INTERCREDITOR AGREEMENT
This
INTERCREDITOR
AGREEMENT,
dated
as of November 16, 2004, is among LASALLE BANK NATIONAL
ASSOCIATION,
in its
capacity as the Administrative Agent under the Credit Agreement (as defined
below) (in such capacity, the "Administrative
Agent"),
XXXXX
FARGO BANK, N.A., as collateral agent and trustee under the Indenture referred
to below (in its capacity as collateral agent, the "Trustee"),
and
INTEGRATED ALARM SERVICES GROUP, INC., a Delaware corporation (the "Borrower").
W
I T
N E S S E T H:
WHEREAS,
the
Borrower, Criticom International Corporation, Monital Signal Corporation,
Xxxxx
Security Group, L.L.C., American Home Security, Inc., various financial
institutions from time to time parties thereto (the "Lenders")
and
the Administrative Agent are entering into a Credit Agreement, dated as of
November 16, 2004 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Credit
Agreement");
WHEREAS,
the Obligors (as hereinafter defined) will grant to the Administrative Agent,
for the benefit of the Lenders, security interests in the First Priority
Collateral (as hereinafter defined) as security for payment and performance
of
the First Priority Claims (as hereinafter defined);
WHEREAS,
the
Borrower and the Trustee are entering into an Indenture, dated as of November
16, 2004 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "Indenture"),
governing the rights and duties of the Borrower under its 12% Senior Secured
Notes due 2011 in the original aggregate principal amount of $125,000,000
(together with any additional notes issued under the Indenture, the
"Notes");
and
WHEREAS,
the Obligors will grant to the Trustee, for the benefit of the Noteholders
(as
hereinafter defined), security interests in the Noteholder Collateral (as
hereinafter defined) as security for payment and performance of the Noteholder
Claims (as hereinafter defined);
NOW,
THEREFORE,
in
consideration of the foregoing, the mutual covenants and obligations herein
set
forth and for other good and valuable consideration, the adequacy and receipt
of
which are hereby acknowledged, and in reliance upon the representations,
warranties and covenants herein contained, the parties hereto, intending
to be
legally bound, hereby agree as follows:
Section
1. Definitions.
1.1 Defined
Terms.
As used in this Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and the plural
forms of the terms indicated):
"Administrative
Agent"
means,
in addition to the Administrative Agent defined in the preamble,
the
then acting agent for the Lenders under the Loan Documents and any successor
thereto exercising substantially the same rights and powers.
"Agreement"
means
this Intercreditor Agreement, as amended, supplemented, amended and restated
or
otherwise modified from time to time in accordance with the terms
hereof.
"Bankruptcy
Code"
means
Title 11 of the United States Code (11 U.S.C. 101 et
seq.).
"Borrower"
is
defined in the preamble.
"Business
Day"
means
any day other than a Saturday, Sunday or other day on which commercial banks
are
required or authorized to be closed in New York, New York.
"Cash
Management Obligations"
means
all obligations of the Borrower or any other Obligor to any Lender under
or in
connection with any arrangement in respect of overdraft protection, Automated
Clearing House services and other treasury, depositary and cash management
services, including reimbursement obligations relating thereto, overdraft
liabilities, liabilities in respect of returned items, fees, expenses and
indemnities (including interest accruing thereon after the filing of a petition
in bankruptcy or the commencement of any Insolvency Proceeding, regardless
of
whether the same is allowed as a claim in such proceeding).
"Common
Collateral"
means
all of the assets and property of the Obligors, whether real, personal or
mixed,
constituting both First Priority Collateral and Noteholder
Collateral.
"Comparable
Noteholder Collateral Document"
means,
in relation to any Common Collateral subject to any Lien created under any
First
Priority Collateral Document, that Noteholder Collateral Document which creates
a Lien in the same Common Collateral, granted by the same Obligor, as
applicable.
"Credit
Agreement"
is
defined in the first recital;
provided
that (i)
the term "Credit" Agreement shall (x) also include any renewal, extension,
refunding, restructuring, replacement or refinancing thereof (whether with
the
original administrative agent and lenders or another administrative agent
or
agents or other lenders, whether provided under the original Credit Agreement
or
any other credit or other agreement or indenture and whether entered into
concurrently with or subsequent to the termination of the prior Credit
Agreement), provided
that any
such renewal, extension, refunding, restructuring, replacement or refinancing
does not increase the principal amount thereof beyond the limit set forth
in the
Indenture or any other Noteholder Document and (y) exclude the Notes and
other
Noteholder Documents and (ii) if at any time a Discharge of First Priority
Claims occurs with respect to the Credit Agreement (without giving effect
to
Section
5.6),
then,
to the extent provided in Section
5.6,
the
term "Credit Agreement" shall mean the Future First Lien Credit Facility
designated by the Borrower in accordance with the terms of such
section.
"Credit
Agreement Obligations"
means
all Obligations under or pursuant to the Credit Agreement.
"DIP
Financing"
is
defined in Section
6.1.
2
"Discharge
of First Priority Claims"
means,
except to the extent otherwise provided in Sections
5.6
and
6.5,
payment
in full in cash of (a) the principal of and interest (including interest
accruing on or after the commencement of any Insolvency Proceeding, whether
or
not such interest would be allowed in such Insolvency Proceeding) and premium,
if any, on all Indebtedness outstanding under the First Lien Credit Facilities
and, with respect to letters of credit outstanding thereunder, termination
thereof or delivery of cash collateral or backstop letters of credit in respect
thereof and for the full amount thereof in compliance with such First Lien
Credit Facilities, as applicable, in each case after or concurrently with
termination of all commitments to extend credit thereunder and (b) any other
First Priority Claims that are due and payable or otherwise accrued and owing
at
or prior to the time such principal and interest are paid, in each case other
than obligations that constitute Unasserted Contingent Obligations at the
time
such principal and interest is paid.
"First
Lien Credit Facilities"
means
(a) the credit facilities provided pursuant to the Credit Agreement and (b)
any
other credit facility permitted by Section 4.07(b)(i) of the Indenture, that,
in
the case of both clauses
(a)
and
(b),
is
secured by a Lien permitted pursuant to clause (5) of the definition of
"Permitted Liens" in Section 1.01 of the Indenture.
"First
Priority Cash Management Obligations"
means
any Cash Management Obligations secured by any Common Collateral under the
same
First Priority Collateral Documents that secure Obligations under any First
Lien
Credit Facility.
"First
Priority Claims"
means
(a) all Credit Agreement Obligations, (b) all Obligations under one or more
other First Lien Credit Facilities, the Indebtedness under each of which
is
designated by the Borrower as "First Priority Claims" for purposes of the
Indenture, (c) all other Obligations of the Borrower or any other Obligor
under
the First Priority Documents, including all First Priority Hedging Obligations
and First Priority Cash Management Obligations and (d) all Future Other First
Lien Obligations. First Priority Claims shall include all interest accrued
or
accruing (or which would, absent the commencement of an Insolvency Proceeding,
accrue) after the commencement of an Insolvency Proceeding in accordance
with
and at the rate specified in the relevant First Priority Document whether
or not
the claim for such interest is allowed as a claim in such Insolvency Proceeding.
To the extent any payment with respect to the First Priority Claims (whether
by
or on behalf of any Obligor, as proceeds of security, enforcement of any
right
of set-off or otherwise) is declared to be fraudulent or preferential in
any
respect, set aside or required to be paid to a debtor in possession, trustee,
receiver or similar Person, then the obligation or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding
as if
such payment had not occurred. Notwithstanding the foregoing the Notes and
related Obligations will not constitute First Priority Claims and collateral
therefor will not constitute First Priority Collateral even if any proceeds
of
the Notes are used to repay Obligations under the Credit Agreement.
Notwithstanding anything to the contrary contained in this definition, any
Obligation under a First Priority Document (including any Cash Management
Obligation or Hedging Obligation) shall constitute a "First Priority Claim"
if
the Administrative Agent or the relevant First Priority Lender or First Priority
Lenders under such First Priority Document shall have received a written
representation from the Borrower in or in connection with such First Priority
Document that such Obligation constitutes a "First Priority Claim" under
and
as
defined in the Indenture (whether or not such Obligation is at any time
determined not to have been permitted to be incurred under the Indenture).
3
"First
Priority Collateral"
means
all of the property or assets of any Obligor, whether real, personal or mixed,
with respect to which a Lien is granted or held as security for any First
Priority Claim.
"First
Priority Collateral Documents"
means
any agreement, document or instrument pursuant to which a Lien is granted
securing any First Priority Claim or under which rights or remedies with
respect
to such Liens are governed.
