  Funding by Branch, Subsidiary or Affiliate

  	
   

  	
  76

  
	
   

  	
   

  	
  10.5.1

  	
  Notional Funding

  	
   

  	
  76

  
	
   

  	
   

  	
  10.5.2

  	
  Actual Funding

  	
   

  	
  76

  
	
   

  	
  10.6

  	
  Notices

  	
   

  	
  77

  
	
   

  	
  10.7

  	
  Severability

  	
   

  	
  77

  
	
   

  	
  10.8

  	
  Governing Law

  	
   

  	
  78

  
	
   

  	
  10.9

  	
  Prior Understanding

  	
   

  	
  78

  
	
   

  	
  10.10

  	
  Duration; Survival

  	
   

  	
  78

  
	
   

  	
  10.11

  	
  Successors and Assigns

  	
   

  	
  78

  
	
   

  	
  10.12

  	
  Confidentiality

  	
   

  	
  79

  



 


vi

















 


TABLE OF CONTENTS


 


	
  Section

  	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.12.1

  	
  General

  	
   

  	
  79

  
	
   

  	
   

  	
  10.12.2

  	
  Sharing Information With Affiliates of Lenders

  	
   

  	
  80

  
	
   

  	
  10.13

  	
  Counterparts

  	
   

  	
  80

  
	
   

  	
  10.14

  	
  Agent’s or Lender’s Consent

  	
   

  	
  80

  
	
   

  	
  10.15

  	
  Exceptions

  	
   

  	
  81

  
	
   

  	
  10.16

  	
  CONSENT TO FORUM; WAIVER OF JURY TRIAL

  	
   

  	
  81

  
	
   

  	
  10.17

  	
  Certifications From Lenders and Participants

  	
   

  	
  81

  
	
   

  	
   

  	
  10.17.1

  	
  Tax Withholding

  	
   

  	
  81

  
	
   

  	
   

  	
  10.17.2

  	
  USA Patriot Act

  	
   

  	
  82

  
	
   

  	
  10.18

  	
  Related Entities

  	
   

  	
  82

  



 


vii

















 


LIST OF SCHEDULES AND EXHIBITS


 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1.1(B)

  	
  -

  	
  COMMITMENTS
  OF LENDERS AND ADDRESSES FOR NOTICES

  
	
  SCHEDULE
  1.1(P)

  	
  -

  	
  PERMITTED
  LIENS

  
	
  SCHEDULE
  5.1.1

  	
  -

  	
  QUALIFICATIONS
  TO DO BUSINESS

  
	
  SCHEDULE
  5.1.7

  	
  -

  	
  LITIGATION

  
	
  SCHEDULE
  5.1.9

  	
  -

  	
  FINANCIAL
  PROJECTIONS

  
	
  SCHEDULE
  5.1.13

  	
  -

  	
  CONSENTS
  AND APPROVALS

  
	
  SCHEDULE
  5.1.15

  	
  -

  	
  PATENTS,
  TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

  
	
  SCHEDULE
  5.1.18

  	
  -

  	
  BORROWER’S
  OPERATING AGREEMENT

  
	
  SCHEDULE
  5.1.19

  	
  -

  	
  INSURANCE
  POLICIES

  
	
  SCHEDULE
  5.1.21

  	
  -

  	
  MATERIAL
  CONTRACTS

  
	
  SCHEDULE
  5.1.28

  	
  -

  	
  TELEPHONE
  NUMBERS

  
	
  SCHEDULE
  7.1.17

  	
  -

  	
  DEPOSIT
  ACCOUNTS

  
	
  SCHEDULE
  7.2.1

  	
  -

  	
  PERMITTED
  INDEBTEDNESS

  
	
  SCHEDULE
  7.2.8

  	
  -

  	
  AFFILIATE
  TRANSACTIONS

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1.1(A)(1)

  	
  -

  	
  ASSIGNMENT
  AND ASSUMPTION AGREEMENT

  
	
  EXHIBIT 1.1(A)(2)

  	
  -

  	
  ASSIGNMENT
  AND MODIFICATION AGREEMENT

  
	
  EXHIBIT 1.1(C)(1)

  	
  -

  	
  COLLATERAL
  ASSIGNMENT OF CONTRACTS

  
	
  EXHIBIT 1.1(E)

  	
  -

  	
  FORM OF
  SECURITY ALARM CONTRACT

  
	
  EXHIBIT 1.1(G)

  	
  -

  	
  GUARANTY
  AGREEMENT (ANTI-FRAUD)

  
	
  EXHIBIT 1.1(N)(1)

  	
  -

  	
  NONSOLICITATION
  AGREEMENT (BORROWER)

  
	
  EXHIBIT 1.1(N)(2)

  	
  -

  	
  NONSOLICITATION
  AGREEMENT (MEMBER)

  
	
  EXHIBIT 1.1(N)(3)

  	
  -

  	
  NONSOLICITATION
  AGREEMENT (SENIOR MANAGEMENT TEAM)

  
	
  EXHIBIT 1.1(P)

  	
  -

  	
  PLEDGE
  AGREEMENT

  
	
  EXHIBIT 1.1(R)

  	
  -

  	
  REVOLVING
  CREDIT NOTE

  
	
  EXHIBIT 1.1
  (S)(1)

  	
  -

  	
  SECURITY
  AGREEMENT

  
	
  EXHIBIT 1.1
  (S)(2)

  	
  -

  	
  SUBORDINATION
  AGREEMENT

  
	
  EXHIBIT 2.5

  	
  -

  	
  REVOLVING
  CREDIT LOAN REQUEST

  
	
  EXHIBIT 2.9(a)

  	
  -

  	
  INCREASING
  LENDER JOINDER AND ASSUMPTION

  
	
  EXHIBIT 2.9(b)

  	
  -

  	
  AUGMENTING
  LENDER JOINDER AND ASSUMPTION

  
	
  EXHIBIT 6.1.4

  	
  -

  	
  OPINION
  OF COUNSEL

  
	
  EXHIBIT 7.2.6

  	
  -

  	
  ACQUISITION
  COMPLIANCE CERTIFICATE

  
	
  EXHIBIT 7.2.22

  	
  -

  	
  BORROWER’S
  UNDERWRITING GUIDELINES

  
	
  EXHIBIT 7.3.4

  	
  -

  	
  QUARTERLY
  COMPLIANCE CERTIFICATE

  
	
  EXHIBIT 7.3.5

  	
   

  	
  BORROWING
  BASE CERTIFICATE

  



 


viii






 










 


CREDIT AGREEMENT


 


THIS
CREDIT AGREEMENT is dated as of May 25, 2007, and is made by and among
ALARM FUNDING, LLC, a Delaware limited liability company (“Borrower”), Lenders
(as hereinafter defined), and FCC, LLC,
a Florida limited liability company, in its capacity as agent for Lenders under
this Agreement (hereinafter referred to in such capacity as “Agent”).


 


WITNESSETH:


 


WHEREAS,
Borrower has requested Lenders to provide a revolving credit facility in a
principal amount not to exceed $40,000,000; and


 


WHEREAS,
the revolving credit facility shall be used: (a)  to finance Permitted
Acquisitions, (b) for general corporate purposes, (c) to repay up to
$30,000,000 of Borrower’s debt to Whitecap (US) Fund I, L.P., and (d) for
working capital; and


 


WHEREAS,
Lenders are willing to provide such credit upon the terms and conditions
hereinafter set forth.


 


NOW,
THEREFORE, the parties, in consideration of their mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby,
covenant and agree as follows:


 


1.             CERTAIN DEFINITIONS


 


1.1          Certain
Definitions.


 


In
addition to words and terms defined elsewhere in this Agreement, the following
words and terms shall have the following meanings, respectively, unless the
context clearly requires otherwise:


 


ACH shall mean
Automated Clearing House or any successor reasonably acceptable to Agent.


 


Affiliate as to any
Person shall mean any other Person: 
(a) which directly or indirectly controls, is controlled by, or is
under common control with such Person, (b) which beneficially owns or
holds 5% or more of any class of the voting or other equity interests of such
Person, or (c) 5% or more of any class of voting interests or other equity
interests of which is beneficially owned or held, directly or indirectly, by
such Person.  Control, as used in this
definition, shall mean 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 ownership of voting securities, by contract or otherwise,
including the power to elect a majority of the directors or trustees of a
corporation or trust, as the case may be. 
Notwithstanding the foregoing, in the event that Whitecap forms an
entity as described in Section 10.18 [Related Entities] and under the
conditions set forth therein, such entity shall be deemed not to be an
Affiliate of Borrower for purposes of this definition.


 

















 


Agent shall mean
FCC, LLC and its successors and assigns.


 


Agreement shall mean
this Credit Agreement, including all schedules and exhibits.


 


Alarm
System shall mean all electronic or other wiring, sensors, detectors, relays,
controls, transmitters, sirens and other equipment provided to Borrower’s
customers.


 


Annual
Fee shall mean the fee referred to in Section 2.3 [Annual Fees].


 


Annual
Statements shall have the meaning assigned to that term in
Section 5.1.9(a) [Historical Statements].


 


Anti-Terrorism
Laws shall mean any Laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA Patriot Act, the Laws
comprising or implementing the Bank Secrecy Act, and the Laws administered by
the United States Treasury Department’s Office of Foreign Asset Control.


 


Applicable
Margin shall mean 3.00% per annum; provided, however, that in the
event that the Annual Attrition Rate exceeds 13%, the Applicable Margin shall
be increased by 0.25% for each 0.5% that the Annual Attrition Rate exceeds 13%
(rounding up to the nearest 0.5%); provided further that the Applicable Margin
shall not exceed 4.00%.   The Applicable
Margin shall be recomputed as of the end of each month ending after the Closing
Date based on the Annual Attrition Rate as of such month end.  Any increase or decrease in the Applicable
Margin computed as of a month end shall be effective on the date on which the
Compliance Certificate evidencing such computation is due to be delivered under
Section 7.3.4 [Certificate of Borrower].


 


If,
as a result of any restatement of or other adjustment to the financial
statements of the Borrower or for any other reason, Borrower determines or
Agent or the Lenders determine and provide reasonable support that (i) the
Annual Attrition Rate as calculated by Borrower as of any applicable date was
inaccurate and (ii) a proper calculation of the Annual Attrition Rate
would have resulted in higher pricing for such period, Borrower shall
immediately and retroactively be obligated to pay to Agent for the account of
the Lenders, promptly on demand by Agent (or, after the occurrence of an actual
or deemed entry of an order for relief with respect to Borrower under the
Bankruptcy Code of the United States, automatically and without further action
by Agent or any Lender), an amount equal to the excess of the amount of
interest and fees that should have been paid for such period over the amount of
interest and fees actually paid for such period.  This paragraph shall not limit the rights of
Agent or any Lender, as the case may be, under Section 3.3[Interest After
Default] or 8 [Default].  Borrower’s
obligations under this paragraph shall survive the termination of the Revolving
Credit Commitments and the repayment of all other Obligations hereunder.


 


Approved
Central Stations shall mean (a) any third party monitoring
central  stations acceptable to Agent in
its reasonable discretion as evidenced in writing and (b) SAI’s Illinois
and Florida central stations, provided that each central station has
delivered to Agent a fully-executed Assignment and Modification Agreement.


 


Approved
Credit Score shall mean a credit score provided by a Credit
Bureau Provider.


 


2

















 


Assignment
and Assumption Agreement shall mean an Assignment and Assumption
Agreement by and among a Purchasing Lender, a Transferor Lender and Agent, as
Agent and on behalf of the remaining Lenders, substantially in the form of Exhibit 1.1(A)(1).


 


Assignment
and Modification Agreement shall mean an Assignment
and Modification Agreement by and among Agent, Borrower and an Approved Central
Station, substantially in the form of Exhibit 1.1(A)(2) but
without respect to those provisions specific to the relationship with SAI.


 


Attrition
Rate shall mean the annualized ratio of (a) to (b), expressed as a
percentage, each without duplication:


 


(a)           (i)            all
RMR that cancelled or failed to renew, plus,


 


(ii)           all RMR with balances more than 90
days past Due Date, minus the previous month’s RMR with balances more
than 90 days past Due Date, plus


 


(iii)          all RMR rate decreases, divided by


 


(b)           all RMR with balances 90 days or less
past Due Date.


 


The
“Annual Attrition Rate” shall be calculated as of the last day of each calendar
month for the 12 months then ended and reported as a monthly average commencing
on the Closing Date; provided, however, that the Annual Attrition Rate calculated
as of the last day of (t) May 2007 shall be calculated for the 6
months then ended, (u) June 2007 shall be calculated for the 7 months
then ended, (v) July 2007 shall be calculated for the 8 months then
ended, (w) August 2007 shall be calculated for the 9 months then
ended, (x) September 2007 shall be calculated for the 10 months then
ended, (y) October 2007 shall be calculated for the 11 months then
ended, and (z) November 2007 shall be calculated for the 12 months
then ended, and in each case reported as a monthly average. The “Quarterly
Attrition Rate” shall be calculated as of the last day of each calendar month
for the 3 months then ended and reported as an annualized monthly average
commencing on the Closing Date.  For
example, if the Attrition Rate for the first month is 0.75% and the Attrition
Rate for each of the next 2 months is 1.5%, then the average for such 3 month
period is 1.25% and the Attrition Rate on an annualized basis is 15%.


 


Augmenting
Lender shall have the meaning set forth in Section 2.9 [Increase in
Revolving Credit Commitments].


 


Augmenting
Lender Joinder shall have the meaning set forth in Section 2.9
[Increase in Revolving Credit Commitments].


 


Authorized
Officer shall mean those individuals, designated by written notice to Agent
from Borrower, authorized to execute notices, reports and other documents on
behalf of Borrower required hereunder. 
Borrower may amend such list of individuals from time to time by giving
written notice of such amendment to Agent.


 


Availability shall mean, as
of any date of determination, (a) the lesser of (i) the Revolving
Credit Commitments or (ii) the Borrowing Base, minus (b) the
Revolving Facility Usage.


 


3

















 


Base
Rate shall mean a fluctuating interest rate per annum equal at all times to
the sum of (a) the rate of interest announced publicly from time to time
by The Wall Street Journal, Money Rates section, as the “prime rate”
(currently defined as the base rate on corporate loans posted by at least
seventy five percent (75%) of the nation’s thirty (30) largest banks), which
rate may not be the lowest or best rate at which the Agent or Lenders calculate
interest or extend credit, plus (b) 0.5%.  In the event that The Wall Street Journal
quotes more than one rate, or a range of rates, as the prime rate, then the
Base Rate shall mean the average of the quoted rates.  In the event that The Wall Street Journal
ceases to publish a prime rate, then the Base Rate shall be the average of the
three (3) largest U.S. money center commercial banks, as determined by
Agent.  Each change in the fluctuating
interest rate shall take effect for purposes of calculating interest hereunder
simultaneously with the corresponding change in the prime rate.


 


Blocked
Accounts shall have them meaning assigned to such term in Section 7.1.17
[Establishment of a Lockbox Account; Dominion Account].


 


Blocked
Person shall have the meaning assigned to such term in Section 5.1.17
[Anti-Terrorism Laws].


 


Borrower shall mean
Alarm Funding, LLC, a Delaware limited liability company.


 


Borrowing
Base shall mean, as of any date of determination, the amount equal to the
sum of (a) the product of 23 multiplied by the Eligible RMR (other than
the Puerto Rican Eligible RMR) plus (b) the
lesser of (i) 10 multiplied by the Puerto Rican Eligible RMR and (ii) $1,500,000,
all as calculated with reference to the most recent Borrowing Base Certificate
acceptable to Agent and otherwise in accordance with this Agreement; provided,
however, the Borrowing Base shall not (x) on the Closing Date, exceed the
aggregate amount of Subordinated Debt as of such date, or (y) as of any
date of determination after the Closing Date, exceed twice the aggregate amount
of Subordinated Debt as of such date; provided  further that until
Borrower’s year-end reviewed and segregated financial statements for the fiscal
year ending December 31, 2006 are received by Agent in form and substance
satisfactory to Agent, the Borrowing Base shall not exceed $30,000,000.


 


Borrowing
Base Certificate shall mean the certificate to be delivered by
Borrower in accordance with Section 7.3.5 [Borrowing Base Certificate].


 


Borrowing
Date shall mean, with respect to any Revolving Credit Loan, the date for
the making thereof or the renewal thereof, which shall be a Business Day.


 


Business
Day shall mean any day other than a Saturday or Sunday or a legal holiday
on which commercial banks are authorized or required to be closed for business
in New York, New York, and if the applicable Business Day relates to any
Revolving Credit Loan to which the Euro-Rate applies, such day must also be a
day on which dealings are conducted in the London interbank market.


 


Cash
Flow from Operations for any period of determination shall mean, without
duplication:  (a) the sum of net
income and, to the extent deducted in determining net income, depreciation,
amortization, interest expense and income tax expense, minus (b) the
sum of non-cash credits to net income, in each case of Borrower determined in
accordance with GAAP.


 


4

















 


CIP
Regulations shall have the meaning assigned to that term in Section 9.18
[No Reliance on Agent’s Customer Identification Program].


 


Closing
Date shall mean May 25, 2007.


 


Collateral shall mean the
Pledged Collateral and the UCC Collateral.


 


Collateral
Agent shall have the meaning assigned to that term in Section 8.2.5(b) [Collateral
Sharing].


 


Collateral
Assignment of Contracts   shall mean the
Collateral Assignment of Contracts in the form of Exhibit 1.1(C)(1).


 


Collateral
Documents shall have the meaning assigned to that term in Section 8.2.5(b) [Collateral
Sharing].


 


Collateral
Servicer shall mean Iron Mountain Information Management, Inc., or such other custodian as Agent may select in its sole
discretion.


 


Commercial
Security Alarm Contract shall mean a Security Alarm Contract where
the customer is a business or other legal entity (other than an Official Body)
and the alarm monitoring service to be provided thereunder is for commercial,
but not residential, use.


 


Compliance
Certificate shall have the meaning assigned to such term in Section 7.3.4
[Certificate of Borrower].


 


Contamination shall mean the
presence or release or threat of release of Regulated Substances in, on, under
or emanating to or from the Property, which pursuant to Environmental Laws
requires notification or reporting to an Official Body, or which pursuant to
Environmental Laws requires the investigation, cleanup, removal, remediation,
containment, abatement of or other response action or which otherwise
constitutes a violation of Environmental Laws.


 


Credit
Bureau Provider shall mean a company that maintains an accessible
database for monitoring the credit activity of Persons and provides a numerical
credit score using a credit risk assessment system that is in each case
reasonably acceptable to Agent. Agent agrees that the following companies,
databases and systems are acceptable: 
(a) Equifax Beacon ranging from 500 to 850 for residential
customers, and (b) Dun & Bradstreet ranging from 0 to 5 for
commercial customers.


 


Credit
Documents shall mean this Agreement, the Collateral
Assignment of Contracts, the Assignment and Modification Agreement, any
Revolving Credit Note, the Pledge Agreement, the Security Agreement, the
Guaranty Agreement (Anti-Fraud), the Subordination Agreement, the
Nonsolicitation Agreements, the deposit account control agreements, and any
other instruments, certificates or documents delivered or contemplated to be
delivered hereunder or thereunder or in connection herewith or therewith, as
the same may be supplemented or amended from time to time in accordance
herewith or therewith, and Credit Document shall mean any of the Credit
Documents.


 


5

















 


Dealer
Program shall mean a program pursuant to which Borrower acquires from third
parties on a regular periodic basis Security Alarm Contracts.


 


Dollar,
Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.


 


Due
Date shall mean the invoice date or if not available the last day of the
month in which the service being billed is to be rendered.  In the case of customer accounts paid by
automated clearing house, electronic funds transfer, or credit card, the “Due
Date” is assumed to be the first day of each month.


 


EFT shall mean
electronic funds transfer.


 


Eligible
RMR shall mean, as of the date of determination, the RMR attributable to
each customer of Borrower that is party to a Security Alarm Contract, is
subject to a  Prior Security Interest in
favor of Agent, is deemed acceptable by Agent, in its commercially reasonable
discretion, and satisfies each of the following minimum criteria:


 


(a)           no RMR shall be more than 90
days past any Due Date;


 


(b)           each customer evidenced by a Residential Security Alarm
Contract must be the owner of the residence and must have an Approved Credit
Score greater than 625; provided,  however, that up to 10% of
Eligible RMR can be, on an aggregate basis, from customers evidenced by
Residential Security Alarm Contracts each of whom is the owner of the residence
and has an Approved Credit Score equal to or less than 625 but greater than
600;


 


(c)           at least 80% of Eligible RMR consists of RMR attributable
to customers who pay via pre-arranged ACH, EFT or credit card payments;


 


(d)           neither the customer nor any guarantor thereof is employed
by, related to or an Affiliate of Borrower;


 


(e)           to the best of Borrower’s knowledge, neither the customer
nor any guarantor thereof is subject to or restricted by any Insolvency Proceeding;


 


(f)            all RMR associated with the customer shall be clearly
described in the underlying Security Alarm Contract, excluding only subsequent
price increases and additional services, provided that the description set
forth in the form of Security Alarm Contract attached hereto as Exhibit 1.1(E) is
deemed acceptable;


 


(g)           to the best of Borrower’s knowledge, all amounts and
information appearing in the underlying Security Alarm Contract or furnished to
Agent in connection therewith are true and correct and undisputed by the
customer or any guarantor thereof;


 


(h)           Borrower and the customer and any guarantor thereof are
not engaged in any proceeding regarding nonpayment by the customer;


 


6

















 


(i)            no condition exists that materially or adversely affects
the value of the customer or jeopardizes any security therefor and to the
actual knowledge of Borrower, the customer has no claim to any defense, set off
or counter claim;


 


(j)            customer payments are made in Dollars or, in the case of
customers located in Canada, Canadian dollars;


 


(k)           the Security Alarm Contract and the RMR are not subject to
any Lien, other than Permitted Liens;


 


(l)            the customer complies with all of Borrower’s underwriting
guidelines as set forth on Exhibit 7.2.21, in addition to the
Minimum Commercial Underwriting Guidelines if the customer is party to a
Commercial Security Alarm Contract;


 


(m)          the customer is monitored at an Approved Central Station;


 


(n)           the customer has not prepaid
more than 10 months of RMR;


 


(o)           all periods during which the customer can rescind the
contract have expired without notice of rescission; and


 


(p)           not more than 5% of Eligible RMR shall consist of RMR
attributable to customers located in Canada, and not more than 10% of Eligible
RMR shall consist of RMR attributable to customers located in Puerto Rico.


 


Environmental
Complaint shall mean any written complaint by any Person or
Official Body setting forth a cause of action for personal injury or property
damage, natural resource damage, contribution or Indemnity for response costs,
civil or administrative penalties, criminal fines or penalties, or declaratory
or equitable relief arising under any Environmental Laws or any order, notice
of violation, citation, subpoena, request for information or other written
notice or demand of any type issued by an Official Body pursuant to any
Environmental Laws.


 


Environmental
Laws shall mean all federal, state, local and foreign Laws and any consent
decrees, settlement agreements, judgments, orders, directives, policies or
programs issued by or entered into with an Official Body pertaining or relating
to:  (a) pollution or pollution
control; (b) protection of human health or the environment;
(c) employee safety in the workplace; (d) the presence, use,
management, generation, manufacture, processing, extraction, treatment,
recycling, refining, reclamation, labeling, transport, storage, collection,
distribution, disposal or release or threat of release of Regulated Substances;
(e) the presence of Contamination; (f) the protection of endangered
or threatened species; and (g) the protection of Environmentally Sensitive
Areas.


 


Environmentally
Sensitive Area shall mean: 
(a) any wetland as defined by applicable Environmental Laws;
(b) any area designated as a coastal zone pursuant to applicable Laws,
including Environmental Laws; (c) any area of historic or archeological
significance or scenic area as defined or designated by applicable Laws,
including Environmental Laws; (d) habitats of endangered species or
threatened species as designated by applicable Laws, including 


 


7

















 


Environmental
Laws; or (e) a floodplain or other flood hazard area as defined pursuant
to any applicable Laws.


 


ERISA shall mean the
Employee Retirement Income Security Act of 1974, as the same may be amended or
supplemented from time to time, and any successor statute of similar import,
and the rules and regulations thereunder, as from time to time in effect.


 


ERISA
Group shall mean, at any time, Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.


 


Escrow
Agreement shall mean that certain escrow agreement among
Agent, Borrower and the Collateral Servicer.


 


Euro-Rate shall mean,
with respect to the Revolving Credit Loans to which the Euro-Rate applies for
any Interest Period, an interest rate per annum equal to the interest rate per
annum (rounded upwards, if necessary, to the nearest 1/8th of 1%) reported at such time on Telerate
Access Service Page 3750 (British Bankers Association Settlement Rate) as
the London Interbank Offered Rate for United States dollar deposits having a
term of thirty (30) days and in a principal amount of $1,000,000.00 or more
(or, if such page shall cease to be publicly available or, if the
information contained on such page, in Agent’s sole judgment, shall cease to be
accurately reflect such London Interbank Offered Rate, such rate as reported by
any publicly available recognized source of similar market data selected by
Agent that, in Agent’s reasonable judgment, accurately reflects such London
Interbank Offered Rate).  The Euro-Rate
shall be initially calculated on the date it becomes effective and shall be
recalculated by Agent on each regularly-scheduled payment date thereafter,
notwithstanding that such recalculation date is more or less than thirty (30)
days from the previous calculation date. 
If the recalculation date falls on a date upon which Agent is not open
for business, the recalculation shall occur on the last Business Day prior to such
recalculation date.  The specified
Euro-Rate shall apply daily or until the next Business Day when a new Euro-Rate
is established.  Agent shall give prompt
notice to Borrower of the Euro-Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.  Notwithstanding the foregoing, in no event
shall the Euro-Rate be less than 4.25%.


