Document:

Exhibit 10.1

 

FIFTH LOAN MODIFICATION AGREEMENT

 

This Fifth Loan Modification Agreement (this “Loan
Modification Agreement”) is entered into as of November 13, 2009, by and
between SILICON VALLEY BANK, a California
corporation with its principal place of business at 3003 Tasman Drive,
Santa Clara, California 95054 and with a loan production office located at One
Newton Executive Park, Suite 200, 2221 Washington Street, Newton,
Massachusetts 02462 (“Bank”) and AMERICAN SCIENCE AND
ENGINEERING, INC., a Massachusetts corporation with its chief
executive office located at 829 Middlesex Turnpike, Billerica,
Massachusetts  01821 (“Borrower”).

 

1.                                       DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS.  Among other indebtedness and
obligations which may be owing by Borrower to Bank, Borrower is indebted to
Bank pursuant to a loan arrangement dated as of August 11, 2003, evidenced
by, among other documents, a certain Loan and Security Agreement dated as of August 11,
2003, between Borrower and Bank, as amended by a certain First Loan
Modification Agreement dated as of June 30, 2004, between Borrower and
Bank, as amended by a certain Second Loan Modification Agreement dated as of November 30,
2004, between Borrower and Bank, as amended by a certain Third Loan Modification
Agreement dated as of November 16, 2006, between Borrower and Bank, and as
further amended by a certain Fourth Loan Modification Agreement dated as of November 14,
2008, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement.

 

2.                                       DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by
the Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the “Security Documents”).

 

Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Obligations shall be referred to as
the “Existing Loan Documents”.

 

3.                                       DESCRIPTION OF CHANGE IN TERMS.

 

1.                                       Modifications to Loan Agreement.

 

1.                                       The Loan Agreement shall be amended by deleting the following text,
appearing in Section 2.1.2(a) thereof:

 

“                                          (a)                                  As part
of the Revolving Line, Bank shall issue or have issued Letters of Credit for
Borrower’s account.  The face amount of
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit and any Letter of Credit Reserve) may not exceed Forty Million Dollars
($40,000,000.00).”

 

and inserting in lieu thereof the following:

 

“                                          (a)                                  As part of the Revolving Line, Bank shall issue or
have issued Letters of Credit for Borrower’s account.  The face amount of outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed Thirty Million Dollars ($30,000,000.00).”

 

2.                                       The Loan Agreement shall be amended by deleting the following appearing
as Section 2.1.4 thereof:

 

“2.1.4               Cash Management Services Sublimit.  Borrower may use up to $10,000,000.00 for the
Bank’s Cash Management Services, which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in the various cash management services agreements related to such Cash
Management Services (the “Cash Management Services”).  Such aggregate amounts utilized under the
Cash Management Services Sublimit shall at all times reduce the amount
otherwise available for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrower
or any amounts that are not paid by Borrower for any Cash Management Services
will be treated as Advances under the Revolving Line and will accrue interest
at the interest rate applicable to Advances.”

 

and inserting in lieu
thereof the following:

 

 

 

“2.1.4               Cash Management Services Sublimit.  Borrower may use up to $30,000,000.00 for the
Bank’s Cash Management Services, which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in the various cash management services agreements related to such Cash
Management Services (the “Cash Management Services”).  Such aggregate amounts utilized under the
Cash Management Services Sublimit shall at all times reduce the amount
otherwise available for Credit Extensions under the Revolving Line.  Any amounts Bank pays on behalf of Borrower
or any amounts that are not paid by Borrower for any Cash Management Services
will be treated as Advances under the Revolving Line and will accrue interest
at the interest rate applicable to Advances.”

 

3.                                       The Loan Agreement shall be amended by deleting the following appearing
as Section 2.2 thereof:

 

“2.2                         Overadvances.  If, at any time Borrower’s Unrestricted Cash,
Cash Equivalents, and short-term investments maintained with Bank or Bank’s
Affiliates are less than Sixty Million Dollars ($60,000,000.00) for a period of
thirty (30) consecutive days, and the Credit Extensions under Sections 2.1.1,
2.1.2, 2.1.3 and 2.1.4 exceed the lesser of either (a) the Revolving Line
or (b) the Borrowing Base, Borrower shall immediately pay to Bank in cash
such excess.”

 

and inserting in lieu thereof the following:

 

“2.2                         Overadvances. 
If, at any time Borrower’s Unrestricted Cash, Cash Equivalents, and
short-term investments maintained with Bank or Bank’s Affiliates are less than
Forty Million Dollars ($40,000,000.00) for a period of thirty (30) consecutive
days, and the Credit Extensions under Sections 2.1.1, 2.1.2, 2.1.3 and 2.1.4
exceed the lesser of either (a) the Revolving Line or (b) the
Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.”

 

4.                                       The Loan Agreement shall be amended by deleting the following appearing
as Sections 2.4(b) thereof:

 

“                                          (b)                                 Unused Revolving Line Facility Fee.  A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount
equal to one-half of one percent (0.50%) per annum of the average unused
portion of the Revolving Line, as determined by Bank.   For purposes hereof, any Letter of Credit
Reserve, any F/X Reserve, or Cash Management Services held or in place for any
calendar year shall constitute a utilization of the Revolving Line. Borrower
shall not be entitled to any credit, rebate or repayment of any Unused
Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding
any termination of the Agreement or the suspension or termination of Bank’s
obligation to make loans and advances hereunder.  Notwithstanding the foregoing, such Unused
Revolving Line Facility Fee shall be waived for any quarter in which Credit
Extensions have been made in an aggregate average amount equal to or greater
than Twenty-Five Million Dollars ($25,000,000.00) for such quarter.”

 

and inserting in lieu thereof the following:

 

“                                          (b)                                 Intentionally Deleted.”

 

 

5.                                       The Loan Agreement shall be amended by
deleting the following appearing as Section 6.2(a) thereof:

 

“                                          (a)                                  Borrower shall
deliver to Bank:  (i) as soon as
available, but no later than thirty (30) days after the last day of each month,
a company prepared consolidated balance sheet and income statement covering
Borrower’s consolidated operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon as available, but
no later than ninety (90) days after the last day of Borrower’s fiscal year,
audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion on the financial statements from
an independent certified public accounting firm reasonably acceptable to Bank; (iii) within
five (5) days of filing, copies of all statements, reports and notices
made available to Borrower’s security holders or to any holders of Subordinated
Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission; (iv) a prompt report of any legal actions pending
or threatened against Borrower or any Subsidiary that is reasonably likely to
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; (v) prompt notice of any material
change in the composition of the Intellectual Property, or the registration of
any copyright, including any subsequent ownership right of Borrower in or to
any Copyright, Patent or Trademark not shown in any intellectual property
security agreement between Borrower and Bank or knowledge of an event that
materially adversely affects the value of the Intellectual Property; and (vi) budgets,
sales projections, operating plans or other financial information reasonably
requested by Bank.”

 

and inserting in lieu
thereof the following:

 

“                                          (a)                                  Borrower shall
deliver to Bank (or, in the case of the items in clause (i) below, make
available by posting on www.sec.gov):  (i) within
five (5) days of filing, copies of all statements, reports and notices
made available to Borrower’s security holders or to any holders of Subordinated
Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission; (ii) a prompt report of any legal actions pending
or threatened against Borrower or any Subsidiary that is reasonably likely to
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; and (iii) budgets, sales
projections, operating plans or other financial information reasonably
requested by Bank.”

 

6.                                       The Loan Agreement shall be amended by deleting the following text
appearing as Section 6.2(c) thereof:

 

“                                          (c)                                  Within
forty-five (45) days after the last day of each quarter, Borrower shall deliver
to Bank with the monthly financial statements a Compliance Certificate signed
by a Responsible Officer in the form of Exhibit D.”

 

and inserting in lieu
thereof the following:

 

“                                          (c)                                  Within
forty-five (45) days after the last day of each quarter in which Advances made pursuant to Section 2.1.1
were outstanding or requested, Borrower
shall deliver to Bank with the quarterly financial statements a Compliance
Certificate signed by a Responsible Officer in the form of Exhibit D.”

 

7.                                       The Loan Agreement shall be amended by deleting the following text
appearing as Section 6.2(d) thereof:

 

“                                          (d)                                 Allow Bank to audit
Borrower’s Collateral at Borrower’s expense. 
Such audits shall be conducted no more often than once every twelve (12)
months unless an Event of Default has occurred and is continuing.”

 

and inserting in lieu thereof the following:

 

“                                          (d)                                 Allow Bank to
audit Borrower’s Collateral at Borrower’s expense.  Such audits shall be conducted no more often
than once every twelve (12) months unless an Event of Default has occurred and
is continuing.  The foregoing inspections and audits
shall be at Borrower’s expense, and the charge therefor shall be $850 per
person per day (or such higher amount as shall represent Bank’s then-current
standard charge for the same), plus reasonable out-of-pocket expenses.”

 

 

8.                                       The Loan Agreement shall be amended by
inserting the following new provisions to appear as subsections 6.2(e) and
(f) thereof:

 

“                                          (e)                                  Within forty-five (45) days after the last day of each
quarter, Borrower shall deliver to Bank: (i) future billings schedule; and
(ii) Deferred Revenue report.

 

(f)                                    Annually, within thirty (30) days prior
to the last day of Borrower’s fiscal year, Board of Director’s approved
projections and any subsequent amendments thereto.”

 

9.                                       The Loan Agreement shall be amended by deleting the following text,
appearing at the end of Section 6.2 thereof:

 

“                                          Notwithstanding the above financial
reporting requirements, in the event that Borrower maintains cash with Bank in
an amount equal to or greater than Sixty Million Dollars ($60,000,000) at all
times during any quarter, the financial reporting requirements set forth in
subsections (b) and (d) above shall not be required in connection
with such quarter.”

 

and inserting in lieu thereof the following:

 

“                                          Notwithstanding the above financial
reporting requirements, in the event that Borrower maintains Unrestricted Cash,
Cash Equivalents, and short-term investments with Bank or Bank’s Affiliates in
an amount equal to or greater than Forty Million Dollars ($40,000,000) at all
times during any quarter, the financial reporting requirements set forth in
subsections (b), (d), and (e) above shall not be required in connection
with such quarter.”

 

10.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.1 thereof:

 

“7.1                         Dispositions. 
Convey, sell, lease, transfer or otherwise dispose of (collectively a
“Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the
ordinary course of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; (iii) of worn-out or obsolete Equipment, or (iv) other
assets not exceeding One Hundred Thousand Dollars ($100,000.00), in the
aggregate, during any fiscal year.”

 

and inserting in lieu
thereof the following:

 

“7.1                         Dispositions. 
Convey, sell, lease, transfer or otherwise dispose of (collectively, a
“Transfer”), or permit any of its Subsidiaries to transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the
ordinary course of business; (ii) of non-exclusive licenses, sublicenses,
collaboration agreements, cross licensing and similar arrangements for the use
of the property of Borrower or its Subsidiaries in the ordinary course of its
business and other licenses, sublicenses, collaborations, cross licenses and
arrangements that do not result in a legal transfer of Borrower’s title in the
licensed property, in good faith and in a manner that the board of directors of
Borrower reasonably believes is in, or is not opposed to, the best interests of
Borrower; (iii) of worn-out or obsolete Equipment; or (iv) other
assets not exceeding One Hundred Thousand Dollars ($100,000.00), in the
aggregate, during any fiscal year.”

 

11.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.5 thereof:

 

“7.5                         Encumbrance. 
Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest
granted herein.  The Collateral may also
be subject to Permitted Liens.”

 

and inserting in lieu
thereof the following:

 

 

“7.5                         Encumbrance.  Create, incur, allow, or suffer any Lien on
any of its property, or assign or convey any right to receive income, including
the sale of any Accounts, or permit any of its Subsidiaries to do so, except
for Permitted Liens, permit any Collateral not to be subject to the first
priority security interest granted herein, or enter into any agreement,
document, instrument or other arrangement (except with or in favor of Bank)
with any Person which directly or indirectly prohibits or has the effect of
prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging,
granting a security interest in or upon, or encumbering any of Borrower’s or
any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1
hereof and the definition of “Permitted Liens” herein.”

 

12.                                 The Loan Agreement shall be amended by deleting the following appearing
as Section 7.6 thereof:

 

“7.6                         Distributions; Investments.  (i) Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (ii) pay any dividends in an amount not to exceed ten million dollars
($10,000,000.00) in the aggregate, per fiscal year, or make any distribution or
payment or redeem, retire or purchase any capital stock, except for repurchases
of stock from former employees or directors of Borrower under the terms of applicable
repurchase agreements in an aggregate amount not to exceed One Hundred Thousand
Dollars ($100,000.00) in the aggregate in any fiscal year, provided that no
Event of Default has occurred, is continuing or would exist after giving effect
to the repurchases.”

 

and
inserting in lieu thereof the following:

 

“7.6                         Distributions; Investments.  (i) Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do so;
or (ii) pay any dividends in an amount exceeding ten million dollars
($10,000,000.00) in the aggregate, per fiscal year, or make any distribution or
payment or redeem, retire or purchase any capital stock, except for (a) repurchases
of shares of Borrower’s common stock in accordance with Borrower’s stock
repurchase program commenced in May 2008 of up to Thirty-Five Million
Dollars ($35,000,000.00) in the aggregate, of such common stock, and (b) repurchases
of stock from former employees or directors of Borrower under the terms of
applicable repurchase agreements in an aggregate amount not to exceed One
Hundred Thousand Dollars ($100,000.00) in the aggregate in any fiscal year,
provided that no Event of Default has occurred, is continuing or would exist
after giving effect to the repurchases.”

 

13.                                 The Loan Agreement shall be amended by deleting the following definitions
appearing in Section 13.1 thereof:

 

“                                          “Availability
Amount” is: (a) if Borrower’s Unrestricted
Cash, Cash Equivalents, and short-term investments maintained at Bank or Bank’s
Affiliates are greater than or equal to Sixty Million Dollars ($60,000,000.00),
the Revolving Line, minus (i) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit) plus an amount
equal to the Letter of Credit Reserves, minus (ii) the FX Reserve, and
minus (iii) the outstanding principal balance of any Advances (including
any amounts used for Cash Management Services); or (b) if Borrower’s
Unrestricted Cash, Cash Equivalents, and short-term investments are maintained
at Bank or Bank’s Affiliates are less than Sixty Million Dollars
($60,000,000.00) for a period of thirty (30) consecutive days, the lesser of (i) the
Revolving Line or (ii) the Borrowing Base minus (x) the amount of all
outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit) plus an amount equal to the Letter of Credit Reserves, minus (y) the
FX Reserve, and minus (z) the outstanding principal balance of any
Advances (including any amounts used for Cash Management Services).”

 

 

“                                          “Intellectual  Property” is

 

(i)                                     Copyrights, Trademarks,
Patents, and Mask Works including amendments, renewals, extensions and all
licenses or other rights to use and all license fees and royalties from the use;

 

(ii)                                  Any trade secrets and any
Intellectual Property rights in computer software and computer software
products now or later existing, created, acquired or held;

 

(iii)                               All design rights which
may be available to Borrower now or later created, acquired or held; and

 

(iv)                              Any claims for damages
(past, present or future) for infringement of any of the rights above, with the
right, but not the obligation, to sue and collect damages for use or
infringement of the intellectual property rights above.

 

All proceeds
and products of the foregoing, including all insurance, indemnity or warranty
payments.”

 

“                                          “Loan
Documents” are, collectively, this Agreement, the Exim Agreement,
the IP Agreement, any note, or notes or guaranties executed by Borrower or
Guarantor, and any other present or future agreement between Borrower and/or
for the benefit of Bank in connection with this Agreement, all as amended,
extended or restated.”

 

“                                          “Revolving Line”
is an Advance or Advances of up to Forty Million Dollars ($40,000,000.00).”

 

“                                          “Revolving Maturity Date”
is November 13, 2009.”

 

and inserting in lieu thereof the following:

 

“                                          “Availability Amount”
is: (a) if Borrower’s Unrestricted Cash, Cash Equivalents, and short-term
investments maintained at Bank or Bank’s Affiliates are greater than or equal
to Forty Million Dollars ($40,000,000.00), the Revolving Line, minus (i) the
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) plus an amount equal to the Letter of Credit Reserves, minus
(ii) the FX Reserve, and minus (iii) the outstanding principal
balance of any Advances (including any amounts used for Cash Management
Services); or (b) if Borrower’s Unrestricted Cash, Cash Equivalents, and
short-term investments are maintained at Bank or Bank’s Affiliates are less
than Forty Million Dollars ($40,000,000.00) for a period of thirty (30)
consecutive days, the lesser of (i) the Revolving Line or (ii) the
Borrowing Base minus (x) the amount of all outstanding Letters of Credit
(including drawn but unreimbursed Letters of Credit) plus an amount equal to
the Letter of Credit Reserves, minus (y) the FX Reserve, and minus (z) the
outstanding principal balance of any Advances (including any amounts used for
Cash Management Services).”

 

 

“                                          “Intellectual Property”
means all right, title, and interest in and to the following:

 

(i)                                                                                     its Copyrights, Trademarks and Patents;

 

(ii)                                  any and all trade secrets and trade
secret rights, including, without limitation, any rights to unpatented
inventions, know-how, operating manuals;

 

(iii)                               any and all source code;

 

(iv)                              any and all design rights which may be
available to a Borrower;

 

(v)                                 any and all claims for damages by way of
past, present and future infringement of any of the foregoing, with the right,
but not the obligation, to sue for and collect such damages for said use or
infringement of the Intellectual Property rights identified above; and

 

(iv)                              all amendments, renewals and extensions
of any of the Copyrights, Trademarks or Patents.”

 

“                                          “Loan
Documents” are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.”

 

“                                          “Revolving Line”
is an Advance or Advances of up to Thirty Million Dollars ($30,000,000.00).”

 

“                                          “Revolving Maturity Date”
is November 12, 2010 [364 days from the date of this Loan Modification
Agreement].”

 

14.                                 The Loan Agreement shall be amended by deleting the definitions of “IP Agreement” and “Unused Revolving Line Facility Fee” appearing in Section 13.1 thereof and deleting every reference to
such term, respectively, in the Loan Agreement and each other document that
references such terms as defined in the Loan Agreement.

 

15.                                 The Loan Agreement shall be amended by substituting Exhibit A
thereto in its entirety and inserting in lieu thereof Schedule 1
hereto.  Borrower hereby grants Bank, to
secure the payment and performance in full of all Obligations and the
performance of each of Borrower’s duties under the Existing Loan Documents, a
continued security interest in and pledges and assigns to Bank, the Collateral
wherever located, whether now owned or hereafter acquired or arising and all
proceeds and products thereof.

 

16.                                 The Borrowing Base Certificate appearing as Exhibit C to the
Loan Agreement is hereby replaced with the Borrowing Base Certificate attached
as Schedule 2 hereto.

 

17.                                 The Compliance Certificate appearing as Exhibit D to the Loan
Agreement is hereby replaced with the Compliance Certificate attached as Schedule
3 hereto.

 

4.                                       FEES. 
A fully earned, non-refundable facility fee of One Hundred Fifty
Thousand Dollars ($150,000.00) is earned and payable as of the date
hereof.  The Borrower shall also
reimburse Bank for all legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.

 

5.                                       TERMINATION OF IP AGREEMENT.  The IP Agreement is hereby terminated.

 

6.                                       RATIFICATION OF PERFECTION CERTIFICATE. 
Borrower hereby ratifies, confirms and reaffirms, all and singular, the
terms and disclosures contained in a certain Perfection Certificate dated as of
August 11, 2003, as updated from time to time, between Borrower and Bank,
and acknowledges, confirms and agrees the disclosures and information Borrower
provided to Bank in the Perfection Certificate has not changed, as of the date
hereof, except to the extent such disclosure is updated by the information
contained in Schedule 4 attached hereto.

 

 

7.                                       CONSISTENT CHANGES.  The Existing Loan Documents are hereby
amended wherever necessary to reflect the changes described above.

 

8.                                       RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.

 

9.                                       NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.

 

10.                                 CONTINUING VALIDITY.  Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Loan
Documents.  Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to
retain as liable parties all makers of Existing Loan Documents, unless the
party is expressly released by Bank in writing. 
No maker will be released by virtue of this Loan Modification Agreement.

 

11.                                 COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.

 

 

This Loan Modification Agreement is executed as a
sealed instrument under the laws of the Commonwealth of Massachusetts as of the
date first written above.

 

	
  BORROWER:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  AMERICAN
  SCIENCE AND ENGINEERING, INC.

  	
   

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

The undersigned, AS&E
GLOBAL, INC.,  a Massachusetts
corporation (“Guarantor”) hereby: (i) ratifies, confirms and reaffirms,
all and singular, the terms and conditions of a certain (A) Unlimited
Guaranty dated August 11, 2003 (the “Guaranty”), and (B) a certain
Security Agreement by Guarantor in favor of the Bank dated August 11,
2003, as amended by that certain First Amendment to Security Agreement dated as
of even date herewith (as amended, the “Security Agreement”); and (ii) acknowledges,
confirms and agrees that the Guaranty and Security Agreement shall remain in
full force and effect and shall in no way be limited by the execution of this
Loan Modification Agreement, or any other documents, instruments and/or
agreements executed and/or delivered in connection herewith; and (iii) acknowledges, confirms and agrees that
the obligations of Borrower to Bank under the Guaranty include, without
limitation, all Obligations of Borrower to Bank under the Loan Agreement, as
amended by this Loan Modification Agreement.

 

	
   

  	
  AS&E
  GLOBAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

SCHEDULE
1

 

EXHIBIT
A

 

The
Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:

 

All goods,
Accounts (including health-care receivables), Equipment, Inventory, contract
rights or rights to payment of money, leases, license agreements, franchise
agreements, General Intangibles (except as provided below), commercial tort
claims, documents, instruments (including any promissory notes), chattel paper
(whether tangible or electronic), cash, deposit accounts, all certificates of
deposit, fixtures, letters of credit rights (whether or not the letter of
credit is evidenced by a writing), securities, and all other investment
property, supporting obligations, and financial assets, whether now owned or
hereafter acquired, wherever located; and

 

all
Borrower’s Books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not
include any Intellectual Property; provided, however, the Collateral shall include
all Accounts and all proceeds of Intellectual Property.

 

Pursuant to the terms of a certain negative pledge
arrangement with Bank, Borrower has agreed not to encumber any of its Intellectual
Property without Bank’s prior written consent.

 

 

SCHEDULE
2

 

EXHIBIT
C

 

BORROWING
BASE CERTIFICATE

 

Borrower: American Science and Engineering, Inc.

Lender:  Silicon Valley Bank

Commitment Amount:      $30,000,000.00

 

	
  ACCOUNTS
  RECEIVABLE

  	
   

  	
   

  	
   

  
	
  (1) 
  Accounts Receivable Book Value as of

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (2) 
  Additions (please explain on reverse)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (3) 
  TOTAL ACCOUNTS RECEIVABLE

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ACCOUNTS
  RECEIVABLE DEDUCTIONS (without duplication)

  	
   

  	
   

  	
   

  
	
  (4) 
  Amounts over 90 days due

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (5) 
  Balance of 50% over 90 day accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (6) 
  Credit balances over 90 days

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (7) 
  Concentration Limits

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (8) 
  Foreign Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (9) 
  Governmental Accounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (10) 
  Contra Accounts

  	
   

  	
  $

  	
   

  
	
  (11) 
  Promotion or Demo Accounts

  	
   

  	
  $

  	
   

  
	
  (12) 
  Intercompany/Employee Accounts

  	
   

  	
  $

  	
   

  
	
  (13) 
  Disputed Accounts

  	
   

  	
  $

  	
   

  
	
  (14) 
  Other (please explain on reverse)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (15) 
  Deferred Revenue

  	
   

  	
  $

  	
   

  
	
  (16) 
  TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS

  	
   

  	
  $

  	
   

  
	
  (17) 
  Eligible Accounts (#3 minus #16)

  	
   

  	
  $

  	
   

  
	
  (18) 
  ELIGIBLE AMOUNT OF ACCOUNTS (80% of #17)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BALANCES

  	
   

  	
   

  	
   

  
	
  (19) 
  Maximum Loan Amount

  	
   

  	
  $

  	
   

  
	
  (20) 
  Total Funds Available (Lesser of #19 and #18)

  	
   

  	
  $

  	
   

  
	
  (21) 
  Present balance owing on Line of Credit

  	
   

  	
  $

  	
   

  
	
  (22) 
  Outstanding under Sublimits (L/C, Cash Mgt, Fx)

  	
   

  	
  $

  	
   

  
	
  (23) 
  RESERVE POSITION (#20 minus #21 and #22)

  	
   

  	
  $

  	
   

  

 

The undersigned represents and warrants that this
is true, complete and correct, and that the information in this Borrowing Base
Certificate complies with the representations and warranties in the Loan and
Security Agreement between the undersigned and Silicon Valley Bank.

 

 

	
   

  	
   

  	
  BANK USE ONLY

  	
   

  
	
  COMMENTS:

  	
  Received by:

  	
   

  
	
   

  	
  AUTHORIZED
  SIGNER

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Authorized
  Signer

  	
  Verified:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
  Compliance Status:           Yes              No

  	
   

  

 

 

SCHEDULE
3

 

EXHIBIT
D

 

COMPLIANCE
CERTIFICATE

 

TO:         SILICON VALLEY BANK

 

FROM:   AMERICAN SCIENCE AND ENGINEERING, INC.

 

The undersigned
authorized officer of AMERICAN SCIENCE AND ENGINEERING, INC. certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (i) Borrower is in complete
compliance for the period ending
                              
with all required covenants except as noted below and (ii) all
representations and warranties in the Agreement are true and correct in all
material respects on this date.  Attached
are the required documents supporting the certification.  The Officer certifies that these are prepared
in accordance with Generally Accepted Accounting Principles (GAAP) consistently
applied from one period to the next except as explained in an accompanying
letter or footnotes.  The Officer
acknowledges that no borrowings may be requested at any time or date of
determination that Borrower is not in compliance with any of the terms of the
Agreement, and that compliance is determined not just at the date this
certificate is delivered.

 

Please
indicate compliance status by circling Yes/No under “Complies” column.

 

	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compliance Certificate

  	
   

  	
  Quarterly (for each
  quarter Advances were outstanding or requested)

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  10-Q, 10-K and 8-K

  	
   

  	
  Within 5 days after
  filing with SEC

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  BBC, A/R Agings*

  	
   

  	
  Quarterly within 45
  days

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Deferred Revenue
  Schedule* and

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Future Billing
  Schedule*

  	
   

  	
  Quarterly within 45
  days

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Audit*

  	
   

  	
  Annually

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Board Approved
  Projections

  	
   

  	
  Annually, 30 prior to
  FYE

  	
   

  	
  Yes

  	
   

  	
  No

  

 

* When cash at Bank is
less than $40,000,000.00 (See Section 6.2 of the Loan Agreement)

 

	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Adjusted Quick
  Ratio (Quarterly)

  	
   

  	
  2.0:1.0

  	
   

  	
                  :1.0

  	
   

  	
  Yes

  	
   

  	
  No

  
	
  Minimum EBIT (Quarterly)

  	
   

  	
  $

  	
  3,000,000

  	
   

  	
  $

  	
   

  	
  Yes

  	
   

  	
  No

  
										

 

 

	
  Comments
  Regarding Exceptions: See Attached.

  	
   

  	
   

  	
  BANK
  USE ONLY

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sincerely,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
  Received
  By:

  	
   

  
	
  SIGNATURE

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
  Reviewed
  By:

  	
   

  
	
  TITLE

  	
   

  	
   

  	
  Compliance
  Status:   Yes / No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

 

SCHEDULE 4

 

UPDATES TO PERFECTION CERTIFICATEExhibit 10.1

 

Execution Version

 

$379,500,000

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

PROTECTION ONE, INC.,

 

PROTECTION ONE ALARM MONITORING, INC.,

as Borrower,

 

The Several Lenders from Time to Time Parties Hereto,

 

and

 

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

 

Dated as of November 17, 2009

 

J.P. MORGAN SECURITIES INC.,

as Sole Lead Arranger and Sole Book Manager

 

BANK OF AMERICA, N.A.,

as Documentation Agent

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.
  DEFINITIONS

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Defined
  Terms

  	
  2

  
	
  1.2.

  	
  Other
  Definitional Provisions

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 2.
  AMOUNT AND TERMS OF TERM LOANS AND TERM COMMITMENTS

  	
  33

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Term
  Commitments

  	
  33

  
	
  2.2.

  	
  Procedure
  for Term Loan Borrowing

  	
  33

  
	
  2.3.

  	
  Repayment
  of Tranche B-1 Term Loans

  	
  34

  
	
  2.4.

  	
  Additional
  Term Loans

  	
  35

  
	
   

  	
   

  	
   

  
	
  SECTION 3.
  AMOUNT AND TERMS OF REVOLVING COMMITMENTS

  	
  37

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Revolving
  Commitments

  	
  37

  
	
  3.2.

  	
  Procedure
  for Revolving Loan Borrowing

  	
  37

  
	
  3.3.

  	
  Swingline
  Commitment

  	
  37

  
	
  3.4.

  	
  Procedure
  for Swingline Borrowing; Refunding of Swingline Loans

  	
  38

  
	
  3.5.

  	
  Commitment
  Fees, Etc.

  	
  39

  
	
  3.6.

  	
  Termination
  or Reduction of Revolving Commitments

  	
  40

  
	
  3.7.

  	
  L/C
  Commitment

  	
  40

  
	
  3.8.

  	
  Procedure
  for Issuance of Letter of Credit

  	
  40

  
	
  3.9.

  	
  Fees
  and Other Charges

  	
  41

  
	
  3.10.

  	
  L/C
  Participations

  	
  41

  
	
  3.11.

  	
  Reimbursement
  Obligation of the Borrower

  	
  42

  
	
  3.12.

  	
  Obligations
  Absolute

  	
  43

  
	
  3.13.

  	
  Letter
  of Credit Payments

  	
  43

  
	
  3.14.

  	
  Applications

  	
  43

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

  	
  44

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Optional
  Prepayments

  	
  44

  
	
  4.2.

  	
  Mandatory
  Prepayments and Commitment Reductions

  	
  44

  
	
  4.3.

  	
  Conversion
  and Continuation Options

  	
  45

  
	
  4.4.

  	
  Limitations
  on Eurodollar Tranches

  	
  46

  
	
  4.5.

  	
  Interest
  Rates and Payment Dates

  	
  46

  
	
  4.6.

  	
  Computation
  of Interest and Fees

  	
  47

  
	
  4.7.

  	
  Inability
  to Determine Interest Rate

  	
  47

  
	
  4.8.

  	
  Pro
  Rata Treatment and Payments

  	
  48

  
	
  4.9.

  	
  Requirements
  of Law

  	
  49

  
	
  4.10.

  	
  Taxes

  	
  51

  
	
  4.11.

  	
  Indemnity

  	
  53

  

 

 

	
  4.12.

  	
  Change
  of Lending Office

  	
  54

  
	
  4.13.

  	
  Replacement
  of Lenders

  	
  54

  
	
  4.14.

  	
  Evidence
  of Debt

  	
  55

  
	
  4.15.

  	
  Illegality

  	
  55

  
	
   

  	
   

  	
   

  
	
  SECTION 5.
  REPRESENTATIONS AND WARRANTIES

  	
  56

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Financial
  Condition

  	
  56

  
	
  5.2.

  	
  No
  Change

  	
  56

  
	
  5.3.

  	
  Corporate
  Existence; Compliance with Law

  	
  56

  
	
  5.4.

  	
  Power;
  Authorization; Enforceable Obligations

  	
  57

  
	
  5.5.

  	
  No
  Legal Bar

  	
  57

  
	
  5.6.

  	
  Litigation

  	
  57

  
	
  5.7.

  	
  No
  Default

  	
  57

  
	
  5.8.

  	
  Ownership
  of Property; Liens

  	
  58

  
	
  5.9.

  	
  Intellectual
  Property

  	
  58

  
	
  5.10.

  	
  Taxes

  	
  58

  
	
  5.11.

  	
  Federal
  Regulations

  	
  58

  
	
  5.12.

  	
  Labor
  Matters

  	
  58

  
	
  5.13.

  	
  ERISA

  	
  58

  
	
  5.14.

  	
  Investment
  Company Act; Other Regulations

  	
  59

  
	
  5.15

  	
  Subsidiaries

  	
  59

  
	
  5.16.

  	
  Use
  of Proceeds

  	
  59

  
	
  5.17.

  	
  Environmental
  Matters

  	
  60

  
	
  5.18.

  	
  Accuracy
  of Information, Etc.

  	
  60

  
	
  5.19.

  	
  Security
  Documents

  	
  61

  
	
  5.20.

  	
  Solvency

  	
  62

  
	
  5.21.

  	
  Regulation
  H

  	
  62

  
	
   

  	
   

  	
   

  
	
  SECTION 6.
  CONDITIONS PRECEDENT

  	
  62

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions
  to Restatement Date

  	
  62

  
	
  6.2.

  	
  Conditions
  to Each Extension of Credit

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 7.
  AFFIRMATIVE COVENANTS

  	
  66

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Financial
  Statements

  	
  66

  
	
  7.2.

  	
  Certificates;
  Other Information

  	
  67

  
	
  7.3.

  	
  Payment
  of Obligations

  	
  68

  
	
  7.4.

  	
  Maintenance
  of Existence; Compliance

  	
  68

  
	
  7.5.

  	
  Maintenance
  of Property; Insurance

  	
  69

  
	
  7.6.

  	
  Inspection
  of Property; Books and Records; Discussions

  	
  69

  
	
  7.7.

  	
  Notices

  	
  69

  
	
  7.8.

  	
  Environmental
  Laws

  	
  70

  
	
  7.9.

  	
  [Reserved]

  	
  70

  
	
  7.10.

  	
  Additional
  Collateral, Etc.

  	
  70

  
	
  7.11.

  	
  Further
  Assurances

  	
  72

  

 

 

	
  SECTION 8.
  NEGATIVE COVENANTS

  	
  72

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Financial
  Condition Covenants

  	
  72

  
	
  8.2.

  	
  Indebtedness

  	
  73

  
	
  8.3.

  	
  Liens

  	
  75

  
	
  8.4.

  	
  Fundamental
  Changes

  	
  77

  
	
  8.5.

  	
  Disposition
  of Property

  	
  77

  
	
  8.6.

  	
  Restricted
  Payments

  	
  78

  
	
  8.7.

  	
  Capital
  Expenditures; Net Cash Investment Costs

  	
  79

  
	
  8.8.

  	
  Investments

  	
  80

  
	
  8.9.

  	
  Optional
  Payments and Modifications of Certain Debt Instruments

  	
  81

  
	
  8.10.

  	
  Transactions
  with Affiliates

  	
  82

  
	
  8.11.

  	
  Sales
  and Leasebacks

  	
  83

  
	
  8.12.

  	
  Hedge
  Agreements

  	
  83

  
	
  8.13.

  	
  Changes
  in Fiscal Periods

  	
  83

  
	
  8.14.

  	
  Negative
  Pledge Clauses

  	
  83

  
	
  8.15.

  	
  Clauses
  Restricting Subsidiary Distributions

  	
  83

  
	
  8.16.

  	
  Lines
  of Business

  	
  84

  
	
  8.17.

  	
  Limitations
  on the Activities of Holdings

  	
  84

  
	
   

  	
   

  	
   

  
	
  SECTION 9.
  EVENTS OF DEFAULT

  	
  84

  
	
   

  	
   

  	
   

  
	
  SECTION 10.
  THE AGENTS

  	
  87

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Appointment

  	
  87

  
	
  10.2.

  	
  Delegation
  of Duties

  	
  88

  
	
  10.3.

  	
  Exculpatory
  Provisions

  	
  88

  
	
  10.4.

  	
  Reliance
  by Agents

  	
  88

  
	
  10.5.

  	
  Notice
  of Default

  	
  89

  
	
  10.6.

  	
  Non-Reliance
  on Agents and Other Lenders

  	
  89

  
	
  10.7.

  	
  Indemnification

  	
  89

  
	
  10.8.

  	
  Agent
  in Its Individual Capacity

  	
  90

  
	
  10.9.

  	
  Successor
  Administrative Agent

  	
  90

  
	
  10.10.

  	
  Agents
  Generally

  	
  90

  
	
  10.11.

  	
  The
  Lead Arranger

  	
  91

  
	
  10.12.

  	
  Withholding
  Tax

  	
  91

  
	
   

  	
   

  	
   

  
	
  SECTION 11.
  MISCELLANEOUS

  	
  91

  
	
   

  	
   

  	
   

  
	
  11.1.

  	
  Amendments
  and Waivers

  	
  91

  
	
  11.2.

  	
  Notices

  	
  94

  
	
  11.3.

  	
  No
  Waiver; Cumulative Remedies

  	
  95

  
	
  11.4.

  	
  Survival
  of Representations and Warranties

  	
  95

  
	
  11.5.

  	
  Payment
  of Expenses and Taxes

  	
  95

  
	
  11.6.

  	
  Successors
  and Assigns; Participations and Assignments

  	
  97

  
	
  11.7.

  	
  Adjustments;
  Set-off

  	
  100

  

 

 

	
  11.8.

  	
  Counterparts

  	
  100

  
	
  11.9.

  	
  Severability

  	
  100

  
	
  11.10.

  	
  Integration

  	
  101

  
	
  11.11.

  	
  GOVERNING
  LAW

  	
  101

  
	
  11.12.

  	
  Submission
  To Jurisdiction; Waivers

  	
  101

  
	
  11.13.

