American Home Shield 2009 Annual Report Download - page 21

Table of Contents
is necessary or important to our growth strategy and efforts to improve operating margins of our businesses.
Despite our indebtedness levels, we and our subsidiaries may be able to incur substantially more debt, including secured debt. This could further
exacerbate the risks associated with our substantial debt.
We and our subsidiaries may be able to incur substantial additional debt in the future. The terms of the indentures governing our debt securities do not
prohibit us or our subsidiaries from doing so. The Credit Facilities provide us with commitments for additional borrowings of up to $500.0 million under the
Revolving Credit Facility, as of December 31, 2009, and permit additional borrowings beyond those commitments under certain circumstances. In addition,
we have the option to pay interest on portions of our debt by increasing the principal amount of the outstanding loans ("PIK Interest"), which would increase
our debt by the amount of any such PIK Interest. If new debt is added to our current debt levels, the related risks we face would increase, and we may not be
able to meet all of our debt obligations.
The agreements and instruments governing our debt contain restrictions and limitations that could significantly impact our ability to operate our
business.
The Credit Facilities contain covenants that, among other things, restrict our ability to:
incur additional debt (including guarantees of other debt);
pay dividends or make other restricted payments, including investments;
prepay or amend the terms of our other debt;
enter into certain types of transactions with affiliates;
sell certain assets, or, in the case of any borrower under the Credit Facilities, consolidate, merge, sell or otherwise dispose of all or substantially
all of its assets;
create liens;
in the case of the Term Loan Facility, enter into agreements restricting dividends or other distributions by subsidiaries to ServiceMaster; and
in the case of the Revolving Credit Facility, make acquisitions, enter into agreements restricting our ability to incur liens securing the Revolving
Credit Facility and change our business or ServiceMaster's fiscal year.
The indenture governing our 10.75%/11.50% senior toggle notes maturing in 2015 (the "Permanent Notes") also contains restrictive covenants that,
among other things, limit our ability and the ability of our restricted subsidiaries to:
incur more debt;
repurchase our debt;
pay dividends, redeem stock or make other distributions;
make investments;
create liens;
transfer or sell assets;
merge or consolidate; and
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