 


Event
of Default shall mean any of the events described in
Section 8.1 [Events of Default] and referred to therein as an “Event of
Default,” provided, however, that any Borrower default described in Section 8.1.3
[Breach of Negative Covenants or Visitation Rights or Account Control
Agreements] or Section 8.1.4 [Breach of Other Covenants] directly
resulting from FCC, LLC’s gross negligence or wilful misconduct in the
performance of its obligations under the Servicing Agreement shall not
constitute an Event of Default for purposes of this definition, provided
further, however, that such limitation shall not apply in the event that
the information provided by Borrower to FCC, LLC for the performance of such
obligations under the Servicing Agreement was materially inaccurate, false, or
misleading.


 


Executive
Order No. 13224 shall mean the Executive Order No. 13224 on
Terrorist Financing,  effective September 24,
2001.


 


8














 


Expense
Deposit shall mean the $50,000 initial deposit previously made by Borrower to
Agent to defray a portion of Agent’s costs and expenses incurred in connection
with:  (a) Agent’s financial, legal
and collateral due diligence and (b) the preparation of the Credit
Documents.


 


Expiration
Date shall mean May 25, 2012.


 


Federal
Funds Effective Rate for any day shall mean the rate per annum (based on
a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions arranged by federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the “Federal Funds
Effective Rate” as of the date of this Agreement; provided, if such
Federal Reserve Bank (or its successor) does not announce such rate on any day,
the “Federal Funds Effective Rate” for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.


 


Financial
Projections shall have the meaning assigned to that term in
Section 5.1.9(b) [Financial Projections].


 


Fixed
Charges shall mean for any period of determination the sum of interest
expense, income  taxes, scheduled principal
installments on Indebtedness (for purposes of this definition, voluntary and mandatory
prepayments shall be considered scheduled principal installments on
Indebtedness), capital expenditures (excluding that portion of capital
expenditures financed by a Person other than Lenders to the extent the
Indebtedness associated therewith is incurred in accordance with the terms
hereof and amounts related to Permitted Acquisitions to the extent consummated
in accordance with the terms hereof) and payments under capitalized leases, in
each case of Borrower determined in accordance with GAAP.


 


Fixed
Charge Coverage Ratio shall mean the ratio of Cash Flow from
Operations to Fixed Charges.


 


Funded
Debt shall mean as of any date of determination the total Indebtedness of
Borrower for borrowed money.


 


GAAP shall mean
generally accepted accounting principles as are in effect from time to time,
subject to the provisions of Section 1.3 [Accounting Principles], and
applied on a consistent basis both as to classification of items and amounts.


 


Guaranty of any Person
shall mean any obligation of such Person guaranteeing or in effect guaranteeing
any liability or obligation of any other Person in any manner, whether directly
or indirectly, including any agreement to indemnify or hold harmless any other
Person, any performance bond or other suretyship arrangement and any other form
of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.


 


9

















 


Guaranty
Agreement (Anti-Fraud) shall mean the Limited Fraud Guaranty
Agreement in substantially the form of Exhibit 1.1(G) executed
and delivered by SAI to Agent for the benefit of Lenders.


 


Increasing
Lender shall have the meaning set forth in Section 2.9 [Increase in
Revolving Credit Commitments].


 


Increasing
Lender Joinder shall have the meaning set forth in Section 2.9
[Increase in Revolving Credit Commitments].


 


Indebtedness shall mean, as
to any Person at any time, any and all indebtedness, obligations or liabilities
(whether matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, or joint or several) of such Person for or in respect
of:  (a) borrowed money, seller
notes or seller holdbacks, (b) amounts raised under or liabilities in
respect of any note purchase or acceptance credit facility,
(c) reimbursement obligations (contingent or otherwise) under any letter
of credit, currency swap agreement, interest rate swap, cap, collar or floor
agreement or other interest rate management device, (d) any other
transaction (including forward sale or purchase agreements, capitalized leases
and conditional sales agreements) having the commercial effect of a borrowing
of money entered into by such Person to finance its operations or capital
requirements (but not including trade payables and accrued expenses incurred in
the ordinary course of business which are not represented by a promissory note
or other evidence of indebtedness and which are not more than 60 days past
due), or (e) any Guaranty of Indebtedness for borrowed money.


 


Ineligible
Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24,
Seventh), as amended.


 


Insolvency
Proceeding shall mean, with respect to any Person, (a) a
case, action or proceeding with respect to such Person:  (i) before any court or any other
Official Body under any bankruptcy, insolvency, reorganization or other similar
Law now or hereafter in effect, or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar
official) of any Person or otherwise relating to the liquidation, dissolution,
winding-up or relief of such Person, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors, or
other, similar arrangement in respect of such Person’s creditors generally or
any substantial portion of its creditors; undertaken under any Law.


 


Interest
Period shall mean one Month.  Such
Interest Period shall commence on the effective date, which shall be:  (a) the Borrowing Date if Borrower is
requesting new Revolving Credit Loans, or (b) the date of renewal of the
Euro-Rate if Borrower is renewing the Euro-Rate applicable to outstanding
Revolving Credit Loans.  Notwithstanding
the second sentence hereof:  (i) any
Interest Period which would otherwise end on a date which is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in the next calendar month, in which case such Interest Period shall end
on the next preceding Business Day, and (ii) Borrower shall not renew an
Interest Period for any portion of the Revolving Credit Loans that would end
after the Expiration Date.


 


10

















 


Internal
Revenue Code shall mean the Internal Revenue Code of 1986, as
the same may be amended or supplemented from time to time, and any successor
statute of similar import, and the rules and regulations thereunder, as
from time to time in effect.


 


Labor
Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among Borrower
and its employees.


 


Law shall mean any
law (including common law), constitution, statute, treaty, regulation, rule,
ordinance, opinion, release, ruling, order, injunction, writ, decree, bond,
judgment, authorization, approval, lien, award by or settlement agreement with
any Official Body, including any of the foregoing Laws relating to do-not-call
regulations, as any of the foregoing Laws from time to time may be amended,
renewed, extended or replaced.


 


Lenders shall mean the
financial institutions named on Schedule 1.1(B) and their
respective successors and assigns as permitted hereunder, each of which is
referred to as a Lender.


 


Lien shall mean any
mortgage, deed of trust, pledge, lien, security interest, charge or other
encumbrance or security arrangement of any nature whatsoever, whether
voluntarily or involuntarily given, including any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing
statement or other notice of any of the foregoing (whether or not a lien or
other encumbrance is created or exists at the time of the filing).


 


Material
Adverse Change shall mean any set of circumstances or events
which:  (a) has or could reasonably
be expected to have any material adverse effect whatsoever upon the validity or
enforceability of any Credit Document or the Collateral, (b) is or could
reasonably be expected to be material and adverse to the business, properties,
assets, or financial condition of Borrower,  (c) impairs
materially or could reasonably be expected to impair materially the ability of
Borrower to duly and punctually pay or perform its Indebtedness, or
(d) impairs materially or could reasonably be expected to impair
materially the ability of Agent or any Lender, to the extent permitted, to
enforce their legal remedies pursuant to any Credit Document.


 


Membership
Interests shall have the meaning assigned to such term in
Section 5.1.2 [Subsidiaries].


 


Minimum
Commercial Underwriting Guidelines shall mean the following
criteria with respect to any Commercial Security Alarm Contract:  (a) the customer has been in business
for a minimum of 12 months, (b) the Commercial Security Alarm Contract is
co-signed or guarantied by the owner/operator of customer, and (c) the
owner/operator of the customer is a homeowner and has an Approved Credit Score
greater than 600.


 


Month, with respect
to an Interest Period under the Euro-Rate, shall mean the interval between the
days in consecutive calendar months numerically corresponding to the first day
of such Interest Period.  If any
Euro-Rate Interest Period begins on a day of a calendar month for which there
is no numerically corresponding day in the month in which such Interest Period
is to end, the final month of such Interest Period shall be deemed to end on
the last Business Day of such final month.


 


11

















 


Net
Worth shall mean as of any date of determination total owners’ equity of
Borrower determined in accordance with GAAP.


 


Nonsolicitation
Agreements shall mean the Nonsolicitation Agreements in
substantially the forms of Exhibit 1.1(N)(1), (2) and (3) executed
by Borrower, each member of Borrower, and each member of the Senior Management
Team, respectively, and delivered to Agent for the benefit of Lenders.


 


Notices shall have the
meaning assigned to that term in Section 10.6 [Notices].


 


Obligation shall mean any
obligation or liability of Borrower to Agent or any Lender, howsoever created,
arising or evidenced, whether direct or indirect, absolute or contingent, now
or hereafter existing, or due or to become due, under or in connection with
this Agreement or any other Credit Document.


 


Official
Body shall mean any national, federal, state, local or other government or
political subdivision or any agency, authority, board, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.


 


Organizational
Documents shall mean: (i) with respect to any
corporation, its certificate or articles of incorporation or organization, and
its by-laws, (ii) with respect to any limited partnership, its certificate
of limited partnership, and its partnership agreement, (iii) with respect
to any general partnership, its partnership agreement, and (iv) with
respect to any limited liability company, its articles or certificate of
organization or formation, and its operating agreement; and in each case, any
modifications thereto pursuant to Section 1.2.8 [Modifications to
Documents, Notes and Laws].  In the event
any term or condition of this Agreement or any other Credit Document requires
any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document”
shall only be to a document of a type customarily certified by such
governmental official.


 


Original
Currency shall have the meaning assigned to such term in Section 4.9.1
[Currency Conversion Procedures for Judgments].


 


Origination
Fee shall mean the fee referred to in Section 2.4 [Origination Fees].


 


Other
Currency shall have the meaning assigned to such term in Section 4.9.1
[Currency Conversion Procedures for Judgments].


 


Other
Taxes shall have the meaning assigned to such term in Section 4.8.2
[Stamp Taxes].


 


Partnership
Interests shall have the meaning assigned to such term in
Section 5.1.3 [Subsidiaries].


 


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


 


12

















 


Permitted
Acquisitions  shall have
the meaning assigned to such term in Section 7.2.6 [Liquidations, Mergers,
Consolidations, Acquisitions].


 


Permitted
Investments shall mean:


 


(a)           direct obligations of the
United States of America or any agency or instrumentality thereof or
obligations backed by the full faith and credit of the United States of America
maturing in 12 months or less from the date of acquisition;


 


(b)           commercial paper maturing in
180 days or less rated not lower than A-1, by Standard & Poor’s or P-1
by Moody’s Investors Service, Inc. on the date of acquisition; and


 


(c)           demand deposits, time
deposits or certificates of deposit maturing within one year in commercial
banks whose obligations are rated A-1, A or the equivalent or better by
Standard & Poor’s on the date of acquisition.


 


Permitted
Liens shall mean:


 


(a)           Liens for taxes, assessments
or similar charges, incurred in the ordinary course of business and which are
not yet due and payable;


 


(b)           Liens in favor of Agent for
the benefit of Lenders securing the Obligations;


 


(c)           Liens on property leased by
Borrower under capital and operating  leases
permitted in Section 7.2.15 [Capital Expenditures and Leases] securing
obligations of Borrower to the lessor under such leases;


 


(d)           Any Lien existing on the
date of this Agreement and described on Schedule 1.1(P), provided
that the principal amount secured thereby is not hereafter increased, and no
additional assets become subject to such Lien;


 


(e)           Purchase Money Security
Interests, provided that the aggregate amount of Revolving Credit Loans
and deferred payments secured by such Purchase Money Security Interests shall
not exceed $10,000 (excluding for the purpose of this computation any Revolving
Credit Loans or deferred payments secured by Liens described on Schedule
1.1(P));


 


(f)            The following, (A) if
the validity or amount thereof is being contested in good faith by appropriate
and lawful proceedings diligently conducted so long as levy and execution thereon
have been stayed and continue to be stayed or (B) if a final judgment is
entered and such judgment is discharged within 30 days of entry, and in either
case they do not affect the Collateral or, in the aggregate, materially impair
the ability of Borrower to perform its Obligations hereunder or under the other
Credit Documents:


 


(1)           Claims or Liens for taxes,
assessments or charges due and payable and subject to interest or penalty,
provided that Borrower maintains such reserves or other appropriate provisions
as shall be required by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose any such Lien; and


 


13

















 


(2)           Liens resulting from final
judgments or orders described in Section 8.1.6 [Final Judgments or
Orders]; and


 


(g)           Second priority Liens in
favor of the Subordinated Creditor securing Borrower’s obligations under the
Subordinated Debt Documents, which Liens are permmitted under and subordinated
pursuant to the Subordination Agreement.


 


Person shall mean any
individual, corporation, partnership, limited liability company, association,
joint-stock company, trust, unincorporated organization, joint venture,
Official Body, or any other entity.


 


Pledge
Agreement shall mean the Pledge Agreement in substantially
the form of Exhibit 1.1(P) executed by Borrower’s sole member
and delivered to Agent for the benefit of Lenders.


 


Pledged
Collateral shall mean the property in which security interests
are to be granted under the Pledge Agreement, and the Collateral Assignment of
Contracts.


 


Potential
Default shall mean any event or condition which with notice, passage of time,
or any combination of the foregoing, would constitute an Event of Default.


 


Principal
Office shall mean the main office of Agent in Oklahoma City, Oklahoma.


 


Prior
Security Interest shall mean a valid and enforceable perfected
first-priority security interest under the Uniform Commercial Code in the UCC
Collateral and the Pledged Collateral which is subject only to Liens for taxes
not yet due and payable to the extent such prospective tax payments are given
priority by statute or Purchase Money Security Interests as permitted
hereunder.


 


Prohibited
Transaction shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.


 


Property shall mean all
real property, both owned and leased, of Borrower.


 


Puerto
Rican Eligible RMR shall mean that portion of Eligible RMR
attributable to customers located in Puerto Rico.


 


Purchase
Money Security Interest shall mean Liens upon tangible personal
property securing Revolving Credit Loans to Borrower or deferred payments by
Borrower for the purchase of such tangible personal property.


 


Purchasing
Lender shall mean a Lender which becomes a party to this Agreement by
executing an Assignment and Assumption Agreement.


 


Put-Call
Agreement shall mean that Put-Call Agreement dated as of May 25,
2007, among Borrower, SAI, and Alarm Call Holdings LLC, as the same may be
amended or modified from time to time as permitted by Section 7.2.14
[Changes in Documents].


 


14

















 


Ratable
Share shall mean the proportion that a Lender’s Revolving Credit Commitment
bears to the Revolving Credit Commitments of all Lenders.


 


Regulated
Substances shall mean, without limitation, any substance,
material or waste, regardless of its form or nature, defined under
Environmental Laws as a “hazardous substance,” “pollutant,” “pollution,” “contaminant,”
“hazardous or toxic substance,” “extremely hazardous substance,” “toxic
chemical,” “toxic substance,” “toxic waste,” “hazardous waste,” “special
handling waste,” “industrial waste,” “residual waste,” “solid waste,” “municipal
waste,” “mixed waste,” “infectious waste,” “chemotherapeutic waste,” “medical
waste,” or “regulated substance” or any other material, substance or waste,
regardless of its form or nature, which otherwise is regulated by Environmental
Laws.


 


Regulation
U shall mean Regulation U, T or X as promulgated by the Board of
Governors of the Federal Reserve System, as amended from time to time.


 


Regulations shall have the
meaning assigned to such term in Section 10.17.1 [Tax Withholding].


 


Required
Lenders shall mean:


 


(a)           if there are no Revolving
Credit Loans outstanding, Lenders whose Revolving Credit Commitments aggregate
at least 51% of the Revolving Credit Commitments of all Lenders, or


 


(b)           if there are Revolving
Credit Loans outstanding, any Lender or group of Lenders if the sum of the
Revolving Credit Loans of such Lenders then outstanding aggregates at least 51%
of the total principal amount of all of the Revolving Credit Loans then
outstanding.


 


Required
Environmental Notices shall mean all notices, reports, plans,
forms or other filings which pursuant to Environmental Laws, Required
Environmental Permits or at the request or direction of an Official Body either
must be submitted to an Official Body or which otherwise must be maintained.


 


Required
Environmental Permits shall mean all permits, licenses, bonds,
consents, programs, approvals or authorizations required under Environmental
Laws to own, occupy or maintain the Property or which otherwise are required
for the operations and business activities of Borrower.


 


Residential
Security Alarm Contract shall mean a Security Alarm Contract where
the obligor is a natural Person and the alarm monitoring service to be provided
thereunder is for a single or multiple family residential home.


 


Revolving
Credit Commitment shall mean, as to any Lender at any time, the
amount initially set forth opposite its name on Schedule 1.1(B) in
the column labeled “Amount of Commitment for Revolving Credit Loans,” and
thereafter on Schedule I to the most recent Assignment and Assumption Agreement, Increasing
Lender Joinder, or Augmenting Lender Joinder, and Revolving Credit
Commitments shall mean the aggregate Revolving Credit Commitments of all
Lenders.


 


15

















 


Revolving
Credit Loans shall mean collectively and Revolving Credit
Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by Lenders or one Lender to Borrower pursuant to
Section 2.1 [Revolving Credit Commitments] or 2.5 [Revolving Credit Loan
Requests].


 


Revolving
Credit Loan Request shall have the meaning assigned to such term in
Section 2.5 [Revolving Credit Loan Requests].


 


Revolving
Credit Notes shall mean collectively and Revolving Credit
Note shall mean separately any Revolving Credit Notes of Borrower in the
form of Exhibit 1.1(R) evidencing the Revolving Credit Loans.


 


Revolving
Facility Usage shall mean at any time the sum of the Revolving
Credit Loans outstanding.


 


RMR shall mean an
amount equal to the gross recurring monthly revenue of Borrower that is billed
to customers on a monthly basis (regardless of whether any particular customer
is billed monthly, quarterly, annually or otherwise) strictly for monitoring
services; but net of any monthly discounts afforded the customer (e.g. for
prepayment or for paying by ACH or EFT) other than service credits granted from
time to time in the ordinary course of Borrower’s business; provided, however,
that RMR shall not include any revenue attributable to or derived from:  (a) reimbursement or prepayment of
private telephone line or other utility company charges associated with the
installation, monitoring or furnishing of alarm services;
(b) reimbursement for or payment of any false alarm assessments;
(c) reimbursement for or payment of any taxes, fees or other charges
imposed by any Official Body relative to the furnishing of access control or
alarm services; (d) non-recurring charges from customers for services
which are not provided on a regular and recurring basis, such as installation
and time and material charges; (e) guard response and patrol services;
(f)  closed-circuit television equipment that is not provided in
conjunction with alarm monitoring; (g) fire test or fire inspection
services; (h) service, extended repair service, maintenance or inspection
agreements; (i) third-party or wholesale monitoring services;
(j) lease agreements; or (k) late fees or fees for not sufficient
fund checks.


 


SAI shall mean
Security Associates International, Inc., a Delaware corporation.


 


SAI
Principals shall mean Ray Gross and Paul M. Lucking.


 


SAI
Servicer Agreement shall mean that certain Sale, Assignment and
Servicing Agreement dated as of June 30, 2005 and by and among Borrower,
Whitecap, and SAI, as amended by that certain letter agreement dated March 30,
2006, and as amended by that certain Clarification and Amendment to Sale,
Assignment and Servicing Agreement, as the same may be further amended or
modified from time to time as permitted by Section 7.2.14 [Changes in
Documents].


 


Section 20
Subsidiary  shall mean
the Subsidiary of the lender holding company controlling any Lender, which
Subsidiary has been granted authority by the Federal Reserve Board to
underwrite and deal in certain Ineligible Securities.


 


16

















 


Security
Agreement shall mean the Security Agreement in substantially
the form of Exhibit 1.1(S)(1) executed and delivered by
Borrower to Agent for the benefit of Lenders.


 


Security
Alarm Contract shall mean an agreement between a customer and
Borrower, pursuant to which Borrower is obligated to provide retail security
alarm monitoring services in return for the customer’s payment of RMR, and
which meets each of the following criteria:


 


(a)           is evidenced by a
fully-signed, original (or, if not available, a copy), written agreement in the
form of Exhibit 1.1(E) or such other written agreement the
form and content of which are acceptable to Agent in its reasonable discretion,
in each instance with no material modifications having been made thereto which
are unacceptable in Agent’s reasonable discretion, provided, however, that not
more than $15,000 of Eligible RMR shall be attributable to written agreements
not in a form set forth in Exhibit 1.1(E);


 


(b)           has a minimum original term
of at least 36 months;


 


(c)           provides that the agreement
will automatically be renewed for a minimum period of 12 months following the
expiration of the then-current term, unless prohibited by Law;


 


(d)           (i) has not been
cancelled by the customer or Borrower, nor has Borrower received written or
oral notice of a pending cancellation, unless the notice of pending
cancellation is promptly rescinded by the customer, provided, however,
that the associated RMR shall not qualify as Eligible RMR even if the customer
commits to pay the balance due in a lump sum or over the remaining term of the
contract, and (ii) any statutory or other applicable cancellation or
rescission period has expired;


 


(e)           complies in all material
respects with the terms, provisions and conditions of the Credit Documents, as
well as with all applicable Laws, including all consumer protection laws;


 


(f)            represents a valid and
binding obligation of the customer, enforceable in accordance with its terms
without any basis for any offset, counterclaim or defense (whether actual or
alleged);


 


(g)           is originated or purchased
by Borrower in the ordinary course of its business;


 


(h)           is assignable to third
parties without having to obtain the consent of or provide notice to the
customer; and


 


(i)            contains terms and
conditions which are standard within the security alarm industry for such
agreements, including those involving limitation of liability/liquidated
damages,  third-party indemnification and
the unilateral right to increase the RMR after the initial term of the Security
Alarm Contract.


 


Security
Alarm Contract Documents shall mean each original Security Alarm
Contract and all other original documents (including any promissory notes, chattel
paper, purchase money security agreements, security agreements or similar
agreements evidencing or securing a 


 


17

















 


customer’s
performance of a Security Alarm Contract or evidencing or securing financing
for the installation of an Alarm System) executed by customer in connection
with the Security Alarm Contract, together with, if applicable, all such
original documents, instruments and agreements effecting an assignment of such
documents of customers acquired by Borrower, to Borrower, all of which
documentation shall be in form and content as is acceptable to Agent in its
reasonable discretion.


 


Senior
Funded Debt shall mean as of any date of determination the
total Indebtedness of Borrower to Lenders incurred under this Agreement.


 


Senior
Management Team shall mean Eric Kamisher, Westin Lovy, Brian
Broesder, and Mark Klipsch, as well as any Person who succeeds them and assumes
their responsibilities.


 


Servicing
Agreement shall mean that Servicing Agreement dated as of May 25,
2007, by and between Borrower and FCC, LLC, as the same may be amended,
restated, modified, or supplemented.


 


Shares shall have the
meaning assigned to that term in Section 5.1.2 [Capitalization and
Ownership].


 


Single
Purpose Entity shall mean a Person, other than an individual,
estate or unincorporated association, which is formed or organized solely for
the purpose of holding, directly, Security Alarm Contracts, does not engage in
any business unrelated to such Security Alarm Contracts, does not have any
assets other than those related to its interest in the Security Alarm Contracts
or any indebtedness other than as permitted by this Agreement or the other Loan
Documents, has its own separate books and records and its own accounts, in each
case which are separate and apart from the books and records and accounts of
any other Person and holds itself out as being a Person separate and apart from
any other Person.


 


Solvent shall mean,
with respect to any Person on a particular date, 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 market 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 is able to
realize upon its assets and pay its debts and other liabilities, including
contingent liabilities, and other commitments as they mature in the normal
course of business, and (d) 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.


 


Standard &
Poor’s shall mean Standard & Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc.


 


Subordinated
Creditor shall mean Sandhurst Asset Management, LLC, a
Delaware limited liability company.


 


Subordinated
Debt shall mean, collectively, the loans in the original maximum principal
amounts thereof, together with all principal, interest and other amounts
payable by or chargeable to Borrower to Subordinated Creditor in connection
with the Subordinated Debt Documents.


 


18














 


Subordinated
Debt Documents shall mean, collectively, the Subordinated Loan and
Security Agreement, the Secured Promissory Note,  and all other documents executed in
connection therewith, as the same may be amended or modified from time to time
as permitted by Section 7.2.14 [Changes in Documents].


 


Subordination
Agreement shall mean the Subordination and Intercreditor
Agreement in the form of Exhibit 1.1(S)(2) executed by Agent,
Borrower and Subordinated Creditor.


 


Subsidiary of any Person
at any time shall mean:  (a) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person’s Subsidiaries, (b) any partnership of which such
Person is a general partner or of which 50% or more of the partnership
interests is at the time directly or indirectly owned by such Person or one or
more of such Person’s Subsidiaries, (c) any limited liability company of
which such Person is a member or of which 50% or more of the limited liability
company interests is at the time directly or indirectly owned by such Person or
one or more of such Person’s Subsidiaries or (d) any corporation, trust,
partnership, limited liability company or other entity which is controlled or
capable of being controlled by such Person or one or more of such Person’s
Subsidiaries.


 


Subsidiary
Shares shall have the meaning assigned to that term in Section 5.1.3
[Subsidiaries].


 


Tangible
Net Worth shall mean as of any date of determination total
owners’ equity of Borrower plus the aggregate amount of Subordinated Debt, all
as determined in accordance with GAAP.


 


Taxes shall have the
meaning assigned to such term in Section 4.8.1 [No Deductions].


 


Transferor
Lender shall mean the selling Lender pursuant to an Assignment and Assumption
Agreement.