  	
  Acknowledgments

  	
  101

  
	
  11.14.

  	
  Releases
  of Guarantees and Liens

  	
  102

  
	
  11.15.

  	
  Confidentiality

  	
  102

  
	
  11.16.

  	
  WAIVERS
  OF JURY TRIAL

  	
  103

  
	
  11.17.

  	
  Delivery
  of Addenda, Joinder Agreements and Amendment Agreement

  	
  103

  
	
  11.18.

  	
  Subordination
  of Intercompany Indebtedness

  	
  103

  
	
  11.19.

  	
  USA
  PATRIOT Act

  	
  103

  
	
  11.20.

  	
  Amendment
  and Restatement

  	
  103

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1(a)

  	
  Intellectual
  Property Collateral

  	
   

  
	
  1.1(b)

  	
  Mortgaged
  Real Property

  	
   

  
	
  5.4

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  
	
  5.15

  	
  Subsidiaries

  	
   

  
	
  5.19(a)

  	
  UCC
  Filing Jurisdictions

  	
   

  
	
  5.19(b)

  	
  Mortgage
  Filing Jurisdictions

  	
   

  
	
  8.8

  	
  Closing
  Date Investments

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form of
  Compliance Certificate

  	
   

  
	
  B

  	
  Form of
  Restatement Date Certificate

  	
   

  
	
  C

  	
  Form of
  Amended Mortgage

  	
   

  
	
  D

  	
  Form of
  Assignment and Assumption

  	
   

  
	
  E

  	
  Form of
  Legal Opinion of Kirkland & Ellis LLP

  	
   

  
	
  F

  	
  Form of
  Reinvestment Notice

  	
   

  
	
  G

  	
  Form of
  Exemption Certificate

  	
   

  
	
  H-1

  	
  Form of
  Tranche B-1 Term Note

  	
   

  
	
  H-2

  	
  Form of
  Tranche B-2 Term Note

  	
   

  
	
  H-3

  	
  Form of
  Revolving Note

  	
   

  
	
  H-4

  	
  Form Swingline
  Note

  	
   

  
	
  I

  	
  Form of
  Addendum

  	
   

  
	
  J

  	
  Form of
  Subordinated Intercompany Note

  	
   

  
	
  K

  	
  Form of
  Solvency Certificate

  	
   

  
	
  L

  	
  Form of
  Financial Status Certificate

  	
   

  
	
  M

  	
  Form of
  Reaffirmation Agreement

  	
   

  
	
  N

  	
  Form of
  Joinder Agreement

  	
   

  
				

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of November 17, 2009, among PROTECTION ONE, INC., a Delaware
corporation (“Holdings”), PROTECTION ONE ALARM MONITORING, INC., a
Delaware corporation (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to this Agreement (the “Lenders”)
and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, and
together with its successors in such capacity, 
the “Administrative Agent”), with J.P. MORGAN SECURITIES INC., as
sole lead arranger and sole book manager (in such capacity, the “Lead
Arranger”), and BANK OF AMERICA, N.A., as documentation agent (in such
capacity, and together with its successors in such capacity, the “Documentation
Agent”).

 

RECITALS:

 

WHEREAS, capitalized
terms used in these Recitals shall have the respective meanings set forth for
such terms in Section 1.1 hereof;

 

WHEREAS, the
Borrower, Holdings, certain banks and other financial institutions party
thereto as lenders (the “Existing Lenders”), the agents and arrangers
party thereto and Bear Stearns Corporate Lending Inc., as administrative agent
(the “Existing Agent”), are parties to that certain Amended and Restated
Credit Agreement, dated as of April 26, 2006 (as amended by the First
Amendment thereto dated as of March 13, 2007 and as further amended,
restated, supplemented or otherwise modified prior to the date hereof, the “Original
Credit Agreement”), pursuant to which the Existing Lenders extended certain
senior credit facilities to the Borrower;

 

WHEREAS, the Borrower desires that certain of the
Existing Lenders and other parties hereto agree to amend and restate the
Original Credit Agreement in its entirety to: 
(i) establish Tranche B-2 Term Loans to be made hereunder; (ii) make
certain amendments affecting the Existing Term Loans and convert certain
Existing Term Loans into a portion of the Tranche B-2 Term Loans made hereunder
in the manner set forth herein and in the Amendment Agreement (with the portion
of the Existing Term Loans that is not converted into Tranche B-2 Term Loans
being renamed hereafter the “Tranche B-1 Term Loans”); (iii) terminate
and replace the Existing Revolving Commitments with the Revolving Commitments
made hereunder in the manner set forth herein and in the Amendment Agreement
and (iv) make certain other changes as more fully set forth herein, which
amendment and restatement shall become effective upon the Restatement Date;

 

WHEREAS, the Required Lenders have, on or prior to the
Restatement Date, authorized the Administrative Agent to execute this Agreement
on behalf of all Existing Lenders;

 

WHEREAS, each Tranche B-2 Term Lender has either
executed the Amendment Agreement or an Addendum hereto;

 

WHEREAS, the Majority Facility Lenders under each
Facility have, on or prior to the Restatement Date, authorized the
Administrative Agent to execute this Agreement on behalf of all applicable
Lenders;

 

1

 

WHEREAS, it is the intent of
the parties hereto that this Agreement not constitute a novation of the
obligations and liabilities of the parties under the Original Credit Agreement
and that this Agreement amend and restate in its entirety the Original Credit
Agreement and re-evidence the Obligations outstanding on the Restatement Date
as contemplated hereby; and

 

WHEREAS, it is the intent of the Loan Parties to confirm that all
Obligations of the Loan Parties under the Loan Documents, as amended hereby,
shall continue in full force and effect and that, from and after the
Restatement Date, all references to the “Credit Agreement” contained therein
shall be deemed to refer to this Agreement.

 

NOW, THEREFORE, in
consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree to amend and restate the Original
Credit Agreement as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.          Defined Terms.  As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

“Accepting Lenders”:  as defined in Section 11.1.

 

“Acquired Entity”:  as defined in the definition of “Permitted
Acquisition”.

 

“Addendum:” 
an agreement substantially in the form of Exhibit I by which an
Additional Term Lender or an Additional Revolving Lender, as applicable,
becomes a party to this Agreement as of the Restatement Date.

 

“Additional Revolving Lender”:  each Lender (other than an Existing Lender)
that has a Revolving Commitment or that holds Revolving Loans.

 

“Additional Term Lender”:  each Lender (other than an Existing Lender)
that has a Tranche B-2 Term Commitment or that holds Tranche B-2 Term Loans.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

“Affiliate”: 
as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such
Person.  For purposes of this definition,
“control” of a Person means the power, directly or indirectly, either to (a) vote
10% or more of the securities having ordinary voting power for the election of
directors (or persons performing similar functions) of such Person or (b) direct
or cause the direction of the management and policies of such Person, whether
by contract or otherwise.

 

“Agents”: 
the collective reference to the Documentation Agent, the Lead Arranger
and the Administrative Agent, which term shall include, for purposes of Section 10
only, the Issuing Lenders.

 

2

 

“Aggregate Exposure”:  with respect to any Lender at any time, an
amount equal to (a) until the Restatement Date, the aggregate amount of
such Lender’s Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender’s Term Loans and (ii) the
amount of such Lender’s Revolving Commitment then in effect or, if the
Revolving Commitments have been terminated, the amount of such Lender’s
Revolving Extensions of Credit then outstanding.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”: 
this Amended and Restated Credit Agreement, as amended, amended and
restated, supplemented or otherwise modified from time to time.

 

“Allotted Dispositions”:  (a) the Disposition of certain real
estate owned by the Borrower at 120 East 1st Street,
Wichita, Kansas 67202 at a sale price consistent with the fair market value of
such real estate (as determined in good faith by the board of directors of the
Borrower) pursuant to a purchase and sale agreement on terms reasonably
satisfactory to the Administrative Agent, and (b) Dispositions of  Property for gross proceeds (valued at the
initial principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case of
other non-cash proceeds) not to exceed $100,000,000 in the aggregate after the
Restatement Date.

 

“Amendment Agreement”:  that certain Amendment and Restatement and
Resignation and Appointment Agreement, dated as of November 17, 2009,
among Holdings, the Borrower, the Administrative Agent, the Existing Agent and
the Lenders party thereto to which this Agreement shall be attached.

 

“Applicable Margin”:  for each Type of Loan, the rate per annum set
forth under the relevant column heading below:

 

	
   

  	
   

  	
  Eurodollar Loans

  	
   

  	
  Base Rate Loans

  	
   

  
	
  Revolving Loans and Swingline Loans

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  
	
  Tranche B-1 Term Loans

  	
   

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  
	
  Tranche B-2 Term Loans

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  

 

The Applicable Margin with respect to Modified Term
Loans shall be as set forth in the applicable Loan Modification Agreement.

 

“Application”:  an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
open a Letter of Credit.

 

“Approved Fund”:  (a) a CLO and (b) with respect to
any Lender that is a fund which invests in commercial loans, any other fund
that invests in commercial loans and is 

 

3

 

managed or advised by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.

 

“Asset Sale”: 
any Disposition of Property or series of related Dispositions of
Property (excluding any such Disposition permitted by Section 8.5, other
than clause (e) thereof) that yields gross proceeds to any Group Member
(valued at the initial principal amount thereof in the case of non-cash
proceeds consisting of notes or other debt securities and valued at fair market
value in the case of other non-cash proceeds) in excess of $500,000.

 

“Assignee”: 
as defined in Section 11.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantially
in the form of Exhibit D.

 

“Available Revolving Commitment”:  as to any Revolving Lender at any time, an
amount equal to the excess, if any, of (a) such Lender’s Revolving
Commitment then in effect minus (b) such Lender’s Revolving
Extensions of Credit then outstanding; provided that, in calculating any
Lender’s Revolving Extensions of Credit for the purpose of determining such
Lender’s Available Revolving Commitment pursuant to Section 3.5, the
aggregate principal amount of Swingline Loans then outstanding shall be deemed
to be zero.

 

“Base Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in
effect on such day plus 0.50% and (c) the Eurodollar Rate for a Eurodollar
Loan with a one-month Interest Period commencing on such day plus 1.00%.  For purposes hereof:  “Prime Rate” shall mean the rate of
interest per annum publicly announced from time to time by the Reference Bank
as its prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by the
Reference Bank in connection with extensions of credit to debtors).  Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective as of
the opening of business on the effective day of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.

 

“Base Rate Loans”:  Loans the rate of interest applicable to
which is based upon the Base Rate.

 

“Benefited Lender”:  as defined in Section 11.7(a).

 

“Board”: 
the Board of Governors of the Federal Reserve System of the United
States (or any successor).

 

“Borrower”: 
as defined in the preamble to this Agreement.

 

“Borrowing Date”:  any Business Day specified by the Borrower as
a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.

 

“Business”: 
as defined in Section 5.17(b).

 

4

 

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to close, provided that, with respect to notices and determinations
in connection with, and payments of principal and interest on, Eurodollar
Loans, such day is also a day for trading by and between banks in Dollar
deposits in the interbank eurodollar market.

 

“Capital Expenditures”:  for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries; provided
that Capital Expenditures shall not include expenditures included in the
definition of Net Cash Investment Costs.

 

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

 

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

 

“Cash Equivalents”:  (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition; (b) certificates
of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of twelve months or less from the date of acquisition issued
by any Lender or by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus of not less
than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by
Standard & Poor’s Ratings Services (“S&P”) or P-2 by
Moody’s Investors Service, Inc. (“Moody’s”), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within twelve months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition or of a recognized securities dealer
having combined capital and surplus of not less than $500,000,000, having a
term of not more than 30 days, with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at 

 

5

 

least A by S&P or A by
Moody’s; (f) securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any Lender or
any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition or money market funds that (i) comply with the
criteria set forth in Securities and Exchange Commission Rule 2a-7 under
the Investment Company Act of 1940, as amended, (ii) are rated AAA by
S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.

 

“CLO”: any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or
an Affiliate of such Lender.

 

“Closing Date”:  April 18, 2005.

 

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

 

“Collateral”: 
all property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.

 

“Commitment”: 
as to any Lender, the sum of the Tranche B-2 Term Commitment and the
Revolving Commitment of such Lender.

 

“Commitment Fee Rate”:  1.00% per annum.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001
of ERISA or is part of a group that includes the Borrower and that is treated
as a single employer under Section 414 of the Code.

 

“Compliance Certificate”:  a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit A.

 

“Conduit Lender”:  any special purpose entity organized and
administered by any Lender for the purpose of making Loans otherwise required
to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower
(which consent shall not be unreasonably withheld); provided that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for
any reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender, and provided, further,
that no Conduit Lender shall (a) be entitled to receive any greater amount
pursuant to Section 4.9, 4.10, 4.11 or 11.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any Commitment.

 

6

 

“Confidential Information Memorandum”:  the Confidential Information Memorandum dated
March 2005 and furnished to the Lenders.

 

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

 

“Consolidated Current Liabilities”:  at any date, all amounts that would, in
conformity with GAAP, be set forth opposite the caption “total current
liabilities” (or any like caption) on a consolidated balance sheet of Holdings
and its Subsidiaries at such date, but excluding (a) the current portion
of any Funded Debt of Holdings and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving
Loans or Swingline Loans to the extent otherwise included therein.

 

“Consolidated EBITDA”:  for any period, Consolidated Net Income for
such period

 

plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period (except in the case of (i) below),
the sum of:

 

(a)           income tax expense (including,
without duplication, franchise and foreign withholding taxes and any state
single business unitary or similar tax, to the extent classified as income tax
expense on the consolidated income statement of Holdings and its Subsidiaries
in accordance with GAAP),

 

(b)           interest expense, amortization or
write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness (including the Loans),

 

(c)           depreciation
and amortization expense,

 

(d)           amortization
of intangibles (including, but not limited to, goodwill), deferred customer
acquisition costs and organization costs,

 

(e)           any
extraordinary charges, expenses or losses determined in accordance with GAAP,

 

(f)            non-cash
compensation expenses arising from the issuance, vesting or exercise  of stock, options to purchase stock, stock
appreciation rights and other equity awards to the management, directors,
officers, consultants and other employees of Holdings or any of its
Subsidiaries,

 

(g)           any
other noncash charges, noncash expenses or noncash losses of the Borrower or
any other Subsidiaries of Holdings for such period (excluding any such charge,
expense or loss incurred in the ordinary course of business that constitutes an
accrual of or a reserve for cash charges for any future period); provided,
however, that cash payments made in 

 

7

 

such period or in any future
period in respect of such noncash charges, expenses or losses incurred after
the Closing Date (excluding any such charge, expense or loss incurred in the
ordinary course of business that constitutes an accrual of or a reserve for
cash charges for any future period) shall be subtracted from Consolidated Net
Income in calculating Consolidated EBITDA in the period when such payments are
made,

 

(h)           all
reasonable one-time costs, fees, expenses and charges related to this
Agreement, any permitted Investment, Permitted Acquisition, issuance of equity,
recapitalization, reorganization or asset disposition,

 

(i)            cash  proceeds of business interruption insurance,

 

(j)            management
and transaction fees and related expenses paid under the Management Agreement
substantially in the form most recently delivered to the Administrative Agent
prior to the Closing Date, and without further modification thereto as to
amounts payable thereunder,

 

(k)           any
non-recurring charges, expenses or losses not exceeding, together with expenses
under clause (l), $1.75 million in each of calendar years 2005 and 2006, $15.0
million in calendar year 2007, $3 million in calendar year 2008 and $2.0
million in each calendar year thereafter,

 

(l)            expenses
incurred in work force reductions such as severance, key employee retention
plans, and unfavorable lease payments or accruals for such payments not
exceeding, together with amounts under clause (k), $1.75 million in each of
calendar years 2005 and 2006, $15.0 million in calendar year 2007, $3 million
in calendar year 2008 and $2.0 million in each calendar year thereafter, and

 

(m)          interest
income generated from loans made to dealers in the ordinary course of business,

 

minus, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of:

 

(i)            interest
income other than income included pursuant to clause (m),

 

(ii)           any
extraordinary income or gains determined in accordance with GAAP, and

 

(iii)          any other non-cash
income (excluding (x) any items that represent the reversal of any accrual
of, or cash reserve for, anticipated cash charges in any prior period that are
described in the parenthetical to clause (g) above and (y) items
representing ordinary course accruals of cash to be received in future
periods), all as determined on a consolidated basis.

 

For the purposes of calculating Consolidated EBITDA
for any period of four consecutive fiscal quarters (each, a “Reference
Period”) pursuant to any determination of the 

 

8

 

Consolidated Leverage Ratio,
(a) if at any time during such Reference Period Holdings or any of its
Subsidiaries shall have made any Material Disposition, the Consolidated EBITDA
for such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Reference Period and (b) if during such Reference Period Holdings
or any of its Subsidiaries shall have made a Material Acquisition, Consolidated
EBITDA for such Reference Period shall be calculated after giving pro  forma
effect thereto as if such Material Acquisition occurred on the first day of
such Reference Period.  As used in this
definition, “Material Acquisition” means any acquisition of property or
series of related acquisitions of property that (i) constitutes assets
comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (ii) involves
the payment of consideration by Holdings and any of its Subsidiaries in excess
of $5,000,000; and “Material Disposition” means any Disposition of
property or series of related Dispositions of property that yields gross
proceeds to Holdings or any of its Subsidiaries in excess of $5,000,000.

 

“Consolidated Interest Coverage Ratio”:  for any period, the ratio of (a) Consolidated
EBITDA for such period to (b) Consolidated Interest Expense for such
period.

 

“Consolidated Interest Expense”:  for any period, total cash interest expense
(including that attributable to Capital Lease Obligations) of Holdings and its
Subsidiaries for such period with respect to all outstanding Indebtedness of
Holdings and its Subsidiaries (including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with
GAAP).

 

“Consolidated Leverage Ratio”:  as of the last day of any period, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period.

 

“Consolidated Net Income”:  for any period, the consolidated net income
(or loss) of Holdings and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any
of its Subsidiaries, (b) the income (or deficit) of any Person (other than
a Subsidiary of Holdings) in which Holdings or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by Holdings or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of
Holdings to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than any Loan Document) or Requirement of Law
applicable to such Subsidiary.

 

“Consolidated Total Debt”:  at any date, the aggregate principal amount
of all Indebtedness of Holdings and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.

 

9

 

“Consolidated Working Capital”: 
at any date, Consolidated Current Assets on such date minus
Consolidated Current Liabilities on such date.

 

“Continuing
Directors”:  the directors of
Holdings on the Closing Date, after giving effect to the financing transactions
that occurred on such date, and each other director, if, in each case, such
other director’s nomination for election to the board of directors of Holdings
is recommended by at least a majority of the then Continuing Directors or such
other director receives the vote of the Permitted Investors in his or her
election by the shareholders of Holdings.

 

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

 

“Control Investment Affiliate”: 
as to any Person, any other Person that (a) directly or indirectly,
is in control of, is controlled by, or is under common control with, such Person
and (b) is organized by such Person primarily for the purpose of making
equity or debt investments in one or more companies.  For purposes of this definition, “control” of
a Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

 

“Default”:  any of the
events specified in Section 9, whether or not any requirement set forth in
Section 9 for the giving of notice, the lapse of time, or both, has been satisfied.

 

“Disposition”:  with
respect to any Property, any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition thereof.  The terms “Dispose” and “Disposed
of” shall have correlative meanings.

 

“Documentation
Agent”:  as defined in the preamble
to this Agreement.

 

“Dollars” and “$”: 
dollars in lawful currency of the United States.

 

“Domestic Subsidiary”: 
any Subsidiary of Holdings organized under the laws of any jurisdiction
within the United States.

 

“ECF Percentage”:  with
respect to any fiscal year of Holdings ending on or after December 31,
2007, 75%; provided that the ECF Percentage shall be reduced to 50% if
the Consolidated Leverage Ratio as of the last day of such fiscal year is less
than 3.0 to 1.0, and the ECF Percentage shall be further reduced to 25% if the
Consolidated Leverage Ratio as of the last day of such fiscal year is less than
2.0 to 1.0.

 

“Eligible Assignee” : (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development (the “OECD”), or a
political subdivision of any such country, and having a combined capital and
surplus in a dollar 

 

10

 

equivalent amount of at least $100,000,000; provided, however,
that such bank is acting through a branch or agency located in the country in
which it is organized or another country that is also a member of the OECD; (c) an
insurance company, mutual fund or other entity which is regularly engaged in
making, purchasing or investing in loans or securities, or any other financial institution
organized under the laws of the United States, any state thereof, any other
country that is a member of the OECD or a political subdivision of any such
country with assets, or assets under management, in a dollar equivalent amount
of at least $100,000,000; (d) any Affiliate of a Lender or an Approved
Fund of a Lender; (e) any other entity (other than a natural person) which
is an “accredited investor” (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses or investing
activities including, but not limited to, insurance companies, mutual funds and
investment funds; (f) any other entity if at the time of the applicable
assignment a Default or Event of Default shall be continuing and (g) any
other entity consented to by the Administrative Agent and the Borrower.

 

“Environmental Laws”:  any
and all applicable foreign, Federal, state, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
occupational safety and health or protection of the environment, as now or may
at any time hereafter be in effect.

 

“ERISA”:  the Employee
Retirement Income Security Act of 1974, as amended from time to time, the
regulations promulgated thereunder and any successor thereto.

 

“Eurocurrency Reserve Requirements”:  for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

 

“Eurodollar Base Rate”: 
with respect to each day during each Interest Period pertaining to a
Eurodollar Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on
the first day of such Interest Period appearing on the Reuters Screen LIBOR01 Page as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period.  In the event that
such rate does not appear on such page (or otherwise on such screen), the
“Eurodollar Base Rate” shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability,
by reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., New York City time, two Business Days
prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.

 

11

 

“Eurodollar Loans”:  Loans
the rate of interest applicable to which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with
respect to each day during each Interest Period pertaining to a Eurodollar
Loan, a rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):

 

          Eurodollar
Base Rate         

1.00 - Eurocurrency Reserve Requirements

 

“Eurodollar Tranche”:  the
collective reference to Eurodollar Loans under a particular Facility the then
current Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally have
been made on the same day).

 

“Event of Default”:  any
of the events specified in Section 9, provided that any requirement
specified in Section 9 for the giving of notice, the lapse of time, or
both, has been satisfied.

 

“Excess Cash Flow”:  for
any fiscal year of Holdings, the excess, if any, of:

 

(a)           the sum, without
duplication, of:

 

(i)            Consolidated
Net Income for such fiscal year,

 

(ii)           the amount of all
non-cash charges deducted in arriving at such Consolidated Net Income, other
than any charges that represent an accrual of a reserve for cash charges for
any future period,

 

(iii)          depreciation
and amortization expense,

 

(iv)          amortization of
intangibles (including, but not limited to, goodwill), deferred customer
acquisition costs and organization costs,

 

(v)           the increase in
long-term liabilities excluding (a) the long-term portion of debt, (b) the
long-term portion of Capital Lease Obligations, and (c) deferred customer
acquisition revenues for such fiscal year,

 

(vi)          the aggregate net
amount of non-cash loss on the Disposition of Property by Holdings and its
Subsidiaries during such fiscal year (other than sales of inventory in the ordinary
course of business), to the extent deducted in arriving at such Consolidated
Net Income,

 

(vii)         cash  proceeds of business interruption insurance,

 

(viii)        the decrease in
Consolidated Working Capital for such fiscal year, and

 

12

 

(ix)           the decrease in
long-term assets excluding (a) property, plant and equipment, (b) purchased
accounts, (c) goodwill, (d) intangible assets, (e) debt issuance
costs, and (f) deferred customer acquisition costs for such fiscal year, minus

 

(b)           the sum, without
duplication, of:

 

(i)            the amount of all
non-cash credits included in arriving at such Consolidated Net Income,

 

(ii)           the amortization of
deferred customer acquisition revenue,

 

(iii)          the aggregate
amount actually paid (other than amounts for which payables had been recorded
in a prior fiscal year and deducted pursuant to this clause (b)(iii)) by
Holdings and its Subsidiaries in cash, and expenditures for which payables have
been recorded but not yet paid, during such fiscal year on account of Capital
Expenditures (excluding the principal amount of Indebtedness incurred to
finance such expenditures (but including repayments of any such Indebtedness
incurring during such period or any prior period) and any such expenditures
financed with the proceeds of any Reinvestment Deferred Amount),

 

(iv)          the aggregate amount
of all regularly scheduled principal payments of Funded Debt (including the
Term Loans) of Holdings and its Subsidiaries made during such fiscal year
(other than in respect of Revolving Loans and any other revolving credit
facility to the extent there is not an equivalent permanent reduction in
commitments thereunder),

 

(v)           an amount equal to
the deferred customer acquisition costs during such fiscal year minus
the deferred customer acquisition revenue during such fiscal year,

 

(vi)          the increase in
Consolidated Working Capital for such fiscal year,

 

(vii)         the increase in
long-term assets excluding (A) property, plant and equipment, (B) purchased
accounts, (C) goodwill, (D) intangible assets, (E) debt issuance
costs, and (F) deferred customer acquisition costs for such fiscal year,

 

(viii)        the aggregate net
amount of non-cash gain on the Disposition of Property by Holdings and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income,

 

(ix)           all reasonable
one-time costs, fees, expenses and charges and one-time payments constituting
or related to any permitted Investments, Permitted Acquisitions, or equity
issuances to the extent not deducted in arriving at such Consolidated Net
Income,

 

(x)            management and
transaction fees and related expenses paid under the Management Agreement
(substantially in the form most recently delivered to the

 

13

 

Administrative Agent prior to the Closing
Date, and without further modification thereto as to amounts payable
thereunder) to the extent not deducted in arriving at such Consolidated Net
Income,

 

(xi)           Restricted Payments
made in cash which were permitted to be made under this Credit Agreement,

 

(xii)          the decrease in
long-term liabilities excluding (A) the long-term portion of debt, (B) the
long-term portion of Capital Lease Obligations, and (D) deferred customer
acquisition revenues for such fiscal year,

 

(xiii)         all reasonable
one-time fees, expenses and prepayment penalties or premiums paid in connection
with a Permitted Refinancing, and

 

(xiv)        the aggregate amount
of all payments from Westar expected to be received pursuant to that certain
Settlement Agreement dated November 12, 2004 during such fiscal year,
which amount shall not exceed $25,000,000 in the aggregate for all fiscal
years.

 

To the extent any Person is disregarded from the definition of
“Consolidated Net Income” pursuant to the proviso thereto in any period, such
Person shall be so disregarded from the calculation of Excess Cash Flow
hereunder during such period.  The
aggregate amount of optional prepayments of the Term Loans, and prepayments of
Revolving Loans and Swingline Loans to the extent accompanied by permanent
reductions in Revolving Commitments, made during any fiscal year shall reduce
on a dollar-for-dollar basis the required amount of the mandatory prepayment to
be made pursuant to Section 4.2(d) with respect to the Excess Cash
Flow for such fiscal year.

 

“Excess Cash Flow Application Date”:  as defined in Section 4.2.

 

“Excluded Indebtedness”: 
all Indebtedness permitted by Section 8.2.

 

“Existing Agent”:  as
defined in the recitals to this Agreement.

 

“Existing Lenders”:  as
defined in the recitals to this Agreement.

 

“Existing Revolving Commitments”:  the revolving commitments made under the
Original Credit Agreement.

 

“Existing Term Loans”:  the
term loans made under the Original Credit Agreement outstanding immediately
prior to the Restatement Date.

 

“Extending Term Lender”: 
as defined in the Amendment Agreement.

 

“Facility”:  each of (a) the
Tranche B-1 Term Loans outstanding hereunder, the Tranche B-2 Term Commitments
and the Tranche B-2 Term Loans made in respect thereof 

 

14

 

(collectively, the “Term Loan Facility”), and (b) the
Revolving Commitments and the extensions of credit made in respect thereof (the
“Revolving Facility”).

 

“Federal Funds Effective Rate”: 
for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average of the quotations for the day of
such transactions received by the Reference Lender from three federal funds
brokers of recognized standing selected by it.

 

“Foreign Subsidiary”:  any
Subsidiary of Holdings that is not a Domestic Subsidiary.

 

“Funded Debt”:  as to any
Person, all Indebtedness of such Person that has a scheduled maturity
(excluding any mandatory prepayments) more than one year from the date of its
creation or matures within one year from such date but is renewable or
extendible, at the option of such Person, to a date more than one year from
such date or arises under a revolving credit or similar agreement that
obligates the lender or lenders to extend credit during a period of more than
one year from such date, including all current maturities and current sinking
fund payments in respect of such Indebtedness whether or not required to be paid
within one year from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.

 

“Funding Office”:  the
office of the Administrative Agent specified in Section 11.2 or such other
office as may be specified from time to time by the Administrative Agent as its
funding office by written notice to the Borrower and the Lenders.

 

“GAAP”:  generally
accepted accounting principles in the United States as in effect from time to
time, except that for purposes of Section 8.1, GAAP shall be determined on
the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the most recent audited financial statements
referred to in Section 5.1(b).  In
the event that any Accounting Change (as defined below) shall occur and such
change results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of
this Agreement so as to equitably reflect such Accounting Changes with the
desired result that the criteria for evaluating the Borrower’s financial
condition shall be the same after such Accounting Changes as if such Accounting
Changes had not been made.  Until such
time as such an amendment shall have been executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred.  “Accounting Changes” refers to changes
in accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants or, if applicable, the SEC.

 

15

 

“Governmental Authority”: 
any nation or government, any state or other political subdivision
thereof, any agency, authority, instrumentality, regulatory body, court,
central bank or other entity, officer or examiner exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the
collective reference to Holdings, the Borrower and their respective
Subsidiaries.

 

“Guarantee and Collateral Agreement”:  the Guarantee and Collateral Agreement, dated
as of the Closing Date, among Holdings, the Borrower and each Subsidiary
Guarantor.

 

“Guarantee Obligation”: 
as to any Person (the “guaranteeing person”), any obligation of (a) the
guaranteeing person or (b) another Person (including any bank under any
letter of credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the “primary obligations”) of any other third Person
(the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (A) for
the purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business.  The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed to be
the lower of (x) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is made
and (y) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such Guarantee
Obligation or, if recourse is limited to a specific asset, the fair market
value of such asset, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.

 

“Guarantors”:  the
collective reference to Holdings and the Subsidiary Guarantors.

 

“Hedge Agreements”:  any
agreement with respect to any swap, forward, future or derivative transaction
or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock, 

 

16

 

option or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Hedge Agreement.

 

“Holdings”:  as defined in
the preamble to this Agreement.

 

“IASG”:  Integrated Alarm
Services Group Inc., a Delaware corporation.

 

“IASG Acquisition”:  the
merger of Tara Acquisition Corp. with and into IASG, resulting in the
acquisition by Holdings of all the issued and outstanding Capital Stock of IASG
as set forth in the Agreement and Plan of Merger, dated as of December 20,
2006, among Holdings, Tara Acquisition Corp., a Delaware corporation and a
direct wholly owned subsidiary of Holdings, and IASG.

 

“Increased Amount Date”: 
as defined in Section 2.4.

 

“Indebtedness”:  of any
Person at any date, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the
deferred purchase price of property or services (other than current trade
payables incurred in the ordinary course of such Person’s business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such
Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, and (j) for the purposes of Sections
8.2 and 9(e) only, all obligations of such Person in respect of Hedge
Agreements; provided that Indebtedness shall not include deferred
revenue, deferred tax liabilities and unclaimed property.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provide
that such Person is not liable therefor.

 

“Insolvency”:  with
respect to any Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section 4245 of ERISA.

 

“Insolvent”:  pertaining
to a condition of Insolvency.

 

17

 

“Intellectual Property”: 
the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses, technology,
know-how and processes, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

 

“Interest Payment Date”:  (a) as
to any Base Rate Loan (other than any Swingline Loan), the last day of each
March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day that is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period, (d) as to any Loan (other than any Revolving Loan
that is a Base Rate Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof and (e) as to any Swingline Loan, the
day that such Loan is required to be paid.

 

“Interest Period”:  as to
any Eurodollar Loan, (a) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such Eurodollar Loan
and ending one, two, three or six or (if available to all Lenders under the
relevant Facility) nine or twelve months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, as the case may
be, given with respect thereto; and (b) thereafter, each period commencing
on the last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six or (if available to all
Lenders under the relevant Facility) nine or twelve months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent no
later than 2:00 P.M., New York City time, on the date that is three
Business Days prior to the last day of the then current Interest Period with
respect thereto; provided that, all of the foregoing provisions relating
to Interest Periods are subject to the following:

 

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

 

(ii)           the Borrower may
not select an Interest Period under a particular Facility that would extend
beyond the Revolving Termination Date or beyond the date final payment is due
on the Tranche B-1 Term Loans or the Tranche B-2 Term Loans, as applicable;

 

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

 

18

 

(iv)          the Borrower shall
select Interest Periods so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.

 

“Investments”:  as defined
in Section 8.8.

 

“Issuing Lender”:  each of
JPMorgan Chase Bank, N.A. and Bank of America, N.A., in its capacity as issuer
of any Letter of Credit.

 

“Joinder Agreement”:  an
agreement substantially in the form of Exhibit N.

 

“L/C Commitment”: 
$7,500,000.

 

“L/C Fee Payment Date”: 
the last day of each March, June, September and December and
the last day of the Revolving Commitment Period.

 

“L/C Obligations”:  at any
time, an amount equal to the sum of (a) the aggregate then undrawn and
unexpired amount of the then outstanding Letters of Credit and (b) the
aggregate amount of drawings under Letters of Credit that have not then been
reimbursed pursuant to Section 3.11.

 

“L/C Participants”:  with
respect to any Letter of Credit, the collective reference to all the Revolving
Lenders other than the Issuing Lender in respect of such Letter of Credit, in
their respective capacities as such.

 

“Lead Arranger”:  as
defined in the preamble to this Agreement.

 

“Lender Presentation”: 
the Lender Presentation dated October 2009 and furnished to the
Lenders.

 

“Lenders”:  as defined in
the preamble to this Agreement; provided that unless the context
otherwise requires, each reference herein to the Lenders shall be deemed to
include any Conduit Lender.

 

“Letters of Credit”:  as
defined in Section 3.7(a).

 

“Lien”:  any mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement with respect
to property of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).

 

“Loan”:  any loan made by
any Lender pursuant to this Agreement.

 

“Loan Documents”:  this
Agreement, the Amendment Agreement, the Security Documents, the Reaffirmation
Agreement and the Notes.

 

19

 

“Loan Modification Agreement”:  a loan modification agreement by and among,
and in form and substance satisfactory to, the Administrative Agent, the
Borrower and the Accepting Lenders.

 

“Loan Modification Offer”:  as defined in Section 11.1.

 

“Loan Parties”:  each Group Member that is a party to a Loan
Document.

 

“Majority Facility Lenders”:  with respect to (a) the Term Loan
Facility, the holders of more than 50% of the aggregate unpaid principal amount
of the Term Loans outstanding thereunder, (b) the Revolving Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Total
Revolving Extensions of Credit outstanding thereunder (or, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments), (c) the Tranche B-1 Term Loan Subfacility,
the holders of 50% of the aggregate unpaid principal amount of the Tranche B-1
Term Loans outstanding thereunder, and (d) the Tranche B-2 Term Loan
Subfacility, the holders of 50% of the aggregate unpaid principal amount of the
Tranche B-2 Term Loans outstanding thereunder.

 

“Management Agreement”:  collectively, those certain letter
agreements, by and between (a) the Borrower and Quadrangle Advisors LLC,
and (b) the Borrower and Quadrangle Debt Recovery Advisors LLC, setting
forth certain terms regarding payments from the Borrower for management and
advisory services rendered by such entities.

 

“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property, financial condition or results of operations of
Holdings and its Subsidiaries taken as a whole or (b) the validity or
enforceability of the Loan Documents or the rights or remedies of the Agents or
the Lenders hereunder or thereunder or the validity, perfection or priority of
the Administrative Agent’s Liens on the Collateral.

 

“Materials of Environmental Concern”:  any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes as such are defined or otherwise regulated in
or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.

 

“Modifications”:  as defined in Section 6.1(k).

 

“Modified Term Loan”:  a term loan made by a Lender pursuant to a
Loan Modification Agreement.

 

“Modified Term Loan Commitment”:  as to any Lender, the obligation of such
Lender, if any, to extend the maturity date of any Tranche B-1 Term Loans held
by it upon conversion into a Modified Term Loan hereunder in a principal amount
not to exceed the aggregate principal amount of such Lender’s Tranche B-1 Term
Loans at that time, and “Modified Term Loan Commitments” means such
commitments of all Lenders in the aggregate.

 

“Modified Term Loan Percentage”:  as to any Lender at any time, the percentage
which such Lender’s Modified Term Loan Commitment then constitutes of the
aggregate 

 

20

 

Modified Term Loan
Commitments (or, at any time after the funding of the Modified Term Loans, the
percentage which the aggregate principal amount of such Lender’s Modified Term
Loans then outstanding constitutes of the aggregate principal amount of the
Modified Term Loans then outstanding).

 

“Mortgaged Properties”:  the real properties as to which the
Administrative Agent for the benefit of the Lenders shall be granted a Lien
pursuant to the Mortgages, including those listed on Schedule 1.1(b).