"First
Priority Documents"
means
the Credit Agreement, the Loan Documents, the First Priority Collateral
Documents and each of the other agreements, documents and instruments (including
each agreement, document or instrument providing for or evidencing a First
Priority Hedging Obligation or First Priority Cash Management Obligation)
providing for or evidencing any other Obligation under the Credit Agreement
or
any other First Lien Credit Facility or any Future Other First Lien Obligation,
and any other related document or instrument executed or delivered pursuant
to
any First Priority Document at any time or otherwise evidencing any First
Priority Claim.
"First
Priority Hedging Obligations"
means
any Hedging Obligations secured by any Common Collateral under the same First
Priority Collateral Documents that secure Obligations under a First Priority
Credit Facility.
"First
Priority Lenders"
means
the Persons holding First Priority Claims, including the Administrative
Agent.
"First
Priority Liens"
means
all Liens that secure the First Priority Claims.
"Future
First Lien Credit Facility"
shall
mean the Credit Agreement and any other First Lien Credit Facility that is
designated by the Borrower as a "First Lien Credit Facility" for purposes
of the
Indenture or any other Noteholder Document; provided
that the
lenders under any Credit Agreement then in effect have consented to such
designation.
"Future
Other First Lien Obligations"
means
all Obligations of the Borrower or any other Obligor in respect of Cash
Management Obligations or Hedging Obligations that are designated by the
Borrower as "First Priority Claims" as permitted by the Indenture (other
than
any First Priority Cash Management Obligations and First Priority Hedging
Obligations); provided
that the
required lenders (however denominated) under any First Lien Credit Facility
then
in effect have consented to such designation.
"Hedging
Obligations"
has the
meaning assigned thereto in the Indenture.
"Indebtedness"
has the
meaning assigned thereto in the Indenture.
"Indenture"
is
defined in the third recital.
4
"Insolvency
Proceeding"
means
(a) any voluntary or involuntary case or proceeding under the Bankruptcy
Code
with respect to any Obligor as a debtor, (b) any other voluntary or involuntary
insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to any Obligor as a debtor or with respect to any substantial
part
of their respective assets, (c) any liquidation, dissolution, reorganization
or
winding up of any Obligor, whether voluntary or involuntary and whether or
not
involving insolvency or bankruptcy, or (d) any assignment for the benefit
of
creditors or any other marshaling of assets and liabilities of any
Obligor.
"Lenders"
is
defined in the first recital.
"Lien"
means,
when used with respect to any Person, any interest in any property, asset
or
other right owned or being purchased or acquired by such Person which secures
payment or performance of any obligation, and shall include any mortgage,
lien,
encumbrance, charge or other security interest of any kind, whether arising
by
contract, as a matter of law, by judicial process or otherwise.
"Loan
Documents"
means
the Credit Agreement, the Loan Documents (as defined in the Credit Agreement),
and all documents and instruments evidencing any obligation under any Future
First Lien Credit Facility, and any other related document or instrument
executed or delivered pursuant to any Loan Document or Future First Lien
Credit
Facility at any time or otherwise evidencing any First Priority Claim, as
any
such document or instrument may from time to time be amended, supplemented,
amended and restated or otherwise modified from time to time; provided
that any
such modification does not increase the principal amount thereof beyond the
limit set forth in the Indenture or any other Noteholder Document.
"Noteholder
Claims"
means
all Indebtedness, Obligations and other liabilities (contingent or otherwise)
arising under or with respect to the Noteholder Documents or any of
them.
"Noteholder
Collateral"
means
any of the property or assets of the Obligors, whether real, personal or
mixed,
in which the Noteholders or the Trustee or any of them now or hereafter holds
a
Lien as security for any Noteholder Claim (regardless of the effect of the
application of any laws relating to fraudulent transfers or
conveyances).
"Noteholder
Collateral Documents"
means,
collectively, the Noteholder Security Agreements and any document or instrument
executed and delivered pursuant to any Noteholder Document at any time or
otherwise pursuant to which a Lien is granted by an Obligor to secure the
Noteholder Claims or under which rights or remedies with respect to any such
Lien are governed, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Noteholder
Documents"
means,
collectively, the Indenture, the Notes, the Noteholder Collateral Documents,
and
any other related document or instrument executed and delivered pursuant
to any
Noteholder Document at any time or otherwise evidencing any Noteholder Claims,
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Noteholders"
means
the Persons holding Noteholder Claims, including the Trustee.
"Noteholder
Security Agreements"
means
(i) the Security Agreement, dated as of November 16, 2004, among the Borrower,
its Subsidiaries and the Trustee and (ii) the Pledge Agreement dated as of
November 16, 2004 between the Borrower and the Trustee, in each case as the
same
may be amended, supplemented, amended and restated or otherwise modified
from
time to time.
5
"Notes"
is
defined in the third recital.
"Obligations"
means
any and all obligations with respect to the payment of (a) any principal
of or
interest (including interest accruing on or after the commencement of any
Insolvency Proceeding, whether or not a claim for post-filing interest is
allowed in such proceeding) or premium on any Indebtedness, including any
reimbursement obligation in respect of any letter of credit, (b) any fees,
indemnification obligations, damages, expense reimbursement obligations or
other
liabilities payable under the documentation governing any Indebtedness, (c)
any
obligation to post cash collateral in respect of letters of credit and any
other
obligations and (d) any Cash Management Obligations or Hedging
Obligations.
"Obligors"
means
the Borrower and each of its Subsidiaries that is party from time to time
to any
First Priority Document or Noteholder Document.
"Person"
means
any natural person, corporation, partnership, limited liability company,
trust,
association, governmental authority or unit, or any other entity, whether
acting
in an individual, fiduciary or other capacity.
"Recovery"
is
defined in Section
6.5.
"Standstill
Period"
is
defined in Section
3.1.
"Subsidiary"
means,
with respect to any Person, a corporation, partnership, limited liability
company or other entity of which such Person and/or its other Subsidiaries
own,
directly or indirectly, such number of outstanding shares or other ownership
interests as have more than 50% of the ordinary voting power for the election
of
directors or other managers of such corporation, partnership, limited liability
company or other entity.
"Trustee"
shall
include, in addition to the Trustee defined in the preamble,
the
then acting collateral agent under the Indenture and any successor thereto
exercising substantially the same rights and powers.
"Unasserted
Contingent Obligations"
shall
mean, at any time, Obligations for taxes, costs, indemnifications,
reimbursements, damages and other liabilities (except for (i) the principal
of
and interest and premium (if any) on, and fees relating to, any Indebtedness
and
(ii) contingent reimbursement obligations in respect of amounts that may
be
drawn under letters of credit) in respect of which no claim or demand for
payment has been made (or, in the case of Obligations
for indemnification, no notice for indemnification has been issued by the
indemnitee) at such time.
"Uniform
Commercial Code"
or
"UCC"
means
the Uniform Commercial Code (or any similar or equivalent legislation) as
in
effect in any applicable jurisdiction.
6
1.2 Terms
Generally.
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun
shall
include the corresponding masculine, feminine and neuter forms. The words
"include",
"includes"
and
"including"
shall
be deemed to be followed by the phrase "without
limitation."
The
word "will" shall be construed to have the same meaning and effect as the
word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, document or other writing herein shall be construed
as referring to such agreement, document or other writing as from time to
time
amended, supplemented or otherwise modified, (b) any reference herein to
any
Person shall be construed to include such Person's successors and assigns
to the
extent that such successors and assigns are permitted pursuant to the applicable
agreement, (c) the words "herein",
"hereof"
and
"hereunder",
and
words of similar import, shall be construed to refer to this Agreement in
its
entirety and not to any particular provision hereof, (d) all references herein
to Exhibits or Sections shall be construed to refer to Exhibits or Sections
of
this Agreement, (e) the words "asset"
and
"property"
shall
be construed to have the same meaning and effect and to refer to any and
all
tangible and intangible assets and properties, including cash, securities,
accounts and general intangibles, (f) terms defined in the UCC but not otherwise
defined herein shall have the same meanings herein as are assigned thereto
in
the UCC, (g) reference to any law means such law as amended, modified, codified,
replaced or re-enacted, in whole or in part, and in effect on the date hereof,
including rules, regulations, enforcement procedures and any interpretation
promulgated thereunder and (h) underscored references to Sections or clauses
shall refer to those portions of this Agreement, and any underscored references
to a clause shall, unless otherwise identified, refer to the appropriate
clause
within the same Section in which such reference occurs.
Section
2. Lien
Priorities.
