INTEGRATED ALARM SERVICES GROUP, INC., as the Company, THE GUARANTOR PARTIES HERETO, as Subsidiary Guarantors, and WELLS FARGO BANK, N.A., as Trustee 12% SENIOR SECURED NOTES DUE 2011 INDENTURE Dated as of November 16, 2004
INTEGRATED
ALARM SERVICES GROUP, INC.,
as
the
Company,
THE
GUARANTOR PARTIES HERETO,
as
Subsidiary Guarantors,
and
XXXXX
FARGO BANK, N.A.,
as
Trustee
_________
12%
SENIOR SECURED NOTES DUE 2011
_________
Dated
as
of November 16, 2004
_________
Page
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ARTICLE
ONE
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1
|
|
Section
1.01
|
Definitions
|
1
|
Section
1.02
|
Other
Definitions
|
26
|
Section
1.03
|
Incorporation
by Reference of Trust Indenture Act
|
27
|
Section
1.04
|
Rules
of Construction
|
27
|
ARTICLE
TWO
|
THE
NOTES
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28
|
Section
2.01
|
Form
and Dating
|
28
|
Section
2.02
|
Execution
and Authentication
|
29
|
Section
2.03
|
Registrar
and Paying Agent
|
29
|
Section
2.04
|
Paying
Agent to Hold Money in Trust
|
30
|
Section
2.05
|
Holder
Lists
|
30
|
Section
2.06
|
Transfer
and Exchange
|
30
|
Section
2.07
|
Replacement
Notes
|
35
|
Section
2.08
|
Outstanding
Notes
|
35
|
Section
2.09
|
Temporary
Notes
|
35
|
Section
2.10
|
Cancellation
|
35
|
Section
2.11
|
Defaulted
Interest
|
36
|
Section
2.12
|
CUSIP
Numbers
|
36
|
Section
2.13
|
Issuance
of Additional Notes
|
36
|
ARTICLE
THREE
|
REDEMPTION
AND OFFERS TO PURCHASE
|
37
|
Section
3.01
|
Notices
to Trustee
|
37
|
Section
3.02
|
Selection
of Notes to Be Redeemed
|
37
|
Section
3.03
|
Notice
of Redemption
|
37
|
Section
3.04
|
Effect
of Notice of Redemption
|
38
|
Section
3.05
|
Deposit
of Redemption Price
|
38
|
Section
3.06
|
Notes
Redeemed in Part
|
39
|
Section
3.07
|
Repurchase
Offers
|
39
|
2
ARTICLE
FOUR
|
COVENANTS
|
41
|
Section
4.01
|
Payment
of Notes
|
41
|
Section
4.02
|
Maintenance
of Office or Agency
|
41
|
Section
4.03
|
Commission
Reports
|
42
|
Section
4.04
|
Compliance
Certificate
|
43
|
Section
4.05
|
Taxes
|
43
|
Section
4.06
|
Stay,
Extension and Usury Laws
|
44
|
Section
4.07
|
Limitation
on Indebtedness
|
44
|
Section
4.08
|
Limitation
on Restricted Payments
|
46
|
Section
4.09
|
Limitation
on Liens
|
49
|
Section
4.10
|
Repurchase
Offer Following Excess Retail Attrition
|
49
|
Section
4.11
|
Limitation
on Asset Sales
|
51
|
Section
4.12
|
Limitation
on Restrictions on Distributions from Restricted
Subsidiaries
|
52
|
Section
4.13
|
Limitation
on Transactions with Affiliates
|
54
|
Section
4.14
|
Limitation
on Purchases of Retail Alarm Monitoring Contracts Following
Certain
Events
|
55
|
Section
4.15
|
Limitation
on Issuances and Sales of Equity Interests in Restricted
Subsidiaries
|
55
|
Section
4.16
|
Additional
Subsidiary Guarantees
|
56
|
Section
4.17
|
Business
Activities
|
57
|
Section
4.18
|
Payments
for Consent
|
57
|
Section
4.19
|
Repurchase
at the Option of Holders Upon a Change of Control
|
57
|
ARTICLE
FIVE
|
SUCCESSORS
|
58
|
Section
5.01
|
Merger,
Consolidation or Sale of Assets
|
58
|
Section
5.02
|
Successor
Corporation Substituted
|
59
|
ARTICLE
SIX
|
DEFAULTS
AND REMEDIES
|
60
|
Section
6.01
|
Events
of Default
|
60
|
Section
6.02
|
Acceleration
|
62
|
Section
6.03
|
Other
Remedies
|
62
|
Section
6.04
|
Rescission,
Cancellation and Waiver of Past Defaults
|
63
|
3
Section
6.05
|
Control
by Majority
|
63
|
Section
6.06
|
Limitation
on Suits
|
64
|
Section
6.07
|
Rights
of Holders of Notes to Receive Payment
|
64
|
Section
6.08
|
Collection
Suit by Trustee
|
64
|
Section
6.09
|
Trustee
May File Proofs of Claim
|
65
|
Section
6.10
|
Priorities
|
65
|
Section
6.11
|
Undertaking
for Costs
|
66
|
ARTICLE
SEVEN
|
TRUSTEE
|
66
|
Section
7.01
|
Duties
of Trustee
|
66
|
Section
7.02
|
Certain
Rights of Trustee
|
67
|
Section
7.03
|
Individual
Rights of Trustee
|
68
|
Section
7.04
|
Trustee’s
Disclaimer
|
68
|
Section
7.05
|
Notice
of Defaults
|
68
|
Section
7.06
|
Reports
by Trustee to Holders of the Notes
|
68
|
Section
7.07
|
Compensation
and Indemnity
|
69
|
Section
7.08
|
Replacement
of Trustee
|
70
|
Section
7.09
|
Successor
Trustee by Merger, Etc.