 

“Mortgages”: 
each of the mortgages, deeds of trust and deeds to secure debt, and each
of the amended mortgages, deeds of trust and deeds to secure debt, as amended
by the Modifications, made by any Loan Party in favor of, or for the benefit
of, the Administrative Agent for the benefit of the Lenders, substantially in
the form of Exhibit C (with such changes thereto as shall be advisable
under the law of the jurisdiction in which such mortgage or deed of trust is to
be recorded).

 

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

 

“Net Cash Investment Cost”:  for any period, with respect to any Person
and its Subsidiaries, the excess of (a) the sum of (i) the aggregate
amount of direct and indirect installation expenses related to acquiring new
customers, (ii) the aggregate amount of direct and indirect selling
expenses related to acquiring new customers and (iii) the aggregate amount
paid, directly or indirectly (including, without limitation, acquisitions of
stock or equity interests for the principal purpose of acquiring subscriber
accounts), for acquisition of subscriber accounts from any third party, minus
(b) the aggregate system installation revenues related to acquiring new
customers; each of clause (a)(i), (a)(ii) and (b) determined without
the inclusion of amortization of deferred costs or amortization of deferred
revenues, as appropriate, in that period, and with the inclusion of costs
deferred or revenues deferred, as appropriate, in that period, and each amount
herein in accordance with GAAP.

 

“Net Cash Proceeds”:  (a) in connection with any Asset Sale,
Allotted Disposition, equity issuance of Holdings or Recovery Event, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or by the
Disposition of any non-cash consideration received in connection therewith or
otherwise, but only as and when received) of such Asset Sale, Allotted
Disposition or Recovery Event, net of attorneys’ fees, accountants’ fees,
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale, Allotted Disposition or Recovery Event
(other than any Lien pursuant to a Security Document) and other reasonable out
of pocket fees and expenses actually incurred in connection therewith and net
of taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements) and reasonable reserves required to be taken in connection
therewith pursuant to GAAP and (b) in connection with any issuance or sale
of Capital Stock or any incurrence of Indebtedness, the cash proceeds received
from such issuance or incurrence, net of 

 

21

 

attorneys’ fees, investment
banking fees, accountants’ fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in connection therewith.

 

“New Term Commitments”:  as defined in Section 2.4.

 

“New Term Lender”:  as defined in Section 2.4.

 

“New Term Loan”:  as defined in Section 2.4.

 

“Non-Excluded Taxes”:  as defined in Section 4.10(a).

 

“Non-Extending Term Lender”:  as defined in the Amendment Agreement.

 

“Non-U.S. Lender”:  as defined in Section 4.10(d).

 

“Notes”: 
the collective reference to any promissory note evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and Reimbursement
Obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Borrower to any Agent, to any Issuing Lender
or to any Lender (or, in the case of Specified Hedge Agreements, any Affiliate
of any Agent or any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Specified Hedge Agreement or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to any Agent, to any Issuing Lender or to any Lender that are required
to be paid by the Borrower pursuant hereto) or otherwise; provided that (a) obligations
of the Borrower or any Subsidiary under any Specified Hedge Agreement shall be
secured and guaranteed pursuant to the Security Documents only to the extent
that, and for so long as, the other Obligations are so secured and guaranteed
and (b) any release of Collateral or Guarantors or amendments to the
Security Documents effected in the manner permitted by this Agreement shall not
require the consent of holders of obligations under Specified Hedge Agreements.

 

“Original Credit Agreement”:  as defined in the recitals to this Agreement.

 

“Original Restatement Date”:  April 26, 2006.

 

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

 

“Participant”:  as defined in Section 11.6(b).

 

22

 

“PBGC”: 
the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted
Acquisitions”:  any acquisition by
any Subsidiary of Holdings of all or substantially all of the assets of a
Person or line of business of such Person, or all of the Capital Stock of a
Person (in each case referred to herein as the “Acquired Entity”)
(excluding any acquisitions of stock or equity interests for the principal
purpose of acquiring subscriber accounts); provided that (a) the
Acquired Entity shall be a going concern and shall be in a related line of
business as that of any Subsidiary of Holdings as conducted during the current
and most recently concluded calendar year; (b) all of the assets of the
Acquired Entity shall be located in the United States (provided that
such acquisition may involve assets located outside the United States so long
as the sum of the aggregate value of such foreign assets acquired shall be
deemed to be an Investment for purposes of clause (p) of Section 8.8
and shall be permissible under such clause of such Section); (c) such
acquisition shall be consensual and shall have been approved by the Acquired
Entity’s board of directors (or other applicable governing body); (d) either
(A) the consideration paid in connection with such acquisition shall be
funded solely with the Net Cash Proceeds from a Allotted Disposition with
respect to which a Reinvestment Notice shall have been delivered hereunder or (B) the
cash consideration (net of any Net Cash Proceeds received from equity issuances
by Holdings or issuances of subordinated Indebtedness by Holdings to the
Sponsor pursuant to Section 8.2(o), in each case, to the extent such
proceeds are substantially simultaneously applied to fund such Permitted
Acquisition) paid in connection with such acquisition and any other
acquisitions under this definition that is not funded as described in clause (A) above
shall not in the aggregate exceed $60,000,000 in the aggregate during the term
of this Agreement (it being understood that in no event shall consideration in
the form of Capital Stock of Holdings paid in connection with any acquisition
under this definition be included in the dollar limitations imposed by this
clause (B)); (e) at the time of such transaction (A) both before and
after giving effect thereto, no Event of Default or Default shall have occurred
and be continuing; and (B) the Borrower would be in compliance with the
covenants set forth in Section 8.1, in each case, as of the most recently
completed period ending prior to such transaction for which the financial
statements and certificates required by Section 7.1(a) or 7.1(b) and
Section 7.2 were required to be delivered after giving pro forma
effect to such transaction and to any other event occurring after such period
as to which pro forma recalculation is appropriate (including any other
transaction described in this definition occurring after such period) as if
such transaction (and the occurrence, refinancing or assumption of any
Indebtedness in connection therewith) had occurred as of the first day of such
period; (f) at least five Business Days prior to the proposed date of the
consummation of such acquisition, the Borrower shall have delivered to the
Administrative Agent a Compliance Certificate demonstrating compliance with the
requirements of clause (e)(B) above (which shall have attached thereto
reasonably detailed backup data and calculations showing such compliance); (g) Holdings
and its Subsidiaries shall not incur or assume any Indebtedness in connection
with such acquisition, except as permitted by Section 8.2; and (h) Holdings
and its Subsidiaries shall comply, and shall cause the Acquired Entity to
comply, with the applicable provisions of Sections 7.10 and 7.11 and the
Security Documents.

 

23

 

“Permitted Amendments”:  (a) an extension of the final maturity
date of the Tranche B-1 Term Loans of the Accepting Lenders, and (b) an
increase in the Applicable Margin with respect to the applicable Tranche B-1
Term Loans of the Accepting Lenders and the payment of additional fees to the
Accepting Lenders; provided that the
yield applicable to any Modified Term Loan (the “Subject Term Loan”)
(after giving effect to all upfront or similar fees and original issue discount
payable with respect to such Subject Term Loan) shall not be greater than the
yield with respect to the Tranche B-2 Term Loans or with respect to any other
Modified Term Loan, as applicable, unless the yield with respect to the Tranche
B-2 Term Loans or such other Modified Term Loan, as applicable, is increased so
as to cause such yield to equal the yield applicable to the Subject Term Loan
(after giving effect to all upfront or similar fees or original issue discount
payable with respect to such Subject Term Loan).

 

“Permitted Investors”:  the collective reference to the Sponsor and
its Control Investment Affiliates.

 

“Permitted Refinancing”:  the refinancing of all or any portion (as
permitted by Section 8.9) of the Indebtedness of the Loan Parties in
respect of the Unsecured Credit Agreement or any prior Permitted Refinancing in
respect thereof (the “Refinanced Indebtedness”) with the proceeds of
Indebtedness of the Borrower or Holdings that (a) has an aggregate
outstanding principal amount not greater than the sum of the aggregate principal
amount of such Refinanced Indebtedness outstanding at the time of such
refinancing, unpaid accrued interest and premium thereon and other reasonable
amounts paid, and fees and expenses reasonably incurred, in connection with
such refinancing, (b) is issued pursuant to documentation containing terms
that provide for (i) a weighted average maturity (measured as of the date
of such refinancing) and maturity no shorter than the date that is 91 days
after the Tranche B-2 Term Loan Maturity Date, (ii) a fixed interest rate
consistent with then prevailing market conditions, or a floating interest rate
and (iii) no amortization of the principal amount of such Indebtedness
prior to the date that is 91 days after the Tranche B-2 Term Loan Maturity Date
and (c) is not secured by any property or any Lien; provided, however,
that, notwithstanding the foregoing, no Guarantee Obligation in respect of such
Indebtedness shall constitute part of such Permitted Refinancing unless similar
Guarantee Obligations with respect to such Refinanced Indebtedness existed and
constituted Refinanced Indebtedness prior to such Permitted Refinancing.

 

“Person”: 
an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

 

“Plan”: 
at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pro Forma Balance Sheet”:  as defined in Section 5.1(a).

 

“Projections”:  as defined in Section 7.2(c).

 

24

 

“Properties”: 
as defined in Section 5.17(a).

 

“Property”: 
any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, including Capital
Stock.

 

“Qualified Counterparty”:  with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an Affiliate of a Lender or an
Agent or an Affiliate of an Agent.

 

“Reaffirmation Agreement”:  the Reaffirmation Agreement to be executed by
the Borrower and each Guarantor substantially in the form of Exhibit M, as
it may be amended, supplemented or otherwise modified from time to time.

 

“Recovery Event”:  any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of any Group Member (excluding business interruption
insurance).

 

“Reference Bank”:  JPMorgan Chase Bank, N.A.

 

“Refunded Swingline Loans”:  as defined in Section 3.4(b).

 

“Refunding Date”:  as defined in Section 3.4(c).

 

“Register”: 
as defined in Section 11.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect from
time to time.

 

“Reimbursement Obligation”:  the obligation of the Borrower to reimburse
the Issuing Lenders pursuant to Section 3.11 for amounts drawn under
Letters of Credit.

 

“Reinvestment Deferred Amount”:  with respect to any Reinvestment Event, the
portion of Net Cash Proceeds received by any Group Member in connection
therewith that are subject to the mandatory prepayment requirements of Section 4.2(a),
(c) or (e) but are not applied to prepay the Term Loans or reduce the
Revolving Commitments pursuant to Section 4.2(a), (c) or (e) as
a result of the delivery of a Reinvestment Notice.

 

“Reinvestment Event”:  any Asset Sale, equity issuance of Holdings,
Recovery Event or Allotted Disposition in respect of which the Borrower has
delivered a Reinvestment Notice.

 

“Reinvestment Notice”:  a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset
Sale, equity issuance of Holdings, Recovery Event or Allotted Disposition (a) to
acquire or repair assets useful in (or, pursuant to a Permitted Acquisition,
any Acquired Entity engaged in) the business of providing alarm monitoring
services, or (b) for expenditures included in the definition of Net Cash
Investment Costs; provided that 

 

25

 

Reinvestment Notices may
only be delivered in connection with any Allotted Dispositions resulting in Net
Cash Proceeds of less than $25,000,000 in the aggregate after the Restatement
Date.

 

“Reinvestment Prepayment Amount”:  with respect to any Reinvestment Event, the
Reinvestment Deferred Amount relating thereto less any amount expended prior to
the relevant Reinvestment Prepayment Date (a) to acquire or repair assets
useful in (or, pursuant to a Permitted Acquisition, any Acquired Entity engaged
in) the business of providing alarm monitoring services, or (b) for
expenditures included in the definition of Net Cash Investment Costs.

 

“Reinvestment Prepayment Date”:  with respect to any Reinvestment Event, the
earlier of (a) the later of (i) the date occurring 270 days after the
Net Cash Proceeds from such Reinvestment Event are received and (ii) in
the event that any Group Member shall have entered into a legally binding
commitment (evidenced by documentation reasonably satisfactory to the
Administrative Agent), within 270 days after the receipt by any Group Member of
Net Cash Proceeds from such Reinvestment Event, to reinvest the Reinvestment
Deferred Amount with respect to such Reinvestment Event in a manner
contemplated by clause (a) or (b) of the definition of Reinvestment
Prepayment Amount, the earlier of (A) the date occurring 360 days after
the Net Cash Proceeds from such Reinvestment Event are received and (B) the
date on which such legally binding commitment terminates or is abandoned
without the consummation of the reinvestment contemplated thereby, and (b) the
date on which the Borrower shall have determined not to, or shall have otherwise
ceased to, acquire or repair assets useful in (or any Acquired Entity engaged
in) the business of providing alarm monitoring services or for Net Cash
Investment Costs with all or any portion of the relevant Reinvestment Deferred
Amount.

 

“Related Party”:  with respect to the Sponsor, (a) any
controlling stockholder or 80% (or more) owned Subsidiary of the Sponsor or (b) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Sponsor and/or such other Persons
referred to in the immediately preceding clause (a).

 

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

 

“Reportable Event”:  any of the events set forth in Section 4043(c) of
ERISA and the regulations issued thereunder, other than those events as to
which the thirty day notice period is waived under applicable regulations or
any successor thereto.

 

“Required Lenders”:  at any time, the holders of more than 50% of
the sum of (a) until the funding of the Tranche B-2 Term Loans, the
Tranche B-2 Term Commitments of Additional Term Lenders then in effect, (b) the
aggregate unpaid principal amount of Term Loans then outstanding, and (c) the
Total Revolving Commitments then in effect or, if the Revolving Commitments
have been terminated, the Total Revolving Extensions of Credit then
outstanding.

 

26

 

“Requirement of Law”:  as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.

 

“Restatement Date”:  the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied or waived.

 

“Restatement Date Certificate”:  a Restatement Date Certificate substantially
in the form of Exhibit B.

 

“Restricted Payments”:  as defined in Section 8.6.

 

“Revolving Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed
the amount set forth under the heading “New Revolving Commitment” under such
Lender’s name on Schedule C to the Amendment Agreement or under the heading
“Revolving Commitment” under such Lender’s name on such Lender’s Addendum or in
the Assignment and Assumption pursuant to which such Lender became a party
hereto, as applicable, as the same may be changed from time to time pursuant to
the terms hereof, and “Revolving Commitments” means such commitments of
all Lenders in the aggregate.  The amount
of the Total Revolving Commitments as of the Restatement Date is $15,000,000.

 

“Revolving Commitment Period”:  the period from and including the Restatement
Date to the Revolving Termination Date.

 

“Revolving Extensions of Credit”:  as to any Revolving Lender at any time, an
amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender’s
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender’s Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.

 

“Revolving Lender”:  (a) each Lender under the Original Credit
Agreement immediately prior to the Restatement Date that executes and delivers
a signature page to the Amendment Agreement specifically in the capacity
of an Extending Revolving Lender, (b) each Additional Revolving Lender and
(c) any other Person that becomes a party
hereto as a Revolving Lender hereunder pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance or otherwise ceases to have any
Revolving Loans or Revolving Commitments hereunder.

 

27

 

“Revolving Loans”:  as defined in Section 3.1(a).

 

“Revolving Percentage”:  as to any Revolving Lender at any time, the
percentage which such Lender’s Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender’s Revolving Loans, L/C Obligations and Swingline Loans (or
participations therein) then outstanding constitutes of the aggregate principal
amount of the Revolving Loans, L/C Obligations and Swingline Loans (or
participations therein) then outstanding).

 

“Revolving Termination Date”:  March 31, 2013; provided that the
Revolving Termination Date shall automatically become December 14, 2012 if
the Unsecured Credit Agreement is not amended on or before such date to extend
the maturity of the loans thereunder to a date that is at least 91 days after March 31,
2014 or refinanced in full in a Permitted Refinancing with Indebtedness that
matures at least 91 days after March 31, 2014.

 

“SEC”: 
the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Second Lien Notes”:  the 12% Senior Secured Notes due 2011 of the
Borrower issued pursuant to that certain Indenture, dated as of April 2,
2007, among the Borrower, Holdings, the subsidiary guarantors party thereto and
the Second Lien Notes Trustee.

 

“Second Lien Notes Trustee”:  Wells Fargo Bank, N.A., as trustee, or any
person serving in the role of Trustee for the Second Lien Notes.

 

“Secured Parties”:  as defined in the Guarantee and Collateral
Agreement.

 

“Securities Act”:  the Securities Act of 1933, as amended from
time to time.

 

“Security Documents”:  the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting or perfecting (or purporting to
grant or perfect) a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.

 

“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Solvent”: 
with respect to any Person, as of any date of determination, (a) the
amount of the “present fair saleable value” of the assets of such Person will,
as of such date, exceed the amount of all “probable liabilities of such Person,
contingent or otherwise”, as of such date, as such quoted terms are determined
in accordance with applicable federal and state laws governing determinations
of the insolvency of debtors, (b) the present fair saleable value of the
assets of such Person will, as of such date, be greater than the amount that
will be required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to 

 

28

 

conduct its business, (d) such
Person will generally be able to pay its debts as they mature (for purposes of
this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”
means any (A) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (B) right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured), and (e) such Person has not executed any Loan
Documents with actual intent to hinder, delay or defraud either present or
future creditors; provided that in computing the amount of any
contingent, unliquidated, unmatured or disputed claim at any time, it is
intended that such claims will be computed at the amount which, in light of all
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual, liquidated or matured claim.

 

“Specified Change of Control”:  a “Change of Control” (or any other defined
term or provision having a similar purpose) as defined in the Unsecured Credit
Agreement.

 

“Specified Hedge Agreement”:  any Hedge Agreement (a) entered into by (i) Holdings
or any of its Subsidiaries and (ii) any Qualified Counterparty and (b) that
has been designated by such Agent or Lender or Affiliate thereof, as the case
may be, and the Borrower, by notice to the Administrative Agent, as a Specified
Hedge Agreement.  The designation of any
Hedge Agreement as a Specified Hedge Agreement shall not create in favor of the
Qualified Counterparty that is a party thereto any rights in connection with
the management or release of any Collateral or of the obligations of any
Guarantor under the Guarantee and Collateral Agreement.

 

“Sponsor”:  each of (a) Quadrangle Group LLC and its
Affiliates and (b) Monarch Alternative Capital LP and its Affiliates and
funds under its management.

 

“Subfacility”:  each of (a) the Tranche B-1 Term Loan
Subfacility and (b) the Tranche B-2 Term Loan Subfacility.

 

“Subordinated Intercompany Note”:  with respect to any Group Member or affiliate
thereof as the maker thereof, a promissory note substantially in the form of Exhibit J
(with such modifications as the Administrative Agent may agree to), which
promissory note shall evidence all intercompany loans which may be made from
time to time by any payee thereunder (whether or not reflected on the attached
schedule thereto), including that certain Subordinated Intercompany Note dated
as of the Closing Date, by and among the Group Members; provided that
the amounts reflected as owing pursuant to any such notes shall only be
required to be updated on a quarterly basis.

 

“Subsidiary”: 
as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the 

 

29

 

management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. 
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
Holdings.

 

“Subsidiary Guarantor”:  each Domestic Subsidiary of Holdings, other
than the Borrower.

 

“Swingline Commitment”:  the obligation of the Swingline Lender to
make Swingline Loans pursuant to Section 3.3 in an aggregate principal
amount at any one time outstanding not to exceed $2,500,000.

 

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

 

“Swingline Loans”:  as defined in Section 3.3.

 

“Swingline Participation Amount”:  as defined in Section 3.4.

 

“Term Lender”:  any Tranche B-1 Term Lender or Tranche B-2
Term Lender.

 

“Term Loan”: 
any Tranche B-1 Term Loan or Tranche B-2 Term Loan.

 

“Total Revolving Commitments”:  at any time, the aggregate amount of the
Revolving Commitments then in effect.

 

“Total Revolving Extensions of Credit”:  at any time, the aggregate amount of the
Revolving Extensions of Credit of the Revolving Lenders outstanding at such
time.

 

“Tranche B-1 Term Lender”:  (a) each lender under the Original
Credit Agreement immediately prior to the Restatement Date that executes and
delivers a signature page to the Amendment Agreement solely in its
capacity as an Existing Term Lender but not specifically in the capacity of an
Extending Term Lender, (b) each lender under the Original Credit Agreement
immediately prior to the Restatement Date that does not execute and deliver a
signature page to the Amendment Agreement and (c) any other Person that becomes a party hereto as a
Tranche B-1 Term Lender hereunder pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance or otherwise ceases to have any Tranche B-1 Term
Loans hereunder.

 

“Tranche B-1 Term Loan Maturity Date”:  March 31, 2012.

 

“Tranche B-1
Term Loan Subfacility”:  the Tranche
B-1 Term Loans outstanding hereunder.

 

“Tranche B-1 Term Loans”:  as defined in the recitals to this
Agreement.  The aggregate amount of the
Tranche B-1 Term Loans as of the Restatement Date is $86,500,000.

 

30

 

“Tranche B-1 Term Percentage”:  as to any Tranche B-1 Term Lender at any
time, the percentage which the aggregate principal amount of such Lender’s
Tranche B-1 Term Loans then outstanding constitutes of the aggregate principal
amount of the Tranche B-1 Term Loans then outstanding.

 

“Tranche B-2 Term Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make or otherwise fund a Tranche B-2 Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading “Tranche B-2 Term Commitment” under such Lender’s name on
Schedule B to the Amendment Agreement or on such Lender’s Addendum or in the
Assignment and Assumption pursuant to which such Lender became a party hereto,
as applicable, as the same may be changed from time to time pursuant to the
terms and conditions hereof, and “Tranche B-2 Term Commitments” means
such commitments of all Lenders in the aggregate.  The aggregate amount of the Tranche B-2 Term
Commitments as of the Restatement Date is $278,000,000.

 

“Tranche B-2 Term Lender”:  (a) each Lender under the Original
Credit Agreement immediately prior to the Restatement Date that executes and
delivers a signature page to the Amendment Agreement specifically in the
capacity of an Extending Term Lender, (b) each Additional Term Lender and (c) any other Person that becomes a party hereto as a
Tranche B-2 Lender hereunder pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance or otherwise ceases to have any Tranche B-2 Term Loans or
Tranche B-2 Term Commitments hereunder.

 

“Tranche B-2
Term Loan”:  a term loan made by a
Lender pursuant to Section 2.1(b).

 

“Tranche B-2 Term Loan Maturity Date”:  March 31, 2014; provided that the
Tranche B-2 Term Loan Maturity Date shall automatically become December 14,
2012 if the Unsecured Credit Agreement is not amended on or before such date to
extend the maturity of the loans thereunder to a date that is at least 91 days
after March 31, 2014 or refinanced in full in a Permitted Refinancing with
Indebtedness that matures at least 91 days after March 31, 2014.

 

“Tranche B-2
Term Loan Subfacility”:  the Tranche
B-2 Term Commitments and the Tranche B-2 Term Loans made thereunder.

 

“Tranche B-2 Term Percentage”:  as to any Tranche B-2 Term Lender at any
time, the percentage which such Lender’s Tranche B-2 Term Commitment then
constitutes of the aggregate Tranche B-2 Term Commitments (or, at any time
after the funding (or conversion pursuant to Section 2.1(b)) of the
Tranche B-2 Term Loans, the percentage which the aggregate principal amount of
such Lender’s Tranche B-2 Term Loans then outstanding constitutes of the
aggregate principal amount of the Tranche B-2 Term Loans then outstanding).

 

“Transferee”: 
any Assignee or Participant.

 

“Type”: 
as to any Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

 

31

 

“United States”:  the United States of America.

 

“Unsecured Credit Agreement”:  that certain Credit Agreement, dated as of March 14,
2008, among the Borrower, Holdings, the lenders party thereto, JPMorgan Chase
Bank, N.A. (as successor to Bear Stearns Corporate Lending Inc.), as
administrative agent, and the other agents and arrangers party thereto, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with its terms and Section 8.9.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

 

“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a Wholly
Owned Subsidiary of Holdings.

 

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

 

(b)           As
used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”, (iii) the word “incur” shall be construed
to mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words “incurred” and “incurrence” shall have correlative
meanings), (iv) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, Capital Stock, securities,
revenues, accounts, leasehold interests and contract rights, and (v) references
to agreements or other Contractual Obligations shall, unless otherwise
specified, be deemed to refer to such agreements or Contractual Obligations as
amended, supplemented, restated or otherwise modified from time to time
(subject to any applicable restrictions hereunder).

 

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

 

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

 

(e)           The
expressions, “payment in full,” “paid in full” and any other similar terms or
phrases when used herein with respect to the Obligations shall mean the payment
in full, in immediately available funds, of all the Obligations.

 

32

 

(f)            This
Agreement restates and replaces, in its entirety, the Original Credit
Agreement; any reference in any of the other Loan Documents to the Original
Credit Agreement (howsoever defined) shall mean this Agreement.

 

SECTION 2.  AMOUNT AND TERMS OF TERM LOANS AND TERM
COMMITMENTS

 

2.1.          Term Commitments.  (a) The parties hereto acknowledge and
agree that the Existing Term Loans (i) have been made prior to the date
hereof and (ii) shall either remain outstanding as set forth in this Section 2.1(a) or
shall be converted into new Tranche B-2 Term Loans as set forth in Section 2.1(b).  Each Non-Extending Term Lender acknowledges
and agrees that its Existing Term Loans shall hereafter be referred to as
“Tranche B-1 Term Loans”, and on and after the Restatement Date shall have all
of the rights and benefits of Tranche B-1 Term Loans as set forth in this Agreement
and the other Loan Documents.

 

(b)           Subject
to the terms and conditions hereof and of the Amendment Agreement, each
Extending Term Lender and each Additional Term Lender severally agrees,
pursuant to the Amendment Agreement, to make a Tranche B-2 Term Loan on the
Restatement Date to the Borrower in Dollars, which Tranche B-2 Term Loans shall
not exceed for any such Lender the Tranche B-2 Term Commitment of such Lender
as of the Restatement Date.  The Borrower
may make only one borrowing under the Tranche B-2 Term Commitment, which shall
be on the Restatement Date.  Subject to
the terms and conditions hereof and of the Amendment Agreement, each Extending
Term Lender agrees that the Existing Term Loans made by such Lender under the
Original Credit Agreement shall remain outstanding on and after the Restatement
Date as Tranche B-2 Term Loans made pursuant to this Agreement, and shall be
converted into Tranche B-2 Term Loans deemed to be made pursuant to this
Agreement on the Restatement Date.  The
conversion of an Existing Term Loan of an Extending Term Lender shall be deemed
to satisfy, dollar for dollar, such Extending Term Lender’s obligation to make
Tranche B-2 Term Loans on the Restatement Date. 
Such Existing Term Loans of the Extending Term Lenders shall on and
after the Restatement Date have all of the rights and benefits of Tranche B-2
Term Loans as set forth in this Agreement and the other Loan Documents.  Each Extending Term Lender’s and each
Additional Term Lender’s Tranche B-2 Term Commitment shall terminate
immediately and without further action on the Restatement Date after giving
effect to the funding (or conversion, as applicable) of such Lender’s Tranche
B-2 Term Loan on such date. 
Notwithstanding anything herein to the contrary, all Tranche B-2 Term
Loans of Extending Term Lenders made hereunder on the Restatement Date pursuant
to this Section 2.1(b) that are Eurodollar Loans will have initial
Interest Periods ending on the same dates as the Interest Periods applicable to
the Existing Term Loans of such Extending Term Lenders.

 

2.2.          Procedure for Term Loan Borrowing.  The Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 10:00 A.M., New York City time, one Business Day prior to
the anticipated Restatement Date) requesting that the Tranche B-2 Term Lenders
make the Tranche B-2 Term Loans on the Restatement Date and specifying the
amount to be borrowed.  Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender
thereof.  Not later than 12:00 Noon, New
York City time, on the Restatement Date each Term Lender shall make 

 

33

 

available
to the Administrative Agent at the Funding Office an amount in immediately
available funds (except as set forth in Section 2.1(b)) equal to the
Tranche B-2 Term Loan to be made by such Lender.  The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Term Lenders in immediately available funds.

 

2.3.          Repayment of Tranche B-1 Term Loans.  (a) The Tranche B-1 Term Loan of
each Tranche B-1 Term Lender shall mature in the following quarterly
installments, commencing on December 31, 2009, each of which shall be in
an amount equal to such Lender’s Tranche B-1 Term Percentage multiplied by the
amount set forth below opposite such installment:

 

	
  Installment

  	
   

  	
  Principal Amount

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  216,250

  	
   

  
	
  Tranche B-1 Term Loan Maturity Date

  	
   

  	
  $

  	
  84,553,750 or remainder

  	
   

  

 

(b)           The Tranche B-2 Term Loan of each Tranche B-2 Term
Lender shall mature in the following quarterly installments, commencing on December 31,
2009, each of which shall be in an amount equal to such Lender’s Tranche B-2
Term Percentage multiplied by the amount set forth below opposite such
installment:

 

	
  Installment

  	
   

  	
  Principal Amount

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  

 

34

 

	
  June 30, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  September 30, 2012

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  December 31, 2012

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  March 31, 2013

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  June 30, 2013

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  September 30, 2013

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  December 31, 2013

  	
   

  	
  $

  	
  695,000

  	
   

  
	
  Tranche B-2 Term Loan Maturity Date

  	
   

  	
  $

  	
  263,405,000 or remainder

  	
   

  

 

2.4.          Additional Term
Loans.  The Borrower may, by written
notice to the Administrative Agent, in connection with the concurrent
refinancing in full of any outstanding Tranche B-1 Term Loans, elect to request
the establishment of one or more new term loan commitments (the “New Term Commitments”), in an aggregate amount not in
excess of the aggregate principal amount of Tranche B-1 Term Loans outstanding
at the time of the incurrence of such new Loans (the “New Term Loans”); provided
that the proceeds of the New Term Loans shall be used only to refinance in full
all outstanding Tranche B-1 Term Loans (if any) and to pay any related fees and
expenses.  Such notice shall specify (a) the
date (the “Increased Amount Date”)
on which the Borrower proposes that the New Term Commitments shall be
effective, which shall be a date not less than 10 Business Days after the date
on which such notice is delivered to the Administrative Agent (or such shorter
period as may be approved by the Administrative Agent) and (b) the
identity of each Lender or other Person (who shall be an Eligible Assignee)
(each, a “New Term Lender”)
to whom the Borrower proposes any portion of such New Term Commitments be
allocated and the amounts of such allocations; provided that the
Administrative Agent may elect or decline to arrange such New Term Commitments
in its sole discretion and any Lender approached to provide all or a portion of
the New Term Commitments may elect or decline, in its sole discretion, to
provide a New Term Commitment.  Such New
Term Commitments shall become effective as of the Increased Amount Date; provided
that (i) no Default or Event of Default shall exist on the Increased
Amount Date before or after giving effect to such New Term Commitments, (ii) both
before and after giving effect to 

 

35

 

the making of any New Term Loans, each of the conditions
set forth in Section 6.2 shall be satisfied, (iii) the New Term
Commitments shall be effected pursuant to one or more Joinder Agreements dated
as of the Increased Amount Date and executed and delivered by the Borrower,
each New Term Lender and the Administrative Agent, each of which shall be
recorded in the Register, and each New Term Lender shall be subject to the
requirements set forth in Section 4.10(e), and (iv) the Borrower
shall deliver or cause to be delivered any legal opinions or other documents
reasonably requested by the Administrative Agent in connection with any such
transaction.

 

On
the Increased Amount Date, subject to the satisfaction of the foregoing terms
and conditions (a) each New Term Lender shall make a New Term Loan to the
Borrower in an amount equal to its New Term Commitment, (b) each New Term
Loan made thereunder shall be deemed for all purposes a Term Loan and (c) each
New Term Lender shall become a Lender hereunder with respect to its New Term
Commitment and the New Term Loans made pursuant thereto.  The Administrative Agent shall notify the
Lenders promptly upon receipt of the Borrower’s notice of the Increased Amount
Date, the New Term Commitments and the New Term Lenders.

 

The terms and provisions of the New Term Loans and New Term
Commitments shall be, except as otherwise set forth herein or in the applicable
Joinder Agreement, substantially similar to the Tranche B-2 Term Loans, except
that:  (i) the weighted average life
to maturity of all New Term Loans shall be no shorter than the weighted average
life to maturity of the Tranche B-2 Terms Loans, (ii) the maturity date of
all New Term Loans shall be no shorter than the Tranche B-2 Term Loan Maturity
Date, and (iii) the Applicable Margins applicable to the New Term Loans shall
be determined by the Borrower and the applicable new Lenders and shall be set
forth in each applicable Joinder Agreement; provided, however,
that the yield applicable to the New Term Loans (after giving effect to all
upfront or similar fees or original issue discount payable with respect to such
New Term Loans) shall not be greater than the yield with respect to the Tranche
B-2 Term Loans or any Modified Term Loans unless the yield with respect to the
Tranche B-2 Term Loans and the Modified Term Loans, if any, is increased so as
to cause such yield to equal the yield then applicable to the New Term Loans
(after giving effect to all upfront or similar fees and original issue discount
payable with respect to such New Term Loans). 
Each Joinder Agreement may, without the consent of any other Lenders,
effect such amendments to this Agreement and the other Loan Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent, to
effectuate the provisions of this Section 2.4, including, without
limitation, to include appropriately the New Term Lenders in any determination
of Required Lenders and Majority Facility Lenders, and to incorporate
appropriately any New Term Loans into the definition of Subfacility.  Each Group Member agrees to cooperate with
the Administrative Agent to take such actions as the Administrative Agent may
reasonably request to ensure that the Obligations, including all Loans, are
guaranteed by the Guarantors and are secured by all of the Collateral.

 

36

 

SECTION 3.  AMOUNT AND TERMS OF REVOLVING COMMITMENTS

 

3.1.          Revolving
Commitments.   (a)  Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
(“Revolving Loans”) to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender’s Revolving Percentage of the sum
of (i) the L/C Obligations then outstanding and (ii) the aggregate
principal amount of the Swingline Loans then outstanding, does not exceed the
amount of such Lender’s Revolving Commitment. 
During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying and reborrowing the Revolving
Loans in whole or in part, all in accordance with the terms and conditions
hereof.  The Revolving Loans may from
time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 3.2 and
4.3.

 

(b)           The
Borrower shall repay all outstanding Revolving Loans on the Revolving
Termination Date.

 

3.2.          Procedure for Revolving Loan
Borrowing.   The Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 2:00 P.M., New York City time, (a) three Business Days prior
to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one
Business Day prior to the requested Borrowing Date, in the case of Base Rate
Loans) (provided that any such notice of a borrowing of Base Rate Loans under
the Revolving Facility to finance payments required to be made pursuant to Section 3.5
may be given not later than 10:00 A.M., New York City time, on the date of
the proposed borrowing), specifying (i) the amount and Type of Revolving
Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in
the case of Eurodollar Loans, the respective amounts of each such Type of Loan
and the respective lengths of the initial Interest Period therefor.  Each borrowing under the Revolving
Commitments shall be in an amount equal to (A) in the case of Base Rate
Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate
Available Revolving Commitments are less than $1,000,000, such lesser amount)
and (B) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of
$1,000,000 in excess thereof; provided that the Swingline Lender may
request, on behalf of the Borrower, borrowings under the Revolving Commitments
that are Base Rate Loans in other amounts pursuant to Section 3.4.  Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof.  Each Revolving Lender will make
the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Borrower at the Funding Office
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent.  Such borrowing will then be made available to
the Borrower by the Administrative Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like
funds as received by the Administrative Agent.

 

3.3.          Swingline
Commitment.   (a)   Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrower 

 

37

 

under the Revolving Commitments from time to time during the Revolving
Commitment Period by making swing line loans (“Swingline Loans”) to the
Borrower; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender’s other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (ii) the Borrower shall not request, and the Swingline Lender shall
not make, any Swingline Loan if, after giving effect to the making of such
Swingline Loan, the aggregate amount of the Available Revolving Commitments
would be less than zero.  During the
Revolving Commitment Period, the Borrower may use the Swingline Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof.  Swingline Loans shall
be Base Rate Loans only.

 

(b)           The
Borrower shall repay all outstanding Swingline Loans no later than the
Revolving Termination Date.

 

3.4.          Procedure
for Swingline Borrowing; Refunding of Swingline Loans.   (a)  
Whenever the Borrower desires that the Swingline Lender make Swingline Loans it
shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the
requested Borrowing Date (which shall be a Business Day during the Revolving
Commitment Period).  Each borrowing under
the Swingline Commitment shall be in an amount equal to $500,000 or a whole
multiple of $100,000 in excess thereof. 
Not later than 3:00 P.M., New York City time, on the Borrowing Date
specified in a notice in respect of Swingline Loans, the Swingline Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swingline Loan to be
made by the Swingline Lender.  The
Administrative Agent shall make the proceeds of such Swingline Loan available
to the Borrower on such Borrowing Date by depositing such proceeds in the
account of the Borrower with the Administrative Agent on such Borrowing Date in
immediately available funds.

 

(b)           The
Swingline Lender, at any time and from time to time in its sole and absolute
discretion may, and on the third Business Day after the making of any Swingline
Loan if no notice has yet been given shall, on behalf of the Borrower (which
hereby irrevocably directs the Swingline Lender to act on its behalf), on one
Business Day’s notice given by the Swingline Lender no later than 12:00 Noon,
New York City time, request each Revolving Lender to make, and each Revolving
Lender hereby agrees to make, a Revolving Loan, in an amount equal to such
Revolving Lender’s Revolving Percentage of the aggregate amount of the
Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date
of such notice, to repay the Swingline Lender. 
Each Revolving Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately
available funds, not later than 10:00 A.M., New York City time, one
Business Day after the date of such notice. 
The proceeds of such Revolving Loans shall be immediately made available
by the Administrative Agent to the Swingline Lender for application by the
Swingline Lender to the repayment of the Refunded Swingline Loans.  The Borrower irrevocably authorizes the
Swingline Lender to charge the Borrower’s accounts with the Administrative
Agent (up to the amount available in each such 

 

38

 

account) in order to immediately pay the amount of such Refunded
Swingline Loans to the extent amounts received from the Revolving Lenders are
not sufficient to repay in full such Refunded Swingline Loans.