2.1 Relative
Priorities.
Notwithstanding the date, manner or order of grant, attachment or perfection
of
any Lien granted to the Trustee or the Noteholders on the Common Collateral
or
of any Lien granted to the First Priority Lenders on the Common Collateral
and
notwithstanding any provision of the UCC or any other applicable law to the
contrary, the fact that any First Priority Lien may have been subordinated,
voided, avoided, invalidated or lapsed, or any other circumstance whatsoever,
the Trustee, on behalf of itself and the Noteholders, hereby agrees that:
(i)
any Lien on the Common Collateral securing the First Priority Claims now
or
hereafter held by the First Priority Lenders shall be first in priority to
any
Lien on the Common Collateral securing the Noteholder Claims; and (ii) any
Lien
on the Common Collateral now or hereafter held by the Trustee or the Noteholders
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be second in priority in all respects to
all
Liens on the Common Collateral securing the First Priority Claims. All Liens
on
the Common Collateral securing the First Priority Claims shall be and remain
first in priority to all Liens on the Common Collateral securing the Noteholder
Claims for all purposes, whether or not
such
First Priority Liens are subordinated to any Lien securing any other obligation
of any Obligor.
2.2 Prohibition
on Contesting Liens.
Each of the Trustee, for itself and on behalf of each Noteholder, and the
Administrative Agent, for itself and on behalf of each other First Priority
Lender, agrees that it shall not (and hereby waives any right to) contest
or
support any other Person in contesting, in any proceeding (including any
Insolvency Proceeding), the priority, validity or enforceability of a Lien
held
by the First Priority Lenders in the Common Collateral or by the Noteholders
in
the Common Collateral, as the case may be.
7
2.3 No
New
Liens.
So long as the Discharge of First Lien Obligations has not occurred, the
parties
hereto agree that the Obligors shall not (i) grant or permit any additional
Lien
on any asset or property to secure any Noteholder Claim unless it has granted
a
Lien on such asset or property to secure the First Priority Claims, and (ii)
grant or permit any additional Lien on any asset to secure any First Priority
Claim unless it has granted a Lien on such asset to secure the Noteholder
Claims. To the extent that the foregoing provisions are not complied with
for
any reason, without limiting any other rights and remedies available to the
Administrative Agent and/or the First Priority Lenders, the Trustee, on behalf
of the Noteholders, agrees that any amounts received by or distributed to
any of
them pursuant to or as a result of Liens granted in contravention of this
Section
2.3
shall be
subject to Section
4.2.
2.4 Similar
Liens and Agreements.
The parties hereto agree that it is their intention that the First Priority
Collateral and the Noteholder Collateral be identical. In furtherance of
the
foregoing and of Section
8.10,
the
parties hereto agree, subject to the other provisions of this
Agreement:
(a) upon
request by the Administrative Agent or the Trustee, to cooperate in good
faith
(and to direct their counsel to cooperate in good faith) from time to time
in
order to determine the specific items included in the First Priority Collateral
and the Noteholder Collateral and the steps taken to perfect their respective
Liens thereon and the identity of the respective parties obligated under
the
First Priority Collateral Documents and the Noteholder Collateral Documents;
and
(b) that
the
documents and agreements creating or evidencing the First Priority Collateral
and the Noteholder Collateral and guarantees for the First Priority Claims
and
the Noteholder Claims shall be in all material respects the same forms of
documents other than with respect to the first lien and the second lien nature
of the Obligations thereunder.
Section
3. Enforcement.
3.1 Exercise
of Remedies.(a)
So long
as the Discharge of First Priority Claims has not occurred, whether or not
any
Insolvency Proceeding has been commenced by or against any Obligor, (i) the
Trustee and the Noteholders will not exercise or seek to exercise any rights
or
remedies (including the exercise of any right of setoff or any right under
any
lockbox agreement, account control agreement, landlord waiver or bailee's
letter
or similar agreement or arrangement to which the Trustee or any Noteholder
is a
party) with respect to
8
any
Common Collateral (and hereby waives any right to), institute any action
or
proceeding with respect to such rights or remedies, including any action
of
foreclosure, or contest, protest or object to any foreclosure proceeding
or
action brought by the Administrative Agent or any other First Priority Lender,
any exercise of any right under any control agreement in respect of a deposit
account or securities entitlement constituting Common Collateral, or any
bailee's letter or similar agreement or arrangement to which the Trustee
or any
Noteholder is a party, or any other exercise by any such party, of any rights
and remedies relating to the Common Collateral under the Noteholder Documents
or
otherwise, or object to the forbearance by the Administrative Agent from
bringing or pursuing any foreclosure proceeding or action or any other exercise
of any right or remedy relating to the Common Collateral, in each case so
long
as the respective interests of the Noteholders attach to the proceeds thereof
subject to the relative priorities described in Section
2
and (ii)
the Administrative Agent and the other First Priority Lenders shall have
the
exclusive right to enforce rights, exercise remedies (including the exercise
of
any right of setoff or any right under any lockbox agreement, account control
agreement, landlord waiver or bailee's letter or similar agreement or
arrangement to which the Trustee or any Noteholder is a party), refrain from
enforcing or exercising remedies, and make determinations regarding release
or
disposition of the Common Collateral without the consent of or any consultation
with the Trustee or any Noteholder; provided
that (A)
in any Insolvency Proceeding commenced by or against any Obligor, the Trustee
or
any Noteholder may file a claim or statement of interest with respect to
the
Noteholder Claims, (B) the Trustee or any Noteholder may take any action
not
adverse to the Liens on the Common Collateral securing the First Priority
Claims
or the rights of the Administrative Agent or any other First Priority Lender
to
exercise remedies in respect thereof in order to establish, preserve, perfect
or
protect its rights in the Common Collateral and (C) the Trustee and the
Noteholders shall be entitled to (i) file any necessary responsive or defensive
pleading in opposition to any motion, claim, adversary proceeding or other
pleading made by any person objecting to or otherwise seeking the disallowance
of the claims of the Noteholders, including without limitation any claim
secured
by the Common Collateral, if any, in each case in accordance with the terms
of
this Agreement, (ii) file any pleadings, objections, motions or agreements
which
assert rights or interests available to unsecured creditors of the Obligors
arising under the Bankruptcy Code, any similar law or any applicable
non-bankruptcy law, in each case in accordance with the terms of this Agreement
(iii) exercise any rights and remedies as an unsecured creditor against the
Borrower or any other Obligor in accordance with the Noteholder Documents
and
applicable law, (iv) bid (cash) for or purchase (for cash) Common Collateral
at
any private or judicial foreclosure upon such Common Collateral initiated
by any
secured party in respect thereof, (v) file any notice of or vote any claim
in
any Insolvency Proceeding of any Obligor in accordance with this Agreement
and
(vi) file any proof of claim and other filings, appear and be heard on any
matter in connection therewith and make any arguments and motions that are,
in
each case, in accordance with the terms of this Agreement, with respect to
the
Noteholder Claims and the Noteholder Collateral, (D) nothing herein shall
be
construed to limit or impair in any way the right of the Trustee or the
Noteholders to receive any remaining Common Collateral and proceeds of Common
Collateral after the Discharge of First Priority Claims has occurred and
(E)
notwithstanding anything to the contrary in this Section
3.1(a),
the
Trustee and the Noteholders may exercise any or all such rights and remedies
and
take or institute all such other actions in respect of the Common Collateral
and
make such determinations after the passage of a period of 180 days (the
"Standstill
Period")
from
the date of delivery of a notice in writing to the Administrative Agent of
their
intention to
9
exercise
their right to take such actions in respect of such Common Collateral;
provided
further,
however,
that
notwithstanding anything herein to the contrary, in no event shall the Trustee
or any Noteholder exercise any rights or remedies or take such other actions
with respect to the Common Collateral as aforesaid if, notwithstanding the
expiration of the Standstill Period, the Administrative Agent or any other
First
Priority Lender shall have commenced and shall be diligently pursuing the
exercise of any of their rights or remedies with respect to the Common
Collateral (prompt notice of such exercise to be given to the Trustee). In
exercising rights and remedies with respect to the Common Collateral, the
Administrative Agent or any other First Priority Lender may enforce the
provisions of the Loan Documents and exercise remedies thereunder, all in
such
order and in such manner as they may determine in the exercise of their sole
discretion. Such exercise and enforcement shall include the rights of an
agent
appointed by the Administrative Agent and the other First Priority Lenders
to
sell or otherwise dispose of Common Collateral upon foreclosure, to incur
expenses in connection with such sale or disposition, and to exercise all
the
rights and remedies of a secured party under the UCC of any applicable
jurisdiction and of a secured creditor under bankruptcy or similar laws of
any
applicable jurisdiction.