|
71
|
Section
7.10
|
Eligibility;
Disqualification
|
71
|
Section
7.11
|
Preferential
Collection of Claims Against Company
|
71
|
ARTICLE
EIGHT
|
DEFEASANCE
AND COVENANT DEFEASANCE
|
71
|
Section
8.01
|
Option
to Effect Legal Defeasance or Covenant Defeasance
|
71
|
Section
8.02
|
Legal
Defeasance and Discharge
|
71
|
Section
8.03
|
Covenant
Defeasance
|
72
|
Section
8.04
|
Conditions
to Legal or Covenant Defeasance
|
72
|
Section
8.05
|
Deposited
Money and Government Securities to Be Held in Trust; Other
Miscellaneous
Provisions
|
74
|
Section
8.06
|
Repayment
to the Company
|
74
|
Section
8.07
|
Reinstatement
|
75
|
4
ARTICLE
NINE
|
AMENDMENT,
SUPPLEMENT AND WAIVER
|
75
|
Section
9.01
|
Without
Consent of Holders of Notes
|
75
|
Section
9.02
|
With
Consent of Holders of Notes
|
76
|
Section
9.03
|
Compliance
with Trust Indenture Act
|
78
|
Section
9.04
|
Revocation
and Effect of Consents
|
78
|
Section
9.05
|
Notation
on or Exchange of Notes
|
78
|
Section
9.06
|
Trustee
to Sign Amendments, Etc
|
78
|
ARTICLE
TEN
|
SATISFACTION
AND DISCHARGE
|
79
|
Section
10.01
|
Satisfaction
and Discharge
|
79
|
Section
10.02
|
Deposited
Money and Government Securities to Be Held in Trust; Other
Miscellaneous
Provisions
|
80
|
Section
10.03
|
Repayment
to the Company
|
80
|
ARTICLE
ELEVEN
|
SUBSIDIARY
GUARANTEES
|
80
|
Section
11.01
|
Guarantees
|
80
|
Section
11.02
|
Limitation
on Liability
|
82
|
Section
11.03
|
Successors
and Assigns
|
82
|
Section
11.04
|
No
Waiver
|
83
|
Section
11.05
|
Intentionally
Omitted
|
83
|
Section
11.06
|
Release
of Subsidiary Guarantor
|
83
|
Section
11.07
|
Contribution
|
83
|
ARTICLE
TWELVE
|
COLLATERAL
|
83
|
Section
12.01
|
Collateral;
Additional Collateral; Substitute Collateral
|
83
|
Section
12.02
|
Additional
Collateral; Acquisition of Assets or Property
|
85
|
Section
12.03
|
[Intentionally
Omitted]
|
85
|
Section
12.04
|
Release
of Collateral
|
85
|
Section
12.05
|
Possession
and Use of Collateral
|
86
|
Section
12.06
|
Authorization
of Actions to Be Taken by the Collateral Trustee Under
the Collateral
Documents and the Intercreditor Agreement
|
86
|
Section
12.07
|
Recording,
Registration and Opinions
|
87
|
5
ARTICLE
THIRTEEN
|
MISCELLANEOUS
|
|
Section
13.01
|
Trust
Indenture Act Controls
|
88
|
Section
13.02
|
Notices
|
88
|
Section
13.03
|
Communication
by Holders of Notes with Other Holders of Notes
|
89
|
Section
13.04
|
Certificate
and Opinion as to Conditions Precedent
|
89
|
Section
13.05
|
Statements
Required in Certificate or Opinion
|
90
|
Section
13.06
|
Rules
by Trustee and Agents
|
90
|
Section
13.07
|
No
Personal Liability of Directors, Officers, Employees and
Stockholders
|
90
|
Section
13.08
|
Governing
Law
|
90
|
Section
13.09
|
Consent
to Jurisdiction
|
90
|
Section
13.10
|
No
Adverse Interpretation of Other Agreements
|
91
|
Section
13.11
|
Successors
|
91
|
Section
13.12
|
Severability
|
91
|
Section
13.13
|
Counterpart
Originals
|
91
|
Section
13.14
|
Acts
of Holders
|
91
|
Section
13.15
|
Benefit
of Indenture
|
93
|
Section
13.16
|
Table
of Contents, Headings, Etc.
|
93
|
EXHIBITS
Exhibits
A FORM OF
NOTE
6
INDENTURE,
dated as of November 16, 2004, among Integrated Alarm Services Group, Inc.,
a
Delaware corporation, the Subsidiary Guarantors (as defined herein) and
Xxxxx
Fargo Bank, N.A., a national banking association, as trustee.
The
Company has duly authorized the execution and delivery of this Indenture
to
provide for the issuance from time to time of its 12% Senior Secured Notes
due
2011 to be issued as provided in this Indenture. All things necessary to
make
this Indenture a valid agreement of the Company, in accordance with its
terms,
have been done.
The
Company and the Trustee agree as follows for the benefit of each other
and for
the equal and ratable benefit of the Holders of the Notes:
ARTICLE
ONE
Section
1.01. Definitions.
“Acquired
Debt” means, with respect to any specified Person:
(1) Indebtedness
of any other Person existing at the time such other Person is merged with
or
into or became a Restricted Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person; and
(2) Indebtedness
secured by a Lien encumbering any asset acquired by such specified
Person.
“Acquired
Subordinated Debt” means with respect to any specified entity Indebtedness of
any other entity existing at the time such other entity is merged with
or into
or becomes a Restricted Subsidiary of such specified entity, including,
without
limitation, Indebtedness incurred in connection with, or in contemplation
of,
such other entity merging with or into or becoming a Restricted Subsidiary
of
such specified entity and which would constitute Subordinated
Indebtedness.
“Additional
Notes” means Notes issued under this Indenture after the Issue Date and in
compliance with Section 2.13 and 4.07, it being understood that any Notes
issued
in exchange for or replacement of any Notes issued on the Issue Date shall
not
be Additional Notes, including any such Notes issued pursuant to a Registration
Rights Agreement.
“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control
with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,”“controlled by” and “under
common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the Voting Stock of a Person shall
be
deemed to be control.
7
“Agent”
means any Registrar, Paying Agent or co-registrar.
“Asset
Sale” means:
(1) the
sale,
lease, conveyance or other disposition of any assets or rights (including,
without limitation, by way of a sale and leaseback and excluding any pledge
of,
or the creation, incurrence, assumption or sufferance to exist of any other
Lien
on assets by the Company or any of its Restricted Subsidiaries), other
than
sales of inventory in the ordinary course of business, and
(2) the
issue
or sale by the Company or any of its Subsidiaries of Equity Interests in
any of
the Company’s Restricted Subsidiaries (excluding directors’ qualifying shares or
an immaterial number of shares required by applicable law to be held by
a Person
other than the Company or a Restricted Subsidiary and excluding any pledge
of
Equity Interests of the Company or any of its Restricted
Subsidiaries),
in
the
case of either clause (1) or (2), whether in a single transaction or a
series of
related transactions that have a Fair Market Value in excess of $2.5
million.
Notwithstanding
the foregoing, the following items shall not be deemed to be Asset
Sales:
(1) a
transfer of assets by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(2) an
issuance of Equity Interests by a Restricted Subsidiary to the Company
or to a
Wholly Owned Restricted Subsidiary of the Company;
(3) the
sale
of excess or obsolete assets, in the ordinary course of business;
(4) a
Restricted Payment that is permitted by Section 4.07 hereof;
(5) transactions
covered by Section 5.01 hereof;
(6) any
transaction that constitutes a Change of Control;
(7) dispositions
or foreclosure in connection with Permitted Liens; and
(8) the
licensing or sublicensing of intellectual property or other general intangibles
and licenses, leases or subleases of other property in the ordinary course
of
business and which do not materially interfere with the business of the
Company
and its Restricted Subsidiaries.
“Bankruptcy
Law” means Title 11, U.S. Code or any similar federal or state law for the
relief of debtors.
“Board
of
Directors” means the board of directors of the Company or a Holding Company, as
applicable, or any duly authorized and constituted committee
thereof.
8
“Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board
of
Directors and to be in full force and effect on the date of such
certification.
“Broker-Dealer”
has the meaning set forth in the Registration Rights Agreement.
“Business
Day” means any day other than a Legal Holiday.
“Capital
Lease Obligation” means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at
such
time be required to be capitalized on a balance sheet in accordance with
GAAP.
“Capital
Stock” means (1) in the case of a corporation, capital stock, (2) in the case
of
an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (4)
any
other interest or participation that confers on a Person the right to receive
a
share of the profits and losses of, or distributions of assets of, the
issuing
Person.
“Cash
Equivalents” means:
(1) United
States dollars;
(2) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof (provided that the
full
faith and credit of the United States is pledged in support thereof) having
maturities of not more than one year from the date of acquisition, unless
such
securities are deposited by the Company to defease any Indebtedness;
(3) certificates
of deposit and eurodollar time deposits with maturities of one year or
less from
the date of acquisition, bankers’ acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any domestic commercial
bank
having capital and surplus in excess of $250 million and outstanding debt
which
is rated “A” (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule
436
under the Securities Act);
(4) repurchase
obligations with a term of not more than seven days for underlying securities
of
the types described in clauses (2) and (3) above entered into with any
financial
institution meeting the qualifications specified in clause (3)
above;
(5) commercial
paper having the highest rating obtainable from either Moody’s or S&P and in
each case maturing within six months after the date of acquisition;
9
(6) marketable
direct obligations issued by any state of the United States of America
or any
political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at
the time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody’s; and
(7) money
market funds at least 95% of the assets of which constitute Cash Equivalents
of
the kinds described in clauses (1) through (6) of this definition.