 


UCC
Collateral shall mean the property of Borrower in which
security interests are to be granted under the Security Agreement.


 


Uniform
Commercial Code and UCC shall have the meaning assigned to that term
in Section 5.1.16 [Security Interests].


 


USA
Patriot Act shall mean the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56.


 


Whitecap shall mean
Whitecap (US) Fund I, L.P., a Delaware limited partnership.


 


Whitecap
Principals shall mean Westin H. Lovy, Eric S. Kamisher, Mark
D. Klipsch, and Brian Broesder.


 


19

















 


Withholding
Certificate shall have the meaning assigned to that term in Section 10.17.1
[Tax Withholding.]


 


1.2           Construction.


 


Unless
the context otherwise clearly requires, the following rules of
construction shall apply to each Credit Document:


 


1.2.1        Number; Inclusion.


 


References
to the plural include the singular, the plural, the part and the whole; “or”
has the inclusive meaning represented by the phrase “and/or,” and “including”
has the meaning represented by the phrase “including without limitation”;


 


1.2.2        Determination.


 


References
to “determination” of or by Agent or Lenders shall be deemed to include
good-faith estimates by Agent or Lenders (in the case of quantitative
determinations) and good-faith beliefs by Agent or Lenders (in the case of
qualitative determinations) and such determination shall be conclusive absent manifest
error;


 


1.2.3        Discretion and Consent.


 


Whenever
Agent or Lenders are granted the right herein to act in its or their sole
discretion or to grant or withhold consent, such right shall be exercised in
good faith;


 


1.2.4        Documents Taken as a Whole.


 


The
words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in any Credit
Document refer to such Credit Document as a whole and not to any particular
provision of such Credit Document;


 


1.2.5        Headings.


 


Section and
other headings contained in any Credit Document and the Table of Contents (if
any) preceding any Credit Document are for reference purposes only and shall
not control or affect the construction of any Credit Document or the
interpretation in any respect;


 


1.2.6        Implied References.


 


Article,
section, subsection, clause, schedule and exhibit references in any Credit
Document, are to that Credit Document, unless otherwise specified;


 


1.2.7        Persons.


 


Reference
to any Person includes such Person’s successors and assigns, but, if
applicable, only if such successors and assigns are permitted by such Credit
Document, and reference to a Person in a particular capacity excludes such
Person in any other capacity;


 


20

















 


1.2.8        Modifications to Documents,
Notes and Laws.


 


Reference
to any agreement (including any Credit Document together with the schedules and
exhibits thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted, superseded or restated;
and reference to any Law means such Law as the same has been, or shall
hereafter be, amended, renewed, extended or replaced;


 


1.2.9        From, To and Through.


 


Relative
to the determination of any period of time, “from” means “from and including,” “to”
means “to but excluding,” and “through” means “through and including”; and


 


1.2.10      Shall; Will.


 


References
to “shall” and “will” have the same meaning.


 


1.3           Accounting Principles.


 


Except
as otherwise provided in this Agreement, all computations and determinations as
to accounting or financial matters and all financial statements to be delivered
pursuant to this Agreement shall be made and prepared in accordance with GAAP
(including principles of consolidation where appropriate), and all accounting
or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however,
that all accounting terms used in Section 7.2 [Negative Covenants] (and
all defined terms used in the definition of any accounting term used in
Section 7.2 [Negative Covenants]) shall have the meaning given to such
terms (and defined terms) under GAAP as in effect on the date hereof applied on
a basis consistent with those used in preparing the Annual Statements referred
to in Section 5.1.9(a) [Historical Statements].  In the event of any change after the date
hereof in GAAP, and if such change would result in the inability to determine
compliance with the financial covenants set forth in Section 7.2 [Negative
Covenants] based upon Borrower’s regularly prepared financial statements by
reason of the preceding sentence, then the parties hereto agree to endeavor, in
good faith, to agree upon an amendment to this Agreement that would adjust such
financial covenants in a manner that would not affect the substance thereof,
but would allow compliance therewith to be determined in accordance with
Borrower’s financial statements at that time.


 


2.             REVOLVING
CREDIT FACILITY


 


2.1           Revolving Credit Commitments.


 


Subject
to the terms and conditions hereof and relying upon the representations and
warranties herein set forth, each Lender severally agrees to make Revolving
Credit Loans to Borrower at any time or from time to time on or after the date
hereof to the Expiration Date, provided that after giving effect to such
Revolving Credit Loan the aggregate amount of Revolving Credit Loans from such
Lender shall not exceed the lesser of: (a) such Lender’s Revolving Credit
Commitment and (b) such Lender’s Ratable Share of the Borrowing Base.


 


21

















 


Within
such limits of time and amount and subject to the other provisions of this
Agreement, Borrower may borrow, repay and reborrow pursuant to this
Section 2.1.


 


2.2           Nature of Lenders’ Obligations with Respect to
Revolving Credit Loans.


 


Each
Lender shall be obligated to participate in each request for Revolving Credit
Loans pursuant to Section 2.5 [Revolving Credit Loan Requests] in
accordance with its Ratable Share.  The
aggregate of each Lender’s Revolving Credit Loans outstanding hereunder to
Borrower at any time shall never exceed its Revolving Credit Commitment.  The obligations of each Lender hereunder are
several.  The failure of any Lender to
perform its obligations hereunder shall not affect the Obligations of Borrower
to any other party nor shall any other party be liable for the failure of such
Lender to perform its obligations hereunder. 
Lenders shall have no obligation to make Revolving Credit Loans
hereunder on or after the Expiration Date.


 


2.3           Annual Fees.


 


Accruing
from the date hereof until the Expiration Date, Borrower agrees to pay to Agent
for the account of each Lender, as consideration for such Lender’s Revolving
Credit Commitment hereunder, a nonrefundable annual fee (the “Annual Fee”)
equal to .50% of such Lender’s Revolving Credit Commitment.  All Annual Fees shall be payable in advance
commencing on the first anniversary of the Closing Date and on each anniversary
of the Closing Date thereafter.  In the
event of an increase in the Revolving Credit Commitments pursuant to Section 2.9
[Increase in Revolving Credit Commitments] following the first anniversary of
the Closing Date, Borrower shall on the date of such increase pay to Agent for
the account of each Increasing Lender or Augmenting Lender, as the case may be,
the Annual Fee applicable to the amount of such increase, which shall be
prorated for the remainder of the year prior to the next anniversary of the
Closing Date.


 


2.4           Origination Fees.


 


Borrower
agrees to pay to Agent on the Closing Date, for the account of each Lender, as
consideration for such Lender’s Revolving Credit Commitments, a nonrefundable
fee equal to .50% of such Lender’s Revolving Credit Commitments.  In the event of an increase in the Revolving
Credit Commitments pursuant to Section 2.9 [Increase in Revolving Credit
Commitments] prior to the first anniversary of the Closing Date, Borrower shall
on the date of such increase pay to Agent for the account of each Increasing
Lender or Augmenting Lender, as the case may be, the Origination Fee applicable
to the amount of such increase, which shall be prorated for the remainder of
the year prior to the first anniversary of the Closing Date.


 


2.5           Revolving Credit Loan Requests.


 


Except
as otherwise provided herein, up to one week prior to the Expiration Date,
Borrower may from time to time, but no more frequently than once each calendar
week, request Lenders to make Revolving Credit Loans by delivering to Agent,
not later than 9:00 a.m., Oklahoma City time, 2 Business Days prior to the
proposed Borrowing Date (or, in the case of the Closing Date Loan Request, 1
Business Day prior to the Closing Date) 
a duly completed request therefor substantially in the form of Exhibit 2.5
or a request by telephone immediately confirmed in writing by letter, facsimile
or telex in such form (each, a “Revolving Credit Loan 


 


22

















 


Request”),
it being understood that Agent may rely on the authority of any individual
making such a telephonic request without the necessity of receipt of such
written confirmation.  Each Revolving
Credit Loan Request shall be irrevocable and shall specify:  (a) the proposed Borrowing Date; and
(b) the aggregate amount of the proposed Revolving Credit Loans.


 


2.6           Making Revolving Credit Loans.


 


Agent
shall, promptly after receipt by it of a Revolving Credit Loan Request pursuant
to Section 2.5 [Revolving Credit Loan Requests], notify Lenders of its
receipt of such Revolving Credit Loan Request specifying:  (a) the proposed Borrowing Date and the
time and method of disbursement of the Revolving Credit Loans requested
thereby; (b) the amount of each such Revolving Credit Loan; and
(c) the apportionment among Lenders of such Revolving Credit Loans as
determined by Agent in accordance with Section 2.2  [Nature of Lenders’ Obligations With Respect
to Revolving Credit Loans].  Each Lender
shall remit the principal amount of each Revolving Credit Loan to Agent such
that Agent is able to, and Agent shall, to the extent Lenders have made funds
available to it for such purpose and subject to Section 6.2 [Each
Additional Revolving Credit Loan], fund such Revolving Credit Loans to Borrower
in Dollars and immediately available funds at the Principal Office prior to
1:00 p.m., Oklahoma City time, on the applicable Borrowing Date; provided
that if any Lender fails to remit such funds to Agent in a timely manner, Agent
may elect in its sole discretion to fund with its own funds the Revolving
Credit Loans of such Lender on such Borrowing Date, and such Lender shall be
subject to the repayment obligation in Section 9.16 [Availability of
Funds].


 


2.7           Revolving Credit Notes.


 


Upon
the request of any Lender, the Obligation of Borrower to repay the aggregate
unpaid principal amount of the Revolving Credit Loans made to Borrower by such
Lender, together with interest thereon, may be evidenced by a Revolving Credit
Note dated the Closing Date payable to the order of such Lender in a face
amount equal to the Revolving Credit Commitment of such Lender and in the form
of Exhibit 1.1(R).


 


2.8           Use of Proceeds.


 


The
proceeds of the Revolving Credit Loans shall be used in accordance with
Section 7.1.10 [Use of Proceeds].


 


2.9           Increase in Revolving Credit Commitments.


 


Borrower
has elected to increase the Revolving Credit Commitments up to an aggregate
amount not to exceed $100,000,000, subject to the conditions set forth
herein.  Agent shall use its best efforts
to arrange for such increase to be provided by one or more Lenders (each Lender
so agreeing to an increase in its Revolving Credit Commitments, 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 Credit Commitments, or extend
Revolving Credit Commitments, as the case may be, provided that (i) each
Augmenting Lender, shall be subject to the approval of Agent and (ii) (x) in
the case of an Increasing Lender, the Borrower and such Increasing Lender
execute an agreement (an “Increasing Lender Joinder”) substantially in the form
of Exhibit 2.9(a) hereto, and (y) in the case


 


23

















 


of
an Augmenting Lender, the Borrower and such Augmenting Lender execute an
agreement (an “Augmenting Lender Joinder”) substantially in the form of Exhibit 2.9(b) hereto.  Increased and new Revolving Credit
Commitments created pursuant to this subsection shall become effective on the
date agreed by Agent and the relevant Increasing Lender(s) or Augmenting
Lender(s); and, Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in
the Revolving Credit Commitments (or in the Commitment of any Lender), shall
become effective under this paragraph unless, (i) on the proposed date of
the effectiveness of such increase, the conditions set forth in Section 6.2
shall be satisfied and no Potential Default or Event of Default shall exist
after giving effect to such increase in Revolving Credit Commitments and Agent
shall have received a certificate to that effect dated such date and executed
by the Managing Director of Borrower, and (ii) Agent shall have received
Revolving Credit Notes, if requested by the respective Lenders, reflecting the
increase of the Revolving Credit Commitments and documents consistent with those
delivered by the Loan Parties under Section 6.1.2 as to the corporate
power and authority of Borrower to borrow hereunder after giving effect to such
increase.  On the effective date of any
increase in the Revolving Credit Commitments, (i) each Increasing Lender
and Augmenting Lender shall make available to Agent, for the benefit of the
other Lenders, such amounts in immediately available funds as Agent shall
determine 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 Ratable Share of such outstanding Revolving Credit Loans (after
giving effect to the increase in the Revolving Credit Commitments occasioned by
the addition of the Increasing Lender(s) or Augmenting Lender(s), or both,
as the case may be) and (ii) Borrower shall be deemed to have repaid and
reborrowed all outstanding Revolving Credit Loans as of the date of any increase
in the Revolving Credit Commitments.  The
deemed payments made pursuant to clause (ii) of the immediately preceding
sentence in respect of each Revolving Credit Loan subject to the Euro-Rate
shall be subject to indemnification by Borrower pursuant to the provisions of Section 4.6.2
[Indemnity] if the deemed payment occurs other than on the last day of the
related Interest Periods.  Upon the
request of Agent, Borrower shall execute and deliver to Agent for the benefit
of the Lenders any and all other documents, instruments, and agreements
necessary or advisable in the reasonable judgment of Agent to evidence or
document the increase in the Revolving Credit Commitments, including any
amendments hereto, and each of the Lenders hereby provides its consent hereto
and thereto and each Lender hereby authorizes Agent to execute any such
documents, instruments, and agreements consistent with the terms of this
Section 2.9 on its behalf without the necessity of any further consent of
any Lender.  Agent and each Lender shall
have no obligation to provide any additional credit, commitment, or loan under
this Section 2.9.


 


3.             INTEREST RATES


 


3.1           Interest Rates.


 


Borrower
shall pay interest in respect of the outstanding unpaid principal amount of the
Revolving Credit Loans as set forth below, it being understood that, subject to
the provisions of this Agreement, Borrower may renew the Euro-Rate with respect
to all or any portion of the Revolving Credit Loans.  If at any time the designated rate applicable
to any Revolving Credit 


 


24

















 


Loan
made by any Lender exceeds such Lender’s highest lawful rate, the rate of
interest on such Lender’s Revolving Credit Loan shall be limited to such Lender’s
highest lawful rate.


 


3.1.1        Revolving Credit Interest
Rate.


 


Borrower
shall pay interest in respect of the outstanding principal amount of the
Revolving Credit Loans at a rate per annum (computed on the basis of a year of
360 days and actual days elapsed) equal to the Euro-Rate plus the Applicable
Margin.


 


3.1.2        Rate Quotations.


 


Borrower
may call Agent on or before the date on which a Revolving Credit Loan Request
is to be delivered to receive an indication of the rates then in effect, but it
is acknowledged that such indication shall not be binding on Agent or Lenders
nor affect the rate of interest which thereafter is actually in effect when the
election is made.


 


3.2           Interest Periods.


 


In
the case of the renewal of a Euro-Rate Revolving Credit Loan at the end of an
Interest Period, the first day of the new Interest Period shall be the last day
of the preceding Interest Period, without duplication in payment of interest
for such day.


 


3.3           Interest After Default.


 


To
the extent permitted by Law, upon the occurrence and during the continuance of
an Event of Default and until the Event of Default shall have been cured or
waived:


 


3.3.1        Interest Rate.


 


The
rate of interest for each Revolving Credit Loan otherwise applicable pursuant
to Section 3.1 [Interest Rates], shall be increased by 3.0% per annum; and


 


3.3.2        Other Obligations.


 


Each
other Obligation hereunder if not paid when due shall bear interest at a rate
per annum equal to the sum of the rate of interest otherwise applicable
pursuant to Section 3.1 [Interest Rates] plus an additional 3.0% per annum
from the time such Obligation becomes due and payable until it is paid in full.


 


3.3.3        Acknowledgment.


 


Borrower
acknowledges that the increase in rates referred to in this Section 3.3
reflects, among other things, the fact that such Revolving Credit Loans or
other amounts have become a substantially greater risk given their default
status and that Lenders are entitled to additional compensation for such risk;
and all such interest shall be payable by Borrower upon demand by Agent.


 


25














 


3.4           Euro-Rate Unascertainable; Illegality; Increased
Costs; Deposits Not Available.


 


3.4.1        Unascertainable.


 


If
on any date on which a Euro-Rate would otherwise be determined, Agent shall
have determined that:


 


(a)           adequate and reasonable
means do not exist for ascertaining such Euro-Rate, or


 


(b)           a contingency has occurred
which materially and adversely affects the London interbank eurodollar market
relating to the Euro-Rate, Agent shall have the rights specified in
Section 3.4.3 [Agent’s and Lender’s Rights].


 


3.4.2        Illegality; Increased Costs;
Deposits Not Available.


 


If
at any time any Lender shall have determined that:


 


(a)           the making,
maintenance or funding of any Revolving Credit Loan to which a Euro-Rate
applies has been made impracticable or unlawful by compliance by such Lender in
good faith with any Law or any interpretation or application thereof by any
Official Body or with any request or directive of any such Official Body
(whether or not having the force of Law), or


 


(b)           such Euro-Rate
will not adequately and fairly reflect the cost to such Lender of the
establishment or maintenance of any such Revolving Credit Loan, or


 


(c)           after making
all reasonable efforts, deposits of the relevant amount in Dollars for the
relevant Interest Period for a Revolving Credit Loan, or to lenders generally,
to which a Euro-Rate applies, respectively, are not available to such Lender
with respect to such Revolving Credit Loan, or to lenders generally, in the
interbank eurodollar market, then Agent shall have the rights specified in
Section 3.4.3 [Agent’s and Lender’s Rights].


 


3.4.3        Agent’s and Lenders’ Rights.


 


In
the case of any event specified in Section 3.4.1 [Unascertainable], Agent
shall promptly so notify Lenders and Borrower thereof, and in the case of an event
specified in Section 3.4.2 [Illegality; Increased Costs; Deposits Not
Available], such Lender shall promptly so notify Agent and endorse a
certificate to such notice as to the specific circumstances of such notice, and
Agent shall promptly send copies of such notice and certificate to the other
Lenders and Borrower.  Upon such date as
shall be specified in such notice (which shall not be earlier than the date
such notice is given), the obligation of: 
(a) Lenders, in the case of such notice given by Agent, or
(b) such Lender, in the case of such notice given by such Lender, to allow
Borrower to renew an Interest Period under a Euro-Rate shall be suspended until
Agent shall have later notified Borrower, or such Lender shall have later
notified Agent, of Agent’s or such Lender’s, as the case may be, determination
that the circumstances giving rise to such previous determination no longer
exist.  If at any time Agent makes a
determination under Section 3.4.1 [Unascertainable] and the next Interest
Period has not yet gone into effect, such notification shall 


 


26

















 


be
deemed to provide for conversion to the Base Rate.  If any Lender notifies Agent of a
determination under Section 3.4.2 [Illegality; Increased Costs; Deposits
Not Available], Borrower shall, subject to Borrower’s indemnification
Obligations under Section 4.6.2 [Indemnity], as to any Revolving Credit
Loan of the Lender to which a Euro-Rate applies, on the date specified in such
notice either convert such Revolving Credit Loan to the Base Rate or prepay
such Revolving Credit Loan in accordance with Section 4.4 [Voluntary
Prepayments].  Absent due notice from
Borrower of conversion or prepayment, such Revolving Credit Loan shall
automatically be converted to the Base Rate upon such specified date.


 


4.             PAYMENTS


 


4.1           Payments.


 


All
payments and prepayments to be made in respect of principal, interest, Annual
Fees, Origination Fees, or other fees or amounts due from Borrower hereunder
shall be payable prior to 12:00 p.m., Oklahoma City time, on the date when
due without presentment, demand, protest or notice of any kind, all of which
are hereby expressly waived by Borrower, and without set-off, counterclaim or
other deduction of any nature, and an action therefor shall immediately
accrue.  Such payments shall be made to
Agent at the Principal Office for the ratable accounts of Lenders with respect
to the Revolving Credit Loans in Dollars and in immediately available funds,
and Agent shall promptly distribute such amounts to Lenders in immediately
available funds, provided that in the event payments are received by
12:00 p.m., Oklahoma City time, by Agent with respect to the Revolving
Credit Loans and such payments are not distributed to Lenders on the same day
received by Agent, Agent shall pay Lenders the Federal Funds Effective Rate
with respect to the amount of such payments for each day held by Agent and not
distributed to Lenders.  Agent’s and each
Lender’s statement of account, ledger or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount of
principal of and interest on the Revolving Credit Loans and other amounts owing
under this Agreement and shall be deemed an “account stated.”


 


4.2           Pro Rata Treatment of Lenders.


 


Each
borrowing of a Revolving Credit Loan shall be allocated to each Lender
according to its Ratable Share.  Each
selection of or renewal of the Euro-Rate and each payment or prepayment by
Borrower with respect to principal, interest, Annual Fees, Origination Fees, or
other fees or amounts due from Borrower hereunder to Lenders with respect to
the Revolving Credit Loans shall (except as provided in Section 3.4.3
[Agent’s and Lender’s Rights] in the case of an event specified in
Section 3.4 [Euro-Rate Unascertainable; Etc.], 4.4 [Voluntary
Prepayments], or 4.6 [Additional Compensation in Certain Circumstances]) be
made in proportion to the applicable Revolving Credit Loans outstanding from
each Lender and, if no such Revolving Credit Loans are then outstanding, in
proportion to the Ratable Share of each Lender.


 


4.3           Interest Payment Dates.


 


Interest
on Revolving Credit Loans shall be due and payable in arrears on the first day
of each month after the date hereof and on the Expiration Date or upon
acceleration of the 


 


27

















 


Revolving
Credit Loans.  Interest on mandatory
prepayments of principal under Section 4.5 [Mandatory Prepayments] shall
be due on the date such mandatory prepayment is due.  Interest on the principal amount of each
Revolving Credit Loan or other monetary Obligation shall be due and payable on
demand after such principal amount or other monetary Obligation becomes due and
payable (whether on the stated maturity date, upon acceleration or otherwise).


 


4.4           Voluntary Prepayments.


 


4.4.1        Right to Prepay.


 


Borrower
shall have the right at its option from time to time to prepay the Revolving
Credit Loans in whole, but not in part,  without
premium or penalty (except as provided in Section 4.4.2 [Replacement of a
Lender], Section 4.4.3 [Prepayment Fee] or in Section 4.6 [Additional
Compensation in Certain Circumstances]):


 


(a)           on the last day of the
applicable Interest Period with respect to Revolving Credit Loans to which the
Euro-Rate applies,


 


(b)           on the date specified in a
notice by any Lender pursuant to Section 3.4 [Euro-Rate Unascertainable, Etc.]
with respect to any Revolving Credit Loan to which the Euro-Rate applies.


 


Whenever
Borrower desires to prepay the Revolving Credit Loans in full, it shall provide
a prepayment notice to Agent by 12:00 p.m., Oklahoma City time, at least
one Business Day prior to the date of prepayment of Revolving Credit Loans
setting forth the date, which shall be a Business Day, on which the proposed
prepayment is to be made.


 


All
prepayment notices shall be irrevocable. 
The principal amount of the Revolving Credit Loans for which a
prepayment notice is given, together with interest on such principal amount
shall be due and payable on the date specified in such prepayment notice as the
date on which the proposed prepayment is to be made.  Any prepayment hereunder shall be subject to
Borrower’s Obligation to indemnify Lenders under Section 4.6.2
[Indemnity].


 


4.4.2        [Reserved.]


 


4.4.3        Prepayment Fee.


 


In
the event Borrower repays all of the Revolving Credit Loans and terminates all
of the Revolving Credit Commitments after the Closing Date, but on or prior to May 25,
2008, Borrower shall pay Agent for the benefit of Lenders at the date of such
repayment and termination a prepayment fee equal to 3.0% of the maximum
aggregate amount of the Revolving Credit Commitments. In the event Borrower
repays all of the Revolving Credit Loans and terminates all of the Revolving
Credit Commitments after May 25, 2008, but on or prior to May 25,
2009, Borrower shall pay Agent for the benefit of Lenders at the date of such
repayment and termination a prepayment fee equal to 2% of the maximum aggregate
amount of the Revolving Credit Commitments. 
In the event Borrower repays all of the Revolving Credit Loans and
terminates all of the Revolving Credit Commitments after May 25, 2009, but
on or before May 25, 2010, Borrower shall pay Agent for the benefit of
Lenders at the date of such repayment and 


 


28

















 


termination
a prepayment fee equal to 1% of the maximum amount of the Revolving Credit
Commitments.  After May 25, 2010, no
prepayment fee shall be due under this Section 4.4.3.


 


4.4.4        Change of Lending Office.


 


Each
Lender agrees that upon the occurrence of any event giving rise to increased
costs or other special payments under Section 3.4.2 [Illegality, Etc.]
or 4.6.1 [Increased Costs or Reduced Return Resulting from Taxes, Etc.]
with respect to such Lender, it will if requested by Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Revolving Credit Loans affected by such event, provided
that such designation is made on such terms that such Lender and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this
Section 4.4.4 shall affect or postpone any of the Obligations of Borrower
or any other Borrower or the rights of Agent or any Lender provided in this
Agreement.


 


4.5           Mandatory Prepayments.


 


4.5.1        Euro-Rate.


 


In
accordance with Section 4.6.2 [Indemnity], Borrower shall indemnify
Lenders for any loss or expense, including loss of margin, incurred with
respect to any such prepayments applied against Revolving Credit Loans subject
to the Euro-Rate on any day other than the last day of the applicable Interest
Period.


 


4.5.2        Borrowing Base Exceeded.


 


Whenever
the Revolving Facility Usage exceeds the Borrowing Base, Borrower shall
immediately make, without the necessity of any demand by Agent, a mandatory
prepayment of principal on the Revolving Credit Loans equal to the amount by
which the Revolving Facility Usage exceeds the Borrowing Base, together with
accrued interest on such principal amount; provided, however,
that in the event such a mandatory prepayment is due as a result of the payment
of interest of the first day of the month pursuant to Section 4.3
[Interest Payment Dates], Borrower shall have until the fifth day of such month
to either make such mandatory prepayment or ensure that the Borrowing Base is
not less than Revolving Facility Usage.