(b) The
Trustee, on behalf of itself and the Noteholders, agrees that it will not,
in
connection with the exercise of any right or remedy (including the exercise
of
any right of setoff or any right under any lockbox agreement, account control
agreement, landlord waiver or bailee's letter or similar agreement or
arrangement to which the Trustee or any Noteholder is a party) with respect
to
any Common Collateral, take or receive any Common Collateral or any proceeds
of
Common Collateral unless and until the Discharge of First Priority Claims
has
occurred. Without limiting the generality of the foregoing, unless and until
the
Discharge of First Priority Claims has occurred, except as expressly provided
in
the proviso
in
clause
(a)(ii)
of
Section
3.1,
the
sole right of the Trustee and the Noteholders as secured parties with respect
to
the Common Collateral is to hold a perfected Lien on the Common Collateral
pursuant to the Noteholder Documents for the period and to the extent granted
therein and to receive a share of the proceeds thereof, if any, after the
Discharge of the First Priority Claims has occurred.
(c) The
Borrower agrees that it will not, and will not permit any other Obligor to,
in
connection with the exercise of any right or remedy with respect to any Common
Collateral by the Trustee or the Noteholders, transfer, deliver or pay, as
applicable, to the Trustee or any Noteholder any Common Collateral or any
proceeds of Common Collateral unless and until the Discharge of First Priority
Claims has occurred.
(d) Subject
to the proviso
in
clause
(a)(ii)
of
Section
3.1,
(i) the
Trustee, for itself and on behalf of the Noteholders, agrees that the Trustee
and the Noteholders will not take any action that would hinder or cause to
delay
any exercise of remedies undertaken by the Administrative Agent or any other
First Priority Lender under the Loan Documents as secured parties in respect
of
any Common Collateral, including any sale, lease, exchange, transfer or other
disposition of the Common Collateral, whether by foreclosure or otherwise,
and
(ii) the Trustee, for itself and on behalf of the Noteholders, hereby waives
any
and all rights it or the Noteholders may have as a junior lien creditor or
otherwise (whether arising under the UCC or any other law) to object to the
manner in which the Administrative Agent or the other holders of First Priority
Claims seek to enforce the Liens granted in any of the First Priority
Collateral.
(e) The
Trustee and the Noteholders hereby acknowledge and agree that no covenant,
agreement or restriction contained in the Noteholder Collateral Documents
or any
other Noteholder Document (other than this Agreement) is intended to restrict
in
any way the rights and remedies of the Administrative Agent or the First
Priority Lenders with respect to the Common Collateral as set forth in this
Agreement and the First Priority Documents.
3.2 Cooperation.
Subject to the proviso
in
clause
(a)(ii)
of
Section
3.1,
the
Trustee, on behalf of itself and the Noteholders, agrees that, unless and
until
the Discharge of First Priority Claims has occurred, it will not commence,
or
join with any Person in commencing any enforcement, collection, execution,
levy
or foreclosure action or proceeding with respect to any Lien held by it under
any Noteholder Document.
10
3.3 Notices
of Default.
Each of the Administrative Agent and the Trustee will provide such information
as it may have to the other as the other may from time to time reasonably
request concerning the status of the exercise of any enforcement action against
the Common Collateral, and the Administrative Agent and the Trustee shall
be
available on a reasonable basis during normal business hours to review with
each
other alternatives available in exercising such rights; provided
that the
failure of any party to do any of the foregoing shall not affect the relative
priorities of the Administrative Agent's or the Trustee's respective Liens
as
provided herein or the validity or effectiveness of any notice or demand
as
against any Obligor. The Borrower hereby consents and agrees to each of the
Administrative Agent and the Trustee providing any such information to the
other
and to such actions by the Administrative Agent and the Trustee and waives
any
right or claim against the Administrative Agent and the Trustee arising as
a
result of such information or actions.
Section
4. Payments.
4.1 Application
of Proceeds.
As long as the Discharge of First Priority Claims has not occurred, whether
or
not any Insolvency Proceeding has been commenced by or against any Obligor,
the
cash proceeds of Common Collateral received in connection with the sale or
other
disposition of, or collection on, such Common Collateral upon the exercise
of
remedies, shall be applied by the Administrative Agent to the First Priority
Claims in such order as specified in the Credit Agreement until Discharge
of
First Priority Claims has occurred. Upon Discharge of the First Priority
Claims,
the Administrative Agent shall deliver to the Trustee (for application in
such
order as specified in the Indenture and the other applicable Noteholder
Documents) any proceeds of Common Collateral held by it in the same form
as
received, with any necessary endorsement or as a court of competent jurisdiction
may otherwise direct.
4.2 Payments
Over.
So long as the Discharge of the First Priority Claims has not occurred, whether
or not any Insolvency Proceeding has been commenced by or against the Borrower
or any other Obligor, any Common Collateral or proceeds thereof (including
assets or proceeds subject to Liens referred to in the final sentence of
Section 2.3)
received by the Trustee or any Noteholder in connection with the exercise
of any
right or remedy (including set-off) relating to the Common Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Administrative Agent for the benefit of the First
11
Priority
Lenders in the same form as received, with any necessary endorsement, or
as a
court of competent jurisdiction may otherwise direct. The Administrative
Agent
is hereby authorized to make any such endorsement as agent for the Trustee
or
any such Noteholder. This authorization is coupled with an interest and is
irrevocable until the Discharge of First Priority Claims has
occurred.
Section
5. Other
Agreements.
5.1 Releases.
(a) Other
than in connection with the Discharge of First Priority Claims (unless such
Discharge of First Priority Claims is made with proceeds from a sale or other
disposition of Collateral, whether as a result of enforcement thereof by
a
secured party or otherwise), if, in connection with (i) the exercise of any
remedies by the Administrative Agent in respect of the Common Collateral
provided for in Section
3.1,
including any sale, lease, exchange, transfer or other disposition of any
such
Common Collateral or (ii) any sale, lease, exchange, transfer or other
disposition of any Common Collateral permitted under the terms of the First
Priority Documents, the Administrative Agent, for itself or on behalf of
any of
the First Priority Lenders, releases any of its Liens on any part of the
Common
Collateral, the Lien of the Trustee for the benefit of the Noteholders on
such
Common Collateral (but not on any proceeds of such Collateral not required
to be
paid to the First Priority Lenders for application to the First Priority
Claims)
shall be automatically and unconditionally released with no further consent
or
action of any Person, and the Trustee, for itself and on behalf of the
Noteholders, shall promptly execute and deliver to the Administrative Agent
and
the Obligors such termination statements, releases and other documents as
the
Administrative Agent and the Borrower may reasonably request to effectively
confirm such release.
(b) Until
the
Discharge of First Priority Claims occurs, the Trustee, for itself and on
behalf
of the Noteholders, hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent of the Administrative Agent,
with
full power of substitution, as its true and lawful attorney-in-fact with
full
irrevocable power and authority in the place and stead of the Trustee or
such
Noteholder or in the Administrative Agent's own name, from time to time in
the
Administrative Agent's discretion, for the purpose of carrying out the terms
of
this Section
5.1,
to take
any and all appropriate action and to execute any and all releases, documents
and instruments which may be necessary to accomplish the purposes of this
Section
5.1,
including any financing statements, mortgage releases, intellectual property
releases, endorsements or other instruments of transfer or release.
5.2 Insurance.
Unless
and until the Discharge of First Priority Claims has occurred, the
Administrative Agent and the other holders of First Priority Claims shall
have
the sole and exclusive right, subject to the rights of the Obligors under
the
Loan Documents, to adjust settlement for any insurance policy covering the
Common Collateral in the event of any loss thereunder and to approve any
award
granted in any condemnation or similar proceeding affecting the Common
Collateral. Unless and until the Discharge of First Priority Claims has
occurred, all proceeds of any such policy and any such award if in respect
to
the Common Collateral shall be paid to the Administrative Agent for the benefit
of the First Priority Lenders to the extent required under the Credit Agreement
and pursuant to the terms of the First Priority
12
Documents
and thereafter, to the extent the Discharge of First Priority Claims has
occurred, to the Trustee for the benefit of the Noteholders to the extent
required under the applicable Noteholder Documents and then to the owner
of the
subject property or as a court of competent jurisdiction may otherwise direct.