“Change
of Control” means the occurrence of any of the following:
(1) the
sale,
lease, transfer, conveyance or other disposition (other than by way of
merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any Person or;
(2) the
acquisition by any Person or Group of the power, directly or indirectly,
to vote
or direct the voting of securities having more than 50% of the ordinary
voting
power for the election of directors of the Company;
(3) the
first
day on which a majority of the members of the Board of Directors of the
Company
are not Continuing Directors; or
(4) the
liquidation, dissolution or adoption of a plan of liquidation or dissolution
other than in a transaction which complies with the provisions described
in
Section
5.01
herein.
“Cash
Management Obligations” means all obligations of the Company, as 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).
“Closing
Date” means November 16, 2004.
“Collateral”
means all real and personal property of the Company and the Subsidiary
Guarantors other than “Excluded Assets” (as defined in the Security
Agreement).
“Collateral
Documents” means the Security Agreement, the Pledge Agreement, the Second
Priority Mortgages and any other document or instrument pursuant to which
a Lien
is granted by any Grantor to secure any Second Priority Claims or under
which
rights or remedies with respect to any such Lien are governed.
10
“Collateral
Trustee” means Xxxxx Fargo Bank, N.A., acting in its capacity as collateral
trustee under the Collateral Documents, together with its successors and
in such
capacity.
“Commission”
means the Securities and Exchange Commission.
“Company”
means Integrated Alarm Services Group, Inc. until a successor replaces
it
pursuant to Section 5.01 hereof and thereafter means the successor.
“Consolidated
EBITDA” means, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period plus or minus, to the extent deducted
or
added in computing such Consolidated Net Income:
(1) provision
for taxes based on income or profits of such Person and its Restricted
Subsidiaries;
(2) consolidated
interest expense of such Person and its Restricted Subsidiaries, whether
paid or
accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in
respect of letter of credit or bankers’ acceptance financings, and net costs (if
any) pursuant to Hedging Obligations);
(3) depreciation,
amortization (including amortization of goodwill and other intangibles
but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges (excluding any such non-cash charges
to the
extent that it represents an accrual of or reserve for cash payments to
be made
in any future period or amortization of a prepaid cash expense that was
paid in
a prior period) of such Person and its Restricted Subsidiaries; and
(4) (x)
all
non-cash credits and gains increasing Consolidated Net Income for such
period
and (y) all cash payments during such period relating to non-cash charges
that
were added back in determining Consolidated EBITDA in any prior
period,
in
each
case for such period. Notwithstanding the foregoing, items specified in
(1), (3)
and (4) above for any Restricted Subsidiary shall be added to Consolidated
Net
Income to compute Consolidated EBITDA only:
(a) in
proportion to the percentage of the total Capital Stock of such Restricted
Subsidiary held directly or indirectly by the Company; and
(b) to
the
extent that a corresponding amount would be permitted at the date of
determination to be distributed to the Company by such Restricted Subsidiary
pursuant to its charter
and by-laws and each law, regulation, agreement or judgment applicable
to such
distribution.
11
“Consolidated
Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio
of the aggregate amount of Consolidated EBITDA for the four most recent
Four
Quarter Period to Consolidated Fixed Charges for such Four Quarter
Period.
For
purposes of this definition, “Consolidated EBITDA” and “Consolidated Fixed
Charges” shall be calculated on a pro forma basis after giving effect
to:
(1)
|
the
incurrence by the Company and its Restricted Subsidiaries’ of Indebtedness
and the issuance by the Company and its Restricted Subsidiaries’ of
Disqualified Stock (and the application of the proceeds therefrom)
giving
rise to the need to make such calculation and any incurrence
(and the
application of the proceeds therefrom) or repayment of other
Indebtedness
occurring during such Four Quarter Period or at any time subsequent
to the
last day of such Four Quarter Period and on or prior to the date
of
determination, as if such incurrence or issuance (and the application
of
the proceeds therefrom) or the repayment, as the case may be,
occurred on
the first day of such Four Quarter Period,
and
|
(2)
|
any
acquisition or disposition (including, without limitation, any
acquisition
giving rise to the need to make such calculation as a result
of the
Company or one of its Restricted Subsidiaries (including any
entity that
becomes a Restricted Subsidiary as a result of such acquisition)
incurring, assuming or otherwise becoming liable for Indebtedness
or
issuing Disqualified Stock) during such Four Quarter Period or
at any time
subsequent to the last day of such Four Quarter Period and on
or prior to
the date of determination, as if such acquisition or disposition
(including the incurrence or assumption of any such Indebtedness
and the
issuance of such Disqualified Stock and also including any Consolidated
EBITDA associated with such acquisition or disposition) occurred
on the
first day of such Four Quarter Period.
|
For
purposes of paragraph (2) immediately above, acquisitions of alarm monitoring
contracts may be given pro forma effect but only to the extent the aggregate
RMR
with respect to such net acquired alarm monitoring contracts exceeds the
aggregate Cancelled RMR and Disqualified RMR during such Four Quarter Period.
In
calculating Consolidated EBITDA with respect to acquired alarm monitoring
contracts, the Company shall apply its average overhead expenses for the
Four
Quarter Period. For purposes of this definition, pro forma calculations
shall be
made in good faith by a responsible financial or accounting officer of
the
Company consistent with (except as otherwise provided in the Indenture)
Article
11 of Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation may be amended.
If
any
Indebtedness bears interest on a floating or fluctuating basis and is being
given pro forma effect, the interest on such Indebtedness shall be calculated
as
if the rate in effect on the date of determination had been the applicable
rate
for the entire period (taking into account any Hedging Obligation applicable
to
the such Indebtedness if such Hedging Obligation has a remaining term in
excess
of 12 months).
12
If
any
Indebtedness is incurred under a revolving credit facility and is being
given
pro forma effect, the interest on such Indebtedness shall be calculated
based on
the average daily balance of such Indebtedness for the four fiscal quarters
subject to the pro forma calculation.
“Consolidated
Fixed Charges” means, for any period the total interest expense of the Company
and its consolidated Restricted Subsidiaries, plus, to the extent not included
in such total interest expense and to the extent incurred by the Company
or its
Restricted Subsidiaries, without duplication:
(1) interest
expense attributable to Capital Lease Obligations;
(2)
amortization
of debt discount;
(3)
non-cash
interest expense;
(4)
commissions,
discounts and other fees and charges owed with respect to letters of credit
and
bankers’ acceptance financing;
(5)
net
cash
payments pursuant to Hedging Obligations; and
(6) dividends
accrued in respect of all Disqualified Stock of the Company and all Preferred
Stock of any Restricted Subsidiary, in each case held by Persons other
than the
Company or a Wholly Owned Restricted Subsidiary (other than dividends
payable
solely in Capital Stock (other than Disqualified Stock) of the
Company).
For
purposes of this definition, Consolidated Fixed Charges excludes the (i)
amortization of deferred financing fees and the expensing of any bridge
or other
financing fees and (ii) net payments pursuant to Hedging Obligations that
do not
constitute Indebtedness.