 


4.6           Additional Compensation in Certain Circumstances.


 


4.6.1        Increased Costs or Reduced
Return Resulting from Taxes, Reserves, Capital Adequacy Requirements, Expenses, Etc.


 


If
any Law, guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of Law) of any central lender or
other Official Body:


 


(a)           subjects any Lender to any
tax or changes the basis of taxation with respect to this Agreement, any
Revolving Credit Notes, the Revolving Credit Loans or payments 


 


29

















 


by Borrower of principal, interest, Annual Fees, or
other amounts due from Borrower hereunder or under any Revolving Credit Notes
(except for taxes on the overall net income of such Lender);


 


(b)           imposes, modifies or deems
applicable any reserve, special deposit or similar requirement against credits
or commitments to extend credit extended by, or assets (funded or contingent)
of, deposits with or for the account of, or other acquisitions of funds by, any
Lender; or


 


(c)           imposes, modifies or deems
applicable any capital adequacy or similar requirement: (i) against assets
(funded or contingent) of, or letters of credit, other credits or commitments
to extend credit extended by, any Lender, or (ii) otherwise applicable to
the obligations of any Lender under this Agreement, and the result of any of
the foregoing is to increase the cost to, reduce the income receivable by, or
impose any expense (including loss of margin) upon any Lender with respect to
this Agreement, any Revolving Credit Notes or the making, maintenance or
funding of any part of the Revolving Credit Loans (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the
rate of return on any Lender’s capital, taking into consideration such Lender’s
customary policies with respect to capital adequacy) by an amount which such
Lender in its sole discretion deems to be material, such Lender shall from time
to time notify Borrower and Agent of the amount determined in good faith (using
any averaging and attribution methods employed in good faith) by such Lender to
be necessary to compensate such Lender for such increase in cost, reduction of
income, additional expense or reduced rate of return.  Such notice shall set forth in reasonable
detail the basis for such determination. 
Such amount shall be due and payable by Borrower to such Lender 10
Business Days after such notice is given.


 


4.6.2        Indemnity.


 


In
addition to the compensation required by Section 4.6.1 [Increased Costs or
Reduced Return Resulting from Taxes, Etc.], Borrower shall indemnify each
Lender against all liabilities, losses or expenses (including loss of margin,
any loss or expense incurred in liquidating or employing deposits from third
parties and any loss or expense incurred in connection with funds acquired by a
Lender to fund or maintain Revolving Credit Loans subject to a Euro-Rate) which
such Lender sustains or incurs as a consequence of any:


 


(a)           payment, prepayment,
conversion or renewal of any Revolving Credit Loan to which the Euro-Rate
applies on a day other than the last day of the corresponding Interest Period
(whether or not such payment or prepayment is mandatory, voluntary or automatic
and whether or not such payment or prepayment is then due);


 


(b)           attempt by Borrower to
revoke (expressly, by later inconsistent notices or otherwise) in whole or part
any Revolving Credit Loan Requests under Section 2.5 [Revolving Credit
Loan Requests] or Section 3.2 [Interest Periods] or notice relating to
prepayments under Section 4.4 [Voluntary Prepayments]; or


 


(c)           default by Borrower in the
performance or observance of any covenant or condition contained in any Credit
Document, including any failure of Borrower to 


 


30

















 


pay when due (by acceleration or otherwise) any
principal, interest, Annual Fee or any other amount due hereunder.


 


If
any Lender sustains or incurs any such loss or expense, it shall from time to
time notify Borrower of the amount determined in good faith by such Lender
(which determination may include such assumptions, allocations of costs and
expenses and averaging or attribution methods as such Lender shall deem
reasonable) to be necessary to indemnify such Lender for such loss or
expense.  Such notice shall set forth in
reasonable detail the basis for such determination.  Such amount shall be due and payable by
Borrower to such Lender 10 Business Days after such notice is given.


 


4.7           Interbank Market Presumption.


 


For
all purposes of this Agreement and any Revolving Credit Note with respect to
any aspects of the Euro-Rate or any Revolving Credit Loan under the Euro-Rate,
each Lender and Agent shall be presumed to have obtained rates, fundings,
currencies, deposits, and the like in the applicable interbank market
regardless of whether it did so or not; and, each Lender’s and Agent’s
determination of amounts payable under, and actions required or authorized by,
Sections 3.4 [Euro-Rate Unascertainable; Etc.] and 4.6 [Additional Compensation
in Certain Circumstances] shall be calculated, at each Lender’s and Agent’s
option, as though each Lender and Agent funded each Revolving Credit Loan under
the Euro-Rate through the purchase of deposits of the types and maturities
corresponding to the deposits used as a reference in accordance with the terms
hereof in determining the Euro-Rate applicable to such Revolving Credit Loans,
whether in fact that is the case.


 


4.8           Taxes.


 


4.8.1        No Deductions.


 


All
payments made by Borrower hereunder and under any Revolving Credit Note shall
be made free and clear of and without deduction for any present or future
taxes, levies, imposts, deductions, charges, or withholdings, and all liabilities
with respect thereto, excluding taxes imposed on the net income of any Lender
and all income and franchise taxes applicable to any bank of the United States
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as “Taxes”).  If Borrower shall be required by Law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Revolving Credit Note, (a) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.8.1) each
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (b) Borrower shall make such deductions, and
(c) Borrower shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable Law.


 


4.8.2        Stamp Taxes.


 


In
addition, Borrower agrees to pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges, or similar levies which
arise from any payment made hereunder or from the execution, delivery, or
registration of, or otherwise with 


 


31

















 


respect
to, this Agreement or any Revolving Credit Note (hereinafter referred to as “Other
Taxes”).


 


4.8.3        Indemnification for Taxes
Paid by a Lender.


 


Borrower
shall indemnify each Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 4.8.3) paid by any Lender and any liability
(including penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted.  This indemnification shall be
made within 30 days from the date a Lender makes written demand therefor.


 


4.8.4        Certificate.


 


Within
30 days after the date of any payment of any Taxes or Other Taxes by Borrower,
Borrower shall furnish to each Lender, at its address referred to herein, the
original or a certified copy of a receipt evidencing payment thereof.  If no Taxes or Other Taxes are payable in
respect of any payment by Borrower, such Borrower shall, if so requested by a
Lender, provide a certificate of an officer of Borrower to that effect.


 


4.8.5        Survival.


 


Without
prejudice to the survival of any other agreement of Borrower hereunder, the
agreements and obligations of Borrower contained in Sections 4.8.1 through
4.8.4 shall survive the payment in full of principal and interest hereunder and
under any instrument delivered hereunder.


 


4.9           Judgment Currency.


 


4.9.1        Currency Conversion
Procedures for Judgments.


 


If
for the purposes of obtaining judgment in any court it is necessary to convert
a sum due hereunder or under any Revolving Credit Note in any currency (the “Original
Currency”) into another currency (the “Other Currency”), the parties hereby
agree, to the fullest extent permitted by Law, that the rate of exchange used
shall be that at which in accordance with normal banking procedures each Lender
could purchase the Original Currency with the Other Currency after any premium
and costs of exchange on the Business Day preceding that on which final
judgment is given.


 


4.9.2        Indemnity in Certain Events.


 


The
obligation of Borrower in respect of any sum due from Borrower to any Lender
hereunder shall, notwithstanding any judgment in an Other Currency, whether
pursuant to a judgment or otherwise, be discharged only to the extent that, on
the Business Day following receipt by any Lender of any sum adjudged to be so
due in such Other Currency, such Lender may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so
purchased is less than the sum 


 


32

















 


originally
due to such Lender in the Original Currency, Borrower agrees, as a separate
obligation and notwithstanding any such judgment or payment, to indemnify such
Lender against such loss.


 


5.             REPRESENTATIONS
AND WARRANTIES


 


5.1           Representations and Warranties.


 


Borrower
represents and warrants to Agent and each Lender as follows:


 


5.1.1        Organization and
Qualification.


 


Borrower
is a limited liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization.  Borrower has the lawful power to own or lease
its properties and to engage in the business it presently conducts or proposes
to conduct.  Borrower is duly licensed or
qualified and in good standing in each jurisdiction listed on Schedule 5.1.1
and in all other jurisdictions where the property owned or leased by it or the
nature of the business transacted by it or both makes such licensing or
qualification necessary, except where the failure to do so would not constitute
a Material Adverse Change.


 


5.1.2        Capitalization and Ownership.


 


The
authorized membership ownership interests of Borrower consist of 100 points (“Membership
Interests”) which are issued and outstanding. 
As of the Closing Date, Whitecap owns all of the issued and outstanding
Membership Interests of Borrower.  All of
the Membership Interests have been validly issued and are fully paid and
nonassessable.  There are no options,
warrants or other rights outstanding to purchase any of Borrower’s membership
ownership interests.


 


5.1.3        Subsidiaries.


 


Borrower
has no Subsidiaries.


 


5.1.4        Power and Authority.


 


Borrower
has full power to enter into, execute, deliver and carry out the Credit Documents
to which it is a party, to incur the Indebtedness contemplated by the Credit
Documents and to perform its Obligations under the Credit Documents to which it
is a party, and all such actions have been duly authorized by all necessary
proceedings on its part.


 


5.1.5        Validity and Binding Effect.


 


This
Agreement has been duly and validly executed and delivered by Borrower, and
each other Credit Document which Borrower is required to execute and deliver on
or after the date hereof will have been duly executed and delivered by Borrower
on the required date of delivery of such Credit Document.  Each Credit Document constitutes, or will
constitute, legal, valid and binding obligations of Borrower which is or will
be a party thereto on and after its date of delivery thereof, enforceable
against Borrower in accordance with its terms, except to the extent that
enforceability of any Credit Document may be limited by bankruptcy, insolvency,



 


33

















 


reorganization,
moratorium or other similar laws affecting the enforceability of creditors’
rights generally or limiting the right of specific performance and by general
principles of equity, whether considered in a proceeding at law or in equity.


 


5.1.6        No Conflict.


 


Neither
the execution and delivery of the Credit Documents by Borrower nor the
consummation of the transactions herein or therein contemplated or compliance
with the terms and provisions hereof or thereof by Borrower will conflict with,
constitute a default under or result in any breach of:  (a) the terms and conditions of the
Organizational Documents of Borrower or (b) any Law or any material
agreement or instrument or order, writ, judgment, injunction or decree to which
Borrower is a party or by which Borrower is bound or to which it is subject, or
result in the creation or enforcement of any Lien, upon any property (now or
hereafter acquired) of Borrower (other than Liens granted under the Credit
Documents).


 


5.1.7        Litigation.


 


Except
as set forth on Schedule 5.1.7, there are no actions, suits, proceedings
or investigations pending or, to the knowledge of Borrower, threatened against
Borrower at law or in equity before any Official Body which could result in a
Material Adverse Change.  Except as set
forth on Schedule 5.1.7, Borrower is not in violation of any order,
writ, injunction or any decree of any Official Body.


 


5.1.8        Title to Properties.


 


Borrower
owns no real property and Borrower leases no real property.  Borrower’s books, records, and other assets
are located at Whitecap’s leased facilities. 
Borrower is not a party to Whitecap’s lease and uses Whitecap’s leased
facilities free of charge.  Borrower has
good and marketable title to or valid leasehold interest in all personal
property, assets and other rights which it purports to own or lease or which
are reflected as owned or leased on its books and records, free and clear of
all Liens except Permitted Liens, and subject to the terms and conditions of
the applicable leases.  All leases of
personal property are in full force and effect without the necessity for any
consent which has not previously been obtained upon consummation of the
transactions contemplated hereby.


 


5.1.9        Financial Statements.


 


(a)           Historical Statements.  Borrower has delivered to Agent copies of its
year-end financial statements for and as of the end of the last 2 fiscal years
ended December 31, 2005 and 2006 (the “Annual Statements”).  The Annual Statements were compiled from the
books and records maintained by Borrower’s management, are correct and complete
and fairly represent the financial condition of Borrower as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied.


 


(b)           Financial Projections.  Borrower has delivered to Agent its monthly
financial projections for the period March 2007 through December 2007,
attached hereto as Schedule 5.1.9, derived from various assumptions of
Borrower’s management (the “Financial Projections”).  The Financial Projections represent a
reasonable range of possible results in light 


 


34

















 


of
the history of the business, present and foreseeable conditions and the
intentions of Borrower’s Senior Management Team.  The Financial Projections accurately reflect
the liabilities of Borrower upon consummation of the transactions contemplated
hereby as of the Closing Date.


 


(c)           Accuracy of Financial
Statements.  Borrower
has no liabilities, contingent or otherwise, or forward or long-term
commitments that are not disclosed in the Annual Statements or in the notes
thereto, and except as disclosed therein, there are no unrealized or
anticipated losses from any commitments of Borrower which may cause a Material
Adverse Change.  Since December 31,
2006,  no
Material Adverse Change has occurred.


 


5.1.10      Use of Proceeds; Margin
Stock; Section 20 Subsidiaries.


 


(a)           General.  Borrower intends to use the proceeds of the
Revolving Credit Loans in accordance with Sections 7.1.10 [Use of Proceeds].


 


(b)           Margin Stock.  Borrower does not engage or intend to engage
principally, or as one of its important activities, in the business of
extending credit for the purpose, immediately, incidentally or ultimately, of
purchasing or carrying margin stock (within the meaning of Regulation U).  No part of the proceeds of any Revolving
Credit Loan has been or will be used, immediately, incidentally or ultimately,
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock or to refund Indebtedness
originally incurred for such purpose, or for any purpose which entails a
violation of or which is inconsistent with the provisions of the regulations of
the Board of Governors of the Federal Reserve System.  Borrower does not hold nor does Borrower
intend to hold margin stock in such amounts that more than 5% of the reasonable
value of the assets of Borrower are or will be represented by margin stock.


 


(c)           Section 20 Subsidiaries.  Borrower does not intend to use and shall not
use any portion of the proceeds of the Revolving Credit Loans, directly or
indirectly, to purchase during the underwriting period, or for 30 days
thereafter, Ineligible Securities being underwritten by a Section 20
Subsidiary.


 


5.1.11      Full Disclosure.


 


No
Credit Document, nor any certificate, written statement, agreement or other
documents furnished to Agent or any Lender in connection herewith or therewith,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein, in
light of the circumstances under which they were made, not misleading.  There is no fact known to Borrower which
materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of Borrower which has not been
set forth in this Agreement or in the certificates, statements, agreements or
other documents furnished in writing to Agent and Lenders prior to or at the
date hereof in connection with the transactions contemplated hereby.


 


5.1.12      Taxes.


 


All
federal, state, local and other tax returns required to have been filed with
respect to Borrower have been filed, and payment or adequate provision has been
made for the 


 


35

















 


payment
of all taxes, fees, assessments and other governmental charges which have or
may become due pursuant to said returns or to assessments received, except to
the extent that such taxes, fees, assessments and other charges are being
contested in good faith by appropriate proceedings diligently conducted and for
which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. 
There are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of Borrower for any
period.


 


5.1.13      Consents and Approvals.


 


Except
for the filing of financing statements in the required filing offices, no
consent, approval, exemption, order or authorization of, or a registration or
filing with, any Official Body or any other Person is required by any Law or
any agreement in connection with the execution, delivery and carrying out of
the Credit Documents by Borrower, except as listed on Schedule 5.1.13,
all of which shall have been obtained or made on or prior to the Closing Date,
except as otherwise indicated on Schedule 5.1.13.


 


5.1.14      No Event of Default;
Compliance with Instruments.


 


No
event has occurred and is continuing and no condition exists or will exist
after giving effect to the borrowings or other extensions of credit to be made
on the Closing Date under or pursuant to the Credit Documents which constitutes
an Event of Default or Potential Default. 
Borrower is not in violation of: 
(a) any term of its Organizational Documents or (b) any
material agreement or instrument to which it is a party or by which it or any
of its properties may be subject or bound where such violation would constitute
a Material Adverse Change.


 


5.1.15      Patents, Trademarks,
Copyrights, Licenses, Etc.


 


Borrower
owns or possesses all the material patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises, permits and rights
necessary to own and operate its properties and to carry on its business as
presently conducted and planned to be conducted by Borrower, without known,
possible, alleged or actual conflict with the rights of others.  All material patents, trademarks, service marks,
trade names, copyrights, licenses, registrations, franchises and permits of
Borrower are listed and described on Schedule 5.1.15.  Borrower has the necessary staffing with
sufficient expertise to service, update, maintain, and operate such
systems.  To Borrower’s knowledge,
Borrower acknowledges and agrees that no “opensource,” “shareware,” “freeware,”
or other similar third party source code is included in such systems.


 


5.1.16      Security Interests.


 


The
Liens granted to Agent for the benefit of Lenders pursuant to the Credit
Documents in the Collateral constitute and will continue to constitute Prior
Security Interests under the Uniform Commercial Code as in effect in each
applicable jurisdiction (the “Uniform Commercial Code” or “UCC”) or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform Commercial Code or such Law. 
Upon the filing and recording of financing statements relating to said
security interests in each office and in each jurisdiction where required in
order to perfect the security interests described above, and taking 


 


36

















 


possession
of any stock certificates or other ownership certificates evidencing the
Pledged Collateral as applicable, all such action as is necessary or advisable
to establish such rights of Agent will have been taken, and there will be upon
execution and delivery of the Credit Documents, such filings and such taking of
possession, no necessity for any further action in order to preserve, protect
and continue such rights, except the filing of continuation statements with
respect to such financing statements within 6 months prior to each 5 year
anniversary of the filing of such financing statements.  All filing fees and other expenses in
connection with each such action have been or will be paid by Borrower.


 


5.1.17      Anti-Terrorism Laws.


 


(a)           General.  Neither Borrower nor any Affiliate of
Borrower is in violation of any Anti-Terrorism Law or 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.


 


(b)           Executive Order No. 13224.  To the knowledge of Borrower, neither
Borrower nor any Affiliate of Borrower or their respective agents acting or
benefiting in any capacity in connection with the Revolving Credit Loans or
other transactions hereunder, is any of the following (each a “Blocked Person”):


 


(i)            a Person that
is listed in the annex to, or is otherwise subject to the provisions of,
Executive Order No. 13224;


 


(ii)           a Person owned
or controlled by, or acting for or on behalf of, any Person that is listed in
the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224;


 


(iii)          a Person with
which any Lender is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law;


 


(iv)          a Person that
commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224;


 


(v)           a Person that
is named as a “specially designated national” on the most current list
published by the U.S. Treasury Department Office of Foreign Asset Control at
its official website or any replacement website or other replacement official
publication of such list, or


 


(vi)          a Person who is
affiliated or associated with a person or entity listed above.


 


Neither
Borrower nor to the knowledge of Borrower, any of its agents acting in any
capacity in connection with the Revolving Credit Loans or other transactions
hereunder:  (A) conducts any
business or engages in making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person, or (B) deals in, or
otherwise engages in any transaction relating to, any property or interests in
property blocked pursuant to Executive Order No. 13224.


 


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5.1.18      Status of the Pledged
Collateral.


 


All
the Membership Interests included in the Pledged Collateral to be pledged
pursuant to the Pledge Agreement are or will be upon issuance validly issued
and nonassessable and owned beneficially and of record by the pledgor free and
clear of any Lien or restriction on transfer, except as otherwise provided by
the Pledge Agreement and except as the right of Lenders to dispose of the
Membership Interests may be limited by the Securities Act of 1933, as amended,
and the regulations promulgated by the Securities and Exchange Commission
thereunder and by applicable state securities laws.  There are no limited liability company or
other agreements or understandings with respect to the Membership Interests
included in the Pledged Collateral, except for the limited liability company
agreement described on Schedule 5.1.18. 
Borrower has delivered true and correct copies of such limited liability
company agreement to Agent.


 


5.1.19      Insurance.


 


Schedule 5.1.19 lists all insurance policies and other bonds
to which Borrower is a party, all of which are valid and in full force and
effect.  No notice has been given or
claim made and no grounds exist to cancel or avoid any of such policies or bonds
or to reduce the coverage provided thereby. 
Such policies and bonds provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of Borrower in accordance with prudent business practice in the industry of
Borrower.  Without limiting the
foregoing, Schedule 5.1.19 describes the errors and omissions insurance
coverage and Borrower’s business coverage insurance.


 


5.1.20      Compliance with Laws.


 


Borrower
is in compliance in all material respects with all applicable Laws (other than Environmental
Laws which are specifically addressed in Section 5.1.25 [Environmental
Matters]) in all jurisdictions in which Borrower is presently or will be doing
business, except where the failure to do so would not constitute a Material
Adverse Change.  Without limiting the foregoing, Borrower has
provided, and after the Closing Date will, when applicable, provide and will
require all dealers under any Dealer Program to provide, each residential
customer with the 3-day right of rescission in compliance with the provisions
of 16 C.F.R. Part 429 (Cooling-Off Period for Door-to-Door Sales) and any
applicable state laws.  Borrower
acknowledges that any failure on its behalf to comply with such regulation and
laws in connection with any transaction involving a residential customer may
result in such customer having the right to rescind or cancel such transaction.


 


5.1.21      Material Contracts;
Burdensome Restrictions.


 


Schedule 5.1.21 lists all material contracts relating to the
business operations of Borrower, including all employee benefit plans and Labor
Contracts.  All such material contracts
are valid, binding and enforceable upon Borrower and each of the other parties
thereto in accordance with their respective terms, except to the extent any
lack of such validity, binding effect or enforceability may be the result of
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforceability of creditors’ rights generally and by general principles of
equity, whether considered in a proceeding at law or in equity, and there is no
default thereunder,


 


38

















 


to
Borrower’s knowledge, with respect to parties other than Borrower.  Borrower is not bound by any contractual
obligation, or subject to any restriction in any Organizational Document, or
any requirement of Law which would result in a Material Adverse Change.


 


5.1.22      Investment Companies;
Regulated Entities.


 


Borrower
is not an “investment company” registered or required to be registered under
the Investment Company Act of 1940 or under the “control” of an “investment
company” as such terms are defined in the Investment Company Act of 1940 and
shall not become such an “investment company” or under such “control.”  Borrower is not subject to any other Federal
or state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.


 


5.1.23      [Reserved.]


 


5.1.24      Employment Matters.


 


Borrower
has no employees.


 


5.1.25      [Reserved.]


 


5.1.26      Security Alarm Contracts.


 


Borrower has supplied Agent with true and correct copies
of all its form Security Alarm Contracts.  All of the
Security Alarm Contracts are valid, enforceable and in full force and effect in
accordance with their terms (except to the extent any lack of such
validity, binding effect or enforceability may be the result of bankruptcy,
insolvency, moratorium, and other similar laws affecting the enforceability of
creditors’ rights generally and by general principles of equity, whether
considered in a proceeding at law or in equity), are assignable to Agent without obtaining the consent of or providing
notice to any customer or other Person, and contain terms and conditions which
are standard within the electronic security industry, including those involving
limitation of liability/liquidated damages, third-party indemnification,
automatic renewals and the right to increase customer rates.  None of the Security Alarm Contracts has been
pledged, assigned, or otherwise transferred to any Person other than the Agent
for the benefit of the Lenders.  Without
limiting the foregoing, to the best of the Borrower’s knowledge, its business
and all equipment used in connection with it, are now being utilized, operated
and maintained in conformity with the Security Alarm Contracts.  To the best of Borrower’s knowledge, Borrower
has not in any manner at any time failed to so utilize, operate and maintain
its business in a manner that could now or hereafter result in cancellation or
termination of any of the Security Alarm Contracts, or in liability for damages
under any of the Security Alarm Contracts nor has Borrower defaulted in its
obligations pursuant to any of the Security Alarm Contracts, which default
could result in the cancellation of any Security Alarm Contract or adversely
affect the rights of Borrower under that Security Alarm Contract.  Borrower requires that its servicers not
utilize, operate or maintain their business in a manner that could now or
hereafter result in cancellation or termination of any of the Security Alarm
Contracts, or in liability for damages under any of the Security Alarm
Contracts, and such servicers have not defaulted in their obligations pursuant
to any of the Security Alarm Contracts, which default could result in the
cancellation of any Security Alarm Contract or adversely affect the rights of
Borrower under that Security Alarm Contract. 
Borrower is not a party to any franchise, license,


 


39

















 


distributor or other similar type of agreement.  Borrower may terminate any agreement
providing for the monitoring of any of its customers by any third party (other
than the SAI Servicer Agreement) on not more than 30 days’ notice.  No person has any right to acquire any of
Borrower’s accounts except as described in the Put-Call Agreement.  Borrower has not sold or otherwise made its
existing customer lists available to any third party.  Over 85% of Borrower’s
customers pay their RMR invoices by credit card, ACH or other EFT’s.


 


5.1.27      Alarm Systems.


 


To the best of Borrower’s knowledge, all of the Alarm
Systems are in good working order and condition (with the exception of:
ordinary wear and tear, routine service needs, customer misuse, failure of a
customer to report to Borrower any problem known to the customer and customer
non-use), and have been installed and maintained in accordance with good and
workmanlike practices prevailing in the security alarm industry at the time of
installation in accordance with the appropriate specifications and standards
for Borrower’s business and all Official Parties, and Borrower has not been
advised by its servicer of any facts that may indicate otherwise.  To the best of Borrower’s knowledge, all such
Alarm Systems conform in all material respects to the contracts pursuant to
which they were installed and to Borrower’s knowledge, in no case has an
installation been made which at the time of installation was in material
violation of any applicable Law.  All
manufacturer’s warranties applicable to such Alarm Systems are freely
assignable to Agent to secure the Obligations. 
Borrower is not aware of any material difficulty in obtaining
replacement parts for the installed Alarm Systems.