Unless the Discharge of First Priority Claims has occurred, if the Trustee
or
any Noteholder shall, at any time, receive any proceeds of any insurance
policy
or any award or payment thereunder in contravention of this Agreement, it
shall
pay such proceeds, award or payment over to the Administrative Agent in
accordance with Section
4.2.
5.3 Amendments
to Noteholder Collateral Documents.
(a) Unless
and until the Discharge of First Priority Claims has occurred, without the
prior
written consent of the Administrative Agent, no Noteholder Collateral Document
may be amended, supplemented or otherwise modified or entered into to the
extent
such amendment, supplement or modification, or the terms of any new Noteholder
Collateral Document, would contravene any of the terms of this Agreement
or the
Loan Documents. The Trustee agrees that each Noteholder Collateral Document
shall include the following language:
"Notwithstanding
anything herein to the contrary, the lien and security interest granted to
the
Trustee pursuant to this Agreement and the exercise of any right or remedy
by
the Trustee hereunder are subject to the provisions of the Intercreditor
Agreement, dated as of November 16, 2004 (as amended, supplemented, amended
and
restated or otherwise modified from time to time, the "Intercreditor
Agreement")
among
LaSalle Bank National Association, as Administrative Agent, Xxxxx Fargo Bank,
N.A., as Trustee, and Integrated Alarm Services Group, Inc. In the event
of any
conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control."
(b) In
the
event the Administrative Agent enters into any amendment, waiver or consent
in
respect of any First Priority Collateral Document for the purpose of adding
to,
or deleting from, or waiving or consenting to any departure from any provision
of, any First Priority Collateral Document or changing in any manner the
rights
of the Administrative Agent, the other First Priority Lenders or the Obligors
thereunder, then such amendment, waiver or consent shall apply automatically
to
any comparable provision of the Comparable Noteholder Collateral Document
without the consent of the Trustee or the Noteholders and without any action
by
the Trustee or any Obligor; provided
that (A)
no such amendment, waiver or consent shall have the effect of (i) removing
assets subject to the Lien of the Noteholder Collateral Documents, except
to the
extent that a release of such Lien is permitted by Section
5.1
and
provided there is a corresponding release of the Lien securing the First
Priority Claims, (ii) imposing duties on the Trustee without its consent,
(iii)
permitting other Liens on the Collateral not permitted under the terms of
the
Indenture or Section
6
or (iv)
increasing the aggregate principal amount of the Credit Agreement Obligations
in
excess of the amount permitted by Section 4.07(b)(i) of the Indenture, (B)
any
such amendment, waiver or consent that materially and adversely affects the
rights of the Trustee and the Noteholders (and not the holders of the First
Priority Liens in a like or similar manner) shall not apply to the Noteholder
Collateral Documents without the consent of the Trustee (acting at the direction
of the holders of a majority of the aggregate principal amount of
the
applicable Noteholder Claims) and (C) notice of such amendment, waiver or
consent shall have been given to the Trustee within 10 Business Days after
the
effective date thereof; provided,
further,
that
(x) nothing contained in this clause
(b)
shall
impair the rights of the Administrative Agent and the holders of First Priority
Claims, or the obligations and agreements of the Trustee and Noteholders,
under
Sections
3
and
5.1
and (y)
the First Priority Collateral Documents and Noteholder Collateral Documents
may,
without the consent of the Trustee or the Noteholders, be amended or modified
pursuant to this Section
5.3(b)
to
secure additional extensions of credit and add additional secured creditors
as
long as such amendments or modifications do not violate the express provisions
of the Indenture or any other Noteholder Document.
13
(c) The
First
Priority Documents may be amended, supplemented or otherwise modified in
accordance with their terms and the Credit Agreement may be refinanced (subject
to the limits set forth in the Indenture), in each case, without notice to,
or
the consent of the Trustee or the Noteholders subject to the terms hereof,
all
without affecting the lien subordination or other provisions of this
Agreement.
5.4 Rights
As Unsecured Creditors.
Notwithstanding anything to the contrary in this Agreement, the Trustee and
the
Noteholders may exercise rights and remedies as unsecured creditors against
the
Obligors in accordance with the terms of the Noteholder Documents and applicable
law. Nothing in this Agreement shall prohibit the receipt by the Trustee
or any
Noteholder of any payment of interest and principal on the Notes so long
as such
receipt is not the direct or indirect result of the exercise by the Trustee
or
any Noteholder of rights and remedies as a secured creditor or enforcement
of
any Lien held by them on Common Collateral, in either case in contravention
of
this Agreement. In the event that the Trustee or any Noteholder becomes a
judgment lien creditor in respect of Common Collateral as a result of its
enforcement of its rights as an unsecured creditor, such judgment lien shall
be
subject to the terms of this Agreement (including in relation to the First
Priority Liens and the First Priority Claims) to the same extent as the other
Liens securing the Noteholder Claims (created pursuant to the Noteholder
Collateral Documents) subject to this Agreement. Nothing in this Agreement
modifies any rights or remedies the holders of First Priority Claims may
have
with respect to the First Priority Collateral.
5.5 Bailee
for Perfection.
The Administrative Agent hereby acknowledges that, to the extent that it
holds,
or a third party holds on its behalf, physical possession of or "control"
(as
defined in the UCC) over Common Collateral pursuant to any of the First Priority
Collateral Documents, such possession or control is also held as a bailee
for
and for the benefit of the Trustee and the Noteholders (such bailment being
intended, among other things, to satisfy the requirements of Sections
8-301(a)(2) and 9-313(c) of the UCC) and in each case solely to the extent
required to perfect and enforce their security interests in such Common
Collateral. Nothing in the preceding sentence shall be construed to impose
any
duty on the Administrative Agent (or any third party acting on its behalf)
with
respect to such Common Collateral or provide the Trustee or any Noteholder
with
any rights with respect to such Common Collateral beyond those specified
in this
Agreement or the Noteholder Collateral Documents (it
being understood that
the
Administrative Agent's duty under this Section
5.5
shall be
limited solely to holding any such Common Collateral as bailee), provided
that
forthwith upon the Discharge of First Priority Claims, the Administrative
Agent
shall (x) deliver to the Trustee, at the Obligors' sole cost and expense,
the Common Collateral in its possession or control together with any necessary
endorsements or (y) direct and deliver such Common Collateral as a court
of
competent jurisdiction may otherwise direct.
5.6 When
Discharge of First Priority Claims Deemed to Not Have
Occurred.
If at
any time after the Discharge of First Priority Claims has occurred the Borrower
designates any Future First Lien Credit Facility to be the "Credit Agreement"
hereunder, then such Discharge of First Priority Claims shall automatically
be
deemed not to have occurred for all purposes of this Agreement (other than
with
respect to any actions taken prior to the date of such designation as a result
of the occurrence of such first Discharge of First Priority Claims), and
such
Future First Lien Credit Facility shall automatically be treated as the Credit
Agreement for all purposes of this Agreement, including for purposes of the
Lien
priorities and rights in respect of Collateral set forth herein; provided,
however,
that
the Borrower is permitted to enter into such Future First Lien Credit Facility
under Section 4.07(b)(i) of the Indenture; and provided
further
that no
designation of any Future First Lien Credit Facility shall apply retroactively
and the Trustee and the Noteholder shall be entitled to retain any collateral
proceeds or other payments or property received by them prior to the designation
of such Future First Lien Credit Facility. Upon receipt of notice of such
designation (including the identity of the new Administrative Agent), the
Trustee shall promptly deliver to the Administrative Agent any Common Collateral
in its physical possession or "control" (within as defined in the UCC) together
with any necessary endorsements (or otherwise allow such Administrative Agent
to
obtain control of such Common Collateral). If the Obligations under a Future
First Lien Credit Facility are secured by assets of the Obligors of the type
constituting Common Collateral that do not also secure the Noteholder Claims,
then the Notes shall be secured at such time by a second priority Lien on
such
assets to the same extent provided in the Noteholder Collateral Documents
and in
accordance with Section
2.3.
14
5.7 Purchase
Right.
Without
prejudice to the enforcement of the remedies of the First Priority Lenders,
the
First Priority Lenders agree at any time following an acceleration of the
First
Priority Claims in accordance with the terms of the Credit Agreement, the
First
Priority Lenders will offer the Noteholders the option to purchase the aggregate
amount of outstanding First Priority Claims at par, without warranty or
representation or recourse, on a pro rata basis across the First Priority
Lenders. The Noteholders shall irrevocably accept or reject such offer within
fifteen Business Days of the receipt thereof and the parties shall close
within
twenty Business Days after any such acceptance of such offer. If the Noteholders
accept such offer, it shall be exercised pursuant to documentation mutually
acceptable to each of the Administrative Agent and the Trustee. If the
Noteholders reject such offer or do not irrevocably accept such offer within
the
required time frame, the First Priority Lenders shall have no further obligation
pursuant to this Section
5.7
and may
take any further actions in its sole discretion in accordance with the First
Priority Documents and this Agreement.