“Consolidated
Net Income” means, with respect to any Person for any period, the aggregate of
the Net Income of such Person and its Restricted Subsidiaries for such
period,
on a consolidated basis, determined in accordance with GAAP; provided
that:
(1) the
Net
Income of any Person that is not a Restricted Subsidiary or that is accounted
for by the equity method of accounting shall be included only to the extent
of
the amount of dividends or distributions paid in cash to the specified
Person or
a Restricted Subsidiary thereof;
(2) the
Net
Income (but not net loss) of any Restricted Subsidiary shall be excluded
to the
extent that the declaration or payment of dividends or similar distributions
by
such Restricted Subsidiary of such Net Income is not at the date of
determination permitted without any prior governmental approval (that has
not
been obtained) or, directly or indirectly, by operation of the terms of
its
charter or any
13
agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its equityholders;
(3) the
Net
Income of any Person acquired during the specified period for any period
prior
to the date of such acquisition shall be excluded;
(4) any
extraordinary gain or loss, together with any related provision for taxes
on
such gain or loss, shall be excluded;
(5) any
gain
or loss resulting from Asset Sales (without regard to the $2.5 million
limitation set forth in the definition thereof) or abandonments or reserves
relating thereto and the related tax effects shall be excluded;
(6) any
gain
or loss from foreign exchange transactions shall be excluded;
(7) the
cumulative effect of a change in accounting principles shall be
excluded;
(8) the
Net
Income (but not loss) of any Unrestricted Subsidiary shall be excluded,
except
to the extent includable under (1) above;
(9) any
non-cash compensation expense in connection with the issuance of employee
or
independent contractor stock options shall be excluded; and
(10) any
amount paid or accrued as dividends on Preferred Stock of the Company or
any
Subsidiary Guarantor owned by Persons other than the Company and any of
its
Restricted Subsidiaries shall be excluded.
“Consolidated
Net Worth” means, with respect to any specified Person as of any date, the sum
of:
(1) the
consolidated common stockholders’ equity of such Person and its consolidated
Restricted Subsidiaries as of such date; plus
(2) the
respective amounts reported on such Person’s balance sheet as of such date with
respect to any series of Preferred Stock (other than Disqualified Stock)
that by
its terms is not entitled to the payment of dividends unless such dividends
may
be declared and paid only out of net earnings in respect of the year of
such
declaration and payment, but only to the extent of any cash received by
such
Person upon issuance of such Preferred Stock.
“Continuing
Directors” means, as of any date of determination, any member of the Board of
Directors of the Company who:
(1) was
a
member of the Board of Directors on the date of this Indenture; or
14
(2) was
nominated for election or elected to the Board of Directors with the approval
of
a majority of the Continuing Directors who were members of the Board of
Directors at the time of such nomination or election.
“Corporate
Trust Office of the Trustee” shall be at the address of the Trustee specified in
Section 13.02 hereof or such other address as to which the Trustee may
give
notice to the Company.
“Credit
Agreement” means the Credit Agreement, dated as of November 16, 2004, by and
among Integrated Alarm Services Group, Inc., Criticom International Corporation,
Monital Signal Corporation, Integrated Alarm Services, Inc., Xxxxx Security
Group, L.L.C., American Home Security, Inc. and the guarantors party thereto
and
the banks party thereto and LaSalle Bank National Association, as Agent,
including any related notes, guarantees, collateral documents, instruments
and
agreements executed in connection therewith, and in each case as amended,
modified, restated, renewed, refunded, replaced or refinanced from time
to time,
including any agreement extending the maturity of, refinancing, replacing
or
otherwise restructuring (including by way of adding Restricted Subsidiaries
of
the Company as borrowers or guarantors thereunder) all of or a portion
of the
Indebtedness under such agreement or any such successor or replacement
agreement
and whether by the same or any other agent, lender or group of lenders
(or other
institutions) or otherwise.
“Credit
Agreement Obligations” means all Obligations under or pursuant to the Credit
Agreement.
“Custodian”
means the Trustee, as custodian with respect to the Notes in global form,
or any
successor entity thereto.
“Default”
means any event which is, or after notice or passage of time or both would
be,
an Event of Default.
“Definitive
Note” means a certificated Note registered in the name of the Holder thereof,
issued in accordance with Section 2.06 hereof, bearing, if required, the
appropriate Private Placement Legend but not the Global Note Legend and
not
having attached thereto “Schedule of Exchanges of Interests in the Global
Note.”
“Depositary”
means, with respect to the Notes issuable or issued in whole or in part
in
global form, the Person specified in Section 2.04 hereof as the Depositary
with
respect to the Notes, and any and all successors thereto appointed as depositary
hereunder and having become such pursuant to the applicable provision of
this
Indenture.
“Designated
Offering” means an offering (including a private placement) of Capital Stock
(other than Disqualified Stock) of the Company, other than (i) public offerings
with respect to Capital Stock registered on Form S-8 under the Securities
Act
and (ii) issuances to any Subsidiary of the Company.
15
“Disqualified
Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable,
at the
option of the holder thereof), or upon the happening of any event, other
than an
initial public offering of Equity Interests, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at
the option of the holder thereof, in whole or in part, on or prior to the
date
that is 91 days after the earlier of the stated maturity date of the Notes
or
the date on which no Notes remain outstanding; provided that only the portion
of
Capital Stock which so matures or is mandatorily redeemable or is so redeemable
at the sole option of the holder thereof prior to such date shall be deemed
Disqualified Capital Stock; provided, further, that any Capital Stock that
would
constitute Disqualified Stock solely because the holders thereof have the
right
to require the Company to repurchase such Capital Stock upon the occurrence
of a
Change of Control or an Asset Sale shall not constitute Disqualified Stock,
if
the terms of such Capital Stock provide that the Company may not repurchase
or
redeem any such Capital Stock pursuant to such provisions prior to the
Company’s
repurchase of such Notes as are required to be repurchased pursuant to
Section
4.10, 4.11 and Section 4.19.
“Equity
Interests” means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible
into,
or exchangeable for, Capital Stock).
“Event
of
Default” has the meaning set forth in Section 6.01.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exchange
Notes” means (1) the 12% Senior Secured Notes Due 2011 issued pursuant to this
Indenture in connection with a Registered Exchange Offer pursuant to a
Registration Rights Agreement and (2) Additional Notes, if any,
issued in
accordance with the terms of this Indenture pursuant to a registration
statement
filed with the SEC under the Securities Act.
“Exchange
Offer” has the meaning set forth in the Registration Rights
Agreement.
“Exchange
Offer Registration Statement” has the meaning set forth in the Registration
Rights Agreement.
“Existing
Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries
(other than Indebtedness under the Credit Agreement and Indebtedness being
repaid on the date of this Indenture) in existence on the date of this
Indenture, until such amounts are repaid.
“Fair
Market Value” means the price that would be paid in an arm’s-length transaction
between an informed and willing seller under no compulsion to sell and
an
informed and willing buyer under no compulsion to buy, as determined in
good
faith by the Board of Directors, whose determination shall be conclusive
if
evidenced by a Board Resolution.
16
“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 (v) 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 Company, as borrower, as “First Priority
Claims” for purposes of this Indenture, (c) all other Obligations of the
Company, as 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 New Credit Facility
Agent or the relevant First Priority Lender or First Priority Lenders under
such
First Priority Document shall have received a written representation from
the
Company, as borrower, in or in connection with such First Priority Document
that
such Obligation constitutes a “First Priority Claim” under and as defined in
this Indenture (whether or not such Obligation is at any time determined
not to
have been permitted to be incurred under the Indenture).
‘‘First
Priority Claim Period’’ means any period during which: (1) any First Priority
Claim is outstanding; (2) any commitments pursuant to which First Priority
Claims may be incurred are in effect; or (3) any letters of credit issued
under
any First Priority Documents are outstanding but have not been discharged
or
fully cash collateralized in accordance with the terms of the applicable
First
Priority Document.
‘‘First
Priority Collateral Documents’’ means any agreement, document or instrument
pursuant to which a Lien is granted securing any First Priority Claims
or under
which rights or remedies with respect to such Liens are governed.
17
“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 Liens’’ means all Liens that secure the First Priority
Claims.
“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.
“Four
Quarter Period” means, as of any date of determination, the four most recent
full fiscal quarters for which financial statements are available ending
prior
to the date of such determination.
“Future
Other First Lien Obligations” means all Obligations of the Company, as 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.