 


5.1.28      Telephone Numbers.


 


Except as disclosed on Schedule 5.1.28 and except
as set forth in the SAI Assignment and Modification Agreement, Borrower has the
exclusive contractual right to use all of the telephone lines and numbers
applicable to Borrower’s accounts and can convert all such lines and numbers to
communicate with another central station by means of a line switch. To Borrower’s
knowledge, there are no pending plans by any telephone company to change the
dialing procedures or exchange numbers within the areas servicing Borrower’s
customers such that Borrower would need to reprogram its customers’ digital
dialers.


 


5.1.29      Solvency.


 


Borrower
is Solvent and, after giving effect to the repayment of that portion of
Borrower’s debt to Whitecap permitted hereunder, will be Solvent.


 


5.1.30      Affiliates.


 


The
following Delaware companies are unrelated to Borrower and Borrower’s owners:
Alarm Funding Corporation, Alarm Funding II, L.L.C., Alarm Funding I, L.P. and
U.S. Alarm Holdings, LLC d/b/a Alarm Funding Associates.


 


40

















 


5.1.31      Prior Acquisitions.


 


All
of Borrower’s prior acquisitions have been completed pursuant to, and in
material compliance with, the terms outlined for such acquisitions in the SAI
Servicer Agreement.


 


5.1.32      Alarm Licenses.


 


No
alarm license of Borrower has been suspended for more than 3 days and, to
Borrower’s knowledge, there are no unresolved complaints or indictments by any
state bureau of consumer affairs or attorney general.


 


5.2           Updates to Schedules.


 


Should
any of the information or disclosures provided on any of the Schedules become
outdated or incorrect in any material respect, Borrower shall promptly provide
Agent in writing with such revisions or updates to such Schedule as may be
necessary or appropriate to update or correct same; provided, however,
that no Schedule shall be deemed to have been amended, modified or superseded
by any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until Agent, in its
sole and absolute discretion, shall have accepted in writing such revisions or
updates to such Schedule.


 


6.             CONDITIONS OF
LENDING


 


The
obligation of each Lender to make Revolving Credit Loans hereunder is subject
to the performance by Borrower of its Obligations to be performed hereunder at
or prior to the making of any such Revolving Credit Loans and to the
satisfaction of the following further conditions:


 


6.1           First Revolving Credit Loans.


 


On
the Closing Date:


 


6.1.1        Officer’s Certificate.


 


All
representations and warranties of Borrower contained in this Agreement and in
each of the other Credit Documents shall be true and accurate on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein), and Borrower shall have performed and complied with all
covenants and conditions hereof and thereof, no Event of Default or Potential
Default shall have occurred and be continuing or shall exist; and there shall
be delivered to Agent for the benefit of each Lender a certificate of Borrower,
dated the Closing Date and signed by the Managing Director of Borrower, to each
such effect.


 


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6.1.2        Managing Director
Certificate.


 


There
shall be delivered to Agent for the benefit of each Lender a certificate dated
as of the Closing Date and signed by the Managing Director of Borrower,
certifying as appropriate as to:


 


(a)           all action taken by Borrower
in connection with the Credit Documents;


 


(b)           the names of the Managing
Directors  authorized to sign the Credit
Documents and the true signatures of such Managing Directors and specifying the
Authorized Directors permitted to act on behalf of Borrower for purposes of the
Credit Documents and the true signatures of such Managing Directors, on which
Agent and each Lender may conclusively rely; and


 


(c)           copies of Borrower’s
Organizational Documents as in effect on the Closing Date certified by the
appropriate state official where such documents are filed in a state office
together with recent certificates from the appropriate state officials as to
the continued existence and good standing of Borrower in each state where
organized or qualified to do business.


 


6.1.3        Delivery of Credit Documents.


 


The
Assignment and Modification Agreements, Pledge Agreement, Security Agreement,
Subordination Agreement, Guaranty Agreement (Anti-Fraud), Escrow Agreement and
all other Credit Documents shall have been duly executed and delivered to Agent
for the benefit of Lenders, together with all appropriate financing statements,
and all such documentation shall be in form and substance satisfactory to Agent
and its counsel.


 


6.1.4        Opinion of Counsel.


 


There
shall be delivered to Agent for the benefit of each Lender a written opinion of
Kramer Levin Naftalis & Frankel LLP, counsel for Borrower, dated as of
the Closing Date and in form and substance satisfactory to Agent and its
counsel:


 


(a)           as to the matters set forth
in Exhibit 6.1.4; and


 


(b)           as to such other matters
incident to the transactions contemplated herein as Agent may reasonably
request.  There shall also be delivered
to Agent for the benefit of each Lender a written opinion of Kramer Levin
Naftalis & Frankel LLP, counsel for Whitecap, McGuireWoods LLP,
counsel for Alarm Call Holdings LLC,  and
McGuireWoods LLP, counsel for SAI, each dated as of the Closing Date and in
form and substance satisfactory to Agent and its counsel.


 


6.1.5        Legal Details.


 


All
legal details and proceedings in connection with the transactions contemplated
by the Credit Documents shall be in form and substance satisfactory to Agent
and counsel for Agent, and Agent shall have received all such other counterpart
originals or certified or other copies of such documents and proceedings in
connection with such transactions, in form and


 


42

















 


substance
satisfactory to Agent and said counsel, as Agent or said counsel may reasonably
request.


 


6.1.6        Payment of Fees.


 


Borrower
shall have paid or caused to be paid to Agent for itself and for the account of
Lenders to the extent not previously paid the Origination Fee, and all other
fees accrued through the Closing Date, and the reasonable costs and expenses
for which Agent and Lenders are entitled to be reimbursed, including certain
expenses for financial, legal and collateral due diligence, and the cost of the
appraisal required by Section 6.1.19 [Due Diligence; Appraisal], which
fees (other than the Origination Fee), costs, and expenses shall not exceed
$100,000. The Expense Deposit shall be credited against these expenses.


 


6.1.7        Background Checks;
Anti-Fraud Guaranty.


 


(a) 
Lenders shall be satisfied in their sole discretion with the results of Agent’s
background investigations of: (i) each member of the Senior Management
Team of Borrower, (ii) Eric Kamisher of Whitecap, and (iii) Ray Gross
of SAI.


 


(b) 
SAI shall have executed and delivered to Agent for the benefit of the Lenders a
Guaranty Agreement (Anti-Fraud).


 


6.1.8        Consents.


 


All
material consents required to effectuate the transactions contemplated hereby
as set forth on Schedule 5.1.13 shall have been obtained.


 


6.1.9        Managing Director’s
Certificate Regarding No Material Adverse Changes.


 


Since
December 31, 2006, no Material Adverse Change shall have occurred; there
shall have been no material change in the management of Borrower; and there
shall have been delivered to Agent for the benefit of each Lender a certificate
dated as of the Closing Date and signed by the Managing Director of Borrower to
each such effect.


 


6.1.10      No Violation of Laws.


 


The
making of the Revolving Credit Loans shall not contravene any Law applicable to
Borrower or any Lender.


 


6.1.11      No Actions or Proceedings.


 


No
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Official Body to enjoin, restrain
or prohibit, or to obtain damages in respect of, the Credit Documents or the
consummation of the transactions contemplated hereby or thereby or which, in
the sole discretion of Agent and/or Lenders, would make it inadvisable to
consummate the transactions contemplated by the Credit Documents.


 


43

















 


6.1.12      Insurance Policies;
Certificates of Insurance; Endorsements.


 


Borrower
shall have delivered evidence acceptable to Agent that adequate insurance in
compliance with Section 7.1.3 [Maintenance of Insurance] is in full force
and effect and that all premiums then due thereon have been paid, together with
a certified copy of each of Borrower’s insurance policies evidencing coverage
satisfactory to Agent, with additional insured, mortgagee and lender loss
payable special endorsements attached thereto in form and substance
satisfactory to Agent and its counsel naming Agent as additional insured,
mortgagee and lender loss payee.


 


6.1.13      Financial Information.


 


Agent
shall have received and reviewed such financial and other information on
Borrower, including monthly financial projections for Borrower, as Agent may
reasonably request, and such information shall be satisfactory to Agent in its
reasonable discretion. Agent shall have received and reviewed such financial
and other information on Whitecap and SAI as Agent may reasonably request, and
such information shall be satisfactory to Agent in its reasonable discretion.


 


6.1.14      Filing Receipts.


 


Agent
shall have received:  (a) copies of
all filing receipts and acknowledgments issued by the appropriate Official Body
to evidence recordation or filing necessary to perfect the Lien of Lenders on
the Collateral or other satisfactory evidence of such recordation and filing
and (b) evidence in a form acceptable to Agent that such Lien constitutes
a Prior Security Interest in favor of Lenders.


 


6.1.15      SAI Servicer Agreement;
Put-Call Agreement; Subordinated Debt Documents.


 


Borrower
shall have delivered to Agent a true, accurate, and complete copy (as so
certified by Borrower) of the executed SAI Servicer Agreement, Put-Call
Agreement, and Subordinated Debt Documents, and any amendments, supplements,
schedules, and exhibits thereto, the terms and conditions of which shall be
satisfactory to Agent in all respects.


 


6.1.16      Closing Date Compliance
Certificate.


 


Borrower
shall have delivered to Agent a certificate (the “Closing Date Compliance
Certificate”) of Borrower, dated as of the Closing Date, signed by the Managing
Director, substantially in the form of Exhibit 7.3.4, together with
supporting accounting and financial information satisfactory to Agent.


 


6.1.17      Due Diligence; Appraisal.


 


Agent
shall have completed its due diligence review of all aspects of Borrower,
including an initial field examination and a quality of earnings and a quality
of  RMR review of Borrower’s historical
results by a third party due diligence firm acceptable to Agent, and such
review shall be satisfactory to Agent and Lenders in their sole discretion. Agent shall have received a current certified
forced-liquidation-value basis appraisal of Borrower’s portfolio of


 


44

















 


Security Alarm Contracts from a third party appraiser
acceptable to Agent, and such appraisal shall be satisfactory to Agent in its
reasonable discretion.  Without limiting
the foregoing, Agent shall have received on or before the Closing Date, lien
searches demonstrating the absence of Liens on Borrower’s properties and assets
other than Permitted Liens or Liens satisfied as of the Closing Date to the
satisfaction of Agent and Lenders. 
Borrower acknowledges that Agent’s due diligence continues up to the
time of funding the first Revolving Credit Loan.


 


6.1.18      Account Control Agreements.


 


Agent
shall be satisfied with the cash management system of Borrower.  Borrower shall have delivered to Agent
lockbox and account control  agreements
with respect to all bank accounts of Borrower (including the Blocked Accounts)  in form and substance satisfactory to
Agent in its reasonable discretion, executed by Borrower and each respective
bank.


 


6.1.19      Senior Funded Debt.


 


The
ratio of Senior Funded Debt to Subordinated Debt shall not exceed 1.0 to 1.0.


 


6.1.20      Assignment and Bill of Sale.


 


Borrower
shall have delivered to Agent true, correct, and complete copies of the
executed Assignments and Bills of Sale in a form reasonably acceptable to Agent
from SAI and APEX Alarm, LLC (and/or its Affiliate, APX Alarm Security Solutions, Inc.;
collectively, “APX”) documenting all of Borrower’s prior purchases from SAI and
APX.


 


6.1.21      Alarm Call Holdings LLC.


 


The
structure of Alarm Call Holdings LLC and and its parent shall be reasonably
aceptable to Agent.


 


6.2           Each Additional Revolving Credit Loan.


 


At
the time of making any Revolving Credit Loans other than Revolving Credit Loans
made on the Closing Date and after giving effect to the proposed extensions of
credit:  the representations and
warranties of Borrower contained in this Agreement and in the other Credit
Documents shall be true on and as of the date of such additional Revolving
Credit Loan with the same effect as though such representations and warranties
had been made on and as of such date (except representations and warranties
which expressly relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein) and Borrower shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the
Revolving Credit Loans shall not contravene any Law applicable to Borrower or
any Lender; and Borrower shall have delivered to Agent a duly executed and
completed Revolving Credit Loan Request.


 


45

















 


7.             COVENANTS


 


7.1           Affirmative Covenants.


 


Borrower
covenants and agrees that until indefeasible payment in full of the Revolving
Credit Loans and interest thereon, satisfaction of all of Borrower’s other
Obligations under the Credit Documents and termination of the Revolving Credit
Commitments, Borrower shall comply at all times with the following affirmative
covenants:


 


7.1.1        Preservation of Existence, Etc.


 


Borrower
shall maintain its legal existence as a limited liability company and its
license, qualification and good standing in each jurisdiction in which its
ownership or lease of property or the nature of its business makes such license
or qualification necessary, except as otherwise expressly permitted in
Section 7.2.6 [Liquidations, Mergers, Etc.].


 


7.1.2        Payment of Liabilities, Including
Taxes, Etc.


 


Borrower
shall duly pay, discharge, or otherwise satisfy all liabilities to which it is
subject or which are asserted against it, promptly as and when the same shall
become due and payable, including all taxes,  assessments
and governmental charges upon it or any of its properties, assets, income or
profits, prior to the date on which penalties attach thereto, except to the
extent that such liabilities, including taxes, assessments or charges, are
being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP, shall have been made, but
only to the extent that failure to discharge any such liabilities would not
result in any additional liability which would have a Material Adverse Change, provided
that Borrower will pay all such liabilities forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor
(other than a Lien expressly permitted under this Agreement).


 


7.1.3        Maintenance of Insurance.


 


Borrower
shall insure its properties and assets against loss or damage by fire and such
other insurable hazards as such assets are commonly insured (including fire,
extended coverage, public liability and business interruption insurance) and
against other risks (including errors and omissions coverage in an amount not
less than $2,000,000) in such amounts as similar properties and assets are
insured by prudent companies in similar circumstances carrying on similar
businesses, and with reputable and financially sound insurers, including
self-insurance to the extent customary with not less than $5,000,000 aggregate
coverage, all as reasonably determined by Agent.  At the request of Agent, Borrower shall
deliver to Agent and each Lender: 
(a) on the Closing Date and annually thereafter, an original
certificate of insurance signed by Borrower’s independent insurance broker
describing and certifying as to the existence of the insurance required to be
maintained by the Credit Documents, together with a copy of the endorsement
described in the next sentence attached to such certificate and (b) from
time to time, a summary schedule indicating all insurance then in force with
respect to Borrower.  Such policies of
insurance shall contain special endorsements, in form and substance acceptable
to Agent, which shall:  (i) specify
Agent as an additional insured, mortgagee and lender loss payee


 


46

















 


as
its interests may appear, with the understanding that any obligation imposed
upon the insured (including the liability to pay premiums) shall be the sole
obligation of Borrower and not that of the insured, (ii) provide that the
interest of Lenders shall be insured regardless of any breach or violation by
Borrower of any warranties, declarations or conditions contained in such
policies or any action or inaction of Borrower or others insured under such
policies, (iii) provide a waiver of any right of the insurers to set off
or counterclaim or any other deduction, whether by attachment or otherwise,
(iv) provide that any and all rights of subrogation which the insurers may
have or acquire shall be, at all times and in all respects, junior and
subordinate to the prior payment in full of the Indebtedness hereunder and that
no insurer shall exercise or assert any right of subrogation until such time as
the Indebtedness hereunder has been indefeasibly paid in full and the Revolving
Credit Commitments have terminated, (v) provide, except in the case of
public liability insurance, that all insurance proceeds for losses of less than
$50,000  shall be adjusted with and
payable to Borrower and that all insurance proceeds for losses of $50,000  or more shall be adjusted with and payable
to Agent, (vi) include effective waivers by the insurer of all claims for
insurance premiums against Agent, (vii) provide that no cancellation of
such policies for any reason (including non-payment of premium) nor any change
therein shall be effective until at least 30 days after receipt by Agent of
written notice of such cancellation or change, (viii) be primary without
right of contribution of any other insurance carried by or on behalf of any
additional insureds with respect to their respective interests in the
Collateral, (ix) provide that inasmuch as the policy covers more than one
insured, all terms, conditions, insuring agreements and endorsements (except
limits of liability) shall operate as if there were a separate policy covering
each insured, and (x) not limit the errors and omissions coverage, or the
insurer’s obligation to defend, in the event that a written contract does not
exist, does not include a limitation of liability provision, or is found to be
void.  Borrower shall notify Agent
promptly of any occurrence causing a material loss or decline in value of the Collateral
and the estimated (or actual, if available) amount of such loss or
decline.  Any monies received by Agent
constituting insurance proceeds or condemnation proceeds may, at the option of
Agent, (A) be applied by Agent to the payment of the Revolving Credit
Loans in such manner as Agent may reasonably determine, or (B) be
disbursed to Borrower on such terms as are deemed appropriate by Agent for the
repair, restoration and/or replacement of property in respect of which such
proceeds were received.


 


7.1.4        Maintenance of Properties
and Leases.


 


Borrower
shall maintain in good repair, working order and condition (ordinary wear and
tear excepted) in accordance with the general practice of other businesses of
similar character and size, all of those properties useful or necessary to its
business, and from time to time, Borrower will make or cause to be made all
appropriate repairs, renewals or replacements thereof.


 


7.1.5        Maintenance of Patents,
Trademarks, Etc.


 


Borrower
shall maintain in full force and effect all patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and other authorizations
necessary for the ownership and operation of its properties and business, if
the failure so to maintain the same would constitute a Material Adverse Change.


 


47














 


7.1.6                        Visitation
Rights.


 


Borrower
shall permit any of the officers, authorized employees or representatives of
Agent to visit and inspect any of its properties and to examine and make
excerpts from its books and records and discuss its business affairs, finances
and accounts with Borrower’s officers, all in such detail and at such times
during normal business hours and as often as Agent may reasonably request, provided
that Agent shall provide Borrower with reasonable notice prior to any visit or
inspection.  Any Lender wishing to
participate in such a visit shall be entitled to do so.  In the event any Lender desires to conduct an
audit of Borrower, it is hereby agreed that such audit shall be performed by
Agent and Agent’s officers, authorized employees or representatives.  Agent in its sole discretion may conduct, at
Borrower’s expense, (a) up to 4 times within any 12 month period field
audits of Borrower’s business, property, and locations, and (b) up to one
time within any 12 month period an appraisal of the Collateral; provided,
however, such limitation regarding the frequency of such audits and
appraisals shall not apply if an Event of Default exists.


 


Borrower
will pay Agent a field examination fee of $850 per day for all on-site
examinations; and in addition, Borrower will pay all of Agent’s and Lender’s
out-of-pocket expenses for such field examinations up to a maximum of $20,000
(including the field examination fee) within any 12 month period; provided,
however, such limitations regarding the field examination fee and the
reimbursement of out-of-pocket expenses shall not apply if an Event of Default
has occurred and is continuing.


 


7.1.7                        Keeping of
Records and Books of Account.


 


Borrower
shall maintain and keep proper books of record and account which enable
Borrower to issue financial statements in accordance with GAAP and as otherwise
required by applicable Laws of any Official Body having jurisdiction over
Borrower, and in which full, true and correct entries shall be made in all
material respects of all its dealings and business and financial affairs.


 


7.1.8                        Customer
Service.


 


Borrower
shall maintain an exclusive telephone number to be used by its customers for
customer service calls.


 


7.1.9                        Compliance with
Laws.


 


Borrower
shall comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this
Section 7.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.  Borrower shall at all times materially
complied with the separateness provisions set forth in its Organizational
Documents.


 


48

















 


7.1.10                  Use of Proceeds.


 


Borrower
shall use the proceeds of the Revolving Credit Loans only for:  (a) general corporate purposes, (b) working
capital, (c) to finance Permitted Acquisitions, and (d) to repay up
to $30,000,000 of Borrower’s debt to Whitecap.  Borrower
shall not use the proceeds of the Revolving Credit Loans for any purpose which
contravenes any applicable Law or any provision hereof.


 


7.1.11                  Further Assurances.


 


Borrower
shall, from time to time, at its expense, faithfully preserve and protect Agent’s
Lien on and Prior Security Interest in the Collateral as a continuing first
priority perfected Lien, subject only to Permitted Liens, and shall do such
other acts and things as Agent in its sole discretion may deem necessary or in
its reasonable discretion deem advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Credit Documents and
to exercise and enforce Agent’s rights and remedies thereunder with respect to
the Collateral.


 


7.1.12                  Increasing Revolving Credit
Commitments.


 


In
the event Borrower desires to increase the Revolving Credit Commitments,
Borrower shall so notify Agent.  Borrower
shall provide agent with sufficient information to enable Agent and Lenders to
determine in their sole discretion whether they wish to increase the Revolving
Credit Commitments.  In the event that
Agent and all Lenders reject Borrower’s request, Borrower will be prohibited
from creating an additional loan facility with other lenders.


 


7.1.13                  Anti-Terrorism Laws.


 


Borrower
and its Affiliates and agents shall not: 
(a) conduct any business or engage in any transaction or dealing
with any Blocked Person, including the making or receiving any contribution of
funds, goods or services to or for the benefit of any Blocked Person, (b) deal
in, or otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to Executive Order No. 13224; or (c) engage
in or conspire 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 Executive Order No. 13224, the USA Patriot Act or any other
Anti-Terrorism Law.  Borrower shall
deliver to Lenders any certification or other evidence requested from time to
time by any Lender in its sole discretion, confirming Borrower’s compliance
with this Section 7.1.13.


 


7.1.14                  Trade Payables.


 


Borrower
shall cause its trade payables and accrued expenses incurred in the ordinary
course of business to be kept current with respect to payments due.


 


49

















 


7.1.15                  Storage of Security Alarm
Contract Documents.


 


Pursuant
to the terms and conditions of the Escrow Agreement, Borrower shall cause all
Security Alarm Contract Documents to be delivered to the Collateral Servicer
for filing and storage.


 


7.1.16                  Account Control Agreements.


 


Borrower
shall maintain at all times a valid and enforceable account control agreement
with respect to each bank account of Borrower, in form and substance
satisfactory to Agent in its reasonable discretion.


 


7.1.17                  Establishment of a Lockbox
Account, Dominion Account.


 


All
proceeds of Borrower’s Security Alarm Contracts shall be deposited by Borrower
into a lockbox account, dominion account or such other “blocked account” (“Blocked
Accounts”) established at a bank or banks (each such bank, a “Blocked Account
Bank”) pursuant to an arrangement with such Blocked Account Bank as may be
selected by Borrower and be acceptable to Agent.  Borrower, Agent, and each Blocked Account
Bank shall enter into a deposit account control agreement in form and substance
satisfactory to Agent directing such Blocked Account Bank to transfer such
funds so deposited to Agent, either to any account maintained by Agent at said
Blocked Account Bank or by wire transfer to appropriate account(s) of
Agent.  All funds deposited in such
Blocked Accounts shall immediately become the property of Agent and Borrower
shall obtain the agreement by such Blocked Account Bank to waive any offset
rights against the funds so deposited. 
Neither Agent nor any Lender assumes any responsibility for such blocked
account arrangement, including any claim of accord and satisfaction or release
with respect to deposits accepted by any Blocked Account Bank thereunder.  All deposit accounts and investment accounts
of Borrower are set forth on Schedule 7.1.17.


 


7.1.18                  Single Purpose Entities.


 


(a)                                  Borrower at all
times since its formation has been, and will continue to be, a duly formed and
existing limited liability company and a Single Purpose Entity.  Borrower at all times since its formation has
been, and will continue to be, duly qualified as a limited liability company,
in each jurisdiction in which such qualification was or may be necessary for
the conduct of its business.


 


(b)                                 Borrower at all
times since its formation has complied and will continue to comply with the
provisions of its organizational documents and the laws of its jurisdiction of
formation relating to limited liability companies.


 


(c)                                  All formalities
regarding the existence of Borrower as a Single Purpose Entity have been
observed since its formation and will continue to be observed.


 


(d)                                 Borrower has at
all times since its formation accurately maintained, and will continue to
accurately maintain its financial statements, accounting records and limited
liability company documents, separate from those of any other Person.  Borrower has maintained and will maintain
books, records, resolutions and agreements separate from those of any other


 


50

















 


entity. 
Borrower has at all times since its formation accurately maintained, and
will continue to accurately maintain, its own bank accounts, payroll and
separate books of account.  Borrower has
not and will not commingle its funds or assets with those of any other entity,
and has held and will hold its assets in its own name.


 


(e)                                  Borrower has at
all times since its formation paid, and will continue to pay, its own
liabilities from its own separate assets.


 


(f)                                    Borrower was
organized solely for the purpose described in the definition of Single Purpose
Entity and as set forth in this Section 7.1.18 and will not engage in any
business unrelated to acting as the Borrower hereunder which is inconsistent
with or in violation of this Section 7.1.18 or this Agreement.


 


(g)                                 Borrower has
not and will not have any assets other than those related to its Security Alarm
Contracts.


 


(h)                                 Whitecap and
Borrower have not and will not engage in, seek or consent to any dissolution,
winding up, liquidation, consolidation, merger (other than as contemplated in
this Agreement), asset sale (other than as contemplated in this Agreement),
transfer of membership interest of Borrower or amendment of the operating agreement
or articles of formation of Borrower.


 


(i)                                     Except as
expressly permitted herein, Whitecap is and shall remain the sole economic
member of the Borrower.


 


(j)                                     Each of the
Borrower and Whitecap, without the unanimous consent of all holders of limited
liability interests in Borrower or all limited partners of Whitecap, as
applicable, shall not file a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings with respect to itself or to any other entity
in which it has a direct or indirect legal or beneficial ownership interest,
dissolve, liquidate, consolidate, merge, or sell all or substantially all of
its assets or any other entity in which it has a direct or indirect legal or
beneficial ownership interest, engage in any other business activity, or amend
its organizational documents.