 

(c)           If
prior to the time a Revolving Loan would have otherwise been made pursuant to Section 3.4(b),
one of the events described in Section 9(f) shall have occurred and
be continuing with respect to the Borrower or if for any other reason, as
determined by the Swingline Lender in its sole discretion, Revolving Loans may
not be made as contemplated by Section 3.4(b), each Revolving Lender shall,
on the date such Revolving Loan was to have been made pursuant to the notice
referred to in Section 3.4(b) (the “Refunding Date”), purchase
for cash an undivided participating interest in the then outstanding Swingline
Loans by paying to the Swingline Lender an amount (the “Swingline
Participation Amount”) equal to (i) such Revolving Lender’s Revolving
Percentage multiplied by (ii) the sum of the aggregate principal amount of
Swingline Loans then outstanding that were to have been repaid with such Revolving
Loans.  If any Revolving Lender shall
fail to pay its Swingline Participation Amount as and when required by this Section 3.4(c),
the Borrower shall pay to the Administrative Agent within five Business Days of
demand of the Swingline Lender an amount equal to the entire Swingline Loan of
which such unfunded Swingline Participation Amount is a part, which may be
effected with cash on hand or the proceeds of a Revolving Loan.

 

(d)           Whenever,
at any time after the Swingline Lender has received from any Revolving Lender
such Lender’s Swingline Participation Amount, the Swingline Lender receives any
payment on account of the Swingline Loans, the Swingline Lender will distribute
to such Lender its Swingline Participation Amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which such
Lender’s participating interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such Lender’s pro  rata
portion of such payment if such payment is not sufficient to pay the principal
of and interest on all Swingline Loans then due); provided, however,
that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline
Lender.

 

(e)           Each
Revolving Lender’s obligation to make the Loans referred to in Section 3.4(b) and
to purchase participating interests pursuant to Section 3.4(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right
that such Revolving Lender or the Borrower may have against the Swingline
Lender, the Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default or an Event of Default or the failure to
satisfy any of the other conditions specified in Section 6; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv) any
breach of this Agreement or any other Loan Document by the Borrower, any other
Loan Party or any other Revolving Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

 

3.5.          Commitment
Fees, Etc.   (a)   The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period 

 

39

 

from and including the Restatement Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.

 

(b)           The
Borrower agrees to pay to the Administrative Agent the fees in the amounts and
on the dates previously agreed to in writing by the Borrower and the
Administrative Agent.

 

(c)           The
Borrower agrees to pay to the Lead Arranger the fees in the amounts and on the
dates previously agreed to in writing by the Borrower and the Lead Arranger.

 

3.6.          Termination or Reduction of
Revolving Commitments.  The Borrower
shall have the right, upon not less than three Business Days’ notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving Extensions
of Credit would exceed the Total Revolving Commitments.  Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently
the Revolving Commitments then in effect.

 

3.7.          L/C
Commitment.   (a)   Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Lenders set forth in Section 3.10(a), agrees to issue letters of
credit (“Letters of Credit”) for the account of the Borrower on any
Business Day during the Revolving Commitment Period in such form as may be
agreed from time to time between such Issuing Lender and Borrower; provided
that such Issuing Lender shall not issue any Letter of Credit if, (i) after
giving effect to such issuance, the L/C Obligations would exceed the L/C
Commitment, (ii) after giving effect to such issuance, the aggregate
amount of the Available Revolving Commitments would be less than zero, or (iii) it has received
notice of any existing Default or Event of Default.  Each Letter of Credit shall (i) be
denominated in Dollars, and (ii) expire no later than the earlier of (A) the
first anniversary of its date of issuance and (B) unless cash
collateralized in an account at the relevant Issuing Lender, the date that is
five Business Days prior to the Revolving Termination Date, provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (B) above).

 

(b)           No
Issuing Lender shall at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause such Issuing Lender or
any L/C Participant to exceed any limits imposed by, any applicable Requirement
of Law.

 

3.8.          Procedure for Issuance of Letter of
Credit.  The Borrower may from time
to time request that an Issuing Lender issue a Letter of Credit by delivering
to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of such Issuing
Lender, and such other certificates, documents and other 

 

40

 

papers
and information as such Issuing Lender may reasonably request.  Upon receipt of any Application, the relevant
Issuing Lender will notify the Administrative Agent of the amount, the
beneficiary and the requested expiration of the requested Letter of Credit, and
upon receipt of confirmation from the Administrative Agent that after giving
effect to the requested issuance, the Available Revolving Commitments would not
be less than zero, such Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall
any Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed to by such Issuing Lender and the Borrower.  The relevant Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower (with, upon its request, a copy
to the Administrative Agent) promptly following the issuance thereof.  The relevant Issuing Lender shall promptly
furnish to the Administrative Agent, which shall in turn promptly furnish to
the Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).

 

3.9.          Fees
and Other Charges.   (a)   The Borrower will pay to
each Issuing Lender a fee on all outstanding Letters of Credit issued by such
Issuing Lender at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Facility, to be
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to each
Issuing Lender for its own account a fronting fee on the undrawn and unexpired
amount of each Letter of Credit issued by such Issuing Lender as agreed by the
Borrower and such Issuing Lender, payable quarterly in arrears on each L/C Fee
Payment Date after the issuance date.

 

(b)           In
addition to the foregoing fees, the Borrower shall pay or reimburse the Issuing
Lenders for such normal and customary costs and expenses as are incurred or
charged by the Issuing Lenders in issuing, negotiating, effecting payment
under, amending or otherwise administering any Letter of Credit.

 

3.10.        L/C
Participations.   (a)   Each Issuing
Lender irrevocably agrees to grant and hereby grants to each applicable L/C
Participant, and, to induce each Issuing Lender to issue Letters of Credit
hereunder, each applicable L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the relevant Issuing Lender, on
the terms and conditions set forth below, for such L/C Participant’s own
account and risk an undivided interest equal to such L/C Participant’s
Revolving Percentage in each Issuing Lender’s obligations and rights under and
in respect of each Letter of Credit issued by such Issuing Lender hereunder, in
accordance with the terms hereof, and the amount of each draft paid by such
Issuing Lender thereunder.  Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit for which the Borrower is
required to reimburse such Issuing Lender and such Issuing Lender is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Administrative Agent upon
demand of such Issuing Lender an amount equal to such L/C 

 

41

 

Participant’s Revolving Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed. The Administrative Agent shall
promptly forward such amounts to the relevant Issuing Lender.

 

(b)           If
any amount required to be paid by any L/C Participant to the Administrative
Agent for the account of the relevant Issuing Lender pursuant to Section 3.10(a) in
respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is not paid to the Administrative Agent for the
account of such Issuing Lender within three Business Days after the date such
payment is demanded, such L/C Participant shall pay to the Administrative Agent
for the account of such Issuing Lender on demand an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360.  A certificate of the relevant
Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest
error.

 

(c)           Whenever,
at any time after the relevant Issuing Lender has made payment under any Letter
of Credit and has received from any L/C Participant its pro  rata
share of such payment in accordance with Section 3.10(a), the
Administrative Agent or such Issuing Lender receives any payment related to
such Letter of Credit (whether directly from the Borrower or otherwise,
including proceeds of collateral applied thereto by such Issuing Lender), or
any payment of interest on account thereof, the Administrative Agent or the
relevant Issuing Lender, as the case may be, will distribute to such L/C
Participant its pro  rata share thereof; provided, however,
that in the event that any such payment received by Administrative Agent or the
relevant Issuing Lender, as the case may be, shall be required to be returned
by the Administrative Agent or such Issuing Lender, such L/C Participant shall
return to the Administrative Agent for the account of the relevant Issuing
Lender the portion thereof previously distributed by the Administrative Agent
or such Issuing Lender, as the case may be, to it.

 

3.11.        Reimbursement Obligation of the
Borrower.  The Borrower agrees to
reimburse the relevant Issuing Lender no later than (a) the end of the
Business Day on which such Issuing Lender notifies the Borrower of the date and
amount of a draft presented under any Letter of Credit and paid by such Issuing
Lender if such notice is delivered at or before 10:00 A.M., New York City
time, or (b) the next succeeding Business Day if such notice is delivered
after 10:00 A.M., New York City time, or on a non-Business Day, for the
amount of (a) such draft so paid and (b) any taxes, fees, charges or
other reasonable costs or expenses incurred by such Issuing Lender in
connection with such payment.  Each such payment
shall be made to the relevant Issuing Lender at its address for notices
referred to herein in Dollars and in immediately available funds.  Interest shall be payable on any such amounts
from the date on which the relevant draft is paid until payment in full at the
rate set forth in (i) until the Business Day next succeeding the date of
the relevant notice (or, if such notice was delivered prior to 10:00 A.M.,
the Business Day on which such notice was delivered), Section 4.5(b) and
(ii) thereafter, Section 4.5(c). 
To the extent not so reimbursed as set forth above, each drawing under
any Letter of Credit shall (unless an event of the type described in clause (i) or
(ii) of Section 9(f) shall have 

 

42

 

occurred
and be continuing with respect to the Borrower, in which case the procedures
specified in Section 3.10 for funding by L/C Participants shall apply)
constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 3.2 of Base Rate Loans in the amount of such
drawing.  The Borrowing Date with respect
to such borrowing shall be the first date on which a borrowing of Revolving
Credit Loans could be made, pursuant to Section 3.2, if the Administrative
Agent had received a notice of such borrowing at the time the Administrative
Agent receives notice from the relevant Issuing Lender of such drawing under
such Letter of Credit.

 

3.12.        Obligations Absolute.  The Borrower’s obligations under Section 3.11
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the relevant Issuing Lender, any
beneficiary of a Letter of Credit or any other Person.  The Borrower also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible for, and the
Borrower’s Reimbursement Obligations under Section 3.11 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.  Notwithstanding the foregoing, no Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the relevant Issuing Lender.  The
Borrower agrees that any action taken or omitted by the relevant Issuing Lender
under or in connection with any Letter of Credit issued by such Issuing Lender
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the relevant Issuing Lender
to the Borrower.

 

3.13.        Letter of Credit Payments.  If any draft shall be presented for payment
under any Letter of Credit, the relevant Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. 
The responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such
presentment are substantially in conformity with such Letter of Credit.

 

3.14.        Applications.  To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.

 

43

 

SECTION 4. 
GENERAL PROVISIONS APPLICABLE 

TO LOANS AND LETTERS OF CREDIT

 

4.1.          Optional
Prepayments.  The Borrower may at any
time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice delivered to the Administrative
Agent no later than 2:00 P.M., New York City time, three Business Days
prior thereto in the case of Eurodollar Loans and no later than 2:00 P.M.,
New York City time, one Business Day prior thereto in the case of Base Rate
Loans, which notice shall specify the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans or Base Rate Loans; provided that,
if a Eurodollar Loan is prepaid on any day other than the last day of the
Interest Period applicable thereto, the Borrower shall also pay any amounts
owing pursuant to Section 4.11. 
Upon receipt of any such notice, the Administrative Agent shall promptly
notify each relevant Lender thereof.  If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are Base Rate Loans and Swingline Loans) accrued interest
to such date on the amount prepaid. 
Partial prepayments of Term Loans and Revolving Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof.  Partial prepayments of Swingline Loans shall
be in an aggregate principal amount of $100,000 or a whole multiple thereof.

 

4.2.          Mandatory
Prepayments and Commitment Reductions.   (a)  If any
Capital Stock shall be issued by Holdings on any date (other than issuances (a) to
the Sponsor and its Control Investment Affiliates, (b) to management,
employees, directors or consultants of Holdings or any of its Subsidiaries
pursuant to any employee stock option or stock purchase plan or other employee
benefit plan in existence from time to time, or (c) to other Persons to
the extent the proceeds of such issuances are (i) concurrently applied to
fund Permitted Acquisitions or (ii) utilized to increase permitted Net
Cash Investment Costs pursuant to clause (iii) of Section 8.7(b)), an
amount equal to 50% of the Net Cash Proceeds thereof shall be applied (unless a
Reinvestment Notice shall be delivered in respect thereof) on the date of such
issuance toward the prepayment of the Term Loans and the reduction of the
Revolving Commitments as set forth in Section 4.2(e); provided that
(A) no such application of Net Cash Proceeds shall be required if, at the
time of such issuance of Capital Stock, the Borrower’s Consolidated Leverage
Ratio is less than 2.50:1.00 and (B) notwithstanding the foregoing, on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be applied
toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments as set forth in Section 4.2(e).

 

(b)           If
any Indebtedness shall be incurred by any Group Member (other than Excluded
Indebtedness), an amount equal to 100% of the Net Cash Proceeds thereof shall
be applied on the date of such incurrence toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in Section 4.2(e).

 

(c)           If
on any date any Group Member shall receive Net Cash Proceeds from any Asset
Sale (including Allotted Dispositions and sales or issuances of Capital Stock
of any Subsidiary of Holdings) or Recovery Event in excess of $500,000 then,
unless a Reinvestment Notice shall be delivered in respect thereof, such Net Cash
Proceeds shall be applied on such 

 

44

 

date toward the prepayment of the Term Loans and the reduction of the
Revolving Commitments as set forth in Section 4.2(e); provided
that, notwithstanding the foregoing, on each Reinvestment Prepayment Date, an
amount equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event shall be applied toward the prepayment of the Term Loans and
the reduction of the Revolving Commitments as set forth in Section 4.2(e).

 

(d)           If,
for any fiscal year of the Borrower commencing with the fiscal year ending December 31,
2008, there shall be positive Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans and the reduction of
the Revolving Commitments as set forth in Section 4.2(e).  Each such prepayment and commitment reduction
shall be made on a date (an “Excess Cash Flow Application Date”) no
later than five Business Days after the earlier of (i) the date on which
the financial statements of the Borrower referred to in Section 7.1(a),
for the fiscal year with respect to which such prepayment is made, are required
to be delivered to the Lenders and (ii) the date such financial statements
are actually delivered.

 

(e)           Amounts
to be applied in connection with prepayments and Commitment reductions made
pursuant to Section 4.2 shall be applied, first, to the prepayment
of the Term Loans and, second, to reduce permanently the Revolving
Commitments.  Any such reduction of the
Revolving Commitments shall be accompanied by prepayment of the Revolving Loans
and/or Swingline Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Commitments as so
reduced, provided that if the aggregate principal amount of Revolving
Loans and Swingline Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or deposit an amount in cash in a cash collateral account
established with the Administrative Agent for the benefit of the Lenders on
terms and conditions reasonably satisfactory to the Administrative Agent.  The application of any prepayment pursuant to
Section 4.2 shall be made, first, to Base Rate Loans and, second,
to Eurodollar Loans.  Each prepayment of
the Loans under Section 4.2 (except in the case of Revolving Loans that
are Base Rate Loans and Swingline Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.

 

(f)            Notwithstanding
the foregoing, upon its receipt of the proceeds of the Tranche B-2 Term Loans
(other than any Tranche B-2 Term Loans resulting from the conversion of
Existing Term Loans) on the Restatement Date, the Borrower shall irrevocably
deposit with the Second Lien Notes Trustee all of such proceeds plus any additional
amounts necessary to defease or satisfy and discharge the Second Lien Notes in
accordance with the indenture governing the Second Lien Notes.

 

4.3.          Conversion
and Continuation Options.   (a)   The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent prior irrevocable notice of such election no
later than 2:00 P.M., New York City time, on the Business Day preceding
the proposed conversion date, provided that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period with respect
thereto.  The Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by 

 

45

 

giving the Administrative Agent prior irrevocable notice of such
election no later than 2:00 P.M., New York City time, on the Business Day
preceding the proposed conversion date (which notice shall specify the length
of the initial Interest Period therefor), provided that no Base Rate
Loan under a particular Facility may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Administrative
Agent or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions and
have given notice to the Borrower of such determination.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

 

(b)           Any
Eurodollar Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving irrevocable
notice to the Administrative Agent, in accordance with the applicable
provisions of the term “Interest Period” set forth in Section 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations and
have given notice to the Borrower of such determination, and provided, further,
that if the Borrower shall fail to give any required notice as described above
in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base Rate
Loans on the last day of such then expiring Interest Period.  Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

 

4.4.          Limitations on Eurodollar Tranches.  Notwithstanding anything to the contrary in
this Agreement, all borrowings, conversions and continuations of Eurodollar
Loans hereunder and all selections of Interest Periods hereunder shall be in
such amounts and be made pursuant to such elections so that, (a) after
giving effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $500,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.

 

4.5.          Interest
Rates and Payment Dates   (a)   Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at
a rate per annum equal to:

 

(i)            with respect to Loans other than
Tranche B-2 Term Loans, the Eurodollar Rate determined for such day plus the
Applicable Margin; or

 

(ii)           with respect to Tranche B-2 Term
Loans, (A) the greater of (x) the Eurodollar Rate determined for such
day and (y) 2.00%, plus (B) the Applicable Margin.

 

(b)           Each
Base Rate Loan shall bear interest at a rate per annum equal to:

 

(i)            with respect to Loans other than
Tranche B-2 Term Loans, the Base Rate plus the Applicable Margin; or

 

46

 

(ii)           with respect to Tranche B-2 Term
Loans, (A) the greater of (x) the Base Rate and (y) 3.00%, plus (B) the
Applicable Margin.

 

(c)           (i) If
all or a portion of the principal amount of any Loan or Reimbursement
Obligation shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to (A) in the case of the Loans, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus
2% or (B) in the case of Reimbursement Obligations, the rate applicable to
Base Rate Loans under the Revolving Facility plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any fee payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum equal to the rate then applicable to Base
Rate Loans under the relevant Facility plus 2%, in each case, with
respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).

 

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

 

4.6.          Computation
of Interest and Fees.   (a)   Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may
be) day year for the actual days elapsed. 
The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of a Eurodollar
Rate.  Any change in the interest rate on
a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective.  The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.

 

(b)           Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error. 
The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the quotations used by the Administrative
Agent in determining any interest rate pursuant to Section 4.5(a).

 

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

 

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

 

47

 

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

 

the Administrative Agent shall give telecopy
or telephonic notice thereof to the Borrower and the relevant Lenders as soon
as practicable thereafter.  If such
notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Loans under the relevant Facility that were to
have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans under the relevant Facility shall be converted, on the last
day of the then-current Interest Period, to Base Rate Loans.  Until such condition no longer exists, as
determined by the Administrative Agent, no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar
Loans.

 

4.8.          Pro
Rata Treatment and Payments.   (a)   Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders shall
be made pro rata according to the respective Tranche B-1 Term Percentages,
Tranche B-2 Term Percentages or Revolving Percentages, as the case may be, of
the relevant Lenders.

 

(b)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Term Loans shall be made pro  rata according
to the respective outstanding principal amounts of the Term Loans then held by
the Term Lenders (except (i) as otherwise provided in Section 4.2(e),
and (ii) that the Borrower may choose to optionally prepay Tranche B-1
Term Loans pursuant to Section 4.1 without prepaying any Tranche B-2 Term
Loans, in which case such payment shall be made pro rata according to the
respective outstanding principal amounts of the Tranche B-1 Term Loans then
held by the Tranche B-1 Term Lenders). 
The amount of each principal prepayment of the Term Loans shall be
applied to reduce the then remaining installments of the Term Loans pro  rata
based upon the then remaining principal amount thereof.  Amounts prepaid on account of the Term Loans
may not be reborrowed.

 

(c)           Each
payment (including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Loans shall be made pro  rata
according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.

 

(d)           All
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 2:00 P.M., New York City
time, on the due date thereof to the Administrative Agent, for the account of
the Lenders, at the Funding Office, in Dollars and in immediately available
funds.  The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received.  If any payment 

 

48

 

hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day.  If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made
on the immediately preceding Business Day. 
In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.

 

(e)           Unless
the Administrative Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its share of such borrowing available to the Administrative Agent,
the Administrative Agent may assume that such Lender is making such amount
available to the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount.  If such amount is not made
available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the greater of (i) the
Federal Funds Effective Rate and (ii) a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation for the period until such Lender makes such amount
immediately available to the Administrative Agent.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans under the relevant Facility, on demand, from the
Borrower.

 

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

 

4.9.          Requirements
of Law.   (a)   If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:

 

49

 

(i)            shall subject any Lender to any tax
of any kind whatsoever with respect to this Agreement, any Letter of Credit,
any Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 4.10 and changes in the rate of tax on the
overall net income of such Lender);

 

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

 

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

 

and the result of any of the foregoing is to
increase the cost to such Lender, by an amount that such Lender reasonably
deems to be material, of making, converting into, continuing or maintaining
Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce
any amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall, within ten Business Days after receiving written notice from
such Lender setting forth in reasonable detail such cost, pay such Lender, upon
its demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. 
If any Lender becomes entitled to claim any additional amounts pursuant
to this paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled.

 

(b)           If
any Lender shall have determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any Person controlling such
Lender with any request or directive regarding capital adequacy (whether or not
having the force of law) from any Governmental Authority made subsequent to the
date hereof shall have the effect of reducing the rate of return on such
Lender’s or such Person’s capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such
Lender or such Person could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or such Person’s policies
with respect to capital adequacy) by an amount reasonably deemed by such Lender
to be material, then from time to time, within ten Business Days after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor setting forth such amount in reasonable
detail, the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender or such corporation for such reduction.

 

(c)           A
certificate as to any additional amounts payable pursuant to this Section submitted
by any Lender to the Borrower (with a copy to the Administrative Agent) shall
be conclusive in the absence of manifest error. 
Notwithstanding anything to the contrary in this Section, the Borrower
shall not be required to compensate a Lender pursuant to this Section for
any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender’s intention to claim compensation
therefor; provided that, if the 

 

50

 

circumstances giving rise to such claim have a retroactive effect, then
such six-month period shall be extended to include the period of such
retroactive effect.  The obligations of
the Borrower pursuant to this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.

 

4.10.        Taxes.
  (a)   All payments made by or on behalf of the Borrower
under this Agreement or any other Loan Document shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes,
branch profit taxes imposed by the United States and franchise taxes (imposed
in lieu of net income taxes) imposed on any Agent or any Lender as a result of
a present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to any Agent or any Lender hereunder, the amounts so payable to such Agent or
such Lender shall be increased to the extent necessary to yield to such Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (e) or (f) of
this Section or (ii) that are United States withholding taxes imposed
on amounts payable to such Lender at the time such Lender becomes a party to
this Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.  The Borrower shall make (or cause to be made)
any required deduction or withholding and pay (or cause to be paid) the full
amount deducted or withheld to the relevant Governmental Authority in
accordance with applicable law.

 

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

 

(c)           Whenever
any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly
as possible thereafter the Borrower shall send to the Administrative Agent for
its own account or for the account of the relevant Agent or Lender, as the case
may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof.  If the
Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agents and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a result of any
such failure.

 

51

 

(d)           The
Borrower shall indemnify the Administrative Agent and any Lender for the full
amount of Non-Excluded Taxes (to the extent the Borrower would be required to
pay additional amounts with respect to such Non-Excluded Taxes pursuant to Section 4.10(a))
or Other Taxes arising in connection with payments made under this Agreement
(including, without limitation, any Non-Excluded Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 4.10) or any
other Loan Document paid by such Agent or Lender or any of their respective
Affiliates and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally asserted.  Payment under this indemnification shall be
made within ten days from the date the Administrative Agent or any Lender or
any of their respective Affiliates makes written demand therefor; provided
that the Borrower shall not be required to indemnify the Administrative Agent
or any Lender pursuant to this Section 4.10(d) for any amounts
incurred more than six months prior to the date the Administrative Agent or
such Lender makes such written demand therefor; provided  further
that if the circumstance giving rise to such claim have a retroactive effect,
then such six month period shall be extended to include such period of retroactive
effect.

 

(e)           Each
Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN and/or Form W-8 IMY, as
applicable (claiming benefits of an applicable tax treaty) or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of “portfolio interest”, a statement substantially in the
form of Exhibit G and a Form W-8BEN, or in each case any subsequent versions
thereof or successors thereto, properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement
and the other Loan Documents.  Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation).  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender including, but not limited to, as
a result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof. 
Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(f)            A
Lender that is entitled to an exemption from or reduction of non-U.S.
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law and as
reasonably requested in writing by the Borrower, such properly completed 

 

52

 

and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate, provided
that such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.

 

(g)           If any Administrative Agent or any Lender
determines, in its sole discretion, that it has received a refund of any Non-Excluded
Taxes or Other Taxes as to which it has been indemnified by the Borrower or
with respect to which the Borrower has paid additional amounts pursuant to this
Section 4.10, it shall pay over such refund to the Borrower (but only to
the extent of indemnity payments made, or additional amounts paid, by the
Borrower under this Section 4.10 with respect to the Non-Excluded Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
such Agent or such Lender and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund); provided
that the Borrower, upon the request of such Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to such Agent or
such Lender in the event such Agent or such Lender is required to repay such
refund to such Governmental Authority. 
This paragraph shall not be construed to require any Agent or any Lender
to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to the Borrower or any other Person.

 

(h)           For
purposes of this Section 4.10, in the case of any Lender that is treated
as a partnership for U.S. federal income tax purposes, any Non-Excluded Taxes
or Other Taxes required to be deducted and withheld by such Lender with respect
to payments made by the Borrower under any Loan Document shall be treated as
Non-Excluded Taxes or Other Taxes required to be deducted by the Borrower, but
only to the extent such Non-Excluded Taxes or Other Taxes would have been
required to be deducted and withheld by the Lender if the Lender were treated
as a corporation for U.S. federal income tax purposes making such payments
under the Loan Documents on behalf of the Borrower.

 

(i)            The
agreements in this Section shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

 

4.11.        Indemnity.  The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making
a borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement (unless Eurodollar Loans are made unavailable to
the Borrower pursuant to Section 4.7 or 4.15), (b) default by the
Borrower in making any prepayment of or conversion from Eurodollar Loans after
the Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day that is not the last day of an Interest Period with respect thereto.  Such indemnification may include an amount
equal to the excess, if any, of (i) the amount of interest that would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue 

 

53

 

to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included
therein, if any) minus (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. 
A certificate as to any amounts payable pursuant to this Section submitted
to the Borrower by any Lender shall contain calculation of such amount in
reasonable detail and shall be conclusive in the absence of manifest
error.  This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

 

4.12.        Change of Lending Office.  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 4.9, 4.10 or 4.15
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the reasonable judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing
in this Section shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender pursuant to Section 4.9, 4.10 or
4.15.

 

4.13.        Replacement of Lenders.  The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section 4.9
or 4.10, (b) defaults in its obligation to make Loans hereunder, or (c) declines
to deliver any required consent to a proposed waiver or modification of any
provision of the Loan Documents as contemplated by Section 11.1 that has
been consented to by the Borrower, Administrative Agent, Required Lenders and,
if otherwise required, Majority Facility Lenders, with a replacement financial
institution (which replacement institution in the case of clause (c) is
willing to deliver such consent); provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall have
taken no action under Section 4.12 so as to eliminate the continued need
for payment of amounts owing pursuant to Section 4.9 or 4.10, (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement, (v) the
Borrower shall be liable to such replaced Lender under Section 4.11 if any
Eurodollar Loan owing to such replaced Lender shall be purchased other than on
the last day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions of Section 11.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (viii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section 4.9 or 4.10, as the case may be, and
(ix) any such replacement shall not be deemed to be a waiver of any rights
that the Borrower, the Administrative Agent or any other Lender shall have
against the replaced Lender.

 

54

 

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

 

(b)           The
Administrative Agent, on behalf of the Borrower, shall maintain the Register
pursuant to Section 11.6(b), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Loan made hereunder and any
Note evidencing such Loan, the Type of such Loan and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

 

(c)           The
entries made in the Register and the accounts of each Lender maintained
pursuant to Section 4.14(a) shall, to the extent permitted by
applicable law, be prima  facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain the
Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower to repay (with applicable interest) the
Loans made to the Borrower by such Lender in accordance with the terms of this
Agreement.

 

(d)           The
Borrower agrees that, upon the request to the Administrative Agent by any
Lender, the Borrower will execute and deliver to such Lender a promissory note
of the Borrower evidencing any Tranche B-1 Term Loans, Tranche B-2 Term Loans,
Revolving Credit Loans or Swingline Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit H-1, H-2, H-3 or H-4, respectively,
with appropriate insertions as to date and principal amount.  Each Non-Extending Term Lender who has a note
evidencing its Existing Term Loan shall promptly deliver to the Borrower such
note in exchange for a Note evidencing its Tranche B-1 Term Loan.  Each Extending Term Lender who has a note
evidencing its Existing Term Loan shall promptly deliver to the Borrower such
note in exchange for a Note evidencing its Tranche B-2 Term Loan.

 

4.15.        Illegality.  Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be suspended until such time as such condition no longer exists, as
determined by the Administrative Agent and (b) such Lender’s Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law.  If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the then current
Interest Period with respect thereto, the Borrower shall pay to such Lender
such amounts, if any, as may be required pursuant to Section 4.11.

 

55

 

SECTION 5. 
REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, Holdings and the Borrower hereby jointly and severally represent and
warrant to each Agent and each Lender that:

 

5.1.          Financial
Condition.   (a)   The unaudited pro forma consolidated
balance sheet of Holdings and its consolidated Subsidiaries as at December 31,
2008 (including the notes thereto) (the “Pro Forma Balance Sheet”),
copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
Loans to be made on the Restatement Date and the use of proceeds thereof and (ii) the
payment of fees and expenses in connection with the foregoing.  The Pro Forma Balance Sheet presents fairly
in all material respects on a pro forma basis the estimated financial position
of Holdings and its consolidated Subsidiaries as at December 31, 2008,
assuming that the events specified in the preceding sentence had actually occurred
at such date.

 

(b)           The
audited consolidated balance sheets of Holdings as at December 31, 2008, December 31,
2007 and December 31, 2006, and the related consolidated statements of
income and of cash flows for the fiscal years ended on such dates (including
any related schedules and notes thereto), reported on by and accompanied by a
report from Deloitte & Touche LLP, present fairly in all material
respects the consolidated financial condition of Holdings as at such date, and
the consolidated results of its operations and its consolidated cash flows for
the respective fiscal years then ended. 
All such financial statements, including any related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein). As of the
Restatement Date, no Group Member has any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph.  During
the period from December 31, 2008 to and including the date hereof there
has been no Disposition by Holdings or any of its Subsidiaries of any material
part of its business or property.

 

5.2.          No Change.  As of the Restatement Date, since December 31,
2004, there has been no development, event or circumstance that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.

 

5.3.          Corporate Existence; Compliance
with Law.  Each Group Member (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification except in jurisdictions
where the failure to be so qualified or in good standing could not reasonably
be expected to have a Material Adverse Effect and (d) is in compliance
with all Requirements of Law except to the extent that the failure to comply 

 

56

 

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

 

5.4.          Power; Authorization; Enforceable
Obligations.  Each Loan Party has the
power and authority, and the legal right, to make, deliver and perform the Loan
Documents to which it is a party and, in the case of the Borrower, to obtain
extensions of credit hereunder.  Each
Loan Party has taken all necessary organizational action to authorize the
execution, delivery and performance of the Loan Documents to which it is a
party and, in the case of the Borrower, to authorize the extensions of credit
on the terms and conditions of this Agreement. 
No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents, except (a) consents, authorizations, filings and
notices described in Schedule 5.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect,  (b) the filings referred to in Section 5.19
and (c) those consents, authorizations, filings and notices the failure of
which to make or obtain, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.  Each Loan Document has been duly executed and
delivered on behalf of each Loan Party thereto. 
This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

5.5.          No Legal Bar.  The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any material Contractual Obligation of any Group
Member and will not result in, or require, the creation or imposition of any
Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents).  No
Requirement of Law or Contractual Obligation (assuming no defaults thereunder)
applicable to any Subsidiary of Holdings could, individually or in the
aggregate,  reasonably be expected to
have a Material Adverse Effect.

 

5.6.          Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings or the Borrower, threatened by or against any Group
Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby or (b) that, if adversely determined or settled, could
reasonably be expected to have a Material Adverse Effect.

 

5.7.          No Default.  No Group Member is in default under or with
respect to any of its Contractual Obligations in any respect that could,
individually or in the aggregate, 
reasonably be expected to have a Material Adverse Effect.

 

57

 

5.8.          Ownership of Property; Liens.  Each Group Member has good and marketable
title in fee simple to, or a valid leasehold interest in, all its real
property, including the Properties, and good title to, or a valid leasehold
interest in, all its other material property, and none of such property is
subject to any Lien except as permitted by Section 8.3.

 

5.9.          Intellectual Property.  Except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Group
Member owns, or is licensed to use, all Intellectual Property necessary for the
conduct of its business as currently conducted. No material claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does Holdings or the Borrower know of any valid basis for any
such claim.  The use of Intellectual
Property by each Group Member does not infringe on the rights of any Person in
any material respect.

 

5.10.        Taxes.  Each Group Member has filed or caused to be
filed all Federal and State income tax returns and all other material tax
returns that are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than (a) any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of Holdings or its Subsidiaries, as the case may be
or (b) if the failure to pay would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect).

 

5.11.        Federal Regulations.  No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for “buying” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board.  If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred
to in Regulation U.

 

5.12.        Labor Matters.  Except as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against any Group Member pending or, to the knowledge of Holdings or
the Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of
employee health and welfare insurance have been paid or accrued as a liability
on the books of the relevant Group Member.

 

5.13.        ERISA.  Neither a Reportable Event nor a failure to
meet the minimum funding standard of Sections 412 or 430 of the Code or
Sections 302 or 303 of ERISA (whether or not waived in accordance with Section 412(c) of
the Internal Revenue Code or Section 302(c) of ERISA) has occurred
during the five-year period prior to the date on which this representation 

 

58

 

is
made or deemed made with respect to any Single Employer Plan, and each Plan has
complied in all material respects with the applicable provisions of ERISA and
the Code except where failure to do so would cause a liability which would not
be material.  No termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. 
The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. 
No Single Employer Plan is, or is expected to be, in “at risk” status
under Section 430 of the Code or Section 303 of ERISA.  Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made.  To the knowledge of the Borrower after due
inquiry, no such Multiemployer Plan is, or is expected to be, in “critical” or
“endangered” status under Section 432 of the Code or Section 305 of
ERISA, nor is such Multiemployer Plan in Reorganization or Insolvent.

 

5.14.        Investment Company Act; Other
Regulations.  No Loan Party is an
“investment company”, or a company “controlled” by an “investment company”,
required to be registered as such within the meaning of the Investment Company
Act of 1940, as amended.  No Loan Party
is subject to regulation under any Requirement of Law (other than Regulation X
of the Board) that limits its ability to incur Indebtedness.

 

5.15.        Subsidiaries.  Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Restatement Date, (a) Schedule
5.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options and other equity awards granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of
the Borrower or any Subsidiary, except as created by the Loan Documents.

 

5.16.        Use of Proceeds.  The proceeds of the Tranche B-2 Term Loans
(other than any such Tranche B-2 Term Loans resulting from the conversion of
Existing Term Loans pursuant to the Amendment Agreement) shall be irrevocably
deposited with the Second Lien Notes Trustee together with any additional
amounts necessary to defease or satisfy and discharge the Second Lien Notes in
accordance with the indenture governing the Second Lien Notes.  The proceeds of the Revolving Loans shall be
used, together with the proceeds of the Swingline Loans and the Letters of
Credit, for general corporate purposes. 
The proceeds of any New Term Loans shall be used to repay in full any
Tranche B-1 Term Loans outstanding at the time of the incurrence of such New
Term Loans and to pay related fees and expenses.

 

59

 

5.17.        Environmental Matters.  Except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect:

 

(a)           the
facilities and properties owned, leased or operated by any Group Member (the “Properties”)
do not contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under circumstances that
constitute or constituted a violation of, or could give rise to liability
under, any Environmental Law;

 

(b)           no
Group Member has received or is aware of any actual or threatened notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the business operated by any Group Member
(the “Business”), nor does Holdings or the Borrower have knowledge or
reason to believe that any such notice will be received or is being threatened;

 

(c)           no
judicial proceeding or governmental or administrative action is pending or, to
the knowledge of Holdings and the Borrower, threatened, under any Environmental
Law to which any Group Member is or will be named as a party with respect to
the Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business;

 

(d)           the
Properties and all operations at the Properties are in compliance, and have in
the last five years been in compliance, with all applicable Environmental Laws,
and there is no contamination at, under or about the Properties or violation of
any Environmental Law with respect to the Properties or the Business; and

 

(e)           no
Group Member has assumed any liability of any other Person under Environmental
Laws.

 

5.18.        Accuracy of Information, Etc.  No statement or information contained in this
Agreement, any other Loan Document, the Confidential Information Memorandum,
the Lender Presentation or any other document, certificate or statement
(excluding any projections, proforma financial information or estimates)
furnished by or on behalf of any Loan Party to the Administrative Agent or the
Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, taken as a whole,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum,
as of the Closing Date, and in the case of the Lender Presentation, as of the
Restatement Date), any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements contained herein or therein
not misleading.  The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.  As of the
Restatement Date, there is no fact known to any 

 

60

 

Loan
Party that could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in
the other Loan Documents, in the Confidential Information Memorandum, the
Lender Presentation or in any other documents, certificates and statements furnished
to the Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.