“GAAP”
means generally accepted accounting principles as in effect from time to
time
set forth in the opinions and pronouncements of the Accounting Principles
Board
of the American Institute of Certified Public Accountants, and statements
and
pronouncements of the Financial Accounting Standards Board, the Commission
or
the Public Company Accounting Oversight Board or in such other statements
by
such other entity as have been approved by a significant segment of the
accounting profession.
“Global
Note Legend” means the legend set forth in Section 2.06(d)(i)(C) hereof, which
is required to be placed on all Global Notes issued under this
Indenture.
“Global
Notes” means, individually and collectively, each of the Notes in permanent
global form substantially in the form of Exhibit A hereto, issued in accordance
with Section 2.01 hereof.
“Grantors”
means each of the Company and the Subsidiary Guarantors that has executed
and
delivered a First Priority Collateral Document or a Security
Document.
“Group”
means any group of related Persons for purposes of Section 13(d) of the
Exchange
Act.
18
“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner
including, without limitation, by way of a pledge of assets or through
letters
of credit or reimbursement agreements in respect thereof, of all or any
part of
any Indebtedness.
“Hedging
Obligations” of any Person means the obligations of such Person
under:
(1) interest
rate protection agreements, interest rate swap agreements, interest rate
cap
agreements and interest rate collar agreements, interest rate futures and
interest rate options;
(2) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates; and
(3) any
foreign exchange contract, currency swap agreement or other similar agreement
or
arrangement.
“Holder”
means the registered owner of any Note.
“Indebtedness”
means, with respect to any Person, any indebtedness of such Person, whether
or
not contingent, in respect of:
(1) borrowed
money;
(2) evidenced
by bonds, notes, debentures or similar instruments or letters of credit
(or
reimbursement agreements in respect thereof);
(3) banker’s
acceptances;
(4) Capital
Lease Obligations;
(5) the
balance deferred and unpaid of the purchase price of any property, except
any
such balance that constitutes an accrued expense or trade payable;
or
(6) any
Hedging Obligations;
if
and to
the extent any of the preceding items (other than letters of credit and
Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP. In addition, the term “Indebtedness” includes
all Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by such Person, the
amount
of such Indebtedness being deemed to be the lesser of the value of such
property
or asset or the amount of the Indebtedness so secured and, to the extent
not
otherwise included, the Guarantee by such Person of any Indebtedness of
any
other Person; provided that Indebtedness shall not include:
19
(x) any
amounts withheld by the Company or any Restricted Subsidiary from the purchase
price paid for the purchase of monitoring accounts;
(y) Indebtedness
in respect of letters of credit to support workers compensation obligations,
performance bonds, bankers’ acceptances and surety or appeal bonds provided by
the Company or any of its Restricted Subsidiaries to their customers in
the
ordinary course of the business; and
(z) Indebtedness
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guarantees or letters of credit,
surety
bonds or performance bonds securing any obligations of the Company or any
of its
Restricted Subsidiaries pursuant to such agreements, in each case incurred
in
connection with the disposition of any business assets or Restricted
Subsidiaries of the Company (other than guarantees of Indebtedness or other
obligations incurred by any Person acquiring all or any portion of such
business
assets or Restricted Subsidiaries of the Company for the purpose of financing
such acquisition) in a principal amount not to exceed the gross proceeds
actually received by the Company or any of its Restricted Subsidiaries
in
connection with such disposition.
The
amount of any Indebtedness outstanding as of any date shall be:
(1) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and
(2) the
principal amount thereof, together with any interest thereon that is more
than
30 days past due, in the case of any other Indebtedness.
“Indenture”
means this Indenture, as amended or supplemented from time to time.
“Indirect
Participant” means a Person who holds a beneficial interest in a Global Note
through a Participant.
“Initial
Notes” means (1) $125,000,000 aggregate principal amount of 12% Senior
Secured Notes due 2011 issued on the Issue Date and (2) Additional
Notes, if any, issued in accordance with the terms of the Indenture in
a
transaction exempt from the registration requirements of the Securities
Act.
“Initial
Purchasers” means (1) with respect to the Initial Notes issued on the Issue
Date, Xxxxxx Xxxxxx & Co. Inc., Xxxxx Fargo Securities, LLC and ABN AMRO
Incorporated and (2) with respect to each issuance of Additional
Notes, the
Persons purchasing such Additional Notes under the related Purchase
Agreement.
“Insolvency
Proceeding” has the meaning given to it in the Intercreditor
Agreement.
20
“Intercreditor
Agreement” means the Intercreditor Agreement, dated as of November 12, 2004, by
and among the New Credit Facility Agent, the Collateral Trustee and the
Company,
as borrower, as such agreement may be amended, modified or supplemented
from
time to time.
“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the forms of direct or indirect loans
(including guarantees of Indebtedness or other obligations) advances or
capital
contributions (excluding (1) commission, travel and similar advances to
officers
and employees made in the ordinary course of business and (2) advances
to
customers or suppliers in the ordinary course of business that are, in
conformity with GAAP recorded as accounts receivable, prepaid expenses
or
deposits on the balance sheets of the Company or its Restricted Subsidiaries),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities (other than Cash Equivalents), together with
all
items that are or would be classified as investments on a balance sheet
prepared
in accordance with GAAP; provided, however, that Investments shall not
include
the purchase of subscriber accounts or amounts owed to the Company by security
alarm dealers for subscriber accounts lost through attrition. If the Company
or
any Restricted Subsidiary of the Company sells or otherwise disposes of
any
Equity Interests of any direct or indirect Restricted Subsidiary of the
Company
such that, after giving effect to any such sale or disposition, such Person
is
no longer a Restricted Subsidiary of the Company, the Company shall be
deemed to
have made an Investment on the date of any such sale or disposition equal
to the
Fair Market Value of the Investment in such Restricted Subsidiary not sold
or
disposed of in an amount determined as provided in Section 4.07(c) hereof.
The
acquisition by the Company or any Restricted Subsidiary of a Person that
holds
an Investment in a third Person shall be deemed to be an Investment by
the
Company or such Restricted Subsidiary in such third Person in an amount
equal to
the Fair Market Value of the Investment held by the acquired Person in
such
third Person determined as provided in Section 4.07(c) hereof.
“Issue
Date” means November 16, 2004.
“Legal
Holiday” means a Saturday, a Sunday or a day on which banking institutions in
The City of New York or at a place of payment are authorized by law, regulation
or executive order to remain closed. If a payment date is a Legal Holiday
at a
place of payment, payment may be made at that place on the next succeeding
day
that is not a Legal Holiday, and no interest shall accrue on such payment
for
the intervening period.
“Letter
of Transmittal” means the letter of transmittal to be prepared by the Company
and sent to all Holders of the Notes for use by such Holders in connection
with
the Exchange Offer.
“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or
not
filed, recorded or otherwise perfected under applicable law, including
any
conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of
any
jurisdiction.
21
“Liquidated
Damages” means all liquidated damages then owing pursuant to Section 5 of the
Registration Rights Agreement.
“Moody’s”
means Xxxxx’x Investors Service, Inc. or any successor to the rating agency
business thereof.
“Net
Cash
Proceeds” with respect to any issuance or sale of Capital Stock or Indebtedness,
means the cash proceeds of such issuance or sale net of attorneys’ fees,
accountants’ fees, underwriters’ or placement agents’ fees, discounts or
commissions and brokerage, consultant and other fees actually incurred
in
connection with such issuance or sale and net of taxes paid or payable
as a
result thereof.
“Net
Income” means, with respect to any Person, the net income (loss) of such Person,
determined in accordance with GAAP.