 


(k)                                  Borrower has at
all times since its formation identified itself, and will continue to identify
itself, in all dealings with the public, under Borrower’s own name and as a
separate and distinct entity.  Borrower
has not at any time since its formation identified itself, and will not
identify itself, as being a division or a part of any other entity.  Borrower has not at any time since its
formation identified, and will not identify, any other Person as being a
division or part of Borrower.  Borrower
has not and will not fail to correct any known misunderstanding regarding the
separate identity of such entity. 
Borrower has conducted and will conduct its business in its own name.


 


(l)                                     Borrower has at
all times since its formation, and will continue to be, adequately capitalized
in light of the nature of its business.


 


(m)                               Borrower has
not at any time since its formation assumed or guaranteed, and will not assume
or guarantee, the liabilities of any other Persons except in the ordinary
course of acquiring Security Alarm Contracts. 
Borrower has not at any time since its formation


 


51

















 


acquired, and will not acquire, obligations or
securities of any other Persons. 
Borrower has not at any time since its formation made, and will not
make, loans or advances to any Person. 
Borrower has not and will not pledge its assets for the benefit of any
other Person or entity, except in favor of the Agent for the benefit of the
Lenders.


 


(n)                                 Borrower has
not at any time since its formation entered into and was not a party to, and,
will not enter into or be a party to, any transaction with any Affiliate,
except in the ordinary course of business of Borrower on terms which are no
less favorable to Borrower than would be obtained in a comparable arm’s length
transaction with an unrelated third party.


 


(o)                                 Borrower has no
Indebtedness other than the Indebtedness to the Agent and the Lenders under the
Loan Documents and the Indebtedness to Whitecap under the Subordinated Debt
Documents, except as expressly permitted herein.


 


7.1.19                  Alarm Licenses.


 


(a)                                  Borrower shall
obtain an alarm license:


 


(i)  in each jurisdiction accounting for 5% or
more of Borrower’s RMR if an alarm license is required in such jurisdiction;


 


(ii)   if
less than 5% of Borrower’s RMR is attributable to such jurisdiction, in each
jurisdiction where (x) an alarm license is required and (y) the
failure to be licensed may result in a criminal penalty, alarm contracts being
rendered invalid, a cease and desist order to stop alarm monitoring, or a fine
in excess of $50,000 per month.


 


With
respect to Borrower’s accounts held as of the Closing Date, this requirement
shall be deemed to be satisfied so long as Borrower has filed an application in
each such jurisdiction not later than July 25, 2007.


 


(b)                                 In the event
that Borrower becomes subject to (i) pending litigation that raises the
issue of Borrower’s failure to be licensed or (ii) investigation by an
Official Body for its failure to be licensed, Borrower shall immediately start
the process and move expeditiously to obtain alarm licenses in all
jurisdictions where such licensure is required notwithstanding anything to the
contrary in clause (a) above.


 


(c)                                  To the extent
California Laws requires that Borrower’s accounts located in California be held
by an entity other than a limited liability company, Borrower shall take such
actions in order to be in compliance with such Laws to the reasonably
satisfaction of Agent within 60 days following the Closing Date.


 


7.1.20                  Servicer Insolvency.


 


Borrower
shall act promptly to replace SAI or any successor servicer with a servicer
reasonably satisfactory to Agent in the event of a filing by or against SAI or
such successor servicer of any proceeding in bankruptcy, receivership,
insolvency, reorganization, liquidation, or conservatorship or any similar
proceeding.


 


52

















 


7.1.21                  Compliance with FCC Mandate.


 


Borrower
shall cause SAI or any successor servicer to comply with the mandate of the
Federal Communications Commission requiring that all analog radios be converted
from analog to digital technology no later than the deadline set forth therein.


 


7.1.22                  Assignments and Bills of
Sale.


 


(a)                                  Not later than
45 days following the Closing Date, Borrower shall have delivered to Agent
true, correct, and complete copies of the executed Assignments and Bills of
Sale (in a form reasonably acceptable to Agent) from First Security, Inc.,
All American Security, Vision Security Group, Inc., American Home
Protection LLC, Independence Sound & Security, Inc., and
Guardian Security, Inc., documenting all of Borrower’s prior purchases
from such entities.  Borrower represents
that after SAI and APX, these companies were its next six largest suppliers of
Security Alarm Contracts and RMR.


 


(b)                                 Borrower shall
use its best efforts to deliver to Agent true, correct, and complete copies of
the executed Assignments and Bills of Sale (in a form reasonably acceptable to Agent)
with respect to all of the other companies from whom Borrower acquired Security
Alarm Contracts and RMR.


 


7.2                                 Negative Covenants.


 


Borrower
covenants and agrees that until indefeasible payment in full of the Revolving
Credit Loans and interest thereon, satisfaction of all of Borrower’s other
Obligations under the Credit Documents and termination of the Revolving Credit
Commitments, Borrower shall comply at all times with the following negative
covenants:


 


7.2.1                        Indebtedness.


 


Borrower
shall not, at any time create, incur, assume or suffer to exist any
Indebtedness, except:


 


(a)                                  Indebtedness
under the Credit Documents;


 


(b)                                 Existing
Indebtedness as set forth on Schedule 7.2.1 (including any extensions or
renewals thereof), provided there is no increase in the amount thereof
or other significant change in the terms thereof unless otherwise specified on Schedule
7.2.1;


 


(c)                                  Indebtedness
evidenced by the Subordinated Debt Documents, together with any extensions,
modifications, or amendments thereto or replacements and substitutions
therefor, subject to and subordinated in accordance with the provisions of the
Subordination Agreement;


 


(d)                                 Capitalized and
operating leases as and to the extent permitted under Section 7.2.15
[Capital Expenditures and Leases]; and


 


(e)                                  Indebtedness
secured by Purchase Money Security Interests not exceeding $10,000 in the
aggregate.


 


53

















 


7.2.2                        Liens.


 


Borrower
shall not, at any time create, incur, assume or suffer to exist any Lien on any
of its property or assets, tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so,  except
Permitted Liens.  Borrower shall not,
directly or indirectly, enter into any agreement with any Person other than
Agent or Lenders pursuant to a Credit Document which prohibits or limits the
ability of Borrower to create, incur, assume, or suffer to exist any Lien upon
any of its property, assets, or revenues, whether now owned or hereafter
acquired.


 


7.2.3                        Guaranties.


 


Borrower
shall not, at any time, directly or indirectly, become or be liable in respect
of any guaranty, or assume, guarantee, become surety for, endorse or otherwise
agree, become or remain directly or contingently liable upon or with respect to
any obligation or liability of any other Person, except for guaranties of
Indebtedness of Borrower permitted hereunder; provided  however
that this provision shall not apply to account guaranties that are customary in
the security alarm industry for the sale of assets.


 


7.2.4                        Revolving
Credit Loans and Investments.


 


Borrower
shall not, at any time, make or suffer to remain outstanding any Revolving
Credit Loan or advance to, or purchase, acquire or own any stock, bonds, notes
or securities of, or any partnership interest (whether general or limited) or
limited liability company interest in, or any other investment or interest in,  or make any capital contribution to, any other Person, or
agree, become or remain liable to do any of the foregoing, except:


 


(a)                                  trade credit extended
on usual and customary terms in the ordinary course of business;


 


(b)                                 advances to
employees to meet expenses incurred by such employees in the ordinary course of
business; and


 


(c)                                  Permitted
Investments.


 


7.2.5                        Dividends and
Related Distributions.


 


Borrower shall not make or pay, or agree to become or remain liable to
make or pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests.


 


7.2.6                        Liquidations,
Mergers, Consolidations, Acquisitions.


 


Borrower
shall not dissolve, liquidate or wind-up its affairs, or become a party to any
merger or consolidation, or acquire by purchase, lease or otherwise all or
substantially all of the assets or capital stock of any other Person, provided
that


 


54

















 


(a)                                  Borrower may
acquire a bulk purchase of Security Alarm Contracts from SAI or a counterparty
approved by Agent in its reasonable discretion, which approval shall not be
unreasonably withheld (each a “Permitted Acquisition”), provided that
each of the following requirements is met:


 


(1)                                  Borrower shall
grant Liens in the assets of such Person on the date of such Permitted
Acquisition;


 


(2)                                  the governing
bodies of such Person and Borrower shall have approved such Permitted
Acquisition and Borrower shall have delivered to Agent written evidence of the
approval of such governing body of Borrower and such Person for such Permitted
Acquisition;


 


(3)                                  no Potential
Default or Event of Default shall exist immediately prior to or after giving
effect to such Permitted Acquisition;


 


(4)                                  Borrower shall
demonstrate to Agent’s satisfaction that it shall be in compliance with the
covenants contained in Section 7.2.15 [Capital Expenditures and Leases], Section 7.2.16
[Minimum Cash Receipts], Section 7.2.17 [Minimum Fixed Charge Coverage
Ratio], Section 7.2.18 [Maximum Funded Debt to Tangible Net Worth Ratio;
Senior Funded Debt], Section 7.2.19 [Minimum Tangible Net Worth], and Section 7.2.20
[Maximum Attrition Rate], in each case after giving effect to such Permitted
Acquisition (including in such computation Indebtedness or other liabilities
assumed or incurred in connection with such Permitted Acquisition, but
excluding income earned or expenses incurred by the Person, business or assets
to be acquired prior to the date of such Permitted Acquisition), by delivering
at least 5 Business Days prior to such Permitted Acquisition a certificate in
the form of Exhibit 7.2.6 evidencing such compliance;


 


(5)                                  Borrower shall
deliver to Agent at least 5 Business Days before such Permitted Acquisition
copies of any agreements entered into or proposed to be entered into by
Borrower in connection with such Permitted Acquisition, including a purchase
agreement with terms customary for the security alarm industry, including an
account guaranty, a purchase price holdback, and appropriate nonsolicitation
provisions, an assignment and bill of sale (in a form reasonably acceptable to
Agent), and a fully-executed Assignment and Modification Agreement with the
Approved Central Station(s) that monitor the customers included in the
Permitted Acquisition, and shall deliver to Agent such other information about
such Person or its assets as any Lender may reasonably require;


 


(6)                                  if the seller
will remain in business and will provide on-going services to the acquired
customers, then Borrower shall enter into a service agreement with seller on
terms customary for the security alarm industry, including appropriate
nonsolicitation provisions, a right of first refusal, and a consent to
collateral assignment to Agent;


 


(7)                                  Borrower
perform reasonable due diligence on not less than 500 of all security alarm
customer contracts to be acquired (or such lesser amount as may be subject to
the acquisition); and


 


55

















 


(b)                                 subject to Section 7.2.22
[Dealer Programs], Borrower may acquire customer accounts through a Dealer
Program.  Borrower agrees to perform
reasonable due diligence on not less than of all security alarm customer
contracts (or such lesser amount as may be subject to the acquisition) to be
acquired pursuant to this clause (b).


 


7.2.7                        Dispositions of
Assets.


 


Borrower
shall not sell, convey, assign, lease, or otherwise transfer or dispose of,
voluntarily or involuntarily, any of its properties or assets, tangible or
intangible (including sale, assignment, discount or other disposition of
accounts, contract rights, chattel paper, equipment or general intangibles with
or without recourse or of limited liability company interests of Borrower,
unless Borrower obtains Agent’s prior written consent with respect to the
transfer of such limited liability company interests, which shall not be
unreasonably withheld); provided, however, that Borrower may sell
customer accounts in the ordinary course of its business if the RMR from such
accounts is not Eligible RMR.


 


7.2.8                        Affiliate
Transactions.


 


Except
as set forth on Schedule 7.2.8, Borrower shall not enter into or carry
out any transaction (including purchasing property or services from or selling
property or services to any Affiliate of Borrower or other Person) unless such
transaction is: (a) not otherwise prohibited by this Agreement, (b) entered
into in the ordinary course of business upon fair and reasonable arm’s-length
terms and conditions which are fully disclosed to Agent and (c) in
accordance with all applicable Law.


 


7.2.9                        Subsidiaries,
Partnerships and Joint Ventures.


 


Borrower
shall not own or create directly or indirectly any Subsidiaries.  Borrower shall not become or agree to
become:  (i) a general or limited
partner in any general or limited partnership, (ii) a member or manager
of, or hold a limited liability company interest in, a limited liability
company, or (iii) a joint venturer or hold a joint venture interest in any
joint venture.


 


7.2.10                  Continuation of or Change in
Business.


 


Borrower
shall not engage in any business other than the security alarm business,
substantially as conducted and operated by Borrower during the present fiscal
year,  and Borrower shall not permit any
material change in such business.


 


7.2.11                  [Reserved.]


 


7.2.12                  Fiscal Year.


 


Borrower
shall not change its fiscal year from the twelve-month period beginning
January 1st and ending December 31st.


 


56














 


7.2.13      Issuance of Ownership
Interests.


 


Borrower
shall not issue any additional ownership interests or any options, warrants or
other rights in respect thereof without Agent’s prior written consent, which
consent shall not be unreasonably withheld.


 


7.2.14      Changes in Documents.


 


(a) 
Borrower shall not amend in any respect any of its Organizational Documents
without providing at least 15 calendar days’ prior written notice to Agent and,
in the event such change would not be permitted under the Subordinated Debt
Documents without Subordinated Creditor consent, would adversely affect
Borrower’s status as a Single Purpose Entity, or would be adverse to the
Lenders as determined by Agent in its sole discretion, obtaining Agent’s prior
written consent, which consent shall not be unreasonably withheld.


 


(b) 
Except as may be otherwise permitted under the Subordination Agreement,
Borrower shall not enter into any renewal, replacement, or refinancing of nor
any amendment or modification to or waiver or consent under (or solicit any
such renewal, replacement, refinancing, amendment, modification, waiver or
consent) any of the Subordinated Debt Documents, provided, however,
that the terms of the Subordinated Debt Documents may be amended or modified
and any waiver may be obtained thereunder so long as prior to any amendment or
modification of the Subordinated Debt Documents or any waiver under the
Subordinated Debt Documents, Borrower provides at least 15 calendar days’ prior
written notice to Agent and obtains the prior written consent of Agent to each
amendment or modification to or waiver under the Subordinated Debt Documents,
which consent shall not be unreasonably withheld.


 


(c) 
Borrower shall not enter into any renewal or replacement of, amendment or
modification to, or waiver or consent under (or solicit any such renewal,
replacement, amendment, modification, waiver or consent) the SAI Servicer
Agreement or the Put-Call Agreement without obtaining Agent’s prior written
consent.


 


7.2.15      Capital Expenditures and Leases.


 


Borrower
shall not make any payments exceeding $50,000 in the aggregate in any fiscal
year on account of the purchase or lease of any assets which if purchased would
constitute fixed assets or which if leased would constitute a capitalized
lease.  Borrower shall not make any
payments exceeding $50,000  in the
aggregate in any fiscal year on account of the rental or lease of real or
personal property of any other Person which does not constitute a capitalized
lease.  Borrower shall not make any
capital expenditure and lease payments which are not made under usual and
customary terms and in the ordinary course of business.


 


7.2.16      Minimum Cash Receipts.


 


Borrower
shall not permit the aggregate amount of cash receipts derived from billings to
beginning of the month RMR, calculated as of the end of each month for the
month then ended,  to be less than 80%.


 


57

















 


7.2.17      Minimum Fixed Charge Coverage Ratio.


 


Borrower
shall not permit the Fixed Charge Coverage Ratio, calculated as of the end of
each month for the 12 months then ended, to be less than 1.25 to 1.0.


 


7.2.18      Maximum Funded Debt to
Tangible Net Worth Ratio; Senior Funded Debt.


 


(a)           Borrower shall not at any
time permit the ratio of its Funded Debt to Tangible Net Worth to exceed 2.0 to
1.0.


 


(b)           Borrower shall not at any
time following the Closing Date permit the ratio of Senior Funded Debt to
Subordinated Debt to exceed 2.0 to 1.0.


 


7.2.19      Minimum Tangible Net Worth.


 


Borrower
shall not at any time permit Tangible Net Worth to be less than $20,000,000.


 


7.2.20      Maximum Attrition Rate.


 


Borrower
shall not permit either its Annual Attrition Rate to be more than 15% or its
Quarterly Attrition Rate to be more than 17%.


 


7.2.21      Dealer Programs.


 


Borrower
shall not enter into (nor subsequently amend in any material manner) any Dealer
Program without the prior written consent of Agent, which consent may be
withheld in Agent’s sole discretion.


 


7.2.22      Underwriting Guidelines.


 


Borrower
shall not amend or otherwise modify its underwriting guidelines with respect to
residential, commercial, and wholesale customers, as well as dealers and
affiliates, a copy of which is attached hereto as Exhibit 7.2.22,
without the prior written consent of Agent, which consent shall not be
unreasonably withheld.  Borrower
acknowledges that its underwriting guidelines are, as of the Closing Date,
identical to those of SAI and therefore those references to “SAI” in Exhibit 7.2.22
shall mean “Borrower”.  Borrower shall
not make any material change with respect to its billing and collection
processes, including late fees and service credits.


 


7.2.23      Alarm Licenses.


 


Borrower
shall not have any alarm license suspended for more than 3 days.


 


7.2.24      Compensation; Employees.


 


Borrower
shall not pay compensation, including salary and discretionary bonuses.   Borrower shall not at any time have any
employees.


 


58

















 


7.2.25      Sale-Leasebacks; Real
Property.


 


Borrower
shall not engage in any sale-leaseback or similar transaction involving any of
its property or assets.  Borrower shall
not purchase or lease any real property.


 


7.2.26      Cancellation of
Indebtedness.


 


Borrower
shall not cancel any material claim or Indebtedness owing to it, except for
reasonable consideration and in the ordinary course of its business, or
voluntarily prepay any Indebtedness except as otherwise permitted herein.


 


7.3           Reporting Requirements.


 


Borrower
covenants and agrees that until indefeasible payment in full of the Revolving
Credit Loans and interest thereon, satisfaction of all of Borrower’s other
Obligations under the Credit Documents and termination of the Revolving Credit
Commitments, Borrower will furnish or cause to be furnished to Agent and each
Lender:


 


7.3.1        Monthly Financial Statements.


 


As
soon as available and in any event within 30 days after the end of each month,
Borrower’s financial statements, consisting of a balance sheet as of the end of
such month and related statements of income, members’ equity and cash flows for
the month then ended and the fiscal year through that date, all in reasonable
detail and certified (subject to normal year-end adjustments) by the Managing
Director of Borrower as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.  Borrower’s financial
statements will be segregated from Whitecap’s or any other Affiliate’s
financial statements.   Concurrent with
the delivery of Borrower’s financial statements, Borrower shall deliver or
cause to be delivered financial statements and other information as described
herein with respect to SAI.


 


7.3.2        [Reserved.]


 


7.3.3        Annual Financial Statements.


 


As
soon as available and in any event within 90 days after the end of each fiscal
year of Borrower, financial statements of Borrower consisting of a balance
sheet as of the end of such fiscal year, and related statements of income,
members’ equity and cash flows for the fiscal year then ended, all in
reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year, and certified by
RSM McGladrey or other independent certified public accountants of recognized
standing reasonably  satisfactory
to Agent; provided  however within 30 days after the end of each
fiscal year of Borrower, Borrower shall deliver such financial statements
certified (subject to normal year-end audit adjustments) by the Managing Member
of Borrower as having been prepared in accordance with GAAP, consistently
applied.  The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not
indicate the


 


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occurrence
or existence of any event, condition or contingency which would materially
impair the prospect of payment or performance of any covenant, agreement or
duty of Borrower under any of the Credit Documents.  Borrower shall deliver with such financial
statements and certification by its accountants a letter of such accountants to
Agent and Lenders substantially: 
(a) to the effect that, based upon their ordinary and customary
examination of the affairs of Borrower, performed in connection with the
preparation of such consolidated financial statements, and in accordance with
generally accepted auditing standards, they are not aware of the existence of
any condition or event which constitutes an Event of Default or, if they are
aware of such condition or event, stating the nature thereof and confirming
Borrower’s calculations with respect to the Compliance Certificate to be
delivered pursuant to Section 7.3.4 [Certificate of Borrower] with respect
to such financial statements and (b) to the effect that Lenders are
intended to rely upon such accountant’s certification of the annual financial
statements and that such accountants authorize Borrower to deliver such reports
and certificate to Lenders on such accountants’ behalf.  Borrower’s financial statements will be
segregated from Whitecap’s or any other Affiliate’s financial statements.  Concurrent with the delivery of Borrower’s
annual financial statements, Borrower shall deliver or cause to be delivered
financial statements and other information as described herein with respect to
SAI.  Borrower shall deliver or cause to
be delivered financial statements and other information as described herein
with respect to Whitecap as soon as the same become available.


 


7.3.4        Certificate of Borrower.


 


Concurrently
with the financial statements of Borrower furnished to Agent and to Lenders
pursuant to Sections 7.3.1 [Monthly Financial Statements] and 7.3.3 [Annual
Financial Statements], a certificate (each a “Compliance Certificate”) of
Borrower signed by the Managing Director of Borrower, and including
certifications of the Whitecap Principals and the SAI Principals, in the form
of Exhibit 7.3.4, to the effect that, except as described pursuant
to Section 7.3.6 [Notice of Default], (a) the representations and
warranties of Borrower contained in Section 5 [Representations and
Warranties] and in the other Credit Documents are true on and as of the date of
such certificate with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time) and
Borrower has performed and complied with all covenants and conditions hereof
and thereof, (b) no Event of Default or Potential Default exists and is
continuing on the date of such certificate and (c) containing calculations
in sufficient detail to demonstrate compliance as of the date of such financial
statements with all financial covenants contained in Section 7.2 [Negative
Covenants].


 


7.3.5        Borrowing Base Certificate.


 


Borrower
shall execute and deliver a Borrowing Base Certificate, also signed by a
Whitecap Principal, in the form of Exhibit 7.3.5 (as the same may
be amended or otherwise modified from time to time by Agent following reasonble
notice to Borrower) to Agent on each of the following dates:


 


(a)           with each
Revolving Credit Loan Request;


 


(b)           monthly within 5 Business
Days following each calendar month as of the end of such calendar month; and


 


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(c)           at the request of Agent.


 


7.3.6        [Reserved.]


 


7.3.7        Notice of Default.


 


Promptly
after any officer of Borrower has learned of the occurrence of an Event of
Default or Potential Default, a certificate signed by the Managing Director of
Borrower setting forth the details of such Event of Default or Potential
Default and the action which Borrower proposes to take with respect thereto.


 


7.3.8        Notice of Litigation.


 


Promptly
after the commencement thereof, notice of all actions, suits, proceedings or
investigations before or by any Official Body or any other Person against
Borrower which relate to the Collateral, involve a claim or series of claims in
excess of $50,000 or which if adversely determined would constitute a Material
Adverse Change.


 


7.3.9        Certain Events.


 


Written
notice to Agent:


 


(a)           within the time limits set
forth in Section 7.2.14 [Changes in Documents], any amendment to the
Organizational Documents of Borrower;


 


(b)           at least 30 days prior
thereto, with respect to any change in any of Borrower’s locations from the
locations set forth in Schedule A to the Security Agreement;


 


(c)           promptly after the
occurrence thereof, notice of any material developments with respect to those
matters described on Schedule 5.1.7; and


 


(d)           promptly after the enactment
or adoption of any Law which may result in a Material Adverse Change, notice
thereof.


 


7.3.10      Budgets, Forecasts, Other
Reports and Information.


 


Promptly
upon their becoming available to Borrower:


 


(a)           the annual budget and any
forecasts or projections of Borrower, to be supplied not later than 30 days
prior to commencement of the fiscal year to which any of the foregoing may be
applicable;


 


(b)           any reports including
management letters submitted to Borrower by independent accountants in
connection with any annual, interim or special audit;


 


(c)           a copy of any order in any
proceeding to which Borrower is a party issued by any Official Body; and


 


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(d)           such other reports and
information as any Lender may from time to time reasonably request, including
the monthly servicer’s reporting package delivered electronically in a text
formatted file acceptable to Agent including such information as Agent may
reasonably request.


