American Home Shield 2010 Annual Report Download - page 22

Table of Contents
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 Facilities, 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 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, consolidate or sell all or substantially all of our assets;
limit the ability of restricted subsidiaries to make payments to us;
designate our subsidiaries as unrestricted subsidiaries; and
enter into certain transactions with our affiliates.
The restrictions in the indenture governing the Permanent Notes, the Credit Facilities and the instruments governing our other debt may prevent us from
taking actions that we believe would be in the best interest of our business and may make it difficult for us to execute our business strategy successfully or
effectively compete with companies that are not similarly restricted. We may also incur future debt obligations that might subject us to additional restrictive
covenants that could affect our financial and operational flexibility. We cannot assure you that we will be able to pay or refinance our debt, at maturity or
otherwise, on terms acceptable to us, or at all.
Our ability to comply with the covenants and restrictions contained in the Credit Facilities, the indenture governing the Permanent Notes and the
instruments governing our other debt may be affected by economic, financial and industry conditions beyond our control including credit or capital market
disruptions. The breach of any of these covenants or restrictions could result in a default that would permit the applicable lenders or noteholders, as the case
may be, to declare all
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