Section
6. Insolvency
Proceedings.
6.1 Finance
and Sale Issues.
Until the Discharge of First Priority Claims has occurred, if any Obligor
shall
be subject to any Insolvency Proceeding and the holders of a majority in
principal amount of the First Priority Claims shall desire to permit the
use of
cash collateral or to permit the Borrower to obtain financing under Section
363
or Section 364 of the Bankruptcy
Code ("DIP
Financing"),
then
the Trustee, on behalf of itself and the Noteholders, agrees that it will
raise
no objection to such use of cash collateral or DIP Financing and will not
request adequate protection or any other relief in connection therewith (except
as expressly agreed by the Administrative Agent or to the extent permitted
by
Section
6.3)
and, to
the extent the First Priority Liens are junior in priority or pari passu
with
such DIP Financing, will maintain the priority of its Liens in the Common
Collateral as junior in priority to such First Priority Liens on the same
basis
as the other Liens securing the Noteholder Claims are second in priority
to
First Priority Liens under this Agreement; provided,
however,
that
the Noteholders may object to such DIP Financing if (i) the aggregate principal
amount of such DIP Financing plus the aggregate principal amount of the Credit
Agreement (including, in each case, amounts available for drawing thereunder
during the pendency of such Insolvency Proceeding) would exceed $45,000,000
or
(ii) the Noteholders are not permitted to retain a Lien on the Common Collateral
(including proceeds thereof arising after the commencement of such proceeding)
with the same priority as existed prior to the commencement of the case under
the Bankruptcy Code (subject to the Liens securing such DIP Financing as
described above). Until the Discharge of First Priority Claims has occurred,
the
Trustee and the Noteholders shall not, in any Insolvency Proceeding or
otherwise, oppose any sale or disposition of any assets of any of the Obligors
that is supported by the First Priority Lenders, and each of the Trustee
and
each Noteholder will be deemed to have consented under Section 363 of the
Bankruptcy Code to any sale supported by the First Priority Lenders and to
have
released their Liens in such assets so long as and to the extent that (x)
the
First Priority Lenders shall have likewise released their Liens and (y) the
Liens of the First Priority Lenders and the Trustee shall attach to the proceeds
of any Common Collateral sold or disposed of.
15
6.2 Relief
from the Automatic Stay.
While any amounts are outstanding under the Loan Documents or any commitment
under any DIP Financing provided by any First Lien Lender is in effect, the
Trustee, on behalf of itself and the Noteholders, agrees that none of them
shall
seek relief from the automatic stay or any other stay in any Insolvency
Proceeding in respect of the Common Collateral, without the prior written
consent of the Administrative Agent.
6.3 Adequate
Protection.
The
Trustee, on behalf of itself and the Noteholders, agrees that none of them
shall
contest (or support any other Person in contesting) (a) any request by the
Administrative Agent or the other First Priority Lenders for adequate protection
or (b) any objection by the Administrative Agent or the other First Priority
Lenders to any motion, relief, action or proceeding which objection is based
on
the Administrative Agent or the other First Priority Lenders claiming a lack
of
adequate protection. Notwithstanding any provision to the contrary in this
Agreement, in any Insolvency Proceeding (i) if the holders of First Priority
Claims (or any subset thereof) are granted adequate protection in the form
of
additional collateral in connection with any DIP Financing or use of their
cash
collateral under Section 363 or Section 364 of the Bankruptcy Code, then
the
Trustee, on behalf of itself or any of the Noteholders, may seek or request
adequate protection in the form of a Lien on such additional collateral
(including by way of objecting to any DIP Financing that does not provide
for
such Lien), which Lien will be junior in priority to the First Priority Liens
and such DIP Financing (and all Obligations relating thereto) on the same
basis
as the other Liens securing the Noteholder Claims are junior in priority
to the
First Priority Liens under this Agreement, (ii) in the event the Trustee,
on
behalf of itself and the Noteholders, seeks or requests adequate protection
and
such adequate protection is granted in the form of additional collateral,
then
the Trustee, on behalf of itself or any of the
Noteholders,
agrees that the holders of First Priority Claims shall also be granted a
Lien on
such additional collateral as security for the First Priority Claims and
any
such DIP Financing and that any Lien on such additional collateral securing
the
Noteholder Claims shall be junior in priority to the Liens on such collateral
securing the First Priority Claims and any such DIP Financing (and all
Obligations relating thereto) and any other Liens granted to the holders
of
First Priority Claims as adequate protection on the same basis as the other
Liens securing the Noteholder Claims are junior in priority to such First
Priority Claims under this Agreement and (iii) the Noteholders may seek
post-petition interest and/or adequate
16
protection
payments in any Insolvency Proceeding, and the First Priority Lenders may
oppose
such motions. If the Noteholders are granted post-petition interest and/or
adequate protection payments in an Insolvency Proceeding ("Junior
Priority Bankruptcy Payments"),
such
amounts shall be deemed Common Collateral and shall be applied according
to the
terms of this Agreement. For the avoidance of doubt, the Trustee and
Administrative Agent agree that any Junior Priority Bankruptcy Payments shall
be
paid by the Trustee to the Administrative Agent as if they were proceeds
of
Common Collateral under this Agreement. Such Junior Priority Bankruptcy Payments
shall be applied by the Administrative Agent to the First Priority Claims.
Upon
a Discharge of First Priority Claims, and only then, such Junior Priority
Bankruptcy Payments shall be retained by the Trustee for the benefit of the
Noteholders.
6.4 No
Waiver.
Subject to Section
3.1(a),
nothing
contained herein shall prohibit or in any way limit the Administrative Agent
or
any other First Priority Lender from objecting in any Insolvency Proceeding
or
otherwise to any action taken by the Trustee or any of the Noteholders,
including the seeking by the Trustee or any Noteholder of adequate protection
or
the asserting by the Trustee or any Noteholder of any of its rights and remedies
under the Noteholder Documents or otherwise.
6.5 Preference
Recoveries.
If any
First Priority Lender is required in any Insolvency Proceeding or otherwise
to
turn over or otherwise pay to the estate of any Obligor any amount as a
preference (a "Recovery"),
then
the First Priority Claims shall be reinstated to the extent of such Recovery.
If
this Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination
shall
not diminish, release, discharge, impair or otherwise affect the obligations
of
the parties hereto from such date of reinstatement.
6.6 Reorganization
Securities.
If, in
any Insolvency Proceeding, debt obligations of the reorganized debtor secured
by
Liens upon any property of the reorganized debtor are distributed, pursuant
to a
plan of reorganization or similar dispositive restructuring plan, both on
account of First Priority Claims and on account of Noteholder Claims, then,
to
the extent the debt obligations distributed on account of the First Priority
Claims and on account of the Noteholder Claims are secured by Liens upon
the
same property, the provisions of this Agreement will survive the distribution
of
such debt obligations pursuant to such plan and will apply with like effect
to
the Liens securing such debt obligations.
6.7 Post-Petition
Interest.
(a) Neither the Trustee nor any Noteholder shall oppose or seek to challenge
any
claim by the Administrative Agent or any First Priority Lender for allowance
in
any Insolvency Proceeding of the First priority Claims consisting of
post-petition interest,
fees or expenses to the extent of the value of any First Priority Lien, without
regard to the existence of the Lien of the Trustee or the Noteholders on
the
Common Collateral.
(b) Neither
the Administrative Agent nor any other First Priority Lender shall oppose
or
seek to challenge any claim by the Trustee or any Noteholder for allowance
in
any Insolvency Proceeding of Obligations consisting of post-petition interest,
fees or expenses to the extent of the value of the Lien of the Trustee and
the
Noteholders on the Common Collateral (after taking into account the First
Priority Collateral).
6.8 Waiver.
The
Trustee, for itself and on behalf of the Noteholders, waives any claim it
may
hereafter have against any First Priority Lender arising out of the election
of
any First Priority Lender of the application of Section 1111(b)(2) of the
Bankruptcy Code, and/or out of any cash collateral or financing arrangement
or
out of any grant of a security interest in connection with the Common Collateral
in any Insolvency Proceeding.
17
6.9 Separate
Grants of Security and Separate Classification.