 

5.19.        Security
Documents.   (a)   The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral described therein and proceeds and products
thereof.  In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule
5.19(a) in appropriate form are filed in the offices specified on
Schedule 5.19(a), the Guarantee and Collateral Agreement shall constitute
a fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Pledged Stock, Liens arising as a matter of law that do
not detract from the value thereof in any material respect, and in the case of
Collateral other than Pledged Stock, Liens permitted by Section 8.3).

 

(b)           Each
of the Mortgages is effective to create in favor of the Administrative Agent,
for the benefit of the Secured Parties, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds and products thereof,
and when the Mortgages are filed in the offices specified on
Schedule 5.19(b), each such Mortgage shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the Loan
Parties in the Mortgaged Properties and the proceeds thereof, as security for
the Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person, subject to Liens permitted by Section 8.3.

 

(c)           Each
Intellectual Property Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Intellectual Property Collateral
described therein and the proceeds and products thereof.  Upon the filing of (i) each Intellectual
Property Security Agreement in the appropriate indexes of the United States Patent
and Trademark Office relative to patents and trademarks, and the United States
Copyright Office relative to copyrights, together with provision for payment of
all requisite fees, and (ii) financing statements in appropriate form for
filing in the offices specified on Schedule 5.19(a), each Intellectual Property
Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the
Intellectual Property Collateral and the proceeds and products thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except Liens permitted by Section 8.3). 
Schedule 1.1(a) lists, as of the Restatement Date, each parcel of
federally registered or recorded Intellectual Property, including Intellectual
Property for which an application or filing has been made or is pending in the
United States, held by any Subsidiary of Holdings.

 

61

 

5.20.        Solvency.  The Loan Parties are, on a consolidated
basis, and after giving effect to the incurrence of all Indebtedness and
obligations being incurred in connection herewith will be and will continue to
be, Solvent.

 

5.21.        Regulation H.  No Mortgage encumbers improved real property
that is located in an area that has been identified by the Secretary of Housing
and Urban Development as an area having special flood hazards and in which
flood insurance has been made available under the National Flood Insurance Act
of 1968 (except any Mortgaged Properties as to which such flood insurance
as required by Regulation H has been obtained and is in full force and effect
as required by Section 6.1(k)(iv), assuming for such purpose that such
Mortgaged Properties were listed on Schedule 1.1(a) as of the Restatement
Date).

 

SECTION 6. 
CONDITIONS PRECEDENT

 

6.1.          Conditions to Restatement Date.  The agreement of each Lender to make any Loan
or other extension of credit requested to be made by it on the Restatement
Date, or to convert any Existing Term Loan into a Tranche B-2 Term Loan, is
subject to the satisfaction or waiver, prior to or concurrently with the making
of such extension of credit or conversion on the Restatement Date, of the
following conditions precedent:

 

(a)           Loan
Documents.  All legal matters
incident to this Agreement and the other Loan Documents shall be satisfactory
to the Issuing Bank and to the Administrative Agent, and the Administrative
Agent shall have received (i) this Agreement, executed and delivered by
each Agent, Holdings and the Borrower, (ii) the Amendment Agreement,
executed and delivered by each Agent, the Existing Agent, Holdings, the
Borrower, the Required Lenders (as defined in the Original Credit Agreement)
and Majority Facility Lenders under each Facility (as such terms are defined in
the Original Credit Agreement, (iii) in the case of any Additional Term
Lender or Additional Revolving Lender, an Addendum, executed and delivered by
each Agent, Holdings, the Borrower and such Additional Term Lender or
Additional Revolving Lender, as applicable, and (iv) an executed
counterpart of each other Loan Document required to be executed and delivered
on the Restatement Date.

 

(b)           Concurrent
Transactions.

 

(i)            The Borrower shall have (A) issued
an irrevocable notice of redemption under the indenture governing the Second
Lien Notes, providing for the redemption of such Second Lien Notes within 30
days of the Restatement Date in accordance with the provisions of such
indenture, and (B) irrevocably deposited with the Second Lien Notes
Trustee an amount sufficient to defease or satisfy and discharge in full the
Second Lien Notes.

 

(ii)           Contemporaneously with the
application of the proceeds of the Loans to be made on the Restatement Date,
the Borrower shall have (A) defeased or satisfied and discharged all
outstanding Second Lien Notes with the proceeds of the Tranche B-2 Term Loans
hereunder (other than any such Tranche B-2 Term Loans 

 

62

 

resulting from the conversion of Existing Term Loans pursuant to the
Amendment Agreement) (it being understood that all of the Second Lien Notes
will be redeemed by a date no later than 30 days after the Restatement Date),
and (B) obtained a release of all guarantees and collateral provided in
connection with the Second Lien Notes.

 

(c)           Pro
Forma Balance Sheet; Financial Statements. 
The Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of Holdings for the 2008, 2007 and 2006
fiscal years and (iii) unaudited interim consolidated financial statements
of Holdings for each quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available, and such
financial statements shall not reflect any material adverse change in the
consolidated financial condition of Holdings since December 31, 2008.

 

(d)           Approvals.  All governmental and material third party
approvals necessary, or in the discretion of the Administrative Agent,
advisable in connection with the redemption, defeasance, satisfaction and
discharge of the Second Lien Notes and the other transactions contemplated
hereby and by the Amendment Agreement and the continuing operations of the
Group Members shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or otherwise
impose adverse conditions on the transactions contemplated hereby and by the
Amendment Agreement.

 

(e)           Lien
Searches.  The Administrative Agent
shall have received the results of a recent lien search in each of the
jurisdictions where the Group Members are organized and where assets of the
Loan Parties are located, and such search shall reveal no liens on any of the
assets of the Loan Parties except for Liens permitted by Section 8.3 or
discharged on or prior to the Restatement Date pursuant to documentation
reasonably satisfactory to the Administrative Agent.

 

(f)            Fees.  The Lenders and the Agents shall have
received all fees required to be paid, and all expenses for which invoices have
been presented (including the reasonable fees and expenses of legal counsel),
on or before the Restatement Date.  All
such amounts will be paid with proceeds of Loans made on the Restatement Date
and will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Restatement Date.

 

(g)           Restatement
Date Certificate.  The Administrative
Agent shall have received a certificate of each Loan Party, dated the
Restatement Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments including the certificate of incorporation of each
Loan Party that is a corporation certified by the relevant authority of the
jurisdiction of organization of such Loan Party and a long form good standing
certificate for each Loan Party from its jurisdiction of organization; provided
that in lieu of delivering certificates of incorporation for each Loan Party,
Borrower may deliver a certificate of a duly authorized officer certifying that
there have been no material amendments to those certificates of 

 

63

 

incorporation previously delivered to the Existing Agent in connection
with Original Credit Agreement.

 

(h)           Legal
Opinions.  The Administrative Agent
shall have received the following executed legal opinions:

 

(i)            the legal opinion of Kirkland &
Ellis LLP, counsel to the Borrower and its Subsidiaries, substantially in the
form of Exhibit E; and

 

(ii)           the legal opinion of local counsel in
each of Kansas, Florida and Maine.

 

Each such legal opinion
shall cover such other matters incident to the transactions contemplated by
this Agreement as the Administrative Agent may reasonably require.

 

(i)            Pledged
Stock; Stock Powers; Pledged Notes. 
The Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the Guarantee and
Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor thereof
and (ii) each promissory note (if any) pledged to the Administrative Agent
pursuant to the Guarantee and Collateral Agreement endorsed (without recourse)
in blank (or accompanied by an executed transfer form in blank) by the pledgor
thereof.

 

(j)            Filings,
Registrations and Recordings.  Each
document (including any Uniform Commercial Code financing
statement) required by the Security Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a perfected Lien on the Collateral described therein, prior
and superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 8.3), shall be in proper form for filing,
registration or recordation.

 

(k)           Mortgages,
Etc.

 

(i)            The Administrative Agent shall have
received modifications (the “Modifications”) to all Mortgages (as
defined in the Original Credit Agreement) with respect to each Mortgaged
Property listed on Schedule 1.1(b), executed and delivered by a duly authorized
officer of each party thereto in recordable form in the applicable state in
which such Mortgaged Property is located, subject to landlord consent for
leased Mortgaged Properties if such consent is required under the terms of the
applicable lease.

 

(ii)           The Administrative Agent
shall have received in respect of each owned Mortgaged Property listed on
Schedule 1.1(b) (it being understood that no endorsements to mortgagee
title insurance policies shall be required for any of the leased Mortgaged
Properties) endorsements to mortgagee title insurance policies or marked up
unconditional commitment or proforma for such insurance delivered in connection
with the Original Credit Agreement.  Each
such endorsement shall (A) be in an amount 

 

64

 

reasonably satisfactory to
the Administrative Agent; (B) be issued at ordinary rates; (C) insure
that the Mortgage (as modified by the applicable Modification) insured thereby
creates a valid first Lien on such Mortgaged Property free and clear of all
Liens except as permitted by Section 8.3; (D) name the Administrative
Agent for the benefit of the Lenders as the insured thereunder; (E) be in
the form of the 2006 ALTA Loan Policy (or equivalent policies) with gap
coverage from the mortgagor through the date of recording; (F) contain
such endorsements and affirmative coverage as the Administrative Agent may
reasonably request, (G) be issued by title companies reasonably
satisfactory to the Administrative Agent (including any such title companies
acting as co-insurers or reinsurers, at the option of the Administrative Agent)
and (H) be subject to the title insurance company’s standard survey exceptions.  The Administrative Agent shall have received
evidence reasonably satisfactory to it that all premiums in respect of each
such endorsement to any such policy, all charges for Modification recording
tax, and all related expenses, if any, have been paid.

 

(iii)          The Administrative Agent shall have
received (A)(1) a policy of flood insurance for each Mortgaged Property
located in a federally recognized flood zone, which policy shall (x) be
written in an amount not less than the outstanding principal amount of the
Indebtedness secured by such Mortgage that is reasonably allocable to such
owned real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood Insurance
Act of 1968, whichever is less, and (y) have a term ending not later
than the latest maturity of the Indebtedness secured by such Mortgage or (2) flood
certificates reasonably satisfactory to the Administrative Agent showing that
the improvements located on the Mortgaged Properties are not located in
“special flood hazard areas” as designated by the U.S. Federal Emergency
Management Agency and (B) confirmation that the Borrower has received the
notice required pursuant to Section 208(e)(3) of Regulation H of the
Board.

 

(iv)          The Administrative Agent shall have
received a copy of all recorded documents referred to, or listed as exceptions
to title in, the title policy or policies referred to in clause (iii) above.

 

(l)            Solvency
Certificate.  The Administrative
Agent shall have received and shall be reasonably satisfied with a solvency
certificate of the chief financial officer of the Borrower substantially in the
form of Exhibit K, which shall document the solvency of the Loan Parties
after giving effect to the conversion of certain of the Existing Term Loans
into Tranche B-2 Loans as set forth herein, the borrowing of additional Tranche
B-2 Loans and the other transactions contemplated hereby and by the Amendment
Agreement.

 

(m)          Insurance.  The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement.

 

65

 

(n)                                 Amendment
and Restatement.  The effectiveness
of the amendment and restatement of the Original Credit Agreement in the form
of this Agreement shall also be subject to the satisfaction of the conditions
set forth in Section 7 of the Amendment Agreement.

 

(o)                                 Miscellaneous.  The Administrative Agent shall have received
such other documents, agreements, certificates and information as it shall
reasonably request.

 

6.2.                              Conditions
to Each Extension of Credit.  The
agreement of each Lender to make any extension of credit requested to be made
by it on any date (including its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:

 

(a)                                  No
Default.  No Default or Event of
Default shall have occurred and be continuing (both prior to, and after giving
effect to, such extension of credit).

 

(b)                                 Representations
and Warranties.  Each of the
representations and warranties made by any Loan Party in or pursuant to the
Loan Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date, and after giving effect to the
extensions of credit requested to be made on such date, except for
representations and warranties which specifically relate to an earlier specific
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date.

 

(c)                                  No
Change.  Since December 31,
2004, there has been no development, event or circumstance that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.

 

Each borrowing by and issuance
of a Letter of Credit on behalf of the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such extension of
credit that the conditions contained in this Section 6.2 have been
satisfied.

 

SECTION 7.  AFFIRMATIVE COVENANTS

 

Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter
of Credit remains outstanding (unless cash collateralized) or any Loan or other
amount (excluding contingent indemnification obligations for which no claims
have been made or obligations with respect to Hedge Agreements) is owing to any
Lender or Agent hereunder, each of Holdings and the Borrower shall and shall
cause each of its Subsidiaries to:

 

7.1.                              Financial
Statements.  Furnish to the
Administrative Agent:

 

(a)                                  as
soon as available, but in any event within 90 days after the end of each
fiscal year of Holdings a copy of the audited consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at the end of such year and the
related audited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like 

 

66

 

qualification or exception, or
qualification arising out of the scope of the audit, by Deloitte and Touche LLP
or other independent certified public accountants of nationally recognized
standing;

 

(b)                                 as
soon as available, but in any event not later than 45 days after the end of
each of the first three quarterly periods of each fiscal year of Holdings, the
unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of footnotes); and

 

(c)                                  as
soon as available, but in any event not later than 30 days after the end of
each month occurring during each fiscal year of Holdings, calculations showing
the consolidated financial status of Holdings and its consolidated
Subsidiaries, substantially in the form of Exhibit L, as at the end of
such month and the portion of the fiscal year through the end of such month.

 

All such financial statements
shall be complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods (except as approved by
such accountants or officer, as the case may be, and disclosed therein, and
except for such non-GAAP measurements as are required in Exhibit L).

 

7.2.                              Certificates;
Other Information.  Furnish to the
Administrative Agent and each Lender (or, in the case of clause (f), to the
relevant Lender):

 

(a)                                  concurrently
with the delivery of the financial statements referred to in Section 7.1(a),
a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;

 

(b)                                 concurrently
with the delivery of any financial statements pursuant to Section 7.1(a) or
(b), (i) a certificate of a Responsible Officer stating that such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) (A) a
Compliance Certificate containing all information and calculations necessary
for determining compliance by each Group Member with the provisions of Sections
8.1 and 8.7 of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be, and (B) to
the extent not previously disclosed to the Administrative Agent, a listing of
any federally registered or recorded Intellectual Property, including Intellectual
Property for which an application or filing has been made or is pending in the
United States, acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the first
such list so delivered after the Restatement Date, since the date of the last
list delivered pursuant to the Original Credit Agreement);

 

67

 

(c)                                  as
soon as available, and in any event no later than 45 days after the end of each
fiscal year of the Borrower, a detailed consolidated budget for the following
fiscal year (including a projected consolidated balance sheet of Holdings and
its Subsidiaries as of the end of the following fiscal year, the related
consolidated statements of projected cash flow, projected income and a
description of the underlying assumptions applicable thereto, collectively, the
“Projections”), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are based on
reasonable estimates, information and assumptions believed by the Borrower to
have been reasonable when made, it being recognized that such Projections are
not to be viewed as fact and that actual results during the periods covered by
such Projections may differ from the projected results set forth therein by a
material amount;

 

(d)                                 if
the Borrower or Holdings is not then a reporting company under the Securities
Exchange Act of 1934, as amended, within 90 days after the end of each fiscal
year of the Borrower and within 45 days after the end of each of the first
three fiscal quarters of the Borrower, a narrative discussion and analysis of
the financial condition and results of operations of the Subsidiaries of
Holdings for such fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable periods
of the previous year;

 

(e)                                  within
five Business Days after the same are sent, copies of all financial statements
and reports that Holdings or the Borrower sends to the holders of any class of
its debt securities or public equity securities generally and, within five
Business Days after the same are filed, copies of all financial statements and
reports that Holdings or the Borrower may make to, or file with, the SEC; and

 

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

 

7.3.                              Payment
of Obligations.  Except as could not,
individually or in the aggregate, reasonably be expected to cause a Material
Adverse Effect, pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its tax obligations and
contractual obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Group Member.

 

7.4.                              Maintenance
of Existence; Compliance.  (a)  (i) 
Preserve, renew and keep in full force and effect its organizational existence
and (ii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business,
except, in each case, as otherwise permitted by Section 8.4 and except, in
the case of clause (ii) above, to the extent that failure to do so could
not, individually or in the aggregate, 
reasonably be expected to have a Material Adverse Effect; and (b) comply
with all Contractual Obligations and Requirements of Law except to the extent
that failure to comply therewith could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

68

 

7.5.                              Maintenance
of Property; Insurance.  (a) 
Keep all property necessary in its business in good working order and
condition, ordinary wear and tear and casualty excepted and (b) maintain
with reputable insurance companies insurance on all its property in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by similarly situated companies engaged in the
same or a similar business with respect to similar property.

 

7.6.                              Inspection
of Property; Books and Records; Discussions.  (a)  Keep proper books of records and
account in which entries that are full, true and correct in all material
respects in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and (b) at
least once every fiscal year of the Borrower or at any time while an Event of
Default shall have occurred and be continuing, permit representatives of any
Lender (coordinated through the Administrative Agent) to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records during regular business hours 
and to discuss the business, operations, properties and financial and
other condition of the Group Members with officers and employees of the Group
Members and with their independent certified public accountants; provided
that relevant officers and employees of the Group Members shall have the right
to be present during such discussions. 
Nothing in this Section 7.6 shall be construed to cause the
Borrower to divulge any materials covered by an attorney-client privilege that
has not been waived.

 

7.7.                              Notices.  Promptly give notice to the Administrative
Agent and each Lender of:

 

(a)                                  the
occurrence of any Default or Event of Default hereunder or any default or event of default under the Unsecured Credit
Agreement (or any documentation governing any Permitted Refinancing thereof);

 

(b)                                 any
(i) default or event of default under any Contractual Obligation of any
Group Member or any lease encumbered by a Mortgage or (ii) litigation,
investigation or proceeding that may exist at any time between any Group Member
and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;

 

(c)                                  any
litigation or proceeding affecting any Group Member (i) in which the
amount involved is $ 5,000,000 or more (excluding amounts covered by
insurance), (ii) in which injunctive or similar relief is sought with
respect to material operations or (iii) which relates to any Loan
Document;

 

(d)                                 the
following events, as soon as possible and in any event within 30 days after any
Loan Party knows or has reason to know thereof: 
(i) the occurrence of any Reportable Event with respect to any
Multiemployer Plan, a failure to make any required contribution to a
Multiemployer Plan, the creation of any Lien in favor of the PBGC or a Plan or
any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any 

 

69

 

Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan; and

 

(e)                                  any
development or event that, individually or in the aggregate, has had or could
reasonably be expected to have a Material Adverse Effect.

 

Each notice pursuant to this Section 7.7
shall be accompanied by a statement of a Responsible Officer setting forth
details of the occurrence referred to therein and stating what action Holdings,
the Borrower or the relevant Subsidiary proposes to take with respect thereto.

 

7.8.                              Environmental
Laws.  Except as the failure to do so
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect:

 

(a)                                  Comply
in all material respects with, and ensure compliance in all material respects
by all tenants and subtenants, if any, with, all applicable Environmental Laws,
and obtain and comply in all material respects with and maintain, and ensure
that all tenants and subtenants obtain and comply in all material respects with
and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws.

 

(b)                                 Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws.

 

7.9.                              [Reserved].

 

7.10.                        Additional
Collateral, Etc.  With respect to any property acquired after the
Closing Date by any Group Member (other than (w) any property described in
paragraph (b), (c) or (d) below, (x) any property subject to a
Lien expressly permitted by Section 8.3(f), (y) property acquired by
any Foreign Subsidiary and (z) any property of the type not required to be
pledged pursuant to the Security Documents) as to which the Administrative
Agent, for the benefit of the Secured Parties, does not have a perfected Lien,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent reasonably deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a security
interest in such property and (ii) take all actions necessary or advisable
to grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in such property (subject to Liens
permitted under Section 8.3), including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.

 

(b)                                 With
respect to any fee interest in any real property having a value (together with
improvements thereof) of at least $2,000,000 acquired after the Closing Date by
any Group Member (other than (x) any such real property subject to a Lien
expressly permitted by Section 8.3(f) and (y) real property
acquired by any Foreign Subsidiary), promptly (i) execute and deliver a
first priority Mortgage, in favor of the Administrative Agent, for the benefit
of the 

 

70

 

Secured Parties, covering such
real property, (ii) if requested by the Administrative Agent, provide the
Secured Parties with (A) title and extended coverage insurance covering
such real property in an amount at least equal to the purchase price of such
real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with a
surveyor’s certificate, all in accordance with the requirements set forth in Section 6.1(k) and
(B) any consents or estoppels reasonably deemed necessary or advisable by
the Administrative Agent in connection with such Mortgage, each of the
foregoing in form and substance reasonably satisfactory to the Administrative
Agent and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent. 
Notwithstanding the foregoing, no Loan Party shall be deemed in
violation of this Section 7.10(b) for failure to deliver documentation
required under clause (ii)(B) above if the Borrower has used all
commercially reasonable efforts to do so.

 

(c)                                  With
respect to any new Subsidiary (other than a Foreign Subsidiary) created or
acquired after the Closing Date by any Group Member, promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent reasonably deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in the Capital Stock of
such new Subsidiary that is owned by any Loan Party, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock (or other transfer) powers, in blank, executed and delivered
by a duly authorized officer of the relevant Group Member and (iii) cause
such new Subsidiary (A) to become a party to the Guarantee and Collateral
Agreement, (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Secured Parties a perfected first
priority security interest, subject to, in the case of Capital Stock, Liens
arising as a matter of law that do not detract from the value thereof in any
material respect, and (other than as to the Capital Stock of, or held by, such
new Subsidiary) Liens permitted by Section 8.3, in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent and (C) to deliver to the Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit B, with appropriate
insertions and attachments, and (iv) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

 

(d)                                 With
respect to any new Foreign Subsidiary created or acquired after the Closing
Date by any Group Member (other than by any Group Member that is a Foreign
Subsidiary), promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for
the benefit of the Secured Parties, a perfected first priority security
interest in the Capital Stock of such new Subsidiary that is owned by any such
Group Member (provided that in no event shall more than 65% of the total
outstanding 

 

71

 

voting Capital Stock and 100%
of the total outstanding non-voting Capital Stock of any such new Subsidiary be
required to be so pledged) and (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
relevant Group Member, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent’s security interest therein, and (iii) if
reasonably requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent.

 

7.11.                        Further
Assurances.  From time to time
execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Administrative Agent may reasonably request for the purposes of implementing or
effectuating  the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Secured Parties with respect to
the Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with  respect to any
other property or assets hereafter acquired by any Subsidiary of Holdings which
may be deemed to be part of the Collateral) pursuant hereto or thereto.  Upon the exercise by the Administrative Agent
or any Secured Party of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent or such Secured Parties may be required to obtain
from any Subsidiary of Holdings for such governmental consent, approval,
recording, qualification or authorization.

 

SECTION 8.  NEGATIVE COVENANTS

 

Holdings and the Borrower hereby jointly and
severally agree that, so long as the Commitments remain in effect, any Letter
of Credit remains outstanding (unless cash collateralized) or any Loan or other
amount is owing (excluding contingent indemnification obligations for which no
claim has been made or obligations with respect to Hedge Agreements) to any
Lender or Agent hereunder, each of Holdings and the Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly:

 

8.1.                              Financial
Condition Covenants.

 

(a)                                  Consolidated
Leverage Ratio.  Permit the
Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of Holdings ending with any fiscal quarter set
forth below to exceed the ratio set forth below opposite such fiscal quarter:

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  Q3 2009

  	
   

  	
  5.75x

  	
   

  
	
  Q4 2009

  	
   

  	
  5.50x

  	
   

  

 

72

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Leverage Ratio

  	
   

  
	
  Q1 2010

  	
   

  	
  5.50x

  	
   

  
	
  Q2 2010

  	
   

  	
  5.50x

  	
   

  
	
  Q3 2010

  	
   

  	
  5.50x

  	
   

  
	
  Q4 2010

  	
   

  	
  5.25x

  	
   

  
	
  Q1 2011

  	
   

  	
  5.25x

  	
   

  
	
  Q2 2011

  	
   

  	
  5.25x

  	
   

  
	
  Q3 2011

  	
   

  	
  5.25x

  	
   

  
	
  Q4 2011 and thereafter

  	
   

  	
  5.00x

  	
   

  

 

(b)                                 Consolidated
Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of Holdings ending with any fiscal quarter set forth below to be less
than the ratio set forth below opposite such fiscal quarter:

 

	
  Fiscal Quarter

  	
   

  	
  Consolidated

  Interest Coverage Ratio

  	
   

  
	
  Q3 2009

  	
   

  	
  2.00x

  	
   

  
	
  Q4 2009

  	
   

  	
  2.00x

  	
   

  
	
  Q1 2010

  	
   

  	
  2.00x

  	
   

  
	
  Q2 2010

  	
   

  	
  2.00x

  	
   

  
	
  Q3 2010

  	
   

  	
  2.00x

  	
   

  
	
  Q4 2010

  	
   

  	
  2.05x

  	
   

  
	
  Q1 2011

  	
   

  	
  2.05x

  	
   

  
	
  Q2 2011

  	
   

  	
  2.05x

  	
   

  
	
  Q3 2011

  	
   

  	
  2.05x

  	
   

  
	
  Q4 2011 and
  thereafter

  	
   

  	
  2.15x

  	
   

  

 

8.2.                              Indebtedness.  Create, issue, incur, assume, become liable
in respect of or suffer to exist any Indebtedness, except:

 

(a)                                  Indebtedness
of any Loan Party pursuant to any Loan Document;

 

(b)                                 Indebtedness
(i) of the Borrower to any Subsidiary, (ii) of any Wholly Owned
Subsidiary Guarantor to the Borrower or any other Subsidiary, (iii) of any
Foreign Subsidiary to any Foreign Subsidiary and (iv) subject to Section 8.8(p),
of any Foreign Subsidiary to the Borrower or any Subsidiary Guarantor; provided
that such Indebtedness shall be evidenced by a Subordinated Intercompany Note,
which Subordinated Intercompany Note shall (to the extent representing
obligations owed to a Loan Party) be pledged to the Administrative Agent for
the benefit of the Secured Parties;

 

(c)                                  Guarantee
Obligations incurred in the ordinary course of business by any Subsidiary of
Holdings of obligations of the Borrower, any Subsidiary Guarantor and, subject
to Section 8.8(p), of any Foreign Subsidiary;

 

73

 

(d)                                 Indebtedness
in respect of the Unsecured Credit Agreement outstanding on the Restatement
Date and any Permitted Refinancing thereof;

 

(e)                                  Indebtedness
(including Capital Lease Obligations) secured by Liens permitted by Section 8.3(f) in
an aggregate principal amount not to exceed $15,000,000 at any one time
outstanding;

 

(f)                                    Hedge
Agreements permitted under Section 8.12;

 

(g)                                 to
the extent the Loan Parties demonstrate pro forma compliance with each of the
covenants set forth in Section 8.1 as
of the last day of the most recently ended fiscal quarter for which financial
statements are available, after giving effect to the incurrence thereof
(assuming that the interest payable under such Indebtedness was owed throughout
the prior four fiscal quarters, measuring Consolidated Total Debt as of the
date of such incurrence, and with respect to actual Consolidated EBITDA for the
prior four fiscal quarters), Indebtedness of any Subsidiary of Holdings that
was not a Subsidiary on the Closing Date existing at the time such other Person
became a Subsidiary of Holdings; provided such Indebtedness was not
incurred in connection with, or in contemplation of, such other Person becoming
such a Subsidiary;

 

(h)                                 Indebtedness
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guarantees or letters of credit, securing
the performance of such Loan Party or any Subsidiary pursuant to such
agreements, in connection with Permitted Acquisitions or Dispositions permitted
hereunder of any business, assets or Subsidiary of such Loan Party or any of
its Subsidiaries;

 

(i)                                     Indebtedness
incurred in the ordinary course of business in connection with the financing of
insurance premiums;

 

(j)                                     Indebtedness
in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts;

 

(k)                                  Indebtedness
of Foreign Subsidiaries not to exceed a principal amount of $5,000,000 at any
one time outstanding;

 

(l)                                     Indebtedness
in respect of taxes, assessments or governmental charges to the extent that
payment thereof shall not at the time be required to be made hereunder;

 

(m)                               to
the extent permitted by applicable law, Indebtedness consisting of deferred
purchase price or notes issued to officers, directors, consultants and
employees to purchase or redeem equity interests (or option or warrants or
similar instruments) of a Loan Party or its Subsidiaries;

 

(n)                                 to
the extent constituting Indebtedness, obligations under incentive, non-compete,
consulting, deferred compensation or other similar arrangements satisfactory to
the Administrative Agent;

 

74

 

(o)                                 unsecured
Indebtedness issued in connection with Permitted Acquisitions or to Sponsor
and/or its Control Investment Affiliates, which Indebtedness (and any
guarantees thereof) is subordinated to the Loans (and the guarantees thereof
pursuant to the Guarantee and Collateral Agreement) and on terms reasonably
acceptable to the Administrative Agent, including but not limited to PIK
treatment of any interest and the tenor of such Indebtedness;

 

(p)                                 other
Indebtedness incurred in the ordinary course of business in an aggregate
principal amount which shall not exceed $15,000,000 at any one time
outstanding; and

 

(q)                                 Indebtedness in respect of the Second Lien
Notes and the guarantees thereof by the Guarantors; provided that (i) all
such Indebtedness shall be unsecured and (ii) an amount sufficient to satisfy
and discharge such Indebtedness in full has been irrevocably deposited with the
Second Lien Notes Trustee on or prior to the Restatement Date.

 

8.3.                              Liens.  Create, incur, assume or suffer to exist any
Lien upon any of its property, whether now owned or hereafter acquired, except
for:

 

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

 

(b)                                 carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlord’s or other
like Liens arising in the ordinary course of business that are not overdue for
a period of more than 90 days or that are being contested diligently in good
faith and by appropriate proceedings;

 

(c)                                  pledges
or deposits in connection with workers’ compensation, unemployment insurance
and other social security legislation;

 

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

 

(e)                                  easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of any Subsidiary of Holdings;

 

(f)                                    Liens
securing Indebtedness of the Borrower or any other Subsidiary incurred pursuant
to Section 8.2(e) to finance the acquisition of fixed or capital
assets, provided that (i) such Liens shall be created within 90
days after the acquisition of such fixed or capital assets, and (ii) such
Liens do not at any time encumber any property other than the property financed
by such Indebtedness;

 

(g)                                 Liens
created pursuant to the Security Documents;

 

75

 

(h)                                 judgment Liens securing
judgments not constituting an Event of Default under Section 9(h);

 

(i)                                     purported Liens evidenced by
the filing of precautionary UCC financing statements relating solely to
operating leases of personal property entered into in the ordinary course of
business;

 

(j)                                     Liens securing Indebtedness
in an amount of not more than $5,000,000 in the aggregate at any time
outstanding permitted by Section 8.2(g); provided such Liens were
not granted in connection with, or in contemplation of, the obligor on such
Indebtedness becoming such a Subsidiary and do not exceed the value of the
assets acquired when such obligor became a Subsidiary;

 

(k)                                  any interest or title of a
lessor, licensor or sublicensor under any lease, license or sublicense entered
into by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased;

 

(l)                                     Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;

 

(m)                               Liens deemed to exist in
connection with permitted repurchase obligations or set-off rights;

 

(n)                                 replacement, extension or
renewal of any Lien permitted herein in the same property theretofore subject
thereto; provided the amount of Indebtedness secured thereby is not
increased;

 

(o)                                 Liens securing reimbursement
obligations in respect of documentary letters of credit or bankers’
acceptances; provided that such Liens attach only to the documents, the goods
covered thereby and the proceeds thereof;

 

(p)                                 rights of setoff or bankers’
Liens upon deposits of cash in favor of banks or other depository institutions
and Liens associated with overdraft protection, payment processing and netting
services;

 

(q)                                 Liens in connection with the
financing of insurance premiums, provided such Liens shall not exceed the
amount of such premiums so financed;

 

(r)                                    Liens arising as a matter of
law encumbering customary initial deposits and margin deposits, and similar
Liens and margin deposits, and similar Liens attaching to commodity trading
accounts or other brokerage accounts incurred in the ordinary course of
business;

 

(s)                                  Liens in favor of collecting
banks arising under Section 4-210 of the UCC;

 

(t)                                    Liens on the assets of
Foreign Subsidiaries, to the extent securing Indebtedness permitted hereunder;
and

 

76

 

(u)                                 other Liens not specifically
listed above securing Indebtedness not to exceed $5,000,000 outstanding at any
one time in the aggregate.

 

8.4.                              Fundamental Changes. 
Enter into any merger, consolidation or amalgamation, or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of
all or substantially all of its property or business, except that:

 

(a)                                  any Subsidiary of Holdings
(other than the Borrower) may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor (provided
that the Subsidiary Guarantor shall be the continuing or surviving corporation)
or, subject to Section 8.8(p), with or into any Foreign Subsidiary; and

 

(b)                                 any Subsidiary of Holdings
(other than the Borrower) may Dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor
or, subject to utilization of the basket included in Section 8.8(p), any
Foreign Subsidiary.

 

8.5.                              Disposition of Property. 
Dispose of any of its property, whether now owned or hereafter acquired,
or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s Capital Stock to any Person, except:

 

(a)                                  the Disposition of obsolete
or worn out property in the ordinary course of business;

 

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

 

(c)                                  Dispositions permitted by Section 8.4(b);

 

(d)                                 the sale or issuance of any
Subsidiary’s Capital Stock to the Borrower or any Wholly Owned Subsidiary
Guarantor;

 

(e)                                  Allotted Dispositions;

 

(f)                                    Dispositions of Property, in
any transaction or series of related transactions, that do not yield gross
proceeds to any Group Member (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess
of $500,000;

 

(g)                                 the granting of discounts or
forgiveness of account receivables in the ordinary course of business or in
connection with collection or compromise thereof;

 

(h)                                 any Loan Party and its Subsidiaries
may sell or otherwise dispose of cash and Cash Equivalents;

 

77

 

(i)                                     any Loan Party and its
Subsidiaries may sell, for fair market value, non-core assets acquired in
connection with permitted Investments;

 

(j)                                     any Loan Party and its
Subsidiaries may incur Liens permitted under Section 8.3; and

 

(k)                                  any Loan Party may sell or
otherwise dispose of Investments set forth on Schedule 8.8.

 

8.6.                              Restricted Payments. 
Declare or pay any dividend (other than dividends payable solely in
common stock of the Person making such dividend) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any
Capital Stock of any Group Member, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of Holdings, the Borrower or any
Subsidiary (collectively, “Restricted Payments”), except that:

 

(a)                                  any Subsidiary may make
Restricted Payments to the Borrower or any Subsidiary Guarantor;

 

(b)                                 so long as no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, the Borrower and IASG may pay dividends to Holdings to permit
Holdings to (i) purchase Holdings’ common stock or common stock
options  from present or former officers,
directors, consultants or employees of any Group Member (or the respective
estates, spouses or family members) upon the death, disability or termination
of employment of such officer or employee to repay Indebtedness previously
issued to such Person, provided that the aggregate amount of cash
payments under this clause (i) after the date hereof (net of any proceeds
received by Holdings and contributed to the Borrower and IASG after the date
hereof in connection with (a) resales of any common stock or common stock
options so purchased or (b) equity issuances by Holdings (to the extent
not required to be otherwise applied pursuant to Section 4.2(a)) shall not
exceed $2,000,000 in any calendar year or $5,000,000 in the aggregate after the
Closing Date and (ii) pay fees expressly permitted by Section 8.10(e);
and

 

(c)                                  the Borrower and IASG may
pay dividends to Holdings to permit Holdings to (i) pay corporate overhead
expenses incurred in the ordinary course of business, (ii) pay any taxes
that are due and payable by Holdings as the parent of a consolidated or
combined group that includes the Borrower and IASG, in an amount not to exceed
the lesser of (A) the relevant amount of any taxes (including any
penalties and interest) that the Borrower and IASG would owe if the Borrower or
IASG, respectively, were filing a separate tax return (or a separate consolidated
or combined return with their respective Subsidiaries that are members of the
consolidated or combined group), taking into account any carryovers or
carrybacks of tax attributes (such as operating losses) of the Borrower and
IASG and such Subsidiaries from other taxable years and (B) the net amount
of the relevant tax that Holdings actually owes to the appropriate taxing
authority; provided that any such payment in respect of taxes received
by Holdings shall be paid over to the appropriate taxing authority within 30
days of Holdings’ receipt of such payments or shall be refunded to the Borrower
and IASG, as applicable, and (iii) 

 

78

 

pay expense reimbursements pursuant to the
Management Agreement substantially in the form most recently delivered to the
Administrative Agent prior to the Closing Date, and without further
modification thereto as to amounts payable thereunder.