“Net
Proceeds” means the aggregate cash proceeds received by the Company or any of
its Restricted Subsidiaries in respect of any Asset Sale (including payments
in
respect of deferred payment obligations when received in the form of cash),
net
of:
(1) reasonable
out-of-pocket expenses and fees relating to such Asset Sale, including,
without
limitation, legal, accounting and investment banking fees and sales commissions,
recording fees, relocation costs, title insurance premiums, appraisers’ fees and
costs reasonably incurred in preparation of any asset or property for
sale;
(2) taxes
paid or reasonably estimated to be payable (calculated based on the combined
state, federal and foreign statutory tax rates applicable to the Company
or the
Restricted Subsidiary engaged in such Asset Sale after taking into account
any
tax credits or deductions and any tax sharing arrangements);
(3)
all
payments made on any Indebtedness of the Company or any Subsidiary Guarantor
which is secured by any assets subject to such Asset Sale;
(4) all
distributions and other payments required to be made to any Person owning
a
beneficial interest in the assets subject to sale, or minority interest
holders
in Subsidiaries or joint ventures, as a result of such Asset Sale;
and
(5) any
reserves established in accordance with GAAP for adjustment in respect
of the
sales price of the asset or assets subject to such Asset Sale or for any
liabilities associated with such Asset Sale.
“New
Credit Facility Agent” means, at any time, the Person acting as “agent” or
“administrative agent” under the Credit Agreement.
“Non-Recourse
Debt” means Indebtedness:
22
(1) as
to
which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
(to a
Subsidiary Guarantor or otherwise) or (c) constitutes the lender;
and
(2) no
default with respect to which (including any rights that the holders thereof
may
have to take enforcement action against an Unrestricted Subsidiary) would
permit
(upon notice, lapse of time or both) any holder of any other Indebtedness
(other
than the Notes) of the Company or any of its Restricted Subsidiaries to
declare
a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.
“Note
Obligations” means
all
Guaranteed Obligations and all Obligations of any Subsidiary Guarantor
under
this Indenture, the Notes and the Collateral Documents.
“Notes”
means the 12% Senior Secured Notes due 2011 of the Company issued on the
date
hereof, any Additional Notes and the Exchange Notes. The Notes, the Additional
Notes, if any, and the Exchange Notes shall be treated as a single class
for all
purposes under this Indenture.
“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 or liquidation proceedings, 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 Hedging
Obligations.
“Officer”
means the Chief Executive Officer, the Chief Financial Officer, or any
Executive
Vice-President of the Company.
“Officers’
Certificate” means a certificate signed by two Officers of the Company, at least
one of whom shall be the principal executive officer or principal financial
officer of the Company, and delivered to the Trustee.
“Opinion
of Counsel” means a written opinion from legal counsel who is acceptable to the
Trustee. An Opinion of Counsel must meet the requirements of Section 13.04
of
this Indenture. The counsel may be an employee of or counsel to the Company
or
the Trustee.
“Participant”
means, with respect to the Depositary, a Person who has an account with
the
Depositary.
“Permitted
Business” means any business conducted by the Company and its Restricted
Subsidiaries on the date of this Indenture and other businesses reasonably
related, ancillary
or complementary thereto, as determined in good faith by the Company’s Board of
Directors.
23
“Permitted
Investment” means:
(1) any
Investment by the Company or a Restricted Subsidiary (whether existing
on the
Closing Date or created thereafter) in any Person that after such Investment,
and as a result thereof, becomes a Restricted Subsidiary;
(2) any
Investment in Cash Equivalents;
(3) any
Investment made as a result of the receipt of non-cash consideration from
a sale
of assets that was made pursuant to and in compliance with Section
4.11;
(4) any
Investments to the extent acquired in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company;
(5) Investments
in securities of trade creditors, wholesalers, suppliers or customers received
pursuant to any plan of reorganization or similar arrangement for obligations
arising in the ordinary course of business;
(6) loans
or
advances to employees of the Company or any Restricted Subsidiary thereof
for
purposes of purchasing from the Company its Capital Stock and loans and
advances
to dealers or independent contractors secured by alarm monitoring contracts
and
made in the ordinary course of business consistent with past practices
of the
Company or such Restricted Subsidiary, provided that any such loan or advances
shall be limited to the Fair Market Value of the alarm monitoring contracts
securing such loan or advance;
(7) receivables
owing to the Company or any of its Restricted Subsidiaries, if created
or
acquired in the ordinary course of business and payable or dischargeable
in
accordance with customary trade terms;
(8) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any of its Restricted
Subsidiaries or in satisfaction of judgments or claims;
(9) Hedging
Obligations incurred in compliance with Section 4.07 and not for speculative
purposes; and
(10) other
Investments in an amount not to exceed $2.0 million.
“Permitted
Liens” means:
(1) Liens
securing the Notes or the Subsidiary Guarantees;
(2) Liens
in
favor of the Company or any of its Wholly Owned Restricted
Subsidiaries;
24
(3) Liens
on
property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Restricted Subsidiary of the Company
or at
the time such Person becomes a Restricted Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such transaction
and do not extend to any assets other than those of the Person merged into
or
consolidated with the Company or the Restricted Subsidiary;
(4) Liens
on
property existing at the time of acquisition thereof by the Company or
any
Restricted Subsidiary of the Company, provided that such Liens were in
existence
prior to the contemplation of such acquisition;
(5) Liens
under the Credit Agreement;
(6) Liens
existing on the date of this Indenture;
(7) Liens
securing Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the
purpose
of financing all or any part of the purchase price or cost of construction
or
improvement of property or assets used in the Company’s or any Restricted
Subsidiary’s business or incurred to refinance any such purchase price or cost
of construction or improvement, in each case incurred no later than 365
days
after the date of such acquisition or the date of completion of such
construction or improvement; provided that the principal amount of any
Indebtedness described in this clause (6) shall not exceed $5.0 million
at any
time outstanding;
(8) Liens
for
property taxes, assessments and other governmental charges or levies not
yet
delinquent or subject to penalties for nonpayment or which are being contested
in good faith by appropriate proceedings;
(9) Liens
resulting from the deposit of funds or evidences of Indebtedness in trust
for
the purpose of defeasing Indebtedness of the Company or any of its
Subsidiaries;
(10) Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and other
similar Liens, on the assets of the Company or any Restricted Subsidiary
arising
in the ordinary course of business and securing payment of obligations
that are
not more than 60 days past due or are being contested in good faith by
appropriate proceedings;
(11) pledges
or deposits by the Company or any Restricted Subsidiary under workmen’s
compensation laws, unemployment insurance laws or similar legislation,
or good
faith deposits in connection with bids, tenders, contracts (other than
for the
payment of Indebtedness) or leases to which the Company or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations
of
the Company, or deposits for the payment of rent, in each case incurred
in the
ordinary course of business; and
25
(12) Liens
on
the assets of the Company or any Restricted Subsidiary to secure any Permitted
Refinancing Indebtedness, in whole or in part, of any Indebtedness secured
by
Liens; provided, however, that any such Lien shall be limited to the same
assets
that secured the original Indebtedness.
“Permitted
Refinancing Disqualified Stock” means any Disqualified Stock of the Company or
any of its Restricted Subsidiaries issued in exchange for or the net proceeds
of
which are used to repurchase or redeem other Disqualified Stock of the
Company
or such Restricted Subsidiary (other than intercompany Disqualified Stock);
provided that:
(1) the
liquidation preference of such Permitted Refinancing Disqualified Stock
does not
exceed the liquidation value, plus premiums, penalties and accrued dividends
on,
the Disqualified Stock so exchanged, repurchased or redeemed (plus the
amount of
reasonable expenses incurred in connection therewith);
(2) such
Permitted Refinancing Disqualified Stock has a redemption date no earlier
than
the redemption date of the Disqualified Stock being exchanged, repurchased
or
redeemed; and
(3) such
Permitted Refinancing Disqualified Stock is issued either by the Company
or by
the Restricted Subsidiary that issued the Disqualified Stock being exchanged,
repurchased or redeemed.