The
Trustee, for itself and on behalf of the Noteholders, and the Administrative
Agent for itself and on behalf of the First Priority Lenders, acknowledge
and
agree that:
(a) the
grants of Liens pursuant to the First Priority Collateral Documents and the
Noteholder Collateral Documents constitute two separate and distinct grants
of
Liens; and
(b) because
of, among other things, their differing rights in the Common Collateral,
the
Noteholder Claims are fundamentally different from the First Priority Claims
and
must be separately classified in any plan of reorganization proposed or adopted
in an Insolvency Proceeding.
To
further effectuate the intent of the parties as provided in the immediately
preceding sentence, if it is held that, contrary to the intention of the
parties, the claims of the First Priority Lenders and the Noteholders in
respect
of the Common Collateral constitute only one secured claim (rather than separate
classes of senior and junior secured claims), then each of the parties hereto
hereby acknowledges and agrees that, subject to Sections
2.1
and
4.1,
all
distributions shall be made as if there were separate classes of senior and
junior secured claims against the Obligors in respect of the Common Collateral
(with the effect being that, to the extent that the aggregate value of the
Common Collateral is sufficient (for this purpose ignoring all claims held
by
the Noteholders), the First Priority Lenders shall be entitled to receive,
in
addition to amounts distributed to them in respect of principal, pre-petition
interest and other claims, all amounts owing in respect of post-petition
interest, including any additional interest payable pursuant to the Credit
Agreement, arising from or related to a default, which is disallowed as a
claim
in any Insolvency Proceeding) before any distribution is made in respect
of the
claims held by the Noteholders, with the Trustee, for itself and on behalf
of
the Noteholders, hereby acknowledging and agreeing to turn over to the
Administrative Agent, for itself and on behalf of the Noteholders, amounts
otherwise received or receivable by them in respect of the Common Collateral
to
the extent necessary to effectuate the intent of this sentence, even if such
turnover has the effect of reducing the claim or recovery of the
Noteholders.
Section
7. Reliance;
Waivers; etc.
7.1 Reliance.
The Trustee, on behalf of itself and the Noteholders, acknowledges that it
and
the Noteholders have, independently and without reliance on the Administrative
Agent or any other First Priority Lender, and based on documents and information
deemed by them appropriate, made their own credit analysis and decision to
enter
into the Indenture or any other applicable Noteholder Document, this Agreement
and the transactions contemplated hereby and thereby and they will continue
to
make their own credit decisions in taking or not taking any action under
the
Indenture, any such other Noteholder Document or this Agreement.
7.2 No
Warranties or Liability.
The Trustee, on behalf of itself and Noteholders, acknowledges and agrees
that
each of the Administrative Agent and the other holders of First Priority
Claims
have made no express or implied representation or warranty, including with
respect to the execution, validity, legality, completeness, collectibility
or
enforceability of any of the Loan Documents or the ownership of any Common
Collateral or the perfection or priority of any Lien thereon. The holders
of
First Priority Claims will be entitled to manage and supervise their respective
loans and extensions of credit to the Borrower in accordance with applicable
law
and as they may otherwise, in their sole discretion, deem appropriate, and
the
holders of First Priority Claims may manage their loans and extensions of
credit
without regard to any right or interest that the Trustee or any of the
Noteholders have in the Common Collateral or otherwise, except as otherwise
provided in this Agreement. Neither the Administrative Agent nor any other
First
Priority Lender shall have any duty to the Trustee or any of the Noteholders
to
act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any agreement
with the Borrower (including the Noteholder Documents), regardless of any
knowledge thereof which they may have or be charged with.
18
7.3 No
Waiver of Lien Priorities.
(a) To
the
fullest extent permitted under applicable law, no right of the First Priority
Lenders, the Administrative Agent or any of them to enforce any provision
of
this Agreement shall at any time in any way be prejudiced or impaired by
any act
or failure to act on the part of any Obligor or by any act or failure to
act by
any First Priority Lender, or by any noncompliance by any Person with the
terms,
provisions and covenants of this Agreement, any of the Loan Documents or
any of
the Noteholder Documents, regardless of any knowledge thereof which the
Administrative Agent or the other First Priority Lenders, or any of them,
may
have or be otherwise charged with.
(b) Without
in any way limiting the generality of the foregoing paragraph (but subject
to
the rights of the Obligors under the Loan Documents), the First Priority
Lenders
and any of them, may, to the fullest extent permitted under applicable law,
at
any time and from time to time, without the consent of, or notice to, the
Trustee or any Noteholder, without incurring any liability to the Trustee
or any
Noteholder and without impairing or releasing the lien priorities and other
benefits provided in this Agreement (even if any right of subrogation or
other
right or remedy of the Trustee or any Noteholder is affected, impaired or
extinguished thereby) do any one or more of the following:
(i) make
loans and advances to any Obligor or issue, guaranty or obtain letters of
credit
for account of any Obligor or otherwise extend credit to any Obligor, in
any
amount (subject to the limits set forth in the Indenture) and on any terms,
whether pursuant to a commitment or as a discretionary advance and whether
or
not any default or event of default or failure of condition is then
continuing;
(ii) change
the manner, place or terms of payment or change or extend the time of payment
of, or renew, exchange, amend, increase (subject to the limits set forth
in the
Indenture or any other Noteholder Document) or alter, the terms of any of
the
First Priority Claims or any First Priority Lien or guaranty thereof or any
liability of the Obligors, or any liability incurred directly or indirectly
in
respect thereof (including any increase in (subject to the limits set forth
in
the Indenture or any other Noteholder Document) or extension of the First
Priority Claims, without any restriction as to the amount, tenor or terms
of any
such increase (subject to the limits set forth in the Indenture or any other
Noteholder Document) or extension or otherwise amend, renew, exchange, extend,
modify or supplement in any manner any Liens held by the holders of First
Priority Claims, the First Priority Claims or any of the Loan
Documents;
(iii) sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with
in
any manner and in any order any part of the First Priority Collateral or
any
liability of any Obligor to the First Priority Lenders, or any liability
incurred directly or indirectly in respect thereof;
(iv) settle
or
compromise any First Priority Claim or any other liability of any Obligor
or any
security therefor or any liability incurred directly or indirectly in respect
thereof and apply any sum by whomsoever paid and however realized to any
liability (including the First Priority Claims) in any manner or order;
and
(v) exercise
or delay in or refrain from exercising any right or remedy against any Obligor
or any security or any other Person, elect any remedy and otherwise deal
freely
with the Obligors and the First Priority Collateral and any security or any
liability of any Obligor to the holders of First Priority Claims or any
liability incurred directly or indirectly in respect thereof.
19
(c) The
Trustee, on behalf of itself and the Noteholders, also agrees, to the fullest
extent permitted under applicable law, that no First Priority Lender shall
have
any liability to the Trustee or any Noteholder, and the Trustee, on behalf
of
itself and the Noteholders, to the fullest extent permitted under applicable
law, hereby waives any claim against any First Priority Lender, arising out
of
any action which such holders of First Priority Claims may take or permit
or
omit to take with respect to the foreclosure upon, or sale, liquidation or
other
disposition of, the First Priority Collateral. The Trustee, on behalf of
itself
and the Noteholders, agrees that neither the Administrative Agent nor any
other
First Priority Lender shall have any duty to them, express or implied, fiduciary
or otherwise, in respect of the maintenance or preservation of the First
Priority Collateral, the First Priority Claims or otherwise.
d) The
Trustee, on behalf of itself and the Noteholders, agrees not to assert and
hereby waives, to the fullest extent permitted by law, any right to demand,
request, plead or otherwise assert or otherwise claim the benefit of, any
marshaling, appraisal, valuation or other similar right that may otherwise
be
available under applicable law or any other similar right a junior secured
creditor may have under applicable law.
7.4 Obligations
Unconditional.
All rights, interests, agreements and obligations of the Administrative Agent
and the other First Priority Lenders and the Trustee and the Noteholders,
respectively, hereunder shall remain in full force and effect irrespective
of:
(a) any
lack
of validity or enforceability of any Loan Document or any Noteholder Document
or
any setting aside or avoidance of any First Priority Lien;
(b) any
change in the time, manner or place of payment of, or in any other terms
of, any
First Priority Claim or Noteholder Claim, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course
of
conduct or otherwise, of the terms of the Credit Agreement or any other Loan
Document or of the terms of the Indenture or any other Noteholder
Document;
(c) any
exchange of any security interest in any Common Collateral or any other
collateral, or any amendment, waiver or other modification, whether in writing
or by course of conduct or otherwise, of any the First Priority Claim or
Noteholder Claim or any guarantee thereof;
(d) the
commencement of any Insolvency Proceeding in respect of any Obligor;
or
(e) any
other
circumstances which otherwise might constitute a defense available to, or
a
discharge of, any Obligor in respect of the First Priority Claims, or of
the
Trustee, any Noteholder, the Administrative Agent or any other First Priority
Lender in respect of this Agreement.