 


8.             DEFAULT


 


8.1           Events of Default.


 


An
Event of Default shall mean the occurrence or existence of any one or more of
the following events or conditions (whatever the reason therefor and whether
voluntary, involuntary or effected by operation of Law):


 


8.1.1        Payments Under Credit
Documents.


 


Borrower
shall fail to pay any principal of any Revolving Credit Loan (including
mandatory prepayments or the payment due at maturity) or shall fail to pay any
interest on any Revolving Credit Loan, or any other amount owing under the
Credit Documents after such principal, interest or other amount becomes due in
accordance with the terms hereof or thereof, subject to the proviso set forth
in Section 4.5.2 [Borrowing Base Exceeded] with respect to interest
payments;


 


8.1.2        Breach of Warranty.


 


Any
representation or warranty made at any time by Borrower, Whitecap, or SAI in
any Credit Document, or in any certificate, other instrument or statement
furnished pursuant to the provisions hereof or thereof, shall prove to have
been false or misleading in any material respect as of the time it was made or
furnished;


 


8.1.3        Breach of Negative Covenants
or Visitation Rights or Account Control Agreements.


 


Borrower
shall default in the observance or performance of any covenant contained in
Section 7.1.6 [Visitation Rights], Section 7.1.14 [Account Control
Agreements], or Section 7.2 [Negative Covenants];


 


8.1.4        Breach of Other Covenants.


 


Borrower,
Whitecap, or SAI shall default in the observance or performance of any other
covenant, condition or provision of any Credit Document and such default shall
continue unremedied for a period of 10 Business Days after any officer of
Borrower becomes aware of the occurrence thereof (such grace period to be
applicable only in the event such default can be remedied by corrective action
of Borrower as determined by Agent in its sole discretion);


 


8.1.5        Defaults in Other Agreements
or Indebtedness.


 


(a) 
A default or event of default shall occur and be declared at any time under the
Subordinated Debt Documents or a default or event of default shall occur at any
time under the


 


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terms
of any other agreement involving borrowed money or the extension of credit or
any other Indebtedness under which Borrower may be obligated as a borrower or
guarantor in excess of $50,000  in the
aggregate, and such breach, default or event of default consists of the failure
to pay (beyond any period of grace permitted with respect thereto, whether
waived or not) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any Indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend, or (b) a default or
event of default shall occur at any time under the SAI Servicer Agreement;


 


8.1.6        Final Judgments or Orders.


 


Any
final judgments or orders (after the expiration of all times to appeal
therefrom) shall be entered against Borrower by a court having jurisdiction in
the premises:  (a) for the payment
of money in excess of $50,000  in the
aggregate which is not insured or for the payment of money in excess of
$100,000  which is insured, or (b) which
judgment or order would constitute a Material Adverse Change, in each instance
which judgment is not discharged, vacated, bonded or stayed pending appeal
within a period of 30 days from the date of entry;


 


8.1.7        Credit Document
Unenforceable.


 


Any
of the Credit Documents shall cease to be legal, valid and binding agreements
enforceable against the party executing the same or such party’s successors and
assigns (as permitted under the Credit Documents) in accordance with the
respective terms thereof or shall in any way be terminated (except in
accordance with its terms) or become or be declared ineffective or inoperative
or shall in any way be challenged or contested or cease to give or provide the
respective Liens, rights, titles, interests, remedies, powers or privileges
intended to be created thereby;


 


8.1.8        Uninsured Losses;
Proceedings Against Assets.


 


There
shall occur any material uninsured damage to or loss, theft or destruction of
any of the Collateral in excess of $50,000;  or the
Collateral or any other assets of Borrower are attached, seized, levied upon or
subjected to a writ or distress warrant; or the Collateral or any other assets
of Borrower come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors and the same is not cured within 30 days
thereafter;


 


8.1.9        Notice of Lien or Assessment.


 


(a) A
notice of Lien or assessment in excess of $50,000  which
is not a Permitted Lien is filed of record with respect to all or any part of
any assets of Borrower by any Official Body, including the PBGC, or (b) any
taxes or debts owing at any time or times hereafter to any Official Body,
become payable and the same is not paid within 30 days after the same becomes
payable;


 


8.1.10      Insolvency.


 


Borrower
or Whitecap ceases to be Solvent or admits in writing its inability to pay its
debts as they mature;


 


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8.1.11      Separateness Assumptions.


 


Any
of the assumptions contained in any “non-consolidation” opinion delivered to
Agent in connection with the Revolving Credit Loans is or shall become untrue
in any material respect; provided, however, that any such violation shall not
result in an Event of Default if (a) such violation was inadvertent, does
not result in a reasonable likelihood that a substantive consolidation of the
assets and liabilities of Borrower with those of any other Person in a bankruptcy
proceeding under the Bankruptcy Code of the United States would occur, and is
promptly corrected upon Borrower’s obtaining knowledge of such failure (unless
such failure to correct would not result in a future reasonable likelihood of
substantive consolidation and the opinion required in the following clause (b) opines
to the same) and (b) within fifteen (15) days of Agent’s request, Borrower
delivers to Agent an opinion of counsel to the effect that such breach shall
not negate or impair the substance of the “non-consolidation” opinion delivered
to Agent on the Closing Date;


 


8.1.12      Central Monitoring.


 


Borrower
is unable to provide a material portion of its customers with central
monitoring services from an Approved Central Station for any reason whatsoever
for any period of 72 hours or longer;


 


8.1.13      Cessation of Business.


 


Borrower
ceases to conduct its business as contemplated, except as expressly permitted
under Section 7.2.6 [Liquidations, Mergers, Etc.] or  7.2.7 [Dispositions of Assets or
Subsidiaries], or SAI ceases to conduct its business as contemplated, or
Borrower or SAI is enjoined, restrained or in any way prevented by court order
from conducting all or any material part of its business, and such injunction,
restraint or other preventive order is not dismissed within 30 days after the
entry thereof;


 


8.1.14      Change of Control; Change of
Management.


 


(a) Whitecap
ceases to own 100%  of Borrower,
except as expressly permitted herein; (b) Whitecap Advisors, LLC ceases to
serve as the General Partner and advisor for Whitecap, or (c) any member
of the Senior Management Team ceases to
hold the office and title held by such member of the Senior Management Team as
of the Closing Date and to be substantially involved in the day-to-day
management of Borrower, and, in either case, Borrower has not hired or appointed
an individual reasonably acceptable to Required Lenders within 3 months of such
occurrence to replace such Person;


 


8.1.15      Involuntary Proceedings.


 


A
proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of Borrower or
Whitecap in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator or similar official of Borrower for any substantial
part of its property, or for the winding-up or liquidation of its affairs, and
such proceeding shall remain


 


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undismissed or unstayed and in effect for a
period of 30 consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or


 


8.1.16      Voluntary Proceedings.


 


Borrower
or Whitecap shall: (a) commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, (b) consent to the entry of an order for relief in an involuntary
case under any such law, (c) consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator or other similar official of itself or for any substantial part of
its property, (d) make a general assignment for the benefit of creditors, (e) fail
generally to pay its debts as they become due, or (f) take any action in
furtherance of any of the foregoing.


 


8.2           Consequences of Event of Default.


 


8.2.1        Events of Default Other Than
Bankruptcy, Insolvency or Reorganization Proceedings.


 


If
an Event of Default specified under Sections 8.1.1 through 8.1.14 shall
occur and be continuing, Lenders and Agent shall be under no further obligation
to make Revolving Credit Loans and Agent may, and upon the request of Required
Lenders, shall, by written notice to Borrower, declare the unpaid principal
amount of the Revolving Credit Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of Borrower to Lenders
hereunder to be forthwith due and payable, and the same shall thereupon become and
be immediately due and payable to Agent for the benefit of each Lender without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived; and


 


8.2.2        Bankruptcy, Insolvency
or Reorganization Proceedings.


 


If
an Event of Default specified under Section 8.1.15 [Involuntary
Proceedings] or 8.1.16 [Voluntary Proceedings] shall occur, Lenders shall be
under no further obligations to make Revolving Credit Loans hereunder and the
unpaid principal amount of the Revolving Credit Loans then outstanding and all
interest accrued thereon, any unpaid fees and all other Indebtedness of
Borrower to Lenders hereunder and thereunder shall be immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived; and


 


8.2.3        Set-off.


 


If
an Event of Default shall occur and be continuing, any Lender to whom any
Obligation is owed by Borrower under any Credit Document or any participant of
such Lender which has agreed in writing to be bound by the provisions of
Section 9.13 [Equalization of Lenders] and any branch, Subsidiary or
Affiliate of such Lender or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to it, without
notice to Borrower, to set-off against and apply to the then unpaid balance of
all the Revolving Credit Loans and all other Obligations of Borrower or under
any Credit Document any debt owing to, and any other funds held in any manner
for the account of, Borrower by such Lender or participant or by such branch,
Subsidiary or Affiliate, including all funds in all deposit accounts


 


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(whether
time or demand, general or special, provisionally credited or finally credited,
or otherwise) now or hereafter maintained by Borrower for its own account (but
not including funds held in custodian or trust accounts) with such Lender or
participant or such branch, Subsidiary or Affiliate.  Such right shall exist whether or not any
Lender or Agent shall have made any demand under any Credit Document, whether
or not such debt owing to or funds held for the account of Borrower is or are
matured or unmatured and regardless of the existence or adequacy of any
Collateral, Guaranty or any other security, right or remedy available to any
Lender or Agent; and


 


8.2.4        Suits, Actions, Proceedings.


 


If
an Event of Default shall occur and be continuing, and whether or not Agent
shall have accelerated the maturity of Revolving Credit Loans pursuant to any
of the foregoing provisions of this Section 8.2, Agent or any Lender, if
owed any amount with respect to the Revolving Credit Loans, may proceed to
protect and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in any Credit Document, including as permitted by
applicable Law the obtaining of the ex  parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any other legal or
equitable right of Agent or such Lender; and


 


8.2.5        Application of Proceeds;
Collateral Sharing.


 


(a)           Application of Proceeds.  From and after the date on which Agent has
taken any action pursuant to this Section 8.2 and until all Obligations of
Borrower have been indefeasibly paid in full, any and all proceeds received by
Agent from any sale or other disposition of the Collateral, or any part
thereof, or the exercise of any other remedy by Agent, shall be applied as
follows:


 


(i)            first, to reimburse Agent
and Lenders for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys’ and paralegals’ fees and legal expenses, incurred by
Agent or Lenders in connection with realizing on the Collateral or collection
of any Obligations of Borrower under any of the Credit Documents, including
advances made by Lenders or any one of them or Agent for the reasonable
maintenance, preservation, protection or enforcement of, or realization upon,
the Collateral, including advances for taxes, insurance, repairs and the like
and reasonable expenses incurred to sell or otherwise realize on, or prepare
for sale or other realization on, any of the Collateral;


 


(ii)           second, to past due fees and
past due interest with respect to the Revolving Credit Loans pro rata according
to the aggregate amount of such fees and interest due to each Lender;


 


(iii)          third, to past due principal
of the Revolving Credit Loans pro rata according to the aggregate amount of
such principal due to each Lender;


 


(iv)          fourth, to other fees and
interest with respect to the Revolving Credit Loans pro rata according to the
aggregate amount of such fees and interest payable to each Lender;


 


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(v)           fifth, to other principal of
the Revolving Credit Loans pro rata according to the aggregate amount of such
principal payable to each Lender;


 


(vi)          sixth, to other Obligations
due to Lenders hereunder or under the other Credit Documents pro rata according
to the amounts of such other Obligations payable to each Lender; and


 


(vii)         seventh, the balance, if
any, as required by Law.


 


(b)           Collateral Sharing.  All Liens granted under the Security
Agreement, the Pledge Agreement, and any other Credit Document (the “Collateral
Documents”) shall secure ratably and on a pari passu basis the Obligations in
favor of Agent and Lenders hereunder. 
Agent under the Collateral Documents shall be deemed to serve as the
collateral agent (the “Collateral Agent”) for Lenders, provided that the
Collateral Agent shall comply with the instructions and directions of Agent (or
Lenders under this Agreement to the extent that any Credit Document empowers
Lenders to direct Agent), as to all matters relating to the Collateral,
including the maintenance and disposition thereof.


 


8.2.6        Other Rights and Remedies.


 


In
addition to all of the rights and remedies contained in any of the Credit
Documents, Agent shall have all of the rights and remedies of a secured party
under the Uniform Commercial Code or other applicable Law, all of which rights
and remedies shall be cumulative and non-exclusive, to the extent permitted by
Law.  Agent may, and upon the request of
Required Lenders shall, exercise all post-default rights granted to Agent and
Lenders under the Credit Documents or applicable Law.


 


8.3           Notice of Sale.


 


Any
notice required to be given by Agent of a sale, lease or other disposition of
the Collateral or any other intended action by Agent, if given 10 days prior to
such proposed action, shall constitute commercially reasonable and fair notice
thereof to Borrower.


 


9.             AGENT


 


9.1           Appointment.


 


Each
Lender hereby irrevocably designates, appoints and authorizes FCC, LLC to act
as Agent for such Lender under this Agreement and to execute and deliver or
accept on behalf of each Lender each of the Credit Documents. Each Lender
hereby irrevocably authorizes, and each holder of any Revolving Credit Note by
the acceptance of a Revolving Credit Note shall be deemed irrevocably to
authorize, Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and any other instruments and
agreements referred to herein, and to exercise such powers and to perform such
duties hereunder as are specifically delegated to or required of Agent by the
terms hereof, together with such powers as are reasonably incidental
thereto.  FCC, LLC agrees to act as Agent
on behalf of Lenders to the extent provided in this Agreement.


 


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9.2           Delegation of Duties.


 


Agent
may perform any of its duties hereunder by or through agents or employees (provided
such delegation does not constitute a relinquishment of its duties as Agent)
and, subject to Sections 9.5 [Reimbursement and Indemnification of Agent
by Borrower] and 9.6 [Exculpatory Provisions; Limitation of Liability], shall
be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.


 


9.3           Nature of Duties; Independent Credit Investigation.


 


Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise be deemed to
exist.  The duties of Agent shall be
mechanical and administrative in nature. 
Agent shall not have by reason of this Agreement a fiduciary or trust
relationship in respect of any Lender. 
Nothing in this Agreement, expressed or implied, is intended to or shall
be so construed as to impose upon Agent any obligations in respect of this
Agreement except as expressly set forth herein. 
Without limiting the generality of the foregoing, the use of the term “agent”
in this Agreement with reference to Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable Law.  Instead,
such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent
contracting parties.  Each Lender
expressly acknowledges that: 
(a) Agent has not made any representations or warranties to it and
that no act by Agent hereafter taken, including any review of the affairs of
Borrower, shall be deemed to constitute any representation or warranty by Agent
to any Lender; (b) it has made and will continue to make, without reliance
upon Agent, its own independent investigation of the financial condition and
affairs and its own appraisal of the creditworthiness of Borrower in connection
with this Agreement and the making and continuance of the Revolving Credit
Loans hereunder; and (c) except as expressly provided herein, Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of any Revolving Credit Loan
or at any time or times thereafter.


 


9.4           Actions in Discretion of Agent; Instructions From
Lenders.


 


Agent
agrees, upon the written request of Required Lenders, to take or refrain from
taking any action of the type specified as being within Agent’s rights, powers
or discretion herein, provided that Agent shall not be required to take
any action which exposes Agent to personal liability or which is contrary to
this Agreement or any other Credit Document or applicable Law.  In the absence of a request by Required
Lenders, Agent shall have authority, in its sole discretion, to take or not to
take any such action, unless this Agreement specifically requires the consent
of Required Lenders or all Lenders.  Any
action taken or failure to act pursuant to such instructions or discretion
shall be binding on Lenders, subject to Section 9.6 [Exculpatory
Provisions; Limitation of Liability]. 
Subject to the provisions of Section 9.6 [Exculpatory Provisions;
Limitation of Liability], no Lender shall have any right of action whatsoever
against Agent as a result of Agent acting or refraining from acting hereunder
in accordance with the instructions of Required Lenders, or in the absence of
such instructions, in the absolute discretion of Agent.


 


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9.5           Reimbursement and Indemnification of Agent by
Borrower.


 


Borrower
unconditionally agrees to pay or reimburse Agent and hold Agent harmless
against: (a) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including fees and expenses of counsel
(including the allocated costs of staff counsel), appraisers and environmental
consultants, incurred by Agent: (i) in connection with the development,
negotiation, preparation, printing, execution, administration, syndication,
interpretation and performance of Agent’s February 16, 2007 Term Sheet and
the Credit Documents;  provided, however,
Agent agrees to apply the Expense Deposit previously received from Borrower
against such costs and expenses; provided  further that Borrower’s
reimbursement obligation for such out-of-pocket costs, expenses and
disbursements up to and including the Closing Date for (a) Agent’s
financial, legal and collateral due diligence and (b) the preparation and
negotiation of the Credit Documents shall be limited to $100,000;  (ii) relating to any requested
amendments, waivers or consents pursuant to the provisions hereof;
(iii) in connection with the enforcement of any Credit Document or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under any Credit Document, whether in bankruptcy or
receivership proceedings or otherwise; and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Credit Document or in connection with any foreclosure, collection or
bankruptcy proceedings; and (b) all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent, in its capacity as such, in any way relating to or
arising out of any Credit Document or any action taken or omitted by Agent
hereunder or thereunder, provided that Borrower shall not be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements if the same results
from Agent’s gross negligence or willful misconduct, or if Borrower were not
given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that Borrower shall remain liable to
the extent such failure to give notice does not result in a loss to Borrower),
or if the same results from a compromise or settlement agreement entered into
without the consent of Borrower, which shall not be unreasonably withheld.  In addition, Borrower agrees to reimburse and
pay all reasonable out-of-pocket expenses of Agent’s regular employees and
agents engaged periodically to perform audits of Borrower’s books, records and
business properties.


 


9.6           Exculpatory Provisions; Limitation of Liability.


 


Neither
Agent nor any of its directors, officers, employees, agents, attorneys or
Affiliates shall: (a) be liable to any Lender for any action taken or
omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Credit Document, unless caused by its or their own
gross negligence or willful misconduct, (b) be responsible in any manner
to any Lender for the effectiveness, enforceability, genuineness, validity or
the due execution of any Credit Document or for any recital, representation,
warranty, document, certificate, report or statement herein or made or
furnished under or in connection with any Credit Document, or (c) be under
any obligation to any Lender to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions hereof or thereof on
the part of Borrower, or the financial condition of Borrower, or the existence
or possible existence of any Event of Default or Potential Default. No claim
may be made by Borrower, any Lender, Agent or


 


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any
of their respective Subsidiaries against Agent, any Lender or any of their
respective directors, officers, employees, agents, attorneys or Affiliates, or
any of them, for any special, indirect or consequential damages or, to the
fullest extent permitted by Law, for any punitive damages in respect of any
claim or cause of action (whether based on contract, tort, statutory liability,
or any other ground) based on, arising out of or related to any Credit Document
or the transactions contemplated hereby or any act, omission or event occurring
in connection therewith, including the negotiation, documentation,
administration or collection of the Revolving Credit Loans, and Borrower, Agent
and each Lender hereby waive, release and agree never to sue upon any claim for
any such damages, whether such claim now exists or hereafter arises and whether
or not it is now known or suspected to exist in its favor.  Each Lender agrees that, except for notices,
reports and other documents expressly required to be furnished to Lenders by
Agent hereunder or given to Agent for the account of or with copies for
Lenders, Agent and each of its directors, officers, employees, agents,
attorneys or Affiliates shall not have any duty or responsibility to provide
any Lender with credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of Borrower which may come into the possession of Agent or any
of its directors, officers, employees, agents, attorneys or Affiliates.


 


9.7           Reimbursement and Indemnification of Agent by
Lenders.


 


Each
Lender agrees to reimburse and indemnify Agent (to the extent not reimbursed by
Borrower and without limiting the Obligation of Borrower to do so) in proportion
to its Ratable Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements, including attorneys’ fees and disbursements (including the
allocated costs of staff counsel), and costs of appraisers and environmental
consultants, of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against Agent, in its capacity as such, in any way relating to
or arising out of any Credit Document or any action taken or omitted by Agent
hereunder or thereunder, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements: (a) if the same
results from Agent’s gross negligence or willful misconduct, or (b) if
such Lender were not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Lender
shall remain liable to the extent such failure to give notice does not result
in a loss to the Lender), or (c) if the same results from a compromise and
settlement agreement entered into without the consent of such Lender, which
consent shall not be unreasonably withheld. 
In addition, each Lender agrees promptly upon demand to reimburse Agent
(to the extent not reimbursed by Borrower and without limiting the Obligation
of Borrower to do so) in proportion to its Ratable Share for all amounts due
and payable by Borrower to Agent in connection with Agent’s periodic audit of
Borrower’s books, records and business properties.


 


9.8           Reliance by Agent.


 


Agent
shall be entitled to rely upon any writing, telegram, telex or teletype
message, resolution, notice, consent, certificate, letter, cablegram, statement,
order or other document or conversation by telephone or otherwise believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon the advice and opinions of counsel and other
professional advisers selected by Agent. 
Agent shall be fully justified in failing or refusing to take any action
hereunder unless it shall first be indemnified to its


 


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satisfaction
by Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.


 


9.9           Notice of Default.


 


Agent
shall not be deemed to have knowledge or notice of the occurrence of any
Potential Default or Event of Default unless Agent has received written notice
from a Lender or Borrower referring to this Agreement, describing such
Potential Default or Event of Default and stating that such notice is a “notice
of default.”


 


9.10         Notices.


 


Agent
shall send to each Lender a copy of all notices received from Borrower pursuant
to the provisions of the Credit Documents promptly upon receipt thereof.


 


9.11         Lenders in Their Individual Capacities; Agent in its
Individual Capacity.


 


With
respect to its Revolving Credit Commitment and the Revolving Credit Loans made
by it and any other rights and powers given to it as a Lender hereunder or
under any of the other Credit Documents, Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it
were not Agent, and the term “Lender” and “Lenders” shall, unless the context
otherwise indicates, include Agent in its individual capacity.  FCC, LLC  and
its Affiliates and each Lender and such Lender’s Affiliates may, without
liability to account, except as prohibited herein, make Revolving Credit Loans
to, issue letters of credit for the account of, acquire equity interests in,
accept deposits from, discount drafts for, act as trustee under indentures of,
and generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with, Borrower and its Affiliates, in the case
of Agent, as though it were not acting as Agent hereunder, and in the case of
each Lender, as though such Lender were not a Lender hereunder, in each case,
without notice to or consent of the other Lenders.  Lenders acknowledge that, pursuant to such
activities, Agent or its Affiliates may: (a) receive information regarding
Borrower or any of its Affiliates (including information that may be subject to
confidentiality obligations in favor of Borrower or such Affiliate) and
acknowledge that Agent shall be under no obligation to provide such information
to them, and (b) accept fees and other consideration from Borrower for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.  Lenders
acknowledge that FCC, LLC has entered into the Servicing Agreement with
Borrower.


 


9.12         Holders of Notes.


 


Agent
may deem and treat any payee of any Revolving Credit Note as the owner thereof
for all purposes hereof unless and until written notice of the assignment or
transfer thereof shall have been filed with Agent.  Any request, authority or consent of any
Person who at the time of making such request or giving such authority or consent
is the holder of any Revolving Credit Note shall be conclusive and binding on
any subsequent holder, transferee or assignee of such Revolving Credit Note or
of any Revolving Credit Note or Revolving Credit Notes issued in exchange
therefor.


 


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9.13         Equalization of Lenders.


 


Lenders
and the holders of any participations in any Revolving Credit Notes agree among
themselves that,  with respect to all amounts
received by any Lender or any such holder for application on any Obligation
hereunder or under any Revolving Credit Note or under any such participation,
whether received by voluntary payment, by realization upon security, by the
exercise of the right of set-off or banker’s lien, by counterclaim or by any other
non-pro rata source, equitable adjustment will be made in the manner stated in
the following sentence so that, in effect, all such excess amounts will be
shared ratably among Lenders and such holders in proportion to their interests
in payments under the Revolving Credit Notes, except as otherwise provided in
Section 3.4.3 [Agent’s and Lender’s Rights], 4.4.2 [Replacement of a
Lender] or 4.6 [Additional Compensation in Certain Circumstances].  Lenders or any such holder receiving any such
amount shall purchase for cash from each of the other Lenders an interest in
such Lender’s Revolving Credit Loans in such amount as shall result in a
ratable participation by Lenders and each such holder in the aggregate unpaid
amount under the Revolving Credit Notes, provided that if all or any
portion of such excess amount is thereafter recovered from the Lender or the
holder making such purchase, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, together with interest or other
amounts, if any, required by Law to be paid by the Lender or the holder making
such purchase.


 


9.14         Successor Agent.


 


Agent:
(a) may resign as Agent or (b) shall resign if such resignation is
requested by Required Lenders (if Agent is a Lender, Agent’s Revolving Credit
Loans and its Revolving Credit Commitment shall be considered in determining
whether Required Lenders have requested such resignation) or required by
Section 4.4.2 [Replacement of a Lender], in either case of (a) or (b) by
giving not less than 30 days’ prior written notice to Borrower.  If Agent shall resign under this Agreement,
then either: (i) Required Lenders shall appoint from among Lenders a
successor agent for Lenders, or (ii) if a successor agent shall not be so
appointed within the 30 day period following Agent’s notice to Lenders of its
resignation, then Agent shall appoint a successor agent who shall serve as
Agent until such time as Required Lenders appoint a successor agent in
accordance with clause (i) above. 
Upon its appointment pursuant to either clause (i) or (ii) above,
such successor agent shall succeed to the rights, powers and duties of Agent,
and the term “Agent” shall mean such successor agent,  effective
upon its appointment, and the former Agent’s rights, powers and duties as Agent
shall be terminated without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement.  After the resignation of any Agent hereunder,
the provisions of this Section 9 [Agent] shall inure to the benefit of
such former Agent and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by
it while it was an Agent under this Agreement.


 


9.15         Beneficiaries.


 


Except
as expressly provided herein, the provisions of this Section 9 [Agent] are
solely for the benefit of Agent and Lenders, and Borrower shall not have any
right to rely on or enforce any of the provisions hereof.  In performing its functions and duties under
this Agreement, Agent shall act solely as agent of Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship
of agency or trust with or for Borrower.


 


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9.16         Availability of Funds.


 


Agent
may assume that each Lender has made or will make the proceeds of a Revolving
Credit Loan available to Agent unless Agent shall have been notified by such
Lender on or before the later of: (a) the close of business on the
Business Day preceding the Borrowing Date with respect to such Revolving Credit
Loan, or (b) 2 hours before the time on which Agent actually funds the
proceeds of such Revolving Credit Loan to Borrower (whether using its own funds
pursuant to this Section 9.16 or using proceeds deposited with Agent by
Lenders and whether such funding occurs before or after the time on which
Lenders are required to deposit the proceeds of such Revolving Credit Loan with
Agent).  Agent may, in reliance upon such
assumption (but shall not be required to), make available to Borrower a
corresponding amount.  If such
corresponding amount is not in fact made available to Agent by such Lender,
Agent shall be entitled to recover such amount on demand from such Lender (or,
if such Lender fails to pay such amount forthwith upon such demand from
Borrower) together with interest thereon, in respect of each day during the
period commencing on the date such amount was made available to Borrower and
ending on the date Agent recovers such amount, at a rate per annum equal to: (i) the
Federal Funds Effective Rate during the first 3 days after such interest shall
begin to accrue and (ii) the applicable interest rate in respect of such
Revolving Credit Loan after the end of such 3-day period.