“Permitted
Refinancing Indebtedness” means any Indebtedness of the Company or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of
which are
used to extend, refinance, renew, replace, defease or refund other Indebtedness
of the Company or such Restricted Subsidiary (other than intercompany
Indebtedness); provided that:
(1) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus premiums, penalties and accrued interest on,
the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection
therewith);
(2) such
Permitted Refinancing Indebtedness has a final maturity date no earlier
than the
final maturity date, and a Weighted Average Life to Maturity equal to or
greater
than the Weighted Average Life to Maturity, of the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded;
(3) if
the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded
is (i) pari
passu
in right
of payment to the Notes or any Subsidiary Guarantee, such Permitted Refinancing
Indebtedness is pari
passu
with or
subordinated in right of payment to the Notes or any Subsidiary Guarantee,
(ii)
subordinated in right of payment to the Notes or any Subsidiary Guarantee,
such
Permitted Refinancing Indebtedness is subordinated in right of payment
to the
Notes or any Subsidiary
26
Guarantee
of the Notes, in each case on terms at least as favorable to the Holders
of
Notes as those contained in the documentation governing the Indebtedness
being
extended, refinanced, renewed, replaced, defeased or refunded, and (iii)
secured
liens securing such Permitted Refinancing Indebtedness do not extend
to any
assets other than those securing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(4) such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness be extended, refinanced, renewed,
replaced, defeased or refunded.
“Person”
means any individual, corporation, company (including any limited liability
company), association, partnership, joint venture, trust, unincorporated
organization, government or any agency or political subdivision thereof
or any
other entity.
“Pledge
Agreement”, means the Pledge Agreement, dated November 16, 2004, between
Integrated Alarm Services Group, as “Pledgor”, and Xxxxx Fargo Bank, N.A., as
collateral trustee for the Secured Parties (as defined therein).
“Preferred
Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect
to
dividends or redemptions or upon liquidation.
“Private
Exchange” means the issuance by the Company, pursuant to a Registration Rights
Agreement, to the Initial Purchasers, in exchange for the Initial Notes
held by
the Initial Purchaser as part of its initial distribution, of a like aggregate
principal amount of Private Exchange Notes.
“Private
Exchange Notes” means any 12% Senior Secured Notes due 2011 issued in connection
with a Private Exchange.
“Private
Placement Legend” means the legend set forth in Section 2.06(d)(i)(A) o be
placed on all Notes issued under this Indenture except where otherwise
permitted
by the provisions of this Indenture.
“Property”
means any right or interest in or to property of any kind whatsoever, whether
real, personal or mixed and whether tangible or intangible, and including
Capital Stock.
“Purchase
Agreement” means (1) with respect to the Initial Notes issued on the Issue
Date, the Purchase Agreement dated November 10, 2004, among the Company
and the
Initial Purchasers, and (2) with respect to each issuance of Additional
Notes, the purchase agreement or underwriting agreement among the Company
and
the Persons purchasing such Additional Notes.
27
‘‘Purchase
Suspension Period’’ means (i) the date on which the Company files its Quarterly
Report on Form 10-Q (with respect to its first three fiscal quarters) (or,
in
the event the Company is not required to or does not file any such Quarterly
Report with respect to a fiscal quarter, the 45th day after the end of
such
fiscal quarter) or the 45th day
after
the
end of its fourth fiscal quarter (with respect to the last fiscal quarter
of a
year) with respect to a Purchase Suspension Trigger to and including (ii)
the
next succeeding date on which the Company files a Quarterly Report on Form
10-Q
(with respect to its first three fiscal quarters) or the 45th day after
the end
of its fourth fiscal quarter (with respect to the last fiscal quarter of
a year)
(or, in the event the Company is not required to or does not file any such
report with respect to a fiscal period, the 45th day after the end of such
fiscal period) for which both its Weighted Average Retail Attrition Rate
and
Retail Attrition Rate are equal to or less than 18%.
“QIB”
means a “qualified institutional buyer” as defined in Rule 144A.
“Qualified
Consideration” means, with respect to any Asset Sale (or any other transaction
or series of related transactions required to comply with Section 4.11(a)(iii)),
any one or more of:
(1) Cash
Equivalents;
(2) securities,
notes or other obligations received by the Company or such Restricted Subsidiary
from the transferee that are contemporaneously (subject to ordinary settlement
periods) converted into cash;
(3) Indebtedness
(excluding contingent liabilities and Indebtedness that is pari
passu
or
subordinated to the Notes or any Subsidiary Guarantee, and Indebtedness
that is
owed to the Company or any Affiliate of the Company) of the Company or
any
Restricted Subsidiary that is expressly assumed by the transferee in an
Asset
Sale and with respect to which the Company or the Restricted Subsidiary,
as the
case may be, is unconditionally released by the holder of that Indebtedness;
and
(4) any
assets received by the Company or its Restricted Subsidiaries that would
satisfy
clause (ii) of Section 4.11(b) (provided that if such assets involve
consideration in excess of $5.0 million, the valuation of such assets has
been
approved by a majority of the members of the Board of Directors of the
Company
and, provided, further that if such assets involve consideration in excess
of
$15.0 million, the Board of Directors’ determination must be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing).
“Registered
Exchange Offer” means the offer by the Company, pursuant to the Registration
Rights Agreement, to certain Holders of Notes, to issue and deliver to
such
Holders, in exchange for the Notes, a like aggregate principal amount of
Exchange Notes registered under the Securities Act.
“Registration
Rights Agreement” means (1) with respect to the Initial Notes issued on the
Issue Date, the Registration Rights Agreement dated November 16, 2004,
among the
Company and the Initial Purchasers, and (2) with respect to each
issuance
of Additional Notes issued in a transaction exempt from the registration
requirements of the Securities Act, the registration rights agreement,
if any,
among the Company and the Persons purchasing such Additional Notes under
the
related Purchase Agreement.
“Representative”
means the indenture trustee or other trustee, agent or representative of
holders
of any Senior Debt.
28
“Responsible
Officer,” when used with respect to the Trustee, means any officer within the
Corporate Trust Administration of the Trustee (or any successor group of
the
Trustee) or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and
also
means, with respect to a particular corporate trust matter, any other officer
to
whom such matter is referred because of his knowledge of and familiarity
with
the particular subject.
“Restricted
Definitive Note” means a Definitive Note bearing the Private Placement
Legend.
“Restricted
Global Note” means a Global Note bearing Placement Legend.
“Restricted
Investment” means an Investment other than a Permitted Investment.
“Restricted
Payment” means:
(1) the
declaration or payment of any dividend or other payment or distribution
on
account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests
(including, without limitation, any payment in connection with any merger
or
consolidation involving the Company or any of its Restricted Subsidiaries)
or to
the direct or indirect holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such, other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock)
of
the Company or to the Company or a Restricted Subsidiary of the
Company;
(2) the
purchase, repurchase, redemption, acquisition or retirement for value
(including, without limitation, in connection with any merger or consolidation
involving the Company) of any Equity Interests of the Company or any Subsidiary
Guarantor (other than any such Equity Interests owned by the Company or
any
Restricted Subsidiary of the Company);
(3) the
making of any payment on or with respect to, or the purchase, redemption,
defeasance or other acquisition or retirement for value of, any Indebtedness
that is subordinated to the Notes, except (a) a payment of interest or
a payment
of principal at Stated Maturity or (b) the purchase, redemption, defeasance
or
other acquisition or retirement of such subordinated Indebtedness made
in
anticipation of satisfying a sinking fund obligation, principal installment
or
final maturity, in each case due within one year of the date of such purchase,
redemption, defeasance or other acquisition or retirement; or
(4) any
Restricted Investment.