20
Section
8. Miscellaneous.
8.1 Conflicts.
In the
event of any conflict between the provisions of this Agreement and the
provisions of the Loan Documents or the Noteholder Documents, the provisions
of
this Agreement shall govern and control.
8.2 Continuing
Nature of this Agreement.
This Agreement shall continue to be effective until the Discharge of First
Priority Claims shall have occurred. This is a continuing agreement of lien
priority. The Trustee, on behalf of itself and the Noteholders, hereby waives
any right it may have under applicable law to revoke this Agreement or any
provisions hereof.
8.3 Amendments;
Waivers.
No amendment, modification or waiver of any provision of this Agreement shall
be
deemed to be made unless the same shall be in writing signed by the Trustee,
the
Administrative Agent and the Borrower and each waiver, if any, shall be a
waiver
only
with
respect to the specific instance involved and shall in no way impair the
rights
of the parties making such waiver or the obligations of the other parties
to
such party in any other respect or at any other time. Notwithstanding the
foregoing, the Borrower shall not have any right to consent to or approve
any
amendment, modification or waiver of any provision of this Agreement except
to
the extent its rights are directly affected (which includes any amendment
to the
Obligors' ability to cause additional obligations to constitute First Priority
Claims or Noteholder Claims as the Borrower may designate).
8.4 Information
Concerning Financial Condition of the Borrower and its
Subsidiaries.
The
Administrative Agent and the other holders of First Priority Claims, on the
one
hand, and the Trustee and the Noteholders, on the other hand, shall each
be
responsible for keeping themselves informed of (a) the financial condition
of
the Borrower and its Subsidiaries and all endorsers and/or guarantors of
the
Noteholder Claims or the First Priority Claims and (b) all other circumstances
bearing upon the risk of nonpayment of the Noteholder Claims or the First
Priority Claims. Neither the Administrative Agent nor any other First Priority
Lender shall have any duty to advise the Trustee or any Noteholder of
information known to it or them regarding such condition or any such
circumstance or otherwise. In the event the Administrative Agent or any other
First Priority Lender, in its or their sole discretion, undertakes at any
time
or from time to time to provide any such information to the Trustee or any
Noteholder, it or they shall be under no obligation (x) to provide any
additional information or to provide any such information on any subsequent
occasion, (y) to undertake any investigation or (z) to disclose any information
which, pursuant to accepted or reasonable commercial finance practices, such
party wishes to maintain confidential.
21
8.5 Successor
Administrative Agent and Trustee.
Each
successor Administrative Agent under the Credit Agreement or any other First
Priority Document shall execute and deliver a counterpart of and become a
party
to this Agreement, and no replacement or resignation of the Administrative
Agent
shall be effective until its successor shall have executed and delivered
a
counterpart of this Agreement. Each successor Trustee under the Indenture
or any
other Noteholder Document shall execute and deliver a counterpart of and
become
a party to this Agreement, and no replacement or resignation of the Trustee
shall be effective until its successor shall have executed and delivered
a
counterpart of this Agreement.
8.6 Application
of Payments.
All
payments received by the holders of First Priority Claims may be applied,
reversed and reapplied, in whole or in part, to such part of the First Priority
Claims as the holders of First Priority Claims, in their sole discretion,
deem
appropriate.
8.7 Forum
Selection and Consent to Jurisdiction.
ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL
OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO RELATING THERETO SHALL BE BROUGHT
AND
MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN
THE
COURTS OF THE STATE OF ILLINOIS, XXXX COUNTY, OR IN THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. EACH OF THE PARTIES HERETO HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE
OF ILLINOIS, XXXX COUNTY, AND OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH OF THE PARTIES
HERETO
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.
EACH OF
THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY
HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
8.8 Waiver
of Jury Trial.
THE
PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE
OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS
OF
SUCH PARTIES RELATING THERETO. EACH OF THE PARTIES HERETO ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION.
22
8.9 Notices.
All
notices to the Noteholders and the First Priority Lenders permitted or required
under this Agreement may be sent to the Trustee and the Administrative Agent,
respectively. Unless otherwise specifically provided herein, any notice or
other
communication herein required or permitted to be given shall be in writing
and
may be personally served, telecopied, electronically mailed or sent by courier
service or U.S. mail and shall be deemed to have been given when delivered
in
person or by courier service, upon receipt of a telecopy or electronic mail
or
four Business Days after deposit in the U.S. mail (registered or certified,
with
postage prepaid and properly addressed). For the purposes hereof, the addresses
of the parties hereto shall be as set forth below each party's name on the
signature pages hereto, or, as to each party, at such other address as may
be
designated by such party in a written notice to all of the other
parties.
8.10 Further
Assurances.
The Administrative Agent, on behalf of itself and the First Priority Lenders,
and the Trustee, on behalf of itself and the Noteholders, and the Borrower,
agrees that each of them shall take such further action and shall execute
and
deliver such additional documents and instruments (in recordable form, if
requested) as the Administrative Agent or the Trustee may reasonably request
to
effect the terms of this Agreement.
8.11 Governing
Law.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.
8.12 Binding
on Successors and Assigns; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the
Administrative Agent, the other First Priority Lenders, the Trustee, the
Noteholders and their respective successors and assigns. No other Person,
shall
have or be entitled to assert rights or benefits hereunder. This Agreement
shall
be
binding upon the Obligors and their successors and assigns; provided that
no
Obligor or any successor or assign thereof shall be entitled to enforce any
provision of this Agreement (other than any provision hereof expressly
preserving any right of any Obligor under any Loan Document or Noteholder
Document).
8.13 Specific
Performance.
Each of the Administrative Agent and the Trustee may demand specific performance
of this Agreement. The Trustee, on behalf of itself and the Noteholders hereby
irrevocably waives any defense based on the adequacy of a remedy at law and
any
other defense which might be asserted to bar the remedy of specific performance
in any action which may be brought by the Administrative Agent.
8.14 Section
Titles; Time Periods.
The section titles contained in this Agreement are and shall be without
substantive meaning or content of any kind whatsoever and are not a part
of this
Agreement.
8.15 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall
be an original and all of which shall together constitute one and the same
document. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
23
8.16 Authorization.
By its signature, each Person executing this Agreement on behalf of a party
hereto represents and warrants to the other parties hereto that it is duly
authorized to execute this Agreement.
8.17 Effectiveness.
This Agreement shall become effective when executed and delivered by the
parties
listed below. This Agreement shall be effective both before and after the
commencement of any Insolvency Proceeding. All references to any Obligor
shall
include any Obligor as debtor and debtor-in-possession and any receiver or
trustee for such Obligor (as the case may be) in any Insolvency
Proceeding.
8.18 Provisions
Solely to Define Relative Rights.
The provisions of this Agreement are and are intended solely for the purpose
of
defining the relative rights of the First Priority Lenders on the one hand
and
the Noteholders on the other hand. None of the Borrower, any other Obligor
or
any other creditor thereof shall have any right hereunder. Nothing in this
Agreement is intended to or shall impair the obligations of the Borrower
or any
other Obligor, which are absolute and unconditional, to pay the First Priority
Claims and the Noteholder Claims as and when the same shall become due and
payable in accordance with their terms.
8.19 Compliance
with Trust Indenture Act.
Nothing contained herein shall impair the ability of the Trustee to take
any
action necessary to comply with any obligation imposed by applicable law,
including the Trust Indenture Act.
24
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
Administrative
Agent:
LASALLE
BANK NATIONAL ASSOCIATION,
as
Administrative Agent
By: /s/
Xxxxxxx Xxxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxxx
Title:
FVP
Address: 000
Xxxxx
XxXxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxxx, First Vice President
Trustee:
XXXXX
FARGO BANK, N.A.,
as
Trustee
By: /s/
Xxxxxx X. X'Xxxxxxx
Name:
Xxxxxx X. X'Xxxxxxx
Title:
Assistant Vice President
Address:
000
Xxxxx
Xxxxxx, Xxxxx
000
Xxxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxx X'Xxxxxxx
Borrower:
INTEGRATED
ALARM SERVICES GROUP, INC.
By: /s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx X. XxXxxx
Title:
Chairman
of the Board and Chief Executive Officer
Address: One
Capital Center
00
Xxxx
Xxxxxx, 0xx Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. XxXxxx
S-1