 

8.7.                              Capital Expenditures; Net Cash Investment
Costs.  (a) Make any Capital Expenditure,
except:

 

(i)                                     Capital Expenditures of the Borrower and
its Subsidiaries not exceeding $10,000,000 for each fiscal year; provided
that (A) up to 50% of the portion of such amount referred to above (but in
no event more than $2,500,000 in any fiscal year) that is not so expended in
the fiscal year for which it is permitted may be carried over for expenditure
in the next succeeding fiscal year and (B) Capital Expenditures made
pursuant to this clause (i) during any fiscal year shall be deemed made, first,
in respect of amounts carried over from the prior fiscal year pursuant to
subclause (A) above and, second, to amounts permitted for such
fiscal year as provided above;

 

(ii)                                  Capital Expenditures made with the
proceeds of any Reinvestment Deferred Amount;

 

(iii)                               Capital Expenditures made as a tenant in
leasehold improvements to the extent reimbursable by landlord pursuant to
evidence satisfactory to the Administrative Agent;

 

(iv)                              Capital Expenditures that are Permitted
Acquisitions; and

 

(v)                                 Capital Expenditures made with the
proceeds of (A) equity issuances of Holdings concurrently with the
issuance thereof, to the extent the Net Cash Proceeds thereof are not required
to be applied to mandatory prepayments pursuant to Section 4.2(a) or (B) issuances
of subordinated Indebtedness permitted under Section 8.2(p).

 

(b)                                 Incur any Net Cash
Investment Costs, except:

 

(i)                                 Net Cash
Investment Costs of the Borrower and its Subsidiaries in the ordinary course of
business not exceeding for any fiscal year the following amount with respect to
such fiscal year:

 

	
  Fiscal Year

  	
   

  	
  Net Cash Investment Costs

  	
   

  
	
  2009

  	
   

  	
  $

  	
  115,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  120,000,000

  	
   

  
	
  2011 and each fiscal year
  thereafter

  	
   

  	
  $

  	
  130,000,000

  	
   

  

 

provided that (A) up
to 50% of the portion of any such amount referred to above (but in no event
more than $10,000,000 in any fiscal year) that is not so expended in the fiscal
year for which it is permitted may be carried over for expenditure in the next
succeeding fiscal year, and (B) Net Cash Investment Costs incurred pursuant
to this clause (i) during 

 

79

 

any fiscal year shall be
deemed made, first, in respect of amounts carried over from the prior
fiscal year pursuant to subclause (A) above and, second, to amounts
permitted for such fiscal year as provided above;

 

(ii)                                  Net Cash
Investment Costs made with the proceeds of any Reinvestment Deferred Amount;
and

 

(iii)                               Net Cash
Investment Costs in any fiscal year up to the amount of capital contributions
from the Sponsor and its Control Investment Affiliates or any other Person
within such fiscal year, other than proceeds received in respect of
underwritten public offerings of Holdings, the Borrower or any of its
Subsidiaries, and proceeds applied to either (A) fund Permitted Acquisitions
or (B) prepay Term Loans and/or reduce Revolving Commitments in accordance
with Section 4.2.

 

8.8.                              Investments. 
Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution to, or purchase any Capital Stock, bonds,
notes, debentures or other debt securities of, or any assets constituting a
business unit of, or make any other investment in, any Person (all of the
foregoing, “Investments”), except:

 

(a)                                  extensions of trade credit
in the ordinary course of business;

 

(b)                                 Investments in Cash
Equivalents;

 

(c)                                  Guarantee Obligations
permitted by Section 8.2;

 

(d)                                 loans and advances to
employees of any Group Member in the ordinary course of business (including for
travel, entertainment and relocation expenses) in an aggregate amount for all
Group Members not to exceed $1,000,000 at any one time outstanding;

 

(e)                                  Investments in assets useful
in the business of the Borrower or any other Subsidiary of Holdings made by the
Borrower or any other Subsidiary of Holdings with the proceeds of any
Reinvestment Deferred Amount (provided that any such Investments constituting
Investments in one or more Foreign Subsidiaries shall be included in the
maximum amount permitted under Section 8.8(p), notwithstanding the
exclusion in such clause regarding proceeds of Reinvestment Deferred Amounts);

 

(f)                                    intercompany Investments by
any Group Member in the Borrower or any Person that, prior to such Investment,
is a Subsidiary Guarantor; provided that any such Investment in the form
of loans or advances shall be evidenced by a Subordinated Intercompany Note
which shall (to the extent representing obligations owed to a Loan Party) be
pledged to the Administrative Agent for the benefit of the Secured Parties;

 

(g)                                 Permitted Acquisitions and
Capital Expenditures permitted under this Agreement;

 

(h)                                 Hedge Agreements entered
into for non-speculative purposes and otherwise permitted under this Agreement;

 

80

 

(i)                                     earnest money deposits
required in connection with Permitted Acquisitions;

 

(j)                                     any Loan Party may
capitalize or forgive any Indebtedness owed to it by any other Loan Party;

 

(k)                                  Investments acquired in
connection with the IASG Acquisition or Permitted Acquisitions;

 

(l)                                     Investments acquired in
connection with the settlement of accounts, bankruptcy or reorganization of
suppliers or customers;

 

(m)                               Investments received as the
non-cash portion of consideration received in connection with Dispositions
permitted under this Agreement;

 

(n)                                 to the extent permitted by
applicable law, any Loan Party and its Subsidiaries may accept notes from
officers, directors and employees in exchange for equity interests purchased by
such officers, directors or employees pursuant to a stock ownership or purchase
plan or compensation plan of such Loan Party or Subsidiary;

 

(o)                                 the Borrower or any other
Subsidiary of Holdings may make a loan to, or an Investment in, Holdings that
could otherwise be made as a Restricted Payment;

 

(p)                                 in addition to Investments
otherwise expressly permitted by this Section, Investments by the Borrower or
any other Subsidiary of Holdings in an aggregate amount (valued at cost) not to
exceed $10,000,000 after the Closing Date (excluding any Investment made with
the proceeds of (x) any Reinvestment Deferred Amount or (y) equity
issuances of Holdings not otherwise required to be applied pursuant to Section 4.2(a));

 

(q)                                 Investments existing on the Closing Date
set forth on Schedule 8.8; and

 

(r)                                    the Borrower or any other Subsidiary of
Holdings may make loans to wholesale dealers not to exceed $30,000,000 at any
time outstanding.

 

The
amount of any Investment shall be the initial amount of such Investment less
all repayments, returns, dividends and distributions received in respect of
such Investment and less all liabilities expressly assumed by another person in
connection with the sale of such Investment.

 

8.9.                              Optional Payments and
Modifications of Certain Debt Instruments.  (a)  Make any optional or voluntary
payment, prepayment, repurchase or redemption of or otherwise optionally or
voluntarily defease or segregate funds with respect to the Unsecured Credit
Agreement, the Second Lien Notes and any Indebtedness the payment of principal
and interest of which and other obligations of Holdings or any of its
Subsidiaries in respect of which are subordinated to the prior payment in full
of the obligations hereunder (except that the Indebtedness in respect of the
Unsecured Credit Agreement (or any Permitted Refinancing thereof) may be (i) refinanced
with the proceeds of a Permitted Refinancing or (ii) prepaid from 

 

81

 

other sources in connection with a Permitted
Refinancing so long as the proceeds of such Permitted Refinancing constitute at
least 50% of the principal amount of the Indebtedness outstanding in respect of
the Unsecured Credit Agreement or a Permitted Refinancing thereof, and any
Second Lien Notes and related premiums required in connection with the
refinancing thereof, to the extent still outstanding, shall be repaid with the
proceeds of Tranche B-2 Term Loans hereunder and cash on hand on the
Restatement Date and shall be discharged within 30 days after the Restatement
Date); or (b) amend, modify, waive or otherwise change, or consent or agree
to any amendment, modification, waiver or other change to, any of the terms of
any Indebtedness described in clause (a) (including the Unsecured Credit
Agreement and the Second Lien Notes) (other than any such amendment,
modification, waiver or other change that (i) would extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or
extend any date for payment of interest thereon or remove any covenants or
security in favor of the holders thereof or (ii) could not reasonably be
expected to increase the obligations of the obligor or confer additional rights
on the holder of such subordinated Indebtedness, in each case, in a manner
reasonably expected to be materially adverse to the interests of the Lenders).

 

8.10.                        Transactions with Affiliates. 
Enter into any transaction, including any purchase, sale, lease or
exchange of property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than Holdings,
the Borrower or any Wholly Owned Subsidiary Guarantor) unless such transaction
is (a) otherwise permitted under this Agreement or (b) upon fair and
reasonable terms no less favorable to the relevant Group Member than it would
obtain in a comparable arm’s length transaction with a Person that is not an
Affiliate.  Notwithstanding the
foregoing, the Borrower and each other Subsidiary of Holdings may:

 

(a)                                  pay compensation, expense
reimbursement and indemnities to officers and directors of the Loan Parties and
their Subsidiaries in the ordinary course of business;

 

(b)                                 enter into employment
contracts with officers and management of the Loan Parties and their
Subsidiaries;

 

(c)                                  engage in transactions
solely among Foreign Subsidiaries;

 

(d)                                 pay expense reimbursements
pursuant to the Management Agreement substantially in the form most recently
delivered to the Administrative Agent prior to the Closing Date, and without
further modification thereto as to amounts payable thereunder; and

 

(e)                                  so long as no Default or
Event of Default shall have occurred and be continuing, pay to the Sponsor and
its Control Investment Affiliates monitoring and transactions fees pursuant to
the Management Agreement substantially in the form most recently delivered to
the Administrative Agent prior to the Closing Date, and without further
modification thereto as to amounts payable thereunder; provided that the
aggregate amount of monitoring fees paid in cash shall not to exceed $1,500,000
in any fiscal year of Holdings; provided  further, that such fees
not paid shall accrue and be paid when the applicable Default or Event of
Default has been 

 

82

 

cured or waived and no additional Default or
Event of Default has occurred and is continuing or would arise as a result of
such payment.

 

8.11.                        Sales and Leasebacks. 
Enter into any arrangement with any Person providing for the leasing by
any Group Member of real or personal property that has been or is to be sold or
transferred by such Group Member to such Person or to any other Person to whom
funds have been or are to be advanced by such Person on the security of such
property or rental obligations of such Group Member.

 

8.12.                        Hedge Agreements. 
Enter into any Hedge Agreement, except Hedge Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of any Subsidiary
of Holdings.

 

8.13.                        Changes in Fiscal Periods. 
Permit the fiscal year of the Borrower to end on a day other than December 31
or change Holdings’ method of determining fiscal quarters.

 

8.14.                        Negative Pledge Clauses. 
Enter into or suffer to exist or become effective any agreement that
prohibits or limits the ability of any Group Member to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now
owned or hereafter acquired, other than (a) this Agreement and the other
Loan Documents, (b) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets financed
thereby), (c) the Unsecured Credit Agreement and any documentation
governing any Permitted Refinancing thereof, (d) any agreements relating
to the sale of a Subsidiary permitted hereunder pending such sale and only with
respect to the specific property subject to sale, (e) any agreements
evidencing Indebtedness permitted under Section 8.2(k), solely with
respect to property of Foreign Subsidiaries and (f) any licenses or leases
entered into in the ordinary course of business.

 

8.15.                        Clauses Restricting Subsidiary
Distributions.  Enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any
Subsidiary of Holdings (other than the Borrower) to (a) make Restricted
Payments in respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of Holdings, (b) make
loans or advances to, or other Investments in, the Borrower or any other
Subsidiary of Holdings or (c) transfer any of its assets to the Borrower
or any other Subsidiary of Holdings, except for such encumbrances or
restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, (iii) any restrictions contained in
the Unsecured Credit Agreement and any documentation governing any Permitted
Refinancing thereof, (iv) any restrictions contained in licenses or leases
entered into in the ordinary course of business, (v) any restrictions
contained in agreements relating to the sale of assets permitted hereunder
pending such sale and only with respect to the specific property subject to
sale, and (vi) any restrictions contained in agreements evidencing
Indebtedness permitted under Section 8.2(k), solely with respect to
property of Foreign Subsidiaries.

 

83

 

8.16.                        Lines of Business. 
Enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Subsidiaries of Holdings are engaged
on the date of this Agreement or that are reasonably related thereto.

 

8.17.                        Limitations on
the Activities of Holdings.    In the case of Holdings, notwithstanding
anything to the contrary in this Agreement or any other Loan Document, (a) conduct,
transact or otherwise engage in, or commit to conduct, transact or otherwise
engage in, any material business or operations other than those incidental to
its ownership of the Capital Stock of the Borrower and IASG and activities
incidental to the maintenance of its corporate existence, (b) incur,
create, assume or suffer to exist any material Indebtedness or other
liabilities or financial obligations, except (i) nonconsensual obligations
imposed by operation of law, (ii) pursuant to the Loan Documents to which
it is a party and (iii) obligations with respect to its Capital Stock, or (c) own,
lease, manage or otherwise operate any material properties or assets (including
cash (other than cash received in connection with dividends made by the
Borrower and IASG in accordance with Section 8.6 pending application in
the manner contemplated by said Section or cash to be contributed to the
Borrower and IASG) and cash equivalents) other than the ownership of shares of
Capital Stock of the Borrower and IASG.

 

SECTION 9. 
EVENTS OF DEFAULT

 

If any of the following events shall occur and be
continuing:

 

(a)                                  the Borrower shall fail to
pay any principal of any Loan or Reimbursement Obligation when due in
accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan or Reimbursement Obligation, or any other amount payable
hereunder or under any other Loan Document, within five Business Days after any
such interest or other amount becomes due in accordance with the terms hereof;
or

 

(b)                                 any representation or
warranty made or deemed made by any Loan Party herein or in any other Loan
Document or that is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with this
Agreement or any such other Loan Document shall prove to have been inaccurate
in any material respect on or as of the date made or deemed made except for
representations and warranties which specifically relate to an earlier specific
date, in which case such representations and warranties shall have been
inaccurate in any material respect as of such earlier date; or

 

(c)                                  (i)  any Loan Party
shall default in the observance or performance of any agreement contained in
clause (i) or (ii) of Section 7.4(a) (with respect to
Holdings and the Borrower only), Section 7.7(a) or Section 8 of
this Agreement or Sections 5.5 and 5.7(b) of the Guarantee and Collateral
Agreement or (ii) an “Event of Default” under and as defined in any
Mortgage shall have occurred and be continuing; or

 

(d)                                 any Loan Party shall default
in the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue for a period of 30 

 

84

 

days after the earlier of (i) an officer
of such Loan Party becoming aware of such default or (ii) receipt by the
Borrower of notice from the Administrative Agent or any Lender of such default;
or

 

(e)                                  any Group Member shall (i) default
in making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans) on the scheduled or original due
date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created; or (iii) default
in the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or to become subject to a mandatory offer to purchase by the
obligor thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph
(e) shall not at any time constitute an Event of Default unless, at such
time, one or more defaults, events or conditions of the type described in clauses
(i), (ii) and (iii) of this paragraph (e) shall have occurred
and be continuing with respect to Indebtedness the outstanding principal amount
of which exceeds in the aggregate $15,000,000; or

 

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

 

(g)                                 (i) any Person shall
engage in any “prohibited transaction” (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any failure to
meet 

 

85

 

the minimum funding standard of Sections 412 or 430 of the Code or
Sections 302 or 303 of ERISA with respect to any Pension Plan (whether or not
waived in accordance with Section 412(c) of the Code or Section 302(c) of
ERISA) shall exist with respect to any Plan or any Lien in favor of the PBGC or
a Plan shall arise on the assets of any Group Member or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Group Member or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, the determination of “critical” or “endangered” status
under Section 432 of the Code or Section 305 of ERISA, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and in each
case in clauses (i), (iii), (iv), (v) and (vi) above, such event or
condition, together with all other such events or conditions, if any, could, in
the sole judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect;  or

 

(h)                                 one or more judgments or
decrees shall be entered against any Group Member involving in the aggregate a
liability (excluding amounts covered by insurance as to which the relevant
insurance company has not denied coverage, after reaching a final decision
regarding such coverage) of $15,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof; or

 

(i)                                     any of the Security
Documents (except those that relate solely to an immaterial portion of the
Collateral) shall cease, for any reason, to be in full force and effect, or any
Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien
created by any of the Security Documents (other than any such Lien on an
immaterial portion of the Collateral) shall cease to be enforceable and of the
same effect and priority purported to be created thereby; or

 

(j)                                     the guarantee contained in Section 2
of the Guarantee and Collateral Agreement shall cease, for any reason other
than in accordance with its terms, to be in full force and effect or any Loan
Party or any Affiliate of any Loan Party shall so assert; or

 

(k)                                  (i) any “person” or
“group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934 as in effect on the date hereof), other than
the Sponsor and its Related Parties, shall become the “beneficial owner” (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the
Securities Exchange Act of 1934 as in effect on the date hereof), directly or
indirectly, of Capital Stock representing more than 50% of either the aggregate
ordinary voting power or the aggregate equity value represented by the issued
and outstanding Capital Stock of Holdings or the Borrower, (ii) a majority
of the seats (other than vacant seats) on the board of directors of Holdings or
the Borrower shall at any time be occupied by persons who are not Continuing
Directors, (iii) Holdings shall at any time fail to own directly or
indirectly, beneficially and of record, 100% of each class of issued and
outstanding Capital 

 

86

 

Stock of the Borrower free and clear of all
Liens (other than Liens created by the Guarantee and Collateral Agreement and
Liens arising as a matter of law that do not detract from the value thereof in
any material respect) or (iv) a Specified Change of Control shall occur;

 

then, and in any such event, (A) if such
event is an Event of Default specified in clause (i) or (ii) of
paragraph (f) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the
other Loan Documents (including all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or
both of the following actions may be taken: 
(i) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative
Agent shall, by notice to the Borrower declare the Revolving Commitments to be
terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters
of Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.  With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of
an acceleration pursuant to this paragraph, the Borrower shall at such time
deposit in a cash collateral account opened by the Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit.  Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other obligations of the Borrower hereunder
and under the other Loan Documents. 
After all such Letters of Credit shall have expired or been fully drawn
upon, all Reimbursement Obligations shall have been satisfied and all other
obligations of the Borrower hereunder and under the other Loan Documents shall
have been paid in full, the balance, if any, in such cash collateral account
shall be returned to the Borrower (or such other Person as may be lawfully
entitled thereto).  Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived by the Borrower.

 

SECTION 10. 
THE AGENTS

 

10.1.                        Appointment. 
Each Lender hereby irrevocably designates and appoints each Agent as the
agent of such Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes such Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto.   Notwithstanding any provision
to the contrary elsewhere in this 

 

87

 

Agreement, no Agent shall have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.

 

10.2.                        Delegation of Duties. 
Each Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties.  No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys in-fact selected by
it with reasonable care.

 

10.3.                        Exculpatory Provisions. 
Neither any Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under or
in connection with this Agreement or any other Loan Document (except to the
extent that any of the foregoing are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from its or such
Person’s own gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party a party thereto to perform its obligations hereunder or
thereunder.  The Agents shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of any Loan Party.

 

10.4.                        Reliance by Agents. 
Each Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including counsel to Holdings
or the Borrower), independent accountants and other experts selected by such
Agent.  The Administrative Agent may deem
and treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. 
Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action.  The Agents shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.

 

88

 

10.5.                        Notice of Default. 
No Agent shall be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless such Agent has received
notice from a Lender, Holdings or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
“notice of default”.  In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
if so specified by this Agreement, all Lenders or any other instructing group
of Lenders specified by this Agreement); provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.

 

10.6.                        Non-Reliance on Agents and Other Lenders. 
Each Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates have made any representations or warranties to it and that no act by
any Agent previously or hereafter taken, including any review of the affairs of
a Loan Party or any Affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by any Agent to any Lender.  Each Lender represents to the Agents that it
has, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and
their Affiliates and made its own decision to make its Loans hereunder and
enter into this Agreement and, if applicable, the Amendment Agreement.  Each Lender also represents that it will,
independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their Affiliates.  Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to disclose or otherwise provide to any Lender, and
shall not be liable for failure to disclose or otherwise provide, any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or
any Affiliate of a Loan Party that may come into the possession of the Person
serving as Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates in any capacity.

 

10.7.                        Indemnification. 
The Lenders agree to indemnify each Agent in its capacity as such (to
the extent not reimbursed by Holdings or the Borrower and without limiting the
obligation of Holdings or the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with such 

 

89

 

Aggregate Exposure Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (whether before or after the
payment of the Loans) be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from such Agent’s gross negligence or willful misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

10.8.                        Agent in Its Individual Capacity. 
Each Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though such
Agent were not an Agent.  With respect to
its Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms “Lender” and
“Lenders” shall include each Agent in its individual capacity.

 

10.9.                        Successor Administrative Agent. 
The Administrative Agent may resign as Administrative Agent upon 10
Business Days’ notice to the Lenders and the Borrower.  If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Loan Documents, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall (unless an Event of Default under Section 9(a) or
Section 9(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.  If no successor agent has accepted appointment
as Administrative Agent by the date that is 10 Business Days following a
retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. 
After any retiring Administrative Agent’s resignation as Administrative
Agent, the provisions of this Section 10 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement and the other Loan Documents.

 

10.10.                  Agents Generally.  Except as
expressly set forth herein, no Agent shall have any duties or responsibilities
hereunder in its capacity as such.

 

90

 

10.11.                  The Lead Arranger.  The Lead
Arranger, in its capacity as such, shall have no duties or responsibilities,
and shall incur no liability, under this Agreement and other Loan Documents.

 

10.12.                  Withholding Tax.  To the extent
required by any applicable law, the Administrative Agent may withhold from any
interest payment to any Lender an amount equivalent to any applicable
withholding tax.  If any Governmental
Authority asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or because such
Lender failed to notify the Administrative Agent of a change in circumstance
which rendered the exemption from, or reduction of, withholding tax ineffective
or for any other reason, such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including any penalties or interest and together with all
expenses (including legal expenses, allocated internal costs and out-of-pocket
expenses) incurred.

 

SECTION 11. 
MISCELLANEOUS

 

11.1.                        Amendments and Waivers. 
Neither this Agreement, any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 11.1. 
The Required Lenders and each Loan Party party to the relevant Loan
Document may, or, with the written consent of the Required Lenders, the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall (i) forgive
any principal amount or extend the final scheduled date of maturity of any
Loan, extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable hereunder
(except (x) in connection with the waiver of applicability of any
post-default increase in interest rates, which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or
modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or fees for purposes
of this clause (i)) or extend the scheduled date of any payment thereof, or increase
the amount or extend the expiration date of any Lender’s Revolving Commitment,
in each case without the written consent of each Lender directly affected
thereby;  (ii) eliminate or reduce
the voting rights of any Lender under this Section 11.1 without the
written consent of such Lender; (iii) reduce any percentage specified in
the definition of Required Lenders, consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents, release all or substantially all of the Collateral or
release any Subsidiary Guarantor from its obligations under the Guarantee and
Collateral Agreement (except as otherwise expressly permitted hereunder or 

 

91

 

under the other Loan Documents), in each case without
the written consent of all Lenders; (iv) amend, modify or waive any
condition precedent to any extension of credit under the Revolving Facility set
forth in Section 6.2 (including in connection with any waiver of an
existing Default or Event of Default) without the written consent of the
Majority Facility Lenders with respect to the Revolving Facility; (v) amend,
modify or waive any provision of Section 4.8 without the written consent
of the Majority Facility Lenders in respect of the Facility or Subfacility
adversely affected thereby; (vi) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility or
Subfacility without the written consent of all Lenders under such Facility or
Subfacility, as applicable; (vii) reduce the amounts required to be
applied to prepay the Loans pursuant to Section 4.2, or amend any of the
defined terms herein in such a manner as to create a similar result without the
written consent of the Majority Facility Lenders of each adversely affected
Facility; (viii) amend, modify or waive any provision of Section 10
without the written consent of each Agent adversely affected thereby; (ix) amend,
modify or waive any provision of Section 3.3 or 3.4 without the written
consent of the Swingline Lender; or (x) amend, modify or waive any
provision of Sections 3.7 to 3.14 without the written consent of the Issuing
Lenders.  Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and
all future holders of the Loans.  In the
case of any waiver, the Loan Parties, the Lenders and the Agents shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.

 

Notwithstanding
the foregoing, this Agreement may be amended (or amended and restated) with the
written consent of the Required Lenders, the Administrative Agent and the
Borrower (a) to add one or more additional credit facilities to this
Agreement and to permit the extensions of credit from time to time outstanding
thereunder and the accrued interest and fees in respect thereof (collectively,
the “Additional Extensions of Credit”) to share ratably in the benefits
of this Agreement and the other Loan Documents with the Term Loans and
Revolving Extensions of Credit and the accrued interest and fees in respect
thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Majority Facility
Lenders; provided that no such amendment shall permit the Additional
Extensions of Credit to share ratably with or with preference to the Term Loans
in the application of mandatory prepayments without the consent of the Majority
Facility Lenders under the Term Loan Facility or otherwise to share ratably
with or with preference to the Revolving Extensions of Credit in the
application of mandatory prepayments without the consent of the Majority
Facility Lenders under the Revolving Facility.

 

In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the
relevant Replacement Term Loans (as defined below) to permit the refinancing of
all outstanding Term Loans (“Refinanced Term Loans”) with a replacement
term loan tranche hereunder (“Replacement Term Loans”), provided
that (a) the aggregate principal amount of such Replacement Term Loans
shall not exceed the aggregate principal amount of such Refinanced Term Loans, (b) the
Applicable Margin for such Replacement Term Loans shall not be higher 

 

92

 

than
the Applicable Margin for such Refinanced Term Loans, (c) the weighted
average life to maturity of such Replacement Term Loans shall not be shorter
than the weighted average life to maturity of such Refinanced Term Loans at the
time of such refinancing and (d) all other terms applicable to such
Replacement Term Loans shall be substantially identical to, or less favorable
to the Lenders providing such Replacement Term Loans than, those applicable to
such Refinanced Term Loans, except to the extent necessary to provide for
covenants and other terms applicable to any period after the latest final
maturity of the Term Loans in effect immediately prior to such refinancing.

 

In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing any
New Term Loans pursuant to Section 2.4, to effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the opinion of the Administrative Agent, to effectuate the provisions of Section 2.4,
including, without limitation, to include appropriately the New Term Lenders in
any determination of Required Lenders and Majority Facility Lenders, and to
incorporate appropriately any New Term Loans into the definition of
Subfacility.

 

In addition,
notwithstanding the foregoing, the Borrower may, by written notice to the
Administrative Agent from time to time, make one or more offers (each, a “Loan
Modification Offer”) to all of the Tranche B-1 Term Lenders to make one or
more Permitted Amendments pursuant to procedures reasonably specified by the
Administrative Agent and reasonably acceptable to the Borrower.  Each such notice shall set forth (a) the
terms and conditions of the requested Permitted Amendment(s) and (b) the
date on which such Permitted Amendment(s) are requested to become
effective (which shall not be less than 10 Business Days, and shall not be more
than 30 Business Days, after the date of such notice).  Permitted Amendments shall become effective
upon the consent of the Administrative Agent and the Tranche B-1 Term Lenders
that accept the applicable Loan Modification Offer (such Lenders, the “Accepting
Lenders”).  The Borrower and each
Accepting Lender shall execute and deliver to the Administrative Agent a Loan
Modification Agreement and such other documentation as the Administrative Agent
shall reasonably request to evidence the acceptance of the Permitted Amendment(s) and
the terms and conditions thereof.  The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Loan Modification Agreement.  The
Lenders hereby irrevocably authorize the Administrative Agent to enter into
amendments to this Agreement and the Security Documents as may be necessary or
appropriate to effectuate the transactions contemplated by the Permitted Amendment(s) (including
any amendments necessary to treat the Loans of the Accepting Lenders as
Modified Term Loans), including without limitation, to include appropriately
the Accepting Lenders in any determination of Required Lenders and Majority
Facility Lenders, and to incorporate appropriately any resulting tranche of
Term Loans into the definition of Subfacility. 
Each Group Member agrees to cooperate with the Administrative Agent to
take such actions as the Administrative Agent may reasonably request to ensure
that the Obligations, including all Loans, are guaranteed by the Guarantors and
are secured by all of the Collateral. 
Notwithstanding the foregoing, no Permitted Amendment shall become
effective unless the Administrative Agent shall have received legal opinions, a
certificate of an officer of the Borrower, board resolutions and such other
corporate 

 

93

 

and
other documents as the Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to the Administrative Agent.

 

11.2.                        Notices.  All notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when
delivered, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed as
follows in the case of Holdings, the Borrower and the Agents, and as set forth
in an administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto:

 

	
  Holdings:

  	
   

  	
  Protection
  One, Inc.

  
	
   

  	
   

  	
  1035
  N. 3rd Street, Suite 101

  
	
   

  	
   

  	
  Lawrence,
  KS 66044

  
	
   

  	
   

  	
  Attention:
  Eric Griffin

  
	
   

  	
   

  	
  Telecopy:
  (877) 299-0111

  
	
   

  	
   

  	
  Telephone:
  (972) 916-6154

  
	
   

  	
   

  	
   

  
	
  The
  Borrower:

  	
   

  	
  Protection
  One Alarm Monitoring, Inc.

  
	
   

  	
   

  	
  1035
  N. 3rd Street, Suite 101

  
	
   

  	
   

  	
  Lawrence,
  KS 66044

  
	
   

  	
   

  	
  Attention:
  Eric Griffin

  
	
   

  	
   

  	
  Telecopy:
  (877) 299-0111

  
	
   

  	
   

  	
  Telephone:
  (972) 916-6154

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kirkland &
  Ellis LLP

  
	
   

  	
   

  	
  300
  North LaSalle St.

  
	
   

  	
   

  	
  Chicago,
  IL 60654

  
	
   

  	
   

  	
  Attention:
  Louis R. Hernandez

  
	
   

  	
   

  	
  Telecopy:
  (312) 862-2200

  
	
   

  	
   

  	
  Telephone:
  (312) 863-2029

  
	
   

  	
   

  	
   

  
	
  The
  Administrative Agent:

  	
   

  	
  JPMorgan
  Chase Bank, N.A.

  
	
   

  	
   

  	
  1111
  Fannin Street, Floor 10

  
	
   

  	
   

  	
  Houston,
  TX 77002

  
	
   

  	
   

  	
  Attention:
  Shanida Littlejohn, Loan & Agency

  
	
   

  	
   

  	
  Account
  Manager

  
	
   

  	
   

  	
  Telecopy:
  (713) 750-2782

  
	
   

  	
   

  	
  Telephone:
  (713) 750-3510

  

 

94

 

	
   

  	
   

  	
  with
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Latham &
  Watkins LLP

  
	
   

  	
   

  	
  885
  Third Avenue, Suite 1000

  
	
   

  	
   

  	
  New
  York, NY 10022

  
	
   

  	
   

  	
  Attention: Michele O.
  Penzer

  
	
   

  	
   

  	
  Telecopy: (212) 751-4864

  
	
   

  	
   

  	
  Telephone: (212) 906-1200

  

 

provided that any notice,
request or demand to or upon any Agent, any Issuing Lender or the Lenders shall
not be effective until received.

 

Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant
to Section 2 unless otherwise agreed by the Administrative Agent and the
applicable Lender.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

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

 

11.4.                        Survival of Representations and
Warranties.  All representations and warranties made
hereunder, in the other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans and other
extensions of credit hereunder.

 

11.5.                        Payment of Expenses and Taxes. 
The Borrower agrees (a) to pay or reimburse each Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation
and administration of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of one counsel to such Agents
(together with such other special or local counsel as such Agents may deem
appropriate) and filing and recording fees and expenses, with statements with
respect to the foregoing to be submitted to the Borrower prior to the
Restatement Date (in the case of amounts to be paid on the Restatement Date)
and from time to time thereafter on a monthly basis or such other periodic
basis as such Agent shall deem appropriate, provided, however,
that the Borrower shall have received an invoice or similar writing setting
forth such charges in reasonable detail prior to the date such amounts are due,
(b) to pay or reimburse each Lender and Agent for all its out-of-pocket
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other

 

95

 

documents, including the fees and disbursements of
counsel to each Lender and of counsel to such Agent, (c) to pay,
indemnify, and hold each Lender and Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, that may be payable
or determined to be payable in connection with the execution and delivery of,
or consummation or administration of any of the transactions contemplated by,
or any amendment, supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and Agent and
their respective officers, directors, employees, Affiliates, agents and
controlling persons (each, an “Indemnitee”) harmless from and against
any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Group Member
or any of the Properties or the unauthorized use by Persons of information or
other materials sent through electronic, telecommunications or other
information transmission systems that are intercepted by such Persons and the
reasonable fees and expenses of one legal counsel (in addition to such local
and special counsel as the Indemnitees shall deem appropriate) in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively,
the “Indemnified Liabilities”); provided that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to (i) Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee (or any of
its officers, directors, or employees acting within the scope of their duties),
(ii) claims brought solely by one Indemnitee against another, or (iii) special,
exemplary, consequential or punitive damages arising out of the transactions
contemplated hereunder; provided  further, that it is understood
the provisions of clause (d) as to each Lender are not intended to grant
additional rights to Lenders similar to those granted to the Agents under
clause (a) above, the reimbursement of which is intended to be controlled
solely by such clause.  Without limiting
the foregoing, and to the extent permitted by applicable law, each of the
Borrower and Holdings agrees not to assert and to cause its respective
Subsidiaries not to assert, and hereby waives and agrees to cause its
respective Subsidiaries to waive, all rights for contribution or any other
rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. 
All amounts due under this Section 11.5 shall be payable not later
than 10 days after written demand therefor. 
Statements payable by the Borrower pursuant to this Section 11.5
shall be submitted to Darius Nevin (Telephone No. (305) 599-0231)
(Telecopy No. (877) 299-0111), at the address of the Borrower set forth in
Section 11.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative
Agent.  The agreements in this Section 11.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

96

 

11.6.                        Successors and Assigns;
Participations and Assignments.  (a)  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Lender that issues any Letter of Credit), except that (i) the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section.

 

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

 

(A)                              the Borrower, provided that no
consent of the Borrower shall be required for an assignment (i) to a
Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default
has occurred and is continuing, any other Person or (ii) of Term Loans;
and

 

(B)                                the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
to an Assignee that is a Lender immediately prior to giving effect to such
assignment, except in the case of an assignment of a Revolving Commitment to an
Assignee that does not already have a Revolving Commitment.

 

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

 

(A)                              except in the case of an assignment to a
Lender, an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitments or Loans under
any Facility, the amount of the Commitments or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $1,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that (1) no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing and (2) such amounts shall be aggregated in respect of
each Lender and its Affiliates or Approved Funds, if any;

 

(B)                                the Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire and all appropriate tax forms required under Section 4.10;
and

 

97

 

(C)                                    in the case of an assignment to a CLO,
the assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement and the other Loan
Documents, provided that the Assignment and Assumption between such
Lender and such CLO may provide that such Lender will not, without the consent
of such CLO, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 11.1 and (2) directly affects such
CLO.

 

(iii)                               Subject to
acceptance and recording thereof pursuant to paragraph (b)(iv) below,
from and after the effective date specified in each Assignment and Assumption
the Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 4.9, 4.10, 4.11 and 11.5). 
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)                              The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and L/C Obligations owing to,
each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lenders and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower, the
Issuing Lenders and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.

 

(v)                                 Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an Assignee
(together with a processing and recordation fee of $3,500), the Assignee’s
completed administrative questionnaire (unless the Assignee shall already be a
Lender hereunder), and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(c)                                  (i)  Any Lender may,
without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) 

 

98

 

in all or a portion of such Lender’s rights
and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Lenders and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.  Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender
will not, without the consent of the Participant, agree to any amendment,
modification or waiver that (1) requires the consent of each Lender
directly affected thereby pursuant to the proviso to the second sentence of Section 11.1
and (2) directly affects such Participant. 
Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 4.9, 4.10
or 4.11 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.7(b) as
though it were a Lender, provided such Participant shall be subject to Section 11.7(a) as
though it were a Lender.

 

(ii)                                  A Participant
shall not be entitled to receive any greater payment under Section 4.9 or
4.10 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent.  Any Participant that is a
Non-U.S. Lender shall not be entitled to the benefits of Section 4.10
unless such Participant complies with Section 4.10(e).

 

(d)                                 Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(e)                                  The Borrower, upon receipt
of written notice from the relevant Lender, agrees to issue Notes to any Lender
requiring Notes to facilitate transactions of the type described in paragraph (d) above.

 

(f)                                    Notwithstanding the
foregoing, any Conduit Lender may assign any or all of the Loans it may have funded
hereunder to its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set forth in Section 11.6(b).  Each of Holdings, the Borrower, each Lender
and the Administrative Agent hereby confirms that it will not institute against
a Conduit Lender or join any other Person in instituting against a Conduit
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued
by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and 

 

99

 

hold harmless each other
party hereto for any loss, cost, damage or expense arising out of its inability
to institute such a proceeding against such Conduit Lender during such period
of forbearance.

 

11.7.                        Adjustments; Set-off.  (a)  Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a “Benefited
Lender”) shall receive any payment of all or part of the Obligations owing
to it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(f), or otherwise), in a greater proportion than
any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefited Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.

 

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

 

11.8.                        Counterparts. 
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.  Delivery of an executed signature page of
this Agreement by facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

11.9.                        Severability. 
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any 

 

100

 

such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

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

 

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

 

11.12.                  Submission To Jurisdiction; Waivers. 
Each of Holdings and the Borrower hereby irrevocably and
unconditionally:

 

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

 

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

 

(c)                                  agrees that service of
process in any such action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to Holdings or the Borrower, as the case may be at its
address set forth in Section 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

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

 

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

 

11.13.                  Acknowledgments.  Each of Holdings
and the Borrower hereby acknowledges that:

 

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

 

101

 

(b)                                 no Agent or Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising out of
or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agents and Lenders, on the one hand, and Holdings
and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

 

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

 

11.14.                  Releases of Guarantees and
Liens.  (a)  Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 11.1) to take any action requested by the Borrower having the
effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by
any Loan Document or that has been consented to in accordance with Section 11.1
or (ii) under the circumstances described in paragraph (b) below.