 


9.17         Calculations.


 


In
the absence of gross negligence or willful misconduct, Agent shall not be
liable for any error in computing the amount payable to any Lender whether in
respect of the Revolving Credit Loans, fees or any other amounts due to Lenders
under this Agreement.  In the event an
error in computing any amount payable to any Lender is made, Agent, Borrower
and each affected Lender shall, forthwith upon discovery of such error, make
such adjustments as shall be required to correct such error, and any compensation
therefor will be calculated at the Federal Funds Effective Rate.


 


9.18         No Reliance on Agent’s Customer Identification
Program.


 


Each
Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on Agent to carry out such
Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with Borrower, its Affiliates or
its agents, the Credit Documents or the transactions hereunder or contemplated
hereby: (a) any identity verification procedures, (b) any
recordkeeping, (c) comparisons with government lists, (d) customer
notices or (e) other procedures required under the CIP Regulations or such
other Laws.


 


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10.           MISCELLANEOUS


 


10.1         Modifications, Amendments or Waivers.


 


With
the written consent of Required Lenders, Agent, acting on behalf of all
Lenders, and Borrower may from time to time enter into written agreements
amending or changing any provision of any Credit Document or the rights of
Lenders or Borrower hereunder or thereunder, or may grant written waivers or
consents to a departure from the due performance of the Obligations of Borrower
hereunder or thereunder.  Any such
agreement, waiver or consent made with such written consent shall be effective
to bind all Lenders and Borrower; provided, that no such agreement,
waiver or consent may be made which will:


 


10.1.1      Increase of Commitment;
Extension of Expiration Date.


 


Increase
the amount of the Revolving Credit Commitment of any Lender hereunder (except
as set forth in Section 2.9 [Increase in Revolving Credit Commitments])
or, extend the Expiration Date without the prior written consent of all
Lenders;


 


10.1.2      Extension of Payment;
Reduction of Principal Interest or Fees; Modification of Terms of Payment.


 


Whether
or not any Revolving Credit Loans are outstanding, extend the time for payment
of principal or interest of any Revolving Credit Loan (excluding the due date
of any mandatory prepayment of a Revolving Credit Loan or any mandatory
Revolving Credit Commitment reduction in connection with such a mandatory
prepayment hereunder), the Annual Fee or any other fee payable to any Lender,
or reduce the principal amount of or the rate of interest borne by any
Revolving Credit Loan or reduce the Annual Fee or any other fee payable to any
Lender, or otherwise affect the terms of payment of the principal of or
interest of any Revolving Credit Loan, the Annual Fee or any other fee payable
to any Lender without the prior written consent of each Lender directly
affected thereby;


 


10.1.3      Release of Collateral or
Guarantor (Anti-Fraud).


 


Except
for sales of assets permitted by Section 7.2.7 [Dispositions of Assets or
Subsidiaries], release any Collateral consisting of Membership Interests of
Borrower or release substantially all of the assets of Borrower or SAI from its
Obligations under the Guaranty Agreement (Anti-Fraud) without the prior written
consent of all Lenders; or


 


10.1.4      Miscellaneous.


 


Amend
Section 4.2 [Pro Rata Treatment of Lenders], 9.6 [Exculpatory Provisions;
Limitation of Liability] or 9.13 [Equalization of Lenders] or this
Section 10.1, alter any provision regarding the pro rata treatment of
Lenders, change the definition of Required Lenders, or change any requirement
providing for Lenders or Required Lenders to authorize the taking of any action
hereunder without the prior written consent of all Lenders;


 


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provided, further, that
no agreement, waiver or consent which would modify the interests, rights or
obligations of Agent in its capacity as Agent shall be effective without the
prior written consent of Agent.


 


10.2         No Implied Waivers; Cumulative Remedies; Writing
Required.


 


No
course of dealing and no delay or failure of Agent or any Lender in exercising
any right, power, remedy or privilege under any Credit Document shall affect
any other or future exercise thereof or operate as a waiver thereof, nor shall
any single or partial exercise thereof or any abandonment or discontinuance of
steps to enforce such a right, power, remedy or privilege preclude any further
exercise thereof or of any other right, power, remedy or privilege.  The rights and remedies of Agent and Lenders
under any Credit Document are cumulative and not exclusive of any rights or
remedies which they would otherwise have. 
Any waiver, permit, consent or approval of any kind or character on the
part of any Lender of any breach or default under this Agreement or any such
waiver of any provision or condition of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such writing.


 


10.3         Reimbursement and Indemnification of Lenders by
Borrower; Taxes.


 


Borrower
agrees unconditionally upon demand to pay or reimburse to each Lender (other
than Agent, as to which Borrower’s Obligations are set forth in
Section 9.5 [Reimbursement and Indemnification of Agent By Borrower]) and
to save such Lender harmless against: (a) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements (including fees and
expenses of counsel (including allocated costs of staff counsel) for one Lender
except with respect to (i) and (ii) below), incurred by such Lender:
(i) in connection with the administration and interpretation of this
Agreement, and other instruments and documents to be delivered hereunder,
(ii) relating to any amendments, waivers or consents pursuant to the
provisions hereof, (iii) in connection with the enforcement of any Credit
Document, or collection of amounts due hereunder or thereunder or the proof and
allowability of any claim arising under any Credit Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any
workout or restructuring or in connection with the protection, preservation,
exercise or enforcement of any of the terms hereof or of any rights hereunder
or under any other Credit Document or in connection with any foreclosure,
collection or bankruptcy proceedings, or (b) all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Lender, in its capacity as such, in any
way relating to or arising out of any Credit Document or any action taken or
omitted by such Lender hereunder or thereunder, provided that Borrower
shall not be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements: (A) if the same results from such Lender’s gross negligence
or willful misconduct, or (B) if Borrower were not given notice of the
subject claim and the opportunity to participate in the defense thereof, at its
expense (except that Borrower shall remain liable to the extent such failure to
give notice does not result in a loss to Borrower), or (C) if the same
results from a compromise or settlement agreement entered into without the
consent of Borrower, which consent shall not be unreasonably withheld by
Borrower.  Lenders will attempt to
minimize the fees and expenses of legal counsel for Lenders which are subject
to reimbursement by Borrower hereunder by considering the usage of one law firm
to represent Lenders and Agent if appropriate under the circumstances.


 


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Borrower
agrees unconditionally to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by
Agent or any Lender to be payable in connection with any Credit Document, and
Borrower agrees unconditionally to save Agent and Lenders harmless from and
against any and all present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in paying any such
taxes, fees or impositions.


 


10.4         Holidays.


 


Whenever
payment of a Revolving Credit Loan to be made or taken hereunder shall be due
on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 3.2 [Interest Periods] with
respect to Interest Periods under the Euro-Rate) and such extension of time
shall be included in computing interest and fees, except that the Revolving
Credit Loans shall be due on the Business Day preceding the Expiration Date if
the Expiration Date is not a Business Day. 
Whenever any payment or action to be made or taken hereunder (other than
payment of the Revolving Credit Loans) shall be stated to be due on a day which
is not a Business Day, such payment or action shall be made or taken on the
next following Business Day, and such extension of time shall not be included
in computing interest or fees, if any, in connection with such payment or
action.


 


10.5         Funding by Branch, Subsidiary or Affiliate.


 


10.5.1      Notional Funding.


 


Each
Lender shall have the right from time to time, without notice to Borrower, to
deem any branch, Subsidiary or Affiliate (which for the purposes of this
Section 10.5 shall mean any corporation or association which is directly
or indirectly controlled by or is under direct or indirect common control with
any corporation or association which directly or indirectly controls such
Lender) of such Lender to have made, maintained or funded any Revolving Credit
Loan to which the Euro-Rate applies at any time, provided that
immediately following (on the assumption that a payment were then due from
Borrower to such other office), and as a result of such change, Borrower would
not be under any greater financial obligation pursuant to Section 4.6
[Additional Compensation in Certain Circumstances] than it would have been in
the absence of such change.  Notional funding
offices may be selected by each Lender without regard to such Lender’s actual
methods of making, maintaining or funding the Revolving Credit Loans or any
sources of funding actually used by or available to such Lender.


 


10.5.2      Actual Funding.


 


Each
Lender shall have the right from time to time to make or maintain any Revolving
Credit Loan by arranging for a branch, Subsidiary or Affiliate of such Lender
to make or maintain such Revolving Credit Loan subject to the last sentence of
this Section 10.5.2.  If any Lender
causes a branch, Subsidiary or Affiliate to make or maintain any part of the
Revolving Credit Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Revolving Credit Loans to the same extent as if such Revolving
Credit Loans were made or maintained by such Lender, but in no event shall any
Lender’s use of such a branch, Subsidiary or Affiliate to make or maintain any
part of the Revolving Credit Loans hereunder cause such Lender or such branch,
Subsidiary


 


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or
Affiliate to incur any cost or expenses payable by Borrower hereunder or
require Borrower to pay any other compensation to any Lender (including any
expenses incurred or payable pursuant to Section 4.6 [Additional
Compensation in Certain Circumstances]) which would otherwise not be incurred.


 


10.6         Notices.


 


Any
notice, request, demand, direction or other communication (for purposes of this
Section 10.6 only, a “Notice”) to be given to or made upon any party
hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes means of electronic transmission (i.e.,
“e-mail”) or facsimile transmission in accordance with this Section 10.6.  Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on Schedule 1.1(B) or in accordance with any
subsequent unrevoked Notice from any such party that is given in accordance
with this Section 10.6.  Any Notice
shall be effective:


 


(a)           In the case of
hand-delivery, when delivered;


 


(b)           If given by mail, 4 days
after such Notice is deposited with the United States Postal Service, with
first-class postage prepaid, return receipt requested;


 


(c)           In the case of a telephonic
Notice, when a party is contacted by telephone, if delivery of such telephonic
Notice is confirmed no later than the next Business Day by hand delivery, a
facsimile or electronic transmission or overnight courier delivery of a
confirmatory notice (received at or before noon on such next Business Day);


 


(d)           In the case of a facsimile
transmission, when sent to the applicable party’s facsimile machine’s telephone
number if the party sending such Notice receives confirmation of the delivery
thereof from its own facsimile machine;


 


(e)           In the case of electronic
transmission, when actually received; and


 


(f)            If given by any other means
(including by overnight courier), when actually received.


 


Any
Lender giving a Notice to Borrower shall concurrently send a copy thereof to
Agent, and Agent shall promptly notify the other Lenders of Agent’s receipt of
such Notice.  Borrower authorizes Agent
and Lenders to send commercial, business and other information to Borrower via
facsimile and/or electronic transmission.


 


10.7         Severability.


 


The
provisions of this Agreement are intended to be severable.  If any provision of this Agreement shall be
held invalid or unenforceable in whole or in part in any jurisdiction, such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.


 


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10.8                           Governing Law.


 


This
Agreement shall be deemed to be a contract under the Laws of the State of New
York and shall, pursuant to New York General Obligations Law Section 5-1401,
for all purposes be governed by and construed and enforced in accordance with
the laws of the State of New York.


 


10.9                           Prior Understanding.


 


This
Agreement and the other Credit Documents supersede all prior understandings and
agreements, whether written or oral, among the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements, proposals, term sheets and commitments.


 


10.10                     Duration; Survival.


 


All
representations and warranties of Borrower contained herein or made in
connection herewith shall survive the making of Revolving Credit Loans and
shall not be waived by the execution and delivery of this Agreement, any
investigation by Agent or Lenders, the making of Revolving Credit Loans or
payment in full of the Revolving Credit Loans. 
All covenants and agreements of Borrower contained in Sections 7.1
[Affirmative Covenants], 7.2 [Negative Covenants] and 7.3 [Reporting
Requirements] shall continue in full force and effect from and after the date
hereof so long as Borrower may borrow and until termination of the Revolving
Credit Commitments and payment in full of the Revolving Credit Loans.  All covenants and agreements of Borrower
contained herein relating to the payment of principal, interest, premiums,
additional compensation or expenses and indemnification, including those set
forth in any Revolving Credit Notes, Section 4 [Payments] and
Sections 9.5 [Reimbursement and Indemnification of Agent by Borrower], 9.7
[Reimbursement and Indemnification of Agent by Lenders] and 10.3 [Reimbursement
and Indemnification of Lenders by Borrower; Taxes], shall survive payment in
full of the Revolving Credit Loans and termination of the Revolving Credit
Commitments.


 


10.11                     Successors and Assigns.


 


(a)                                  This Agreement
shall be binding upon and shall inure to the benefit of Lenders, Agent,
Borrower and their respective successors and assigns, except that Borrower may
not assign or transfer any of its rights and Obligations hereunder or any
interest herein.  Each Lender may, at its
own cost, make assignments of or sell participations in all or any part of its
Revolving Credit Commitments and the Revolving Credit Loans made by it to one
or more banks or other entities, subject to the consent of Agent with respect
to any assignee, such consent not to be unreasonably withheld, provided
that:  (i) any assignment by a
Lender to a Person other than an Affiliate of such Lender may not be made in
amounts less than the lesser of $5,000,000 or the amount of the assigning
Lender’s Revolving Credit Commitment, and (ii) any assignment made by a
Lender of any portion of its Revolving Credit Commitment, or Revolving Credit
Loans, shall be a pro rata assignment of its Revolving Credit Commitment and
Revolving Credit Loans.  In the case of
an assignment, upon receipt by Agent of the Assignment and Assumption
Agreement, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it had been a signatory


 


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Lender
hereunder, the Revolving Credit Commitments shall be adjusted accordingly, and
upon surrender of any Revolving Credit Note subject to such assignment,
Borrower shall execute and deliver a new Revolving Credit Note to the assignee
in an amount equal to the amount of the Revolving Credit Commitment assumed by
it and a new Revolving Credit Note to the assigning Lender in an amount equal
to the Revolving Credit Commitment retained by it hereunder.  Any Lender that assigns any or all of its
Revolving Credit Commitment or Revolving Credit Loans to a Person other than an
Affiliate of such Lender shall pay to Agent a service fee in the amount of
$3,500 for each assignment.  In the case
of a participation, the participant shall only have the rights specified in
Section 8.2.3 [Set-off] (the participant’s rights against such Lender in
respect of such participation to be those set forth in the agreement executed
by such Lender in favor of the participant relating thereto and not to include
any voting rights except with respect to changes of the type referenced in
Sections 10.1.1 [Increase of Revolving Credit Commitment, Etc.],
10.1.2 [Extension of Payment, Etc.], or 10.1.3 [Release of Collateral or
Guarantor (Anti-Fraud)]), all of such Lender’s obligations under any Credit
Document shall remain unchanged, and all amounts payable by Borrower hereunder
or thereunder shall be determined as if such Lender had not sold such
participation.


 


(b)                                 Any assignee or
participant which is not incorporated under the Laws of the United States of
America or a state thereof shall deliver to Borrower and Agent the Withholding
Certificate described in Section 10.17.1 [Tax Withholding].  Each Lender may furnish any publicly
available information concerning Borrower and any other information concerning
Borrower in the possession of such Lender from time to time to assignees and
participants (including prospective assignees or participants), provided
that such assignees and participants agree to be bound by the provisions of
Section 10.12 [Confidentiality].


 


(c)                                  Notwithstanding
any other provision in this Agreement, any Lender may at any time pledge or
grant a security interest in all or any portion of its rights under this
Agreement, any Revolving Credit Note and the other Credit Documents to any
Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR Section 203.14 without notice to or consent of
Borrower or Agent.  No such pledge or
grant of a security interest shall release the transferor Lender of its
obligations hereunder or under any other Credit Document.


 


10.12                     Confidentiality.


 


10.12.1            General.


 


Agent
and Lenders each agree to keep confidential all information obtained from
Borrower which is nonpublic and confidential or proprietary in nature
(including any information Borrower specifically designates as confidential),
except as provided below, and to use such information only in connection with
their respective capacities under this Agreement and for the purposes
contemplated hereby.  Agent and Lenders
shall be permitted to disclose such information: (a) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain confidentiality,
(b) to assignees and participants as contemplated by Section 10.11
[Successors and Assigns], and prospective assignees and participants, provided,
however, that the Whitecap financial statements shall not be provided to any
prospective assignee or participant unless such prospective assignee or


 


79

















 


participant
is a U.S. or foreign bank, a lender to Agent, Siemens Financial Services, Inc.
(or any Affiliate thereof), or Siemens First Capital Commercial Finance, LLC
(or any Affiliate thereof), (c) to the extent requested by any Official
Body or, with notice to Borrower, as otherwise required by applicable Law or by
any subpoena or similar legal process, or in connection with any investigation
or proceeding arising out of the transactions contemplated by this Agreement,
(d) if it becomes publicly available other than as a result of a breach of
this Agreement or becomes available from a source not known to be subject to
confidentiality restrictions, or (e) if Borrower shall have consented to
such disclosure.


 


Borrower
agrees to keep confidential the terms of Agent’s February 16, 2007 Term
Sheet and the Credit Documents, except Borrower shall be permitted to disclose
such terms: (i) to outside legal counsel, accountants and other
professional advisors who need to know such information, subject to agreement
of such Persons to maintain confidentiality, (ii) to the extent requested
by any Official Body or, with notice to Agent, as otherwise required by
applicable Law or by any subpoena or similar legal process, or in connection
with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iii) if it becomes publicly available
other than as a result of a breach of this Agreement or becomes available from
a source not known to be subject to confidentiality restrictions, or (iv) if
Agent shall have consented to such disclosure.


 


10.12.2                                    Sharing
Information With Affiliates of Lenders.


 


Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to Borrower or one or more of its
Affiliates (in connection with this Agreement or otherwise) by any Lender or by
one or more Subsidiaries or Affiliates of such Lender and Borrower hereby
authorizes each Lender to share any information delivered to such Lender by
Borrower pursuant to this Agreement, or in connection with the decision of such
Lender to enter into this Agreement, to any such Subsidiary or Affiliate of
such Lender, it being understood that any such Subsidiary or Affiliate of any
Lender receiving such information shall be bound by the provisions of Section 10.12.1
[General] as if it were a Lender hereunder. 
Such authorization shall survive the repayment of the Revolving Credit
Loans and other Obligations and the termination of the Revolving Credit
Commitments.


 


10.13                     Counterparts.


 


This
Agreement may be executed by different parties hereto on any number of separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.


 


10.14                     Agent’s or Lender’s Consent.


 


Whenever
Agent’s or any Lender’s consent is required to be obtained under any Credit
Document as a condition to any action, inaction, condition or event, Agent and
each Lender shall be authorized to give or withhold such consent in its sole
and absolute discretion (unless expressly stated otherwise herein) and to
condition its consent upon the giving of additional collateral, the payment of
money or any other matter.


 


80

















 


10.15                     Exceptions.


 


The
representations, warranties and covenants contained herein shall be independent
of each other, and no exception to any representation, warranty or covenant
shall be deemed to be an exception to any other representation, warranty or
covenant contained herein unless expressly provided, nor shall any such
exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.


 


10.16                     CONSENT TO FORUM; WAIVER OF
JURY TRIAL.


 


EACH OF BORROWER, AGENT, AND LENDERS HEREBY IRREVOCABLY CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW
YORK, NEW YORK, AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED
MAIL DIRECTED TO SUCH BORROWER AT THE ADDRESSES PROVIDED FOR IN SECTION 10.6
[NOTICES] AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT THEREOF.  EACH OF BORROWER,
AGENT, AND LENDERS WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION
INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE
BASED ON LACK OF JURISDICTION OR VENUE. 
BORROWER, AGENT AND LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE COLLATERAL TO THE FULL EXTENT
PERMITTED BY LAW.


 


10.17                     Certifications From Lenders
and Participants.


 


10.17.1                                    Tax Withholding.


 


Each
Lender or assignee or participant of a Lender that is not incorporated under
the Laws of the United States of America or a state thereof (and, upon the
written request of Agent, each other Lender or assignee or participant of a
Lender) agrees that it will deliver to Borrower and Agent 2 duly completed
appropriate valid Withholding Certificates (as defined under § 1.1441-1(c)(16)
of the Income Tax Regulations (the “Regulations”)) certifying its status (i.e.
U.S. or foreign person) and, if appropriate, making a claim of reduced, or
exemption from, U.S. withholding tax on the basis of an income tax treaty or an
exemption provided by the Internal Revenue Code.  The term “Withholding Certificate” means a Form W-9;
a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related
statements and certifications as required under § 1.1441-1(e)(2) and/or
(3) of the Regulations; a statement described in §1.871-14(c)(2)(v) of
the Regulations; or any other certificates under the Internal Revenue Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person.  Each
Lender, assignee or participant required to deliver to Borrower and Agent a
Withholding Certificate pursuant to the preceding sentence shall deliver such
valid Withholding Certificate as follows: 
(a) each Lender which is a party hereto on the Closing Date shall
deliver such valid Withholding Certificate at least 5 Business Days prior to
the first date on which any interest or fees are payable by Borrower hereunder
for the account of such Lender;  and (b) each


 


81

















 


assignee
or participant shall deliver such valid Withholding Certificate at least 5
Business Days before the effective date of such assignment or participation
(unless Agent in its sole discretion shall permit such assignee or participant
to deliver such valid Withholding Certificate less than 5 Business Days before
such date in which case, it shall be due on the date specified by Agent).  Each Lender, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver to
Borrower and Agent 2 additional copies of such Withholding Certificate (or a
successor form) on or before the date that such Withholding Certificate expires
or becomes obsolete or after the occurrence of any event requiring a change in
the most recent Withholding Certificate so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be reasonably requested by
Borrower or Agent.  Notwithstanding the
submission of a Withholding Certificate claiming a reduced rate of or exemption
from U.S. withholding tax, Agent shall be entitled to withhold United States
federal income taxes at the full 30% withholding rate if in its reasonable
judgment it is required to do so under the due diligence requirements imposed
upon a withholding agent under § 1.1441-7(b) of the Regulations.  Further, Agent is indemnified under
§ 1.1461-1(e) of the Regulations against any claims and demands of
any Lender or assignee or participant of a Lender for the amount of any tax it
deducts and withholds in accordance with regulations under § 1441 of the
Internal Revenue Code.


 


10.17.2                                    USA Patriot Act.


 


Each
Lender or assignee or participant of a Lender that is not incorporated under
the Laws of the United States of America or a state thereof (and is not
excepted from the certification requirement contained in Section 313 of
the USA Patriot Act and the applicable regulations because it is both: (a) an
affiliate of a depository institution or foreign Lender that maintains a
physical presence in the United states or foreign county, and (b) subject
to supervision by a banking authority regulating such affiliated depository
institution or foreign lender) shall deliver to Agent the certification, or, if
applicable, recertification, certifying that such Lender is not a “shell” and
certifying to other matters as required by Section 313 of the USA Patriot
Act and the applicable regulations: (i) within 10 days after the Closing
Date, and (ii) at such other times as are required under the USA Patriot
Act.


 


10.18                     Related Entities.


 


Nothing
in this Agreement shall be deemed to prohibit Whitecap, in the event that no
Availability exists and the Lenders do not increase the Revolving Credit
Commitments to increase Availability, from creating an additional entity for
the purpose of entering the security alarm business and purchasing security
alarm accounts, so long as such entity is separate from Borrower, operates
under a different name, and is not a party to the SAI Servicer Agreement or the
Put-Call Agreement, and no customers or contracts are transferred from Borrower
to such new entity.


 


[SIGNATURE PAGE FOLLOWS]


 


82

















 


[SIGNATURE PAGE 1 OF 1 - CREDIT AGREEMENT]


 


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


 


	
   

  	
  ALARM
  FUNDING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s / Westin Lovy

  
	
   

  	
  Name:

  	
  Westin
  Lovy

  
	
   

  	
  Title:

  	
  Managing
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FCC,
  LLC,

  
	
   

  	
  as
  a Lender and as Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s / Lee Elmore

  
	
   

  	
  Name:

  	
  Lee
  Elmore

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  



 

















 


SCHEDULE 1.1(B)


 


REVOLVING CREDIT COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES


 


Part 1
- Commitments of Lenders and Addresses for Notices to Lenders


 


	
  Lender

  	
   

  	
  Amount of Commitment

  for Revolving Credit Loans

  	
   

  	
  Aggregate

  Ratable Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: FCC, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address: 3520
  N.W. 58th Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oklahoma City, OK 73112

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attention: Lee
  Elmore, Senior Vice President

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  100

  	
  %

  
	
  Telephone: 405-917-1135

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telecopy:
  405-917-9660

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  40,000,000

  	
   

  	
  100

  	
  %

  



 

















 


SCHEDULE 1.1(B)


 


REVOLVING CREDIT COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES


 


Part 2
- Addresses for Notices to Agent and Borrower:


 


AGENT:


 


Name:
FCC, LLC


	
  Address:

  	
  3520
  N.W. 58th Street

  	
   

  
	
   

  	
  Oklahoma
  City, OK 73112

  	
   

  



Attention:
Lee Elmore, Senior Vice President


	
  Telephone:

  	
  405-917-1135

  
	
  Telecopy:

  	
  405-917-9660

  



 


BORROWER:


 


Name:
Alarm Funding, LLC


	
  Address:

  	
  800
  Connecticut Ave., Suite E-403

  	
   

  
	
   

  	
  Norwalk,
  CT 06854

  	
   

  



Attention:
Westin H. Lovy


	
  Telephone:

  	
  203-656-4848

  
	
  Telecopy:

  	
  203-656-1994