 

(b)                                 At such time as the Loans,
the Reimbursement Obligations and the other obligations under the Loan
Documents (other than contingent indemnity obligations for which no claim has
been made and obligations under or in respect of Hedge Agreements) shall have
been paid in full, the Commitments have been terminated and no Letters of
Credit shall be outstanding, the Collateral shall be released from the Liens
created by the Security Documents, and the Security Documents and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person.

 

11.15.                  Confidentiality.  Each Agent
and each Lender agrees to keep confidential all non-public information provided
to it by any Loan Party or the Sponsor pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing
herein shall prevent any Agent or any Lender from disclosing any such
information (a) to any Agent, any other Lender or any Affiliate of any of
them, (b) subject to an agreement to comply with the provisions of this
Section, to any actual or prospective Transferee or any direct or indirect
counterparty to any Hedge Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys,
accountants and other professional advisors or those of any of its Affiliates, (d) upon
the request or demand of any Governmental Authority, (e) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (f) if requested or required
to do so in connection with any litigation or similar proceeding, (g) that
has been publicly disclosed (except pursuant to a breach of the confidentiality
obligations of this Section 11.15), (h) to the National Association
of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with ratings issued with respect to such
Lender, or (i) in connection with the exercise of any remedy hereunder or
under any other Loan Document;  provided
that, unless specifically prohibited by applicable law or court order, each
Lender shall make reasonable efforts to notify 

 

102

 

the Borrower of any request by any Governmental
Authority or representative thereof (other than any such request in connection
with any examination of the financial condition or other routine examination of
such Lender by such Governmental Authority) for disclosure of any such
non-public information prior to disclosure of such information.

 

11.16.                  WAIVERS OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

 

11.17.                  Delivery of Addenda, Joinder Agreements and Amendment
Agreement.  Each Lender, by delivering to the
Administrative Agent an Addendum, such Lender’s signature page to the
Amendment Agreement or a Joinder Agreement, duly executed by such Lender and
funding its Term Loans and/or Revolving Loans on the Closing Date, the Original
Restatement Date or the Restatement Date, or by funding any New Term Loans on
the Increased Amount Date, shall be deemed to have acknowledged receipt of, and
consented to and approved, each Loan Document and each other document required
to be approved by any Agent, Required Lenders, Majority Facility Lenders or
Lenders, as applicable, on the Closing Date, the Original Restatement Date, the
Restatement Date or the Increased Amount Date, as applicable.

 

11.18.                  Subordination of Intercompany Indebtedness. 
Each of the Borrower and Holdings agrees that it will not become
obligated or otherwise liable for any intercompany Indebtedness that is owed to
any Subsidiary, unless such Subsidiary agrees that (a) such Indebtedness
is completely subordinated to the Obligations and subject in rights of payment
to the prior payment in full of the Obligations (other than contingent
indemnity obligations for which no claim has been made), (b) if an Event
of Default has occurred and is continuing, no payment on any such Indebtedness
shall be made until the payment in full of the Obligations, and (c) such
Indebtedness shall be evidenced by a Subordinated Intercompany Note, which
note, if evidencing obligations owed to a Loan Party, shall be pledged as
Collateral to the Administrative Agent.

 

11.19.                  USA PATRIOT Act.  Each Lender
hereby notifies the Borrower that pursuant to the requirements of the USA
PATRIOT Act (Title III of Publ. L. 107-56 (signed into law October 26,
2001)), (the “Patriot Act”), and the Lenders’ policies and practices, it
is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.

 

11.20.                  Amendment and Restatement. 
It is the intention of each of the parties hereto that the Original
Credit Agreement be amended and restated in its entirety pursuant to this
Agreement so as to preserve the perfection and priority of all security
interests securing indebtedness and obligations under the Original Credit
Agreement and that all Indebtedness and Obligations of the Borrower and the
Guarantors hereunder and under the other Loan Documents shall be secured by the
liens evidenced under the Loan Documents and that this Agreement does not
constitute a novation or termination of the obligations and liabilities
existing under the 

 

103

 

Original Credit Agreement (or serve to terminate
Sections 4.11, 10.7 and 11.5 of the Original Credit Agreement or any of
Borrower’s obligations thereunder with respect to the Existing Lenders).  The parties hereto further acknowledge and
agree that this Agreement constitutes an amendment of the Original Credit
Agreement made under and in accordance with the terms of Section 11.1 of
the Original Credit Agreement.  In
addition, unless specifically amended hereby, each of the Loan Documents shall
continue in full force and effect.  This
Agreement restates and replaces, in its entirety, the Original Credit
Agreement; from and after the Restatement Date, any reference in any of the
other Loan Documents to the “Credit Agreement” shall be deemed to refer to this
Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

104

 

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

 

	
   

  	
  PROTECTION
  ONE, INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ J. Eric Griffin

  
	
   

  	
     Name: J. Eric Griffin

  
	
   

  	
     Title:
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION
  ONE ALARM MONITORING,

  
	
   

  	
  INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ J. Eric Griffin

  
	
   

  	
     Name:
  J. Eric Griffin

  
	
   

  	
     Title:
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A., as

  
	
   

  	
  Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Tony
  Yung

  
	
   

  	
     Name: Tony Yung

  
	
   

  	
     Title: Vice President

  

 

105

 

EXHIBIT A

 

FORM OF COMPLIANCE
CERTIFICATE

 

This Compliance Certificate
(this “Certificate”) is delivered to you pursuant to Section 7.2(b) of
the Second Amended and Restated Credit Agreement, dated as of November      ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), the several Lenders from time
to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, and together with its successors in such capacity, the “Administrative
Agent”), with J.P. Morgan Securities, Inc., as sole lead arranger and
sole book manager, and Bank of America, N.A., as documentation agent (in such
capacity, and together with its successors in such capacity, the “Documentation
Agent”).  Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.

 

1.             I am the duly elected, qualified
and acting chief financial officer of the Borrower.

 

2.             I have reviewed and am familiar
with the contents of this Certificate.

 

3.             I have reviewed the terms of the
Credit Agreement and the other Loan Documents and have made or caused to be
made under my supervision, a review in reasonable detail of the transactions
and condition of the Borrower during the accounting period covered by the
financial statements attached hereto as Attachment 1 (the “Financial
Statements”).  Such review did not
disclose the existence during or at the end of the accounting period covered by
the Financial Statements, and I have no knowledge of the existence, as of the
date of this Certificate, of any condition or event which constitutes a Default
or Event of Default.

 

4.             Attached hereto as Attachment 2
are the computations showing compliance with the covenants set forth in
Sections 8.1 and 8.7 of Credit Agreement.

[Signature
page follows]

 

 

IN WITNESS WHEREOF, the
undersigned has caused this Certificate to be duly executed and delivered, and
the certifications, representations and warranties contained herein to be made,
on and as of this      day of       ,
20   .

 

	
   

  	
  PROTECTION ONE ALARM MONITORING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
    Name:

  	
   

  
	
   

  	
    Title:

  	
  Chief Financial Officer

  
				

 

 

ATTACHMENT
1

 

Financial
Statements

 

 

ATTACHMENT
2

 

Consolidated
Leverage Ratio Calculations

 

	
  1.

  	
   

  	
  Consolidated
  Total Debt as of the last day of any period:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Consolidated
  EBITDA for such period: (i) -
  (ii)

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i) 

  	
  the
  sum of (a) plus, without duplication and to the extent reflected as a
  charge in the statement of such Consolidated Net Income for such period
  (except in the case of clause (j) below), the sum of amounts in clauses
  (b) through (n) below: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)   Consolidated Net Income:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)   income tax expense(1):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)   interest expense, amortization or write-off of debt discount and
  debt issuance costs and commissions, discounts and other fees and charges
  associated with Indebtedness (including the Loans):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (d)   depreciation and amortization expense:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (e)   amortization of intangibles (including, but not limited to,
  goodwill), deferred customer acquisition costs and organization costs:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (f)    any extraordinary charges, expenses or
  losses determined in accordance with GAAP:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (g)   non-cash compensation expenses arising from the issuance,
  vesting or exercise of stock, options to purchase stock, stock appreciation
  rights and other equity awards to the management, directors, officers,
  consultants and other employees of Holdings or any of its Subsidiaries:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (h)   any other noncash charges, noncash expenses
  or noncash losses of the

  	
   

  	
   

  

 

(1)          Including, without
duplication, franchise and foreign withholding taxes and any state single
business unitary or similar tax, to the extent classified as income tax expense
on the consolidated income statement of Holdings and its Subsidiaries in
accordance with GAAP).

 

 

	
   

  	
   

  	
   

  	
  Borrower
  or any of its Subsidiaries for such period(2):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)   all
  reasonable one-time costs, fees, expenses and charges related to the Credit
  Agreement, any permitted Investment, Permitted Acquisition, issuance of
  equity, recapitalization, reorganization or asset disposition:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (j)    cash
  proceeds of business interruption insurance:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (k)   management
  and transaction fees and related expenses paid under the Management
  Agreement(3):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   (l)   any non-recurring charges, expenses or
  losses not exceeding, together with expenses under clause (m) below,
  $1.75 million in each of calendar years 2005 and 2006, $15.0 million in
  calendar year 2007, $3.0 million in calendar year 2008 and $2.0 million in
  each calendar year thereafter:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (m)  expenses
  incurred in work force reductions such as severance, key employee retention
  plans, and unfavorable lease payments or accruals for such payments not
  exceeding, together with amounts under clause (l) above, $1.75 million
  in each of calendar years 2005 and 2006, $15.0 million in calendar year 2007,
  $3.0 million in calendar year 2008 and $2.0 million in each calendar year
  thereafter:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (n)   interest
  income generated from loans made to dealers in the ordinary course of
  business:

  	
   

  	
  $

  	
  [   ,   ,   ]

  

 

(2)   Excluding any such charge, expense or loss incurred in the
ordinary course of business that constitutes an accrual of or a reserve for
cash charges for any future period.  Cash
payments made in such period or in any future period in respect of such noncash
charges, expenses or losses incurred after the Closing Date (excluding any such
charge, expense or loss incurred in the ordinary course of business that
constitutes an accrual of or a reserve for cash charges for any future period)
shall be subtracted from Consolidated Net Income in calculating Consolidated
EBITDA in the period when such payments are made.

 

(3)   Substantially in the form delivered to the Administrative Agent
prior to the Closing Date, and without further modification thereto as to
amounts payable thereunder.

 

 

	
   

  	
   

  	
  (ii)

  	
  the
  sum of (to the extent included in Consolidated Net Income for such period):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)   interest
  income other than income included pursuant to clause (n) above:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)   any
  extraordinary income or gains determined in accordance with GAAP:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)   any
  other non-cash income,(4) all as determined on a consolidated basis:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Consolidated
  Leverage Ratio:  (i)/(ii)

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Consolidated Total Debt

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Consolidated EBITDA

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(4)   Excluding any items that represent the reversal of any accrual of,
or cash reserve for, anticipated cash charges in any prior period that are
described in footnote 2 and items representing ordinary course accruals of cash
to be received in future periods.

 

 

ATTACHMENT
2

Consolidated
Interest Coverage Ratio Calculations

 

	
  1.

  	
   

  	
  Consolidated
  EBITDA for any period: 
  (from Leverage Ratio calculation)

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Consolidated
  Interest Expense for such period:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Consolidated
  Interest Coverage Ratio:  (i)/(ii)

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)   Consolidated
  EBITDA

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)  Consolidated
  Interest Expense

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ATTACHMENT
2

 

Capital
Expenditures Calculations

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Capital
  Expenditures for any period(5):  (i) +
  (ii) + (iii)

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)    acquisition of fixed or
  capital assets:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)   leasing (pursuant to a
  capital lease) of fixed or capital assets: 

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)  additions to
  equipment(6):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(5)          Capital Expenditures shall
not include expenditures included in the definition of Net Cash Investment Costs.

 

(6)          Including
replacements, capitalized repairs and improvements during such period.

 

 

ATTACHMENT
2

Net
Cash Investment Cost Calculations

 

	
   

  	
   

  	
  Net Cash Investment Cost for any period(7):  (i) —
  (ii) 

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  the
  sum of (a) through (c):

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)   the
  aggregate amount of direct and indirect installation expenses related to
  acquiring new customers:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (b)   the
  aggregate amount of direct and indirect selling expenses related to acquiring
  new customers:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)   the
  aggregate amount paid, directly or indirectly (including, without limitation,
  acquisitions of stock or equity interests for the principal purpose of
  acquiring subscriber accounts), for acquisition of subscriber accounts from
  any third party:

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  the
  aggregate system installation revenues related to acquiring new customers: 

  	
   

  	
  $

  	
  [   ,   ,   ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(7)   Each of clauses (i)(a), (i)(b) and (ii) determined
without the inclusion of amortization of deferred costs or amortization of
deferred revenues, as appropriate, in that period, and with the inclusion of
costs deferred or revenues deferred, as appropriate, in that period, and each
amount herein in accordance with GAAP.

 

 

EXHIBIT B

 

FORM OF RESTATEMENT
DATE CERTIFICATE

 

Pursuant to subsection 6.1(g) of
the Second Amended and Restated Credit Agreement dated as of November     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; terms defined therein being used herein as
therein defined), among Protection One, Inc., a Delaware corporation (“Holdings”),
Protection One Alarm Monitoring, Inc., a Delaware corporation (the “Borrower”),
the several Lenders from time to time parties thereto and JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, and together with its
successors in such capacity,  the “Administrative
Agent”), with J.P. Morgan Securities, Inc., as sole lead arranger and
sole book manager, and Bank of America, N.A., as documentation agent (in such
capacity, and together with its successors in such capacity, the “Documentation
Agent”), the undersigned [INSERT TITLE OF OFFICER] of [Protection One, Inc.]
[Protection One Alarm Monitoring, Inc.] [Network Multi-Family Security
Corporation] [Security Monitoring Services, Inc.] [Protection One Alarm
Monitoring of Mass., Inc.] [Protection One Systems, Inc.] [Protection
One Data Services, Inc.] [Criticom International Corporation] [CMS Capital
Advantage, LLC] [ Integrated Alarm Services, Inc.] [Integrated Alarm
Services Group, Inc.] [Monital Signal Corporation] [National Alarm
Computer Center, Inc.], a [          ]
[corporation/limited liability company] (the “Company”), hereby
certifies as follows:

 

1.             The representations and warranties of the Company set
forth in each of the Loan Documents to which it is a party or which are
contained in any certificate furnished by or on behalf of the Company pursuant
to any of the Loan Documents to which it is a party are true and correct in all
material respects (without duplication of any materiality qualifier contained
therein) on and as of the date hereof with the same effect as if made on the
date hereof, except for representations and warranties expressly stated to relate
to a specific earlier date, in which case such representations and warranties
were true and correct in all material respects (without duplication of any
materiality qualifier contained therein) as of such earlier date.

 

2.                                     
is the duly elected and qualified Corporate Secretary of the Company and the
signature set forth for such officer below is such officer’s true and genuine
signature.

 

3.             No Default or Event of Default has occurred and is
continuing as of the date hereof, or after giving effect to the Loans to be
made on the date hereof.

 

4.             The conditions precedent set forth in Section 6 of
the Credit Agreement were satisfied as of the Restatement Date [except as set
forth on Schedule 1 hereto].

 

As of the date hereof, on
behalf of the Company and not in his or her individual capacity, the
undersigned Corporate Secretary of the Company certifies as follows:

 

1.             There are no liquidation or dissolution proceedings
pending or to my actual knowledge threatened against the Company, nor has any
other event occurred adversely affecting or threatening the continued corporate
existence of the Company.

 

 

2.             The Company is a corporation duly [incorporated/formed],
validly existing and in good standing under the laws of the jurisdiction of its
organization.

 

3.             Attached hereto as Annex 1 is a true and complete
copy of resolutions duly adopted by the Board of Directors of the Company on               ,
200   ; such resolutions have not in any way been amended,
modified, revoked or rescinded, have been in full force and effect since their
adoption to and including the date hereof and are now in full force and effect
and are the only corporate proceedings of the Company now in force relating to
or affecting the matters referred to therein.

 

4.             [Attached hereto as Annex 2 is a true and
complete copy of the By-Laws of the Company as in effect on the date hereof.]
[OR:  No changes have been made, or
amendments have been effected, to the By-Laws of the Company since the date of
the Closing Certificate delivered by [              ]
on April 18, 2005.]

 

5.             [Attached hereto as Annex 3 is a true and
complete copy of the Certificate of Incorporation of the Company as in effect
on the date hereof, and such certificate has not been amended, repealed,
modified or restated.] [OR:  No changes
have been made, or amendments, restatements or other modifications have been
effected, to the Certificate of Incorporation of the Company since the date of
the Closing Certificate delivered by [           ]
on April 18, 2005.]

 

6.             Attached hereto as Annex 4 is a true and complete
copy of the Certificate of Good Standing of the Company as in effect on the
date hereof.

 

7.             The following persons are now duly
elected and qualified officers of the Company holding the offices indicated
next to their respective names below, and such officers have held such offices
with the Company at all times since the date indicated next to their respective
titles to and including the date hereof, and the signatures appearing opposite
their respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and deliver
on behalf of the Company each of the Loan Documents to which it is a party and
any certificate or other document to be delivered by the Company pursuant to
the Loan Documents to which it is a party:

 

	
  Name

  	
   

  	
  Office

  	
   

  	
  Date

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[Signature
page follows]

 

 

IN WITNESS WHEREOF, each
undersigned has caused this Certificate to be duly executed and delivered, and
the certifications, representations and warranties contained herein to be made,
on and as of this       day of November, 2009.

 

 

	
  [INSERT
  COMPANY NAME]

  	
  [INSERT
  COMPANY NAME]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  

  	
  Name:
  

  
	
  Title:

  	
  Title:

  
			

 

 

[SCHEDULE 1]

Waived Conditions Precedent

 

[Describe any conditions precedent waived on 

Restatement Date and terms of any waiver]

 

 

ANNEX 1

[Board Resolutions]

 

 

ANNEX 2

[By-Laws/Limited Liability Company Agreement]

 

 

ANNEX 3

[Certificate of [Incorporation/Formation]]

 

 

ANNEX 4

[Certificate of Good Standing]

 

 

 

EXHIBIT C

FORM OF AMENDED
MORTGAGE

 

[provided separately]

 

 

EXHIBIT D

 

FORM OF

ASSIGNMENT AND ASSUMPTION

 

Reference is made to the
Second Amended and Restated Credit Agreement, dated as of November       ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), the several Lenders from time
to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, and together with its successors in such capacity,  the “Administrative Agent”), with J.P.
Morgan Securities, Inc., as sole lead arranger and sole book manager, and
Bank of America, N.A., as documentation agent (in such capacity, and together
with its successors in such capacity, the “Documentation Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.

 

This Assignment and
Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between the Assignor
identified on Schedule l hereto (the “Assignor”) and the Assignee
identified on Schedule l hereto (the “Assignee”).   The Assignor and the Assignee hereby agree
as follows:

 

1.             The Assignor hereby irrevocably
sells and assigns to the Assignee without recourse to the Assignor, and the
Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the terms and conditions set forth herein and in the
Credit Agreement, as of the Effective Date (as defined below), (a) all of
the Assignor’s rights and obligations in its capacity as a Lender under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
on Schedule 1 hereto of all of such outstanding rights and obligations of the
Assignor under the facility or sub-facility identified on Schedule 1 hereto
(the “Assigned Facility”) and (b) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (a) above
(the rights and obligations sold and assigned by the Assignor to the Assignee
pursuant to clauses (a) and (b) above being referred to herein
collectively as the “Assigned Interest”).  Each such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

2.             The Assignor:  (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any Lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the

 

 

transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto, or any collateral thereunder, (iii) the
financial condition of any Loan Party, any of their respective Affiliates or
any other Person obligated in respect of any Loan Document or (iv) the
performance or observance by any Loan Party, any of their respective Affiliates
or any other Person of any of their respective obligations under the Credit
Agreement or any other Loan Document or any other instrument or document
furnished pursuant thereto.

 

3.             The Assignee:  (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an Eligible Assignee under Section 11.6
of the Credit Agreement, (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and,
to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by the Assigned Interest and either it, or the
person exercising discretion in making its decision to acquire the Assigned
Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section 5.1 or 7.1 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, (vi) it has, independently and without
reliance upon the Administrative Agent, the Assignor or any Lender and based on
such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Assignment and Assumption and
to purchase the Assigned Interest, and (vii) if it is organized under the
laws of a jurisdiction outside the United States, attached to the Assignment
and Assumption is any documentation required to be delivered by it pursuant to
the terms of the Credit Agreement (including Section 4.10(e) thereof),
duly completed and (if applicable) executed by the Assignee; (b) agrees
that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement, the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto, and (ii) it will be bound by the provisions of the Credit
Agreement and will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; and (c) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant thereto as are delegated
to the Administrative Agent by the terms thereof, together with such powers as
are incidental thereto.

 

4.             The effective date of this
Assignment and Assumption shall be the Effective Date of Assignment described
in Schedule 1 hereto (the “Effective Date”).  Following the execution of this Assignment
and Assumption, it will be delivered to the Administrative Agent and to the 

 

 

Borrower for their consent
(if such consent is required) and, if such consent is granted, for recording by
the Administrative Agent pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).

 

5.             Upon such acceptance and recording,
from and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have
accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and subsequent to the Effective Date.

 

6.             From and after the Effective Date, (a) the
Assignee shall be a party to the Credit Agreement and, to the extent provided
in this Assignment and Assumption, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in
this Assignment and Assumption, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

7.             This Assignment and Assumption
shall be governed by and construed in accordance with the laws of the State of
New York.

 

IN WITNESS WHEREOF, the
parties hereto have caused this Assignment and Assumption to be executed and
delivered as of the date first above written by their respective duly
authorized officers on Schedule 1 hereto.

 

 

Schedule 1

 

Name of Assignor: _______________________

 

Name of Assignee: _______________________

 

Effective Date of Assignment:
_________________

 

	
  Credit Facility Assigned

  	
   

  	
  Principal

  Amount Assigned

  	
   

  	
  Commitment Percentage Assigned

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B-1 Term Loan Subfacility

  	
   

  	
  $

  	
         

  	
   

  	
      .    

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche B-2 Term Loan Subfacility

  	
   

  	
  $

  	
         

  	
   

  	
      .    

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving Credit Facility

  	
   

  	
  $

  	
         

  	
   

  	
      .    

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  [Name
  of Assignee]

  	
   

  	
  [Name
  of Assignor]

  

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted for Recordation in the Register:

  	
  [Required Consents:]

  
	
   

  	
   

  
	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A., as Administrative Agent

  	
  [Protection One Alarm Monitoring, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Title:

  	
  Title:]

  
	
   

  	
   

  
	
   

  	
  [JPMorgan Chase Bank, N.A., as

  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:]

  	
   

  
	
   

  	
   

  
	
   

  	
  [                         ,
  as Issuing Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:]

  	
   

  
										

 

 

EXHIBIT E

 

FORM OF LEGAL OPINION OF KIRKLAND &
ELLIS LLP

 

[provided separately]

 

 

EXHIBIT F

 

FORM OF REINVESTMENT
NOTICE

 

Protection One Alarm Monitoring, Inc.

1035 N. 3rd Street Suite 101

Lawrence, KS  66044

 

       , 200    

 

JPMorgan
Chase Bank, N.A.

[Address]

Attn.:  [            ]

 

Ladies
and Gentlemen:

 

Reference is made to that
certain Second Amended and Restated Credit Agreement, dated as of November    ,
2009 (the “Credit Agreement”), among Protection One, Inc.,
Protection One Alarm Monitoring, Inc. (“POAMI”), Lenders party
thereto and JPMorgan Chase Bank, N.A., as administrative agent (in such
capacity, and together with its successors in such capacity,  the “Administrative Agent”), with J.P.
Morgan Securities, Inc., as sole lead arranger and sole book manager, and
Bank of America, N.A., as documentation agent (in such capacity, and together
with its successors in such capacity, the “Documentation Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.

 

I,                   ,
chief financial officer of POAMI, hereby certify, on behalf of POAMI and not in
my individual capacity, that:

 

(a)           no Event of Default has occurred and
is continuing;

 

(b)           on             
    , 200    , POAMI received $              
of Net Cash Proceeds resulting from [a/an] [Asset Sale/equity issuance of
Holdings/Recovery Event/Allotted Disposition(1)]; and

 

(c)           POAMI(2) hereby intends and expects to reinvest $            
of such Net Cash Proceeds [to acquire or repair assets useful in (or, pursuant
to a Permitted Acquisition, any Acquired Entity engaged in) the business of
providing alarm monitoring services as follows:  [         ]]
[for expenditures included in the definition of Net Cash Investment Costs as
follows:  [           ]]
[as promptly as practicable, but in any event within 270 days of the receipt of
such Net Cash Proceeds.] [pursuant to the             
agreement attached as Exhibit

 

(1) Reinvestment Notices may only be
delivered in connection with any Allotted Dispositions resulting in Net Cash
Proceeds of less than $25,000,000 in the aggregate after the Restatement Date.

 

(2) POAMI may reinvest directly or
indirectly through a subsidiary.

 

 

1 hereto, on or before           ,
200   , which is the date 360 days following receipt of such Net
Cash Proceeds.]

 

IN WITNESS WHEREOF, the
undersigned has caused this Reinvestment Notice to be duly executed and delivered,
and the certifications, representations and warranties contained herein to be
made, on and as of this       day of        ,
20   .

 

	
   

  	
  PROTECTION
  ONE ALARM MONITORING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer

  
				

 

 

EXHIBIT G

 

FORM OF EXEMPTION CERTIFICATE

 

Reference is made to the
Second Amended and Restated Credit Agreement, dated as of November      ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), the several Lenders from time
to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, and together with its successors in such capacity,  the “Administrative Agent”), with J.P.
Morgan Securities, Inc., as sole lead arranger and sole book manager, and
Bank of America, N.A., as documentation agent (in such capacity, and together
with its successors in such capacity, the “Documentation Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement.               
(the “Non-U.S. Lender”) is providing this certificate (this “Certificate”)
pursuant to Section 4.10(e) of the Credit Agreement.  The Non-U.S. Lender hereby represents and
warrants that:

 

1.             The Non-U.S. Lender is the sole record and beneficial
owner of the Loans in respect of which it is providing this Certificate and
shall remain the sole beneficial owner of the Loans at all times during which
it is the record holder of such Loans.

 

2.             The Non-U.S. Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”).  In this regard, the Non-U.S. Lender further
represents and warrants that:

 

(a) the
Non-U.S. Lender is not subject to regulatory or other legal requirements as a
bank in any jurisdiction; and

 

(b) the
Non-U.S. Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental
Authority, any application made to a rating agency or qualification for any
exemption from tax, securities law or other legal requirements.

 

3.             The Non-U.S. Lender is not a 10-percent shareholder of
the Borrower within the meaning of Section 881(c)(3)(B) of the Code.

 

4.             The Non-U.S. Lender is not a controlled foreign
corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of
the Code.

 

5.             The Non-U.S. Lender shall promptly notify the Borrower
and the Administrative Agent if any of the representations and warranties made
herein are no longer true and correct.

 

 

IN WITNESS WHEREOF, the
undersigned has caused this Certificate to be duly executed and delivered, and
the certifications, representations and warranties contained herein to be made,
on and as of this        day of           ,
20      .

 

 

	
   

  	
  [NAME
  OF NON-U.S. LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT H-1

 

FORM OF TRANCHE B-1
TERM NOTE

 

THIS NOTE AND THE
OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW.  TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED
HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT
PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

 

	
  $

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
             ,
  20    

  

 

FOR VALUE RECEIVED, the undersigned, Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), hereby unconditionally promises
to pay to [           ]
(the “Lender”) or its registered assigns at the Funding Office specified
in the Credit Agreement (as hereinafter defined) in lawful money of the United
States and in immediately available funds, the principal amount of (a) [             ]
DOLLARS ($[           ]),
or, if less, (b) the unpaid principal amount of the Tranche B-1 Term Loans
of the Lender outstanding under the Credit Agreement.  The principal amount shall be paid in the
amounts and on the dates specified in Section 2.3 of the Credit
Agreement.  The Borrower further agrees
to pay interest in like money at such office on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
Section 4.5 of the Credit Agreement.

 

The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, the Type and amount of the
Tranche B-1 Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto.  Each such endorsement
shall constitute prima  facie evidence of the accuracy of the
information endorsed.  The failure to
make any such endorsement or any error in any such endorsement shall not affect
the obligations of the Borrower in respect of the Tranche B-1 Term Loan.

 

This Note (a) is one of the Notes referred to in the Second
Amended and Restated Credit Agreement, dated as of November     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), the Borrower, the several Lenders
from time to time parties thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, and together with its successors in
such capacity,  the “Administrative
Agent”), with J.P. Morgan Securities, Inc., as sole lead arranger and
sole book manager, and Bank of America, N.A., as documentation agent (in such
capacity, and together with its successors in such capacity, the “Documentation
Agent”), (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement.  This Note is
secured and guaranteed as provided in the Loan Documents.  Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has

 

 

been granted, the nature and extent of the security and the guarantees,
the terms and conditions upon which the security interests and each guarantee
were granted and the rights of the holder of this Note in respect thereof.

 

All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

 

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

 

NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE
REGISTRATION AND OTHER PROVISIONS OF SECTION 11.6 OF THE CREDIT AGREEMENT.

 

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

 

	
   

  	
  PROTECTION
  ONE ALARM MONITORING, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

to Tranche B-1 Term Note

 

LOANS, CONVERSIONS AND
REPAYMENTS OF BASE RATE LOANS

 

	
  Date

  	
   

  	
  Amount of Base Rate 

  Loans

  	
   

  	
  Amount Converted to 

  Base Rate Loans

  	
   

  	
  Amount of Principal of 

  Base Rate Loans 

  Repaid

  	
   

  	
  Amount of Base Rate 

  Loans Converted to

  Eurodollar Loans

  	
   

  	
  Unpaid Principal 

  Balance of Base Rate 

  Loans

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule B

to Tranche B-1 Term Note

 

LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

	
  Date

  	
   

  	
  Amount of 

  Eurodollar Loans

  	
   

  	
  Amount

  Converted to

  Eurodollar Loans

  	
   

  	
  Interest Period and 

  Eurodollar Rate 

  with Respect 

  Thereto

  	
   

  	
  Amount of 

  Principal of 

  Eurodollar Loans 

  Repaid

  	
   

  	
  Amount of 

  Eurodollar Loans 

  Converted to Base 

  Rate Loans

  	
   

  	
  Unpaid Principal 

  Balance of 

  Eurodollar Loans

  	
   

  	
  Notation Made 

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

EXHIBIT H-2

 

FORM OF TRANCHE B-2
TERM NOTE

 

THIS NOTE AND THE
OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW.  TRANSFERS OF THIS NOTE AND THE OBLIGATIONS
REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE
ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

 

	
  $          

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
         , 20    

  

 

FOR VALUE RECEIVED, the undersigned, Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), hereby unconditionally promises
to pay to [        ] (the “Lender”)
or its registered assigns at the Funding Office specified in the Credit
Agreement (as hereinafter defined) in lawful money of the United States and in
immediately available funds, the principal amount of (a) [         ]
DOLLARS ($[        ]), or, if less, (b) the
unpaid principal amount of the Tranche B-2 Term Loans of the Lender outstanding
under the Credit Agreement.  The
principal amount shall be paid in the amounts and on the dates specified in Section 2.3
of the Credit Agreement.  The Borrower
further agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in Section 4.5 of the Credit Agreement.

 

The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, the Type and amount of the
Tranche B-2 Term Loan and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto.  Each such endorsement
shall constitute prima  facie evidence of the accuracy of the
information endorsed.  The failure to
make any such endorsement or any error in any such endorsement shall not affect
the obligations of the Borrower in respect of the Tranche B-2 Term Loan.

 

This Note (a) is one of the Notes referred to in the Second
Amended and Restated Credit Agreement, dated as of November     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), the Borrower, the several Lenders
from time to time parties thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, and together with its successors in
such capacity,  the “Administrative
Agent”), with J.P. Morgan Securities, Inc., as sole lead arranger and
sole book manager, and Bank of America, N.A., as documentation agent (in such
capacity, and together with its successors in such capacity, the “Documentation
Agent”), (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement.  This Note is
secured and guaranteed as provided in the Loan Documents.  Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has

 

 

been granted, the nature and extent of the security and the guarantees,
the terms and conditions upon which the security interests and each guarantee
were granted and the rights of the holder of this Note in respect thereof.

 

All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

 

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

 

NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE
REGISTRATION AND OTHER PROVISIONS OF SECTION 11.6 OF THE CREDIT AGREEMENT.

 

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

 

	
   

  	
  PROTECTION
  ONE ALARM MONITORING, 

  
	
   

  	
  INC.,
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

to Tranche B-2 Term Note

 

LOANS, CONVERSIONS AND
REPAYMENTS OF BASE RATE LOANS

 

	
  Date

  	
   

  	
  Amount of Base Rate 

  Loans

  	
   

  	
  Amount Converted to 

  Base Rate Loans

  	
   

  	
  Amount of Principal of 

  Base Rate Loans 

  Repaid

  	
   

  	
  Amount of Base Rate 

  Loans Converted to

  Eurodollar Loans

  	
   

  	
  Unpaid Principal 

  Balance of Base Rate 

  Loans

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

Schedule B

to Tranche B-2 Term Note

 

LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

	
  Date

  	
   

  	
  Amount of 

  Eurodollar Loans

  	
   

  	
  Amount

  Converted to

  Eurodollar Loans

  	
   

  	
  Interest Period and 

  Eurodollar Rate 

  with Respect 

  Thereto

  	
   

  	
  Amount of 

  Principal of 

  Eurodollar Loans 

  Repaid

  	
   

  	
  Amount of 

  Eurodollar Loans 

  Converted to Base 

  Rate Loans

  	
   

  	
  Unpaid Principal 

  Balance of 

  Eurodollar Loans

  	
   

  	
  Notation Made 

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT H-3

 

FORM OF REVOLVING NOTE

 

THIS NOTE AND THE
OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE
WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW.  TRANSFERS OF THIS NOTE AND THE OBLIGATIONS
REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE
AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

 

	
  $           

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
  , 20   

  

 

FOR VALUE RECEIVED, the undersigned, Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), hereby unconditionally promises
to pay to [                ]
(the “Lender”) or its registered assigns at the Funding Office specified
in the Credit Agreement (as hereinafter defined) in lawful money of the United
States and in immediately available funds, on the Revolving Termination Date
the principal amount of (a) [            ]
DOLLARS ($[             ]),
or, if less, (b) the aggregate unpaid principal amount of all Revolving
Loans of the Lender outstanding under the Credit Agreement.  The Borrower further agrees to pay interest
in like money at such Funding Office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in Section 4.5
of the Credit Agreement.

 

The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, the Type and amount of each
Revolving Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof,
each conversion of all or a portion thereof to another Type and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto.  Each such endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed. The failure
to make any such endorsement or any error in any such endorsement shall not
affect the obligations of the Borrower in respect of any Revolving Loan.

 

This Note (a) is one of the Notes referred to in the Second
Amended and Restated Credit Agreement, dated as of November     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), the Borrower, the several Lenders from
time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative
agent (in such capacity, and together with its successors in such
capacity,  the “Administrative Agent”),
with J.P. Morgan Securities, Inc., as sole lead arranger and sole book
manager, and Bank of America, N.A., as documentation agent (in such capacity,
and together with its successors in such capacity, the “Documentation Agent”),
(b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement.  This Note is
secured and guaranteed as provided in the Loan Documents.  Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has 

 

 

been granted, the nature and extent of the security and the guarantees,
the terms and conditions upon which the security interests and each guarantee
were granted and the rights of the holder of this Note in respect thereof.

 

All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

 

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

 

NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE CREDIT AGREEMENT, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND IN ACCORDANCE WITH THE
REGISTRATION AND OTHER PROVISIONS OF SECTION 11.6 OF THE CREDIT AGREEMENT.

 

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

 

	
   

  	
  PROTECTION
  ONE ALARM MONITORING, INC., as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

to Revolving Note

 

LOANS, CONVERSIONS AND
REPAYMENTS OF BASE RATE LOANS

 

	
  Date

  	
   

  	
  Amount of Base Rate 

  Loans

  	
   

  	
  Amount Converted to 

  Base Rate Loans

  	
   

  	
  Amount of Principal of 

  Base Rate Loans 

  Repaid

  	
   

  	
  Amount of Base Rate 

  Loans Converted to

  Eurodollar Loans

  	
   

  	
  Unpaid Principal 

  Balance of Base Rate 

  Loans

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

Schedule B

to Revolving Note

 

LOANS, CONTINUATIONS,
CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

	
  Date

  	
   

  	
  Amount of 

  Eurodollar Loans

  	
   

  	
  Amount

  Converted to

  Eurodollar Loans

  	
   

  	
  Interest Period and 

  Eurodollar Rate 

  with Respect 

  Thereto

  	
   

  	
  Amount of 

  Principal of 

  Eurodollar Loans 

  Repaid

  	
   

  	
  Amount of 

  Eurodollar Loans 

  Converted to Base 

  Rate Loans

  	
   

  	
  Unpaid Principal 

  Balance of 

  Eurodollar Loans

  	
   

  	
  Notation Made 

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

EXHIBIT H-4

 

FORM OF SWINGLINE NOTE

 

THIS NOTE AND THE OBLIGATIONS REPRESENTED
HEREBY MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO BELOW.  TRANSFERS OF THIS NOTE AND THE OBLIGATIONS
REPRESENTED HEREBY MUST BE RECORDED IN THE REGISTER MAINTAINED BY THE
ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF SUCH CREDIT AGREEMENT.

 

	
  $[                  
  ]

  	
   

  	
  New York, New York

  
	
   

  	
   

  	
                        ,
  20    

  

 

FOR VALUE RECEIVED, the
undersigned, Protection One Alarm Monitoring, Inc., a Delaware corporation
(the “Borrower”), hereby unconditionally promises to pay to Bear Stearns
Corporate Lending Inc. (the “Swingline Lender”) or its registered
assigns at the Funding Office specified in the Credit Agreement (as hereinafter
defined) in lawful money of the United States and in immediately available
funds, on the Revolving Termination Date the principal amount of (a) [                                    ]
($[                  ]),
or, if less, (b) the aggregate unpaid principal amount of all Swingline
Loans made by the Swingline Lender to the Borrower pursuant to Section 3.4
of the Credit Agreement, as hereinafter defined.  The Borrower further agrees to pay interest
in like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in Section 4.5 of
such Credit Agreement.

 

The holder of this Note is
authorized to endorse on the schedules annexed hereto and made a part hereof or
on a continuation thereof which shall be attached hereto and made a part hereof
the date and amount of each Swingline Loan made pursuant to the Credit
Agreement and the date and amount of each payment or prepayment of principal
thereof.  Each such endorsement shall
constitute prima  facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
any such endorsement shall not affect the obligations of the Borrower in
respect of any Swingline Loan.

 

This Note (a) is one of
the Notes referred to in the Second Amended and Restated Credit Agreement,
dated as of November     , 2009 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Protection One, Inc., a Delaware corporation (“Holdings”),
the Borrower, the several Lenders from time to time parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, and
together with its successors in such capacity, 
the “Administrative Agent”) with J.P. Morgan Securities, Inc.,
as sole lead arranger and sole book manager, and Bank of America, N.A., as
documentation agent (in such capacity, and together with its successors in such
capacity, the “Documentation Agent”), (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit
Agreement.  This Note is secured and
guaranteed as provided in the Loan Documents. 
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions

 

 

upon which the security
interests and each guarantee were granted and the rights of the holder of this
Note in respect thereof.

 

All parties now and
hereafter liable with respect to this Note, whether maker, principal, surety,
guarantor, endorser or otherwise, hereby waive presentment, demand, protest and
all other notices of any kind.

 

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

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR IN THE
CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 11.6
OF THE CREDIT AGREEMENT.

 

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

 

	
   

  	
  PROTECTION
  ONE ALARM MONITORING,

  
	
   

  	
  INC.,
  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

to Swingline Note

 

LOANS AND REPAYMENTS OF SWINGLINE LOANS

 

	
  Date

  	
   

  	
  Amount of Swingline Loans

  	
   

  	
  Amount of Principal of

  Swingline Loans Repaid

  	
   

  	
  Unpaid Principal Balance of

  Swingline Loans

  	
   

  	
  Notation Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT I

 

FORM OF LENDER ADDENDUM

 

Reference is made to the
Second Amended and Restated Credit Agreement, dated as of November     ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Protection One, Inc., a
Delaware corporation (“Holdings”), Protection One Alarm Monitoring, Inc.,
a Delaware corporation (the “Borrower”), the several Lenders from time
to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent
(in such capacity, and together with its successors in such capacity,  the “Administrative Agent”), with J.P.
Morgan Securities, Inc., as sole lead arranger and sole book manager, and
Bank of America, N.A., as documentation agent (in such capacity, and together
with its successors in such capacity, the “Documentation Agent”).  Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

 

Upon execution and delivery
of this Lender Addendum by the parties hereto as provided in Section 11.17
of the Credit Agreement, the undersigned hereby becomes a Lender thereunder
having the Commitments set forth in Schedule 1 hereto, effective as of the
Restatement Date.

 

THIS LENDER ADDENDUM SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

 

This Lender Addendum may be
executed by one or more of the parties hereto on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. 
Delivery of an executed signature page hereof by facsimile
transmission or other electronic transmission shall be effective as delivery of
a manually executed counterpart hereof.

 

[Signature
Pages Follow]

 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Lender Addendum to be duly executed and
delivered by their proper and duly authorized officers on and as of this     
day of November, 2009.

 

	
   

  	
  [NAME
  OF LENDER],

  
	
   

  	
  as
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Accepted
  and agreed:

  	
   

  
	
   

  	
   

  
	
  PROTECTION
  ONE ALARM MONITORING, INC.,

  	
   

  
	
  as
  Borrower

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK, N.A.,

  	
   

  
	
  as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

Schedule 1

 

COMMITMENTS AND NOTICE ADDRESS

 

	
  1.

  	
   

  	
  Name
  of Lender:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Notice
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Tranche
  B-2 Term Commitment:

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Revolving Commitment:

  

 

 

EXHIBIT J

 

FORM OF

SUBORDINATED INTERCOMPANY NOTE

 

	
  Note Number:

  	
   

  	
  Dated:
                          ,
  20      

  

 

FOR
VALUE RECEIVED, Protection One, Inc., a Delaware corporation (“Holdings”),
Protection One Alarm Monitoring, Inc., a Delaware corporation (the “Borrower”),
and each of their respective Subsidiaries (Holdings, the Borrower and such
Subsidiaries collectively, the “Group Members” and each, a “Group
Member”) which is a party to this subordinated intercompany note (this “Promissory
Note”) promises to pay to the order of such other Group Member as makes
loans to such Group Member (each Group Member which borrows money pursuant to
this Promissory Note is referred to herein as a “Payor” and each Group
Member which makes loans and advances pursuant to this Promissory Note is
referred to herein as a “Payee”), on demand, in lawful money of the
United States of America, in immediately available funds and at the appropriate
office of the Payee, the aggregate unpaid principal amount of all loans and
advances heretofore and hereafter made by such Payee to such Payor and any
other Indebtedness now or hereafter owing by such Payor to such Payee as shown
either on Schedule A attached hereto (and any continuation thereof) or in the
books and records of such Payee.  The
failure to show any such Indebtedness or any error in showing such Indebtedness
shall not affect the obligations of any Payor hereunder.  Capitalized terms used herein but not
otherwise defined herein shall have the meanings given such terms in the Second
Amended and Restated Credit Agreement, dated November    ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among Holdings, the Borrower, the several
Lenders from time to time parties thereto and JPMorgan Chase Bank, N.A., as
administrative agent (in such capacity, and together with its successors in
such capacity, the “Administrative Agent”), with J.P. Morgan Securities, Inc.,
as sole lead arranger and sole book manager, and Bank of America, N.A., as
documentation agent (in such capacity, and together with its successors in such
capacity, the “Documentation Agent”). 
For purposes of this Promissory Note, “Secured Obligations” means
“Obligations” as defined in the Guarantee and Collateral Agreement, dated as of
April 18, 2005 (as amended, restated, supplemented or otherwise modified
from time to time, the “Guarantee and Collateral Agreement”), made by
Holdings, the Borrower and certain of their respective Subsidiaries in favor of
the Administrative Agent.

 

The
unpaid principal amount hereof from time to time outstanding shall bear
interest at a rate equal to the rate as may be agreed upon in writing from time
to time by the relevant Payor and Payee or, at the Administrative Agent’s
option following the occurrence and during the continuation of a Default, at
the rate per annum then applicable to Base Rate Loans (as defined in the Credit
Agreement) plus 2.0% per annum. 
Interest shall be due and payable on the last day of each month
commencing after the date hereof or at such other times as may be agreed upon
in writing from time to time by the relevant Payor and Payee.  Upon demand for payment of any principal
amount hereof, accrued but unpaid interest on such principal amount shall also
be due 

 

 

and
payable.  Interest shall be paid in
lawful money of the United States of America and in immediately available
funds.  Interest shall be computed for
the actual number of days elapsed on the basis of a year consisting of 365 days.

 

Each
Payor and any endorser of this Promissory Note hereby waives presentment,
demand, protest and notice of any kind. 
No failure to exercise, and no delay in exercising, any rights hereunder
on the part of the holder hereof shall operate as a waiver of such rights.

 

This
Promissory Note has been pledged by each Payee to the Administrative Agent, for
the benefit of the Secured Parties, as security for such Payee’s obligations,
if any, under the Loan Documents to which such Payee is a party.  Each Payor acknowledges and agrees that the
Administrative Agent and the other Secured Parties may exercise all the rights
of each Payee under this Promissory Note and will not be subject to any
abatement, reduction, recoupment, defense, setoff or counterclaim available to
such Payor.

 

Each
Payee agrees that any and all claims of such Payee against any Payor or any
endorser of this Promissory Note, or against any of their respective
properties, shall be subordinate and subject in right of payment to the Secured
Obligations until all of the Secured Obligations have been performed and paid
in full in cash in immediately available funds and all commitments to extend
credit under any Loan Document have been terminated; provided, that each
Payor may make payments to the applicable Payee so long as no Default shall
have occurred and be continuing; and provided, further, that all
loans and advances made by a Payee pursuant to this Promissory Note shall be
received by the applicable Payor subject to the provisions of the Loan
Documents.  Notwithstanding any right of
any Payee to ask, demand, sue for, take or receive any payment from any Payor,
all rights, Liens and security interests of such Payee, whether now or
hereafter arising and howsoever existing, in any assets of any Payor (whether
constituting part of the security or collateral given to any Secured Party to
secure payment of all or any part of the Secured Obligations or otherwise)
shall be and hereby are subordinated to the rights of the Secured Parties in
such assets.  Except as expressly
permitted by the Loan Documents, the Payees shall have no right to possession
of any such asset or to foreclose upon, or exercise any other remedy in respect
of, any such asset, whether by judicial action or otherwise, unless and until
all of the Secured Obligations shall have been performed and paid in full in
cash in immediately available funds and all commitments have been expired or
terminated.

 

If all or any part
of the assets of any Payor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of any Payor, whether
partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of any Payor
is dissolved or if (except as expressly permitted by the Loan Documents) all or
substantially all of the assets of any Payor are sold, then, and in any such
event, any payment or distribution of any kind or character, whether in cash,
securities or other investment property, or otherwise, which shall be payable
or deliverable upon or with respect to any indebtedness of such Payor to any
Payee (“Payor Indebtedness”) shall be paid or delivered directly to the
Administrative Agent for application to any of the Secured Obligations, due or
to become due, until the date on which the Secured Obligations shall have been
performed 

 

 

and
paid in full in cash in immediately available funds, no letters of credit shall
be outstanding under any Loan Documents and all commitments to extend credit
under any Loan Document shall have expired or been terminated.  Each Payee irrevocably authorizes, empowers
and appoints the Administrative Agent as such Payee’s attorney-in-fact (which
appointment is coupled with an interest and is irrevocable) to demand, sue for,
collect and receive every such payment or distribution and give acquittance
therefor and to make and present for and on behalf of such Payee such proofs of
claim and take such other action, in the Administrative Agent’s own name or in
the name of such Payee or otherwise, as the Administrative Agent may deem
necessary or advisable for the enforcement of this Promissory Note.  Each Payee also agrees to execute, verify,
deliver and file any such proofs of claim in respect of the Payor Indebtedness
requested by the Administrative Agent. 
The Administrative Agent may vote such proofs of claim in any such
proceeding (and the applicable Payee shall not be entitled to withdraw such
vote), receive and collect any and all dividends or other payments or
disbursements made on Payor Indebtedness in whatever form the same may be paid
or issued and apply the same on account of any of the Secured Obligations in
accordance with the Guarantee and Collateral Agreement.  Upon the occurrence and during the
continuation of any Default, should any payment, distribution, security or
other investment property or instrument or any proceeds thereof be received by
any Payee upon or with respect to Payor Indebtedness owing to such Payee prior
to such time as the Secured Obligations have been performed and paid in full in
cash in immediately available funds, no letters of credit are outstanding under
any Loan Documents and all commitments to extend credit under any Loan Document
have expired or been terminated, such Payee shall receive and hold the same for
the benefit of the Secured Parties, and shall forthwith deliver the same to the
Administrative Agent, for the benefit of the Secured Parties, in precisely the
form received (except for the endorsement or assignment of such Payee where
necessary or advisable in the Administrative Agent’s judgment), for application
to any of the Secured Obligations in accordance with the Guarantee and
Collateral Agreement, due or not due, and, until so delivered, the same shall
be segregated from the other assets of such Payee for the benefit of the
Secured Parties.  If such Payee fails to
make any such endorsement or assignment to the Administrative Agent, the Administrative
Agent or any of its officers, employees or representatives are hereby
irrevocably authorized to make the same. 
Each Payee agrees that until the Secured Obligations have been performed
and paid in full in cash in immediately available funds, no letters of credit
are outstanding under any Loan Document and all commitments to extend credit
under any Loan Document have expired or been terminated, such Payee will not (i) assign
or transfer, or agree to assign or transfer, to any Person (other than in favor
of the Administrative Agent for the benefit of the Secured Parties pursuant to
the Guarantee and Collateral Agreement or otherwise) any claim such Payee has
or may have against any Payor, (ii) discount or extend the time for
payment of any Payor Indebtedness, or (iii) otherwise amend, modify,
supplement, waive or fail to enforce any provision of this Promissory Note.

 

The
Secured Parties shall be third party beneficiaries hereof and shall be entitled
to enforce the subordination and other provisions hereof.

 

Notwithstanding anything to the contrary contained
herein, in any other Loan Document or in any such promissory note or other
instrument, this Promissory Note (i) replaces and supersedes any and all
promissory notes or other instruments which create or evidence any loans 

 

 

or advances made on or before the date hereof by any
Group Member to any other Group Member, and (ii) shall not be
deemed replaced, superseded or in any way modified by any promissory note or
other instrument entered into on or after the date hereof which purports to
create or evidence any loan or advance by any Group Member to any other Group Member.

 

THIS
PROMISSORY NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

From
time to time after the date hereof, additional subsidiaries of the Group
Members may become parties hereto by executing a counterpart signature page to
this Promissory Note (each additional subsidiary, an “Additional Payor”).  Upon delivery of such counterpart signature page to
the Payees, notice of which is hereby waived by the other Payors, each
Additional Payor shall be a Payor and shall be as fully a party hereto as if
such Additional Payor were an original signatory hereof.  Each Payor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Payor hereunder.  This Promissory Note shall be fully effective
as to any Payor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Payor hereunder.

 

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

 

[Signature page follows]

 

 

IN
WITNESS WHEREOF, each Payor has caused this Subordinated Intercompany Note to
be executed and delivered by its proper and duly authorized officer as of the
date set forth above.

 

 

	
   

  	
  [GROUP MEMBERS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

TRANSACTIONS

UNDER

SUBORDINATED INTERCOMPANY NOTE

 

	
  Date

  	
   

  	
  Name of

  Payor

  	
   

  	
  Name of

  Payee

  	
   

  	
  Amount of

  Advance

  This Date

  	
   

  	
  Amount of

  Principal

  Paid This

  Date

  	
   

  	
  Outstanding

  Principal

  Balance

  from Payor

  to Payee

  This Date

  	
   

  	
  Notation Made

  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ENDORSEMENT

 

FOR
VALUE RECEIVED, each of the undersigned does hereby sell, assign and transfer
to                                              all
of its right, title and interest in and to the Subordinated Intercompany Note,
dated                          ,
20    (as amended, restated, supplemented or otherwise modified
from time to time, the “Promissory Note”), made by Protection
One, Inc., Protection One Alarm Monitoring, Inc. and each of their
respective Subsidiaries or any other Person that is or becomes a party thereto,
and payable to the undersigned.  This
endorsement is intended to be attached to the Promissory Note and, when so
attached, shall constitute an endorsement thereof.

 

The
initial undersigned shall be the Group Members (as defined in the Promissory
Note) party to the Loan Documents on the date of the Promissory Note.  From time to time after the date thereof,
additional subsidiaries of the Group Members shall become parties to the
Promissory Note (each, an “Additional Payee”) and a signatory to this
endorsement by executing a counterpart signature page to the Promissory
Note and to this endorsement.  Upon
delivery of such counterpart signature page to the Payors, notice of which
is hereby waived by the other Payees, each Additional Payee shall be a Payee
and shall be as fully a Payee under the Promissory Note and a signatory to this
endorsement as if such Additional Payee were an original Payee under the
Promissory Note and an original signatory hereof.  Each Payee expressly agrees that its obligations
arising under the Promissory Note and hereunder shall not be affected or
diminished by the addition or release of any other Payee under the Promissory
Note or hereunder.  This endorsement
shall be fully effective as to any Payee that is or becomes a signatory hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Payee to the Promissory Note or hereunder.

 

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  [GROUP
  MEMBERS]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
			

 

 

EXHIBIT K

FORM OF

SOLVENCY
CERTIFICATE

 

I, the
undersigned chief financial officer of Protection One Alarm
Monitoring, Inc., a Delaware corporation, (the “Borrower”), and
each other Loan Party (as defined in that certain Second Amended and Restated
Credit Agreement, dated as of November     , 2009 (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Protection One, Inc., a Delaware corporation (“Holdings”),
the Borrower, the several Lenders from time to time parties thereto and
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, and
together with its successors in such capacity, 
the “Administrative Agent”), with J.P. Morgan
Securities, Inc., as sole lead arranger and sole book manager, and Bank of
America, N.A., as documentation agent (in such capacity, and together with its
successors in such capacity, the “Documentation Agent”), do hereby
certify, on behalf of each of the Loan Parties and not in my individual
capacity, that:

 

l.              This Solvency Certificate (this “Certificate”)
is furnished to the Agents and the Lenders pursuant to
Section 6.1(l) of the Credit Agreement.  Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.

 

2.             For purposes of this Certificate,
the terms below shall have the following meanings:

 

(a)           “Fair Market Value” means, as
to any Loan Party, the price available upon the sale of such assets of such
Loan Party by a willing seller to a willing buyer, within a commercially reasonable
period of time, each having reasonable knowledge of the material facts, with
neither being under any compulsion to act.

 

(b)           “Present Fair Salable Value”
means, as to any Loan Party, the amount that may be realized by a willing
seller from a willing buyer if the assets of the Loan Parties are sold with
reasonable promptness in an arm’s-length transaction under present conditions
for the sale of such assets of such Loan Party.

 

(c)           “Stated Liabilities” means, as
to any Loan Party, the recorded liabilities (including contingent liabilities
that would be recorded in accordance with GAAP) of such Loan Party pursuant to
its most recent unaudited balance sheet, after giving effect to the
effectiveness of the Credit Agreement and, in each case, the satisfaction of
the conditions precedent thereto (such effectiveness and satisfaction, the “Transactions”),
determined in accordance with GAAP consistently applied.

 

(d)           “Identified Contingent Liabilities”
means, as to any such Loan Party, the maximum reasonably estimated amount of
liabilities that may result from pending litigation, asserted claims and
assessments, guaranties, environmental conditions, uninsured risks and other
contingent liabilities of such Loan Party.

 

 

(e)           “Unreasonably Small Capital”
means, as to any Loan Party, after giving effect to the Transactions,
insufficient capital for its needs and anticipated needs, including without
limitation, Identified Contingent Liabilities, without substantial unplanned
disposition of assets outside the ordinary course of business, restructuring of
debt, externally forced revisions of its operations or other similar actions.

 

3.             For purposes of this Certificate,
I, or such other Responsible Officers of the Loan Parties under my direction
and supervision, have performed the following procedures as of and for the
periods set forth below:

 

(a)           I and/or such
Responsible Officers have reviewed the financial statements referred to in
Section 5.1 of the Credit Agreement.

 

(b)           I and/or such
Responsible Officers have made inquiries regarding the existence and amount of
Identified Contingent Liabilities associated with the business of the Loan
Parties.

 

(c)           I and/or such
Responsible Officers have knowledge of and have reviewed to my satisfaction the
Loan Documents, and the other documents relating thereto, and the respective
schedules and exhibits thereto.

 

(d)            With respect to Identified
Contingent Liabilities, I and/or such officers:

 

(i)            inquired as to the existence and estimated liability with
respect to all contingent liabilities associated with the business of the Loan
Parties; and

 

(ii)           confirmed that (A) all appropriate items were
included in Stated Liabilities or Identified Contingent Liabilities and
(B) the amounts relating thereto were the estimated amount of liabilities
reasonably likely to result therefrom as of the date hereof.

 

(e)           I and/or such
Responsible Officers have made inquiries of certain officers of the Loan
Parties who have responsibility for financial reporting and accounting matters
regarding whether they had actual notice of any events or conditions that, as
of the date hereof, would cause the Loan Parties taken as a whole, after giving
effect to the Transactions, to (i) have assets with a Fair Market Value
that is less than the total of Stated Liabilities and Identified Contingent
Liabilities, (ii) have assets with a Present Fair Salable Value less than
the total of Stated Liabilities and Identified Contingent Liabilities,
(iii) have Unreasonably Small Capital, or (iv) not be able to pay
Stated Liabilities and Identified Contingent Liabilities as they mature in the
normal course of business.

 

4.             Based on and subject to the
foregoing, I hereby certify on behalf of the Loan Parties and not in my
individual capacity that, after giving effect to the consummation of the
Transactions, it is my opinion that: 
(i) the Fair Market Value of the assets of the Loan Parties taken
as a whole exceeds the total of their Stated Liabilities and Identified
Contingent Liabilities; (ii) the Present Fair Salable Value of the assets
of the Loan Parties taken as a whole exceeds the total of their Stated
Liabilities and Identified Contingent Liabilities; (iii) the Loan Parties
taken 

 

 

as a whole will not have
Unreasonably Small Capital; and (iv) the Loan Parties taken as a whole
will be able to Pay their Stated Liabilities and Identified Contingent
Liabilities as they mature in the normal course of business.

 

[Signature Page Follows]

 

 

IN
WITNESS WHEREOF, the undersigned has caused this Certificate to be duly
executed and delivered, and the certifications, representations and warranties
contained herein to be made, on and as of this      day of
November, 2009.

 

 

	
   

  	
  PROTECTION ONE ALARM MONITORING, 

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:    Chief
  Financial Officer

  

 

 

EXHIBIT L

FORM OF
FINANCIAL STATUS CERTIFICATE

 

Protection
One - Monthly Reporting Data for Investors in the $379.5 million Senior Secured
Credit Facility

	
  Month
  and Year

  	
  [               ]

  

 

	
   

  	
   

  	
  200[   ]

  	
   

  	
  200[   ]

  	
   

  
	
   

  	
   

  	
  Consolidated

  	
   

  	
   

  	
   

  	
  Consolidated

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Month

  	
   

  	
  YTD

  	
   

  	
  Month

  	
   

  	
  YTD

  	
   

  
	
  Operating Metrics:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retail

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (BOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Additions (Retail Internal Additions excluding Resigns)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Additions (Retail Resigns (New Owners signed during the period))

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Additions (Retail Acquired)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Cancellations (Retail excluding effect of holdbacks)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Cancellations (Retail arising from holdbacks)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Price Changes and Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NMF

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (BOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Additions (NMF)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Cancellations (NMF)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Price Changes and Other

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wholesale

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (BOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  Net Change in Wholesale

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR
  (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RMR Cancellations divided by Average RMR for Stated Period

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retail

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NMF

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial Metrics:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revenue

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated EBITDA

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Interest Expense

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash EOP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Outstanding Debt

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolver
  (including L/Cs) (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche
  B-1 Term Loan (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tranche
  B-2 Term Loan (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other
  Debt (EOP)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Total Debt EOP

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital Expenditures (Maintenance Capex)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Net Cash Investment Cost

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT M

FORM OF
REAFFIRMATION AGREEMENT

 

REAFFIRMATION
AGREEMENT dated as of November     , 2009 (as amended,
restated, supplemented or otherwise modified from time to time, this “Agreement”),
among Protection One, Inc., a Delaware corporation (“Holdings”),
Protection One Alarm Monitoring, Inc., a Delaware corporation (the “Borrower”),
the Subsidiary Guarantors identified on the signature pages hereto
(Holding, the Borrower and the Subsidiary Guarantors, collectively, the “Reaffirming
Parties”) and JPMorgan Chase Bank, N.A., as Administrative Agent (as
defined below).

 

WHEREAS, Holdings, the Borrower, the several
banks and other financial institutions or entities from time to time parties
thereto (the “Lenders”) and JPMorgan Chase Bank, N.A., as administrative
agent (in such capacity, and together with its successors in such capacity, the
“Administrative Agent”), with J.P. Morgan Securities, Inc., as sole
lead arranger and sole book manager, and Bank of America, N.A., as
documentation agent (in such capacity, and together with its successors in such
capacity, the “Documentation Agent”), have entered into the Second
Amended and Restated Credit Agreement dated as of the date hereof (the “Second
Amended and Restated Credit Agreement”), which amends and restates in its
entirety the Amended and Restated Credit Agreement, dated as of April 26,
2006 (as amended, restated, supplemented or otherwise modified prior to the
date hereof, the “Original Credit Agreement”), among the Borrower,
Holdings, the agents and arrangers party thereto and Bear Stearns Corporate
Lending Inc., as administrative agent;

 

WHEREAS, each of the Reaffirming Parties is
party to one or more of the Loan Documents (such term and each other
capitalized term used but not defined herein having the meaning assigned to
such terms in the Second Amended and Restated Credit Agreement);

 

WHEREAS, each Reaffirming Party expects to
realize, or has realized, substantial direct and indirect benefits as a result
of the Second Amended and Restated Credit Agreement becoming effective and the
consummation of the transactions contemplated thereby; and

 

WHEREAS, the execution and delivery of this
Agreement is a condition precedent to the effectiveness of the Second Amended
and Restated Credit Agreement and the consummation of the transactions
contemplated thereby;

 

NOW, THEREFORE, in consideration of the
foregoing and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

ARTICLE I

 

Reaffirmation

 

SECTION 1.01.  Reaffirmation
of Security Interests.

 

 

(a)           Each
Reaffirming Party hereby acknowledges that it has reviewed the terms and
provisions of the Second Amended and Restated Credit Agreement and consents to
(i) the amendment and restatement of the Original Credit Agreement
effected pursuant to the Second Amended and Restated Credit Agreement and
(ii) the transactions contemplated by the Amendment Agreement and the
Second Amended and Restated Credit Agreement. 
Each Reaffirming Party hereby (i) confirms that each Loan Document
to which it is a party or is otherwise bound and all Collateral encumbered
thereby will continue to guarantee or secure, as the case may be, to the
fullest extent possible in accordance with the Loan Documents, the payment and
performance of the Obligations, as the case may be, including without
limitation the payment and performance of all such applicable Obligations that
are joint and several obligations of each Guarantor or Grantor (as defined in
the Guarantee and Collateral Agreement) now or hereafter existing,
(ii) grants to the Administrative Agent for the benefit of the Secured
Parties a security interest in and continuing Lien on all of such Loan Party’s
right, title and interest in, to and under all “Collateral” as defined in the
Guarantee and Collateral Agreement, in each case whether now owned or existing
or hereafter acquired or arising and wherever located, as collateral security
for the prompt and complete payment and performance in full when due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all applicable Obligations (including all such Obligations as
amended, reaffirmed and/or increased pursuant to the Second Amended and
Restated Credit Agreement), subject to the terms contained in the applicable
Loan Documents, (iii) confirms its respective guarantees, pledges, grants
of security interests and other obligations, as applicable, under and subject
to the terms of each of the Loan Documents to which it is a party, and
(iv) acknowledges that the Lenders providing new Term Loans on the date
hereof as “Lenders” and “Secured Parties” for all purposes under the Loan
Documents.

 

(b)           Each
Reaffirming Party acknowledges and agrees that each of the Loan Documents to
which it is a party or otherwise bound shall continue in full force and effect
and that all of its obligations thereunder shall be valid and enforceable and
shall not be impaired or limited by the execution or effectiveness of the Amendment
and Restatement and the Second Amended and Restated Credit Agreement.  Each Loan Party represents and warrants that
all representations and warranties contained in the Loan Documents to which it
is a party or otherwise bound are true and correct in all material respects on
and as of the Restatement Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct in all material respects on and as of such earlier date.

 

ARTICLE II

 

Miscellaneous

 

SECTION 2.01.  Notices.  All notices hereunder shall be given in
accordance with Section 11.2 of the Second Amended and Restated Credit
Agreement; provided that, for this purpose, the address of each
Reaffirming Party shall be the one specified for the Borrower under the Second
Amended and Restated Credit Agreement.

 

SECTION 2.02.  Loan Document.  This Agreement is a Loan Document executed
pursuant to the Second Amended and Restated Credit Agreement and shall (unless
otherwise 

 

 

expressly indicated herein)
be construed, administered and applied in accordance with the terms and
provisions thereof.

 

SECTION 2.03.  Effectiveness; Counterparts.  This Agreement shall become effective on the
date when (i) copies hereof which, when taken together, bear the
signatures of each of the Subsidiaries set forth on the signature
pages hereto and the Administrative Agent shall have been received by the
Administrative Agent (or its counsel) and (ii) the Second Amended and
Restated Credit Agreement has become effective in accordance with its
terms.  This Agreement may not be amended
nor may any provision hereof be waived except pursuant to a writing signed by
each of the parties hereto.  This Agreement
may be executed in two or more counterparts, each of which shall constitute an
original but all of which when taken together shall constitute but one
contract.  Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 2.04.  No Novation.  This Agreement shall not extinguish the
obligations for the payment of money outstanding under the Original Credit
Agreement or discharge or release the priority of any Loan Document or any
other security therefor.  Nothing herein
contained shall be construed as a substitution or novation of the obligations
outstanding under the Original Credit Agreement or instruments securing the
same, which shall remain in full force and effect, except to any extent
modified hereby or by instruments executed concurrently herewith.  Nothing in this Agreement shall be construed
as a release or other discharge of the Borrower or any other Loan Party under
any Loan Document from any of its obligations and liabilities under the
Original Credit Agreement or the other Loan Documents.

 

SECTION 2.05.  GOVERNING
LAW.  THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 2.06.  No Amendments.  No amendments to any Loan Document are
intended hereby.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, each Reaffirming Party
and the Administrative Agent, for the benefit of the Secured Parties, have
caused this Agreement to be duly executed and delivered by their respective
authorized officers as of the day and year first above written.

 

	
   

  	
  PROTECTION ONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION ONE ALARM MONITORING,
  

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NETWORK MULTI-FAMILY
  SECURITY 

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  SECURITY MONITORING
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION ONE ALARM
  MONITORING OF 

  MASS., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  PROTECTION ONE SYSTEMS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION ONE DATA
  SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRITICOM INTERNATIONAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CMS CAPITAL ADVANTAGE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTEGRATED ALARM SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTEGRATED ALARM SERVICES
  GROUP, 

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  MONITAL SIGNAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL ALARM COMPUTER
  CENTER, 

  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

	
   

  	
  JPMORGAN CHASE BANK, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT N

 

FORM OF
JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT, dated as of [                
    , 20    ] (this “Agreement”), by and among [NEW
LENDERS] (each a “New Term Lender”),
PROTECTION ONE ALARM MONITORING, INC.,
a Delaware corporation (the “Borrower”),
PROTECTION ONE, INC., a Delaware
corporation (“Holdings”), CERTAIN SUBSIDIARIES OF HOLDINGS, as
Subsidiary Guarantors, and JPMORGAN CHASE BANK, N.A. (“JPMorgan”), as
Administrative Agent (as defined below).

 

RECITALS:

 

WHEREAS, reference is hereby made
to the Second Amended and Restated Credit Agreement dated as of November    ,
2009 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”; terms defined therein being used herein as
therein defined), among Protection One, Inc., a Delaware corporation (“Holdings”),
Protection One Alarm Monitoring, Inc., a Delaware corporation (the “Borrower”),
the several Lenders from time to time parties thereto and JPMorgan Chase Bank,
N.A., as administrative agent (in such capacity, and together with its
successors in such capacity, the “Administrative Agent”), with J.P.
Morgan Securities, Inc., as sole lead arranger and sole book manager, and
Bank of America, N.A., as documentation agent (in such capacity, and together
with its successors in such capacity, the “Documentation Agent”); and

 

WHEREAS, subject to the terms and
conditions of the Credit Agreement, the Borrower  may request New Term Commitments in an
aggregate amount not in excess of the aggregate principal amount of Tranche B-1
Term Loans outstanding at the time of the incurrence of such new Loans (the “New
Term Loans”) by entering into one or more Joinder Agreements with New Term
Lenders.

 

NOW, THEREFORE, in consideration of the
premises and agreements, provisions and covenants herein contained, the parties
hereto agree as follows:

 

Each
New Term Lender party hereto hereby agrees to commit to provide its respective
Term Commitment as set forth on Schedule A annexed hereto, on the terms and
subject to the conditions set forth below:

 

Each
New Term Lender:  (a) confirms that
it has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements referred to therein and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Agreement; (b) agrees that
it will, independently and without reliance upon the Administrative Agent or
any other Lender or Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (c) appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the 

 

 

Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (d) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender.

 

Each
New Term Lender hereby agrees to make its New Term Commitment on the following
terms and conditions:

 

1.                                       Proposed Borrowing.  This
Agreement represents the Borrower’s request to borrow New Term Loans from the
New Term Lenders as follows (the “Proposed
Borrowing”):

 

a.                                       Business Day of
Proposed Borrowing:                     ,
        

 

b.                                      Amount of
Proposed Borrowing:  $                                     

 

2.                                       [New Lenders.  Each
New Term Lender acknowledges and agrees that upon its execution of this
Agreement and the making of New Term Loans that such New Term Lender shall
become a “Lender” under, and for all purposes of, the Credit Agreement and the
other Loan Documents, and shall be subject to and bound by the terms thereof,
and shall perform all the obligations of and shall have all rights of a Lender
thereunder.](10)

 

3.                                       Credit Agreement Governs.  The New Term Loans shall be
subject to the provisions of the Credit Agreement and the other Loan Documents.

 

4.                                       Borrower’s Certifications.  By its execution of this Agreement, the
Borrower and each other Loan Party hereby certifies that:

 

i.                                          each of the
representations and warranties made by any Loan Party in or pursuant to the
Loan Documents are true and correct in all material respects (without
duplication of any materiality qualifier contained therein) on and as of the
date hereof as if made on and as of the date hereof, and after giving effect to
the Proposed Borrowing requested to be made on the date hereof, except for
representations and warranties which specifically relate to an earlier specific
date, in which case such representations and warranties were true and correct in
all material respects (without duplication of any materiality qualifier
contained therein) on and as of such earlier date;

 

ii.                                       no Default or Event of
Default has occurred and is continuing as of the date hereof (both prior to,
and after giving effect to such Proposed Borrowing);

 

(10) Insert bracketed language if the
lending institution is not already a Lender.

 

 

iii.                                    since December 31,
2004, no development, event or circumstance has occurred that, individually or
in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect; and

 

iii.                                    the Borrower has performed
in all material respects all agreements and satisfied all conditions which the
Credit Agreement provides shall be performed or satisfied by it on or before
the date hereof.

 

5.                                       Borrower Covenants.  By
its execution of this Agreement, the Borrower hereby covenants that the
Borrower shall deliver or cause to be delivered the following legal opinions
and documents:  the legal opinion of
Kirkland & Ellis LLP, counsel to the Borrower, substantially in the
form of Exhibit A; and

 

6.                                       Eligible Assignee.  By its execution of this
Agreement, each New Term Lender represents and warrants that it is an Eligible
Assignee.

 

7.                                       Notice.  For
purposes of the Credit Agreement, [the initial notice address of each New Term
Lender shall be as set forth below its signature below.](11) [the notice
address of the New Term Lender shall hereafter be as set forth below its
signature below].(12)

 

8.                                       Non-US Lenders.  For each
New Term Lender that is a Non-US Lender, delivered herewith to the
Administrative Agent are such forms, certificates or other evidence with
respect to United States federal income tax withholding matters as such New
Term Lender may be required to deliver to the Administrative Agent pursuant to
subsection 4.10(e) of the Credit Agreement.

 

9.                                       Recordation of the New Term Loans.  Upon execution and delivery hereof, the
Administrative Agent will record New Term Loans made by New Term Lenders in the
Register.

 

10.                                 Amendment,
Modification and Waiver.  This
Agreement may not be amended, modified or waived except by an instrument or
instruments in writing signed and delivered on behalf of each of the parties
hereto.

 

11.                                 Entire
Agreement.  This
Agreement, the Credit Agreement and  the
other Loan Documents constitute the entire agreement among the parties with
respect to the subject matter hereof and thereof and supersede all other prior
agreements and understandings, both written and verbal, among the parties or
any of them with respect to the subject matter hereof.

 

12.                                 GOVERNING
LAW. 
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, 

 

(11)
Insert bracketed language if the lending institution is not already a Lender.

(12)
Insert bracketed language if the lending institution is already a Lender.

 

 

AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

 

13.                                 Severability.  Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as would be enforceable.

 

14.                                 Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused
its duly authorized officer to execute and deliver this Agreement as of [                     ,
          ].

 

	
   

  	
  [NAME OF LENDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Notice Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [GROUP MEMBERS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Consented to by:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.,

  	
   

  
	
  as Administrative Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
					

 

 

SCHEDULE A

TO JOINDER AGREEMENT

 

	
  Name of Lender

  	
   

  	
  New Term Commitment

  	
   

  
	
  [                             ]

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total:
  

  	
  $

  	
   

  

 

 

EXHIBIT A

TO JOINDER AGREEMENT

 

[Provided separately]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]