“Restricted
Subsidiary” means any Subsidiary of the Company other than an Unrestricted
Subsidiary.
“Rule
144A” means Rule 144A promulgated under the Securities Act.
29
“S&P”
means Standard & Poor’s, a division of The XxXxxx-Xxxx Companies, Inc. or
any successor to the rating agency business thereof.
“Second
Priority Claims” means all Obligations in respect of the Notes or arising under
the Second Priority Documents or any of them.
“Second
Priority Documents” means (a) the Indenture, the Notes and the Collateral
Documents and (b) any other related documents or instruments executed and
delivered pursuant to any Second Priority Document described in clause
(a) above
evidencing or governing any Obligations thereunder.
“Second
Priority Liens” means all liens granted to the Collateral Trustee that secure
Second Priority Claims.
“Second
Priority Mortgages” means a collective reference to each mortgage, deed of
trust, deed to secure debt, and any other document or instrument under
which any
Lien on real property owned by any Grantor is granted to the Collateral
Trustee
secure any Second Priority Claims or under which rights or remedies with
respect
to any such Liens are governed.
“Securities
Act” means the Securities Act of 1933, as amended.
“Security
Agreement” means the Notes Security Agreement, dated as of November 16, 2004,
among the Debtors and (as defined therein) and the Collateral Trustee.
“Senior
Debt” means:
(1) all
Indebtedness of the Company or any Subsidiary Guarantor under the Credit
Agreement;
(2) any
other
Indebtedness of the Company or any Subsidiary Guarantor permitted to be
incurred
under the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with
or
subordinated in right of payment to the Notes or any Subsidiary Guarantee;
and
(3) all
Obligations with respect to the items listed in the preceding clauses (1)
and
(2) (including any interest accruing after the commencement of any bankruptcy
proceeding at the rate specified in the applicable Senior Debt, whether
or not
allowed as a claim in such proceeding).
Notwithstanding
anything to the contrary in the preceding, Senior Debt will not
include:
(1) any
liability for federal, state, local or other taxes owed or owing by such
Person;
(2) any
Indebtedness of the Company or any Subsidiary Guarantor to the Company
or any of
its Subsidiaries or Affiliates;
30
(3) any
trade
payables;
(4) any
amounts or liabilities owing to dealers from whom the Company purchases
subscriber accounts; or
(5) any
Indebtedness that is incurred in violation of this Indenture.
“Shelf
Registration Statement” means the registration statement filed by the Company in
connection with the offer and sale of Initial Notes or Private Exchange
Notes
pursuant to a Registration Rights Agreement.
“Stated
Maturity” means, with respect to any installment of interest or principal on any
series of Indebtedness, the date on which such payment of interest or principal
was scheduled to be paid in the original documentation governing such
Indebtedness, and shall not include any contingent obligations to repay,
redeem
or repurchase any such interest or principal prior to the date originally
scheduled for the payment thereof.
“Subordinated
Indebtedness” means any Indebtedness that has a Stated Maturity not earlier than
the Stated Maturity date of, and is subordinated in right of payment to,
the
Notes.
“Subsidiary”
means, with respect to any Person:
(1) any
corporation, association or other business entity of which more than 50%
of the
total voting power of shares of Capital Stock entitled (without regard
to the
occurrence of any contingency) to vote in the election of directors, managers
or
trustees thereof is at the time owned, directly or indirectly, by such
Person;
and
(2) any
other
Person (other than a corporation), including, without limitation, a partnership,
joint venture or limited liability company, in which the specified Person,
one
or more Subsidiaries thereof or the specified Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has or have at least a majority of the Voting Stock or other ownership
interests of such Person.
“Subsidiary
Guarantee” means a Guarantee of the Notes pursuant to this
Indenture.
“Subsidiary
Guarantors” means each Subsidiary that executes a Subsidiary Guarantee in
accordance with the provisions of this Indenture, and their respective
successors and assigns until released from their obligations under their
Guarantees in accordance with the terms of this Indenture
“TIA”
means the Trust Indenture Act of 1939, as in effect on the date on which
this
Indenture is qualified under the TIA.
“Transfer
Restricted Notes” means Notes that bear or are required to bear the Private
Placement Legend.
31
“Trustee”
means Xxxxx Fargo Bank, N.A., a national banking association, until a successor
replaces it in accordance with the applicable provisions of this Indenture
and
thereafter means the successor serving hereunder.
“Unrestricted
Subsidiary” means any Subsidiary of the Company that is designated by the Board
of Directors as an Unrestricted Subsidiary pursuant to a resolution of
the Board
of Directors, but only to the extent that such Subsidiary:
(1) has
no
Indebtedness other than Non-Recourse Debt; and
(2) is
a
Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (1) to subscribe for
additional Equity Interests or (2) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels
of
operating results.
“U.S.
Government Obligations” means direct obligations (or certificates representing
an ownership interest in such obligations) of the United States of America
(including any agency or instrumentality thereof) for the payment of which
the
full faith and credit of the United States of America is pledged and which
are
not callable or redeemable at the issuer’s option.
“Voting
Stock” with respect to any specified Person (1) means any class or classes of
Equity Interests of the specified Person pursuant to which the holders
thereof
have the general voting power under ordinary circumstances to elect at
least a
majority of the board of directors, partners, managers or trustees of the
specified Person (irrespective of whether or not, at the time, stock of
any
other class or classes have, or might have, voting power by reason of the
happening of any contingency) that control the management and policies
of such
Person, and (2) if such specified Person is a limited partnership, includes
the
general partner and limited partner interests of such Person.
“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at any date,
the number of years obtained by dividing:
(1) the
sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by
(b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between
such date and the making of such payment; by
(2) the
then
outstanding principal amount of such Indebtedness.
“Wholly
Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such
Person all the outstanding Capital Stock or other ownership interests of
which
(except directors’ qualifying shares) is at such time owned by such Person and
its other Wholly Owned Restricted Subsidiaries.
32
Section
1.02. Other
Definitions.
Term
|
Defined
in
Section
|
“Act”
|
12.14
|
“Affiliate
Transaction”
|
4.12
|
“Asset
Sale Offer”
|
4.11
|
“Authentication
Order”
|
2.02
|
“Cancelled
RMR”
|
4.10
|
“Change
of Control Offer”
|
4.19
|
“Change
of Control Payment”
|
4.19
|
“Change
of Control Payment Date”
|
4.19
|
“Covenant
Defeasance”
|
8.03
|
“Disqualified
RMR”
|
4.10
|
“DTC”
|
2.01
|
“Event
of Default”
|
6.01
|
“Excess
Proceeds”
|
4.10
|
“Guaranteed
Obligations”
|
11.01
|
“Incur”
|
4.07
|
“Legal
Defeasance”
|
8.02
|
“Offer
Amount”
|
3.07
|
“Offer
Period”
|
3.07
|
“Paying
Agent”
|
2.04
|
“Payment
Default”
|
6.01
|
“Permitted
Debt”
|
4.07
|
“Purchase
Date”
|
3.07
|
‘‘Purchase
Suspension Trigger’’
|
4.14
|
“Qualified
RMR”
|
4.10
|
“Registrar”
|
2.04
|
“Related
Proceedings”
|
12.09
|
“Replacement
Assets”
|
|
“Replacement
RMR”
|
4.10
|
“Repurchase
Offer”
|
3.07
|
“Retail
Attrition Rate”
|
4.10
|
“Retail
Attrition Rate Trigger Event”
|
4.10
|
“RMR”
|
4.10
|
“Specified
Courts”
|
12.09
|
‘‘Trigger
Determination Date’’
|
4.10
|
“Weighted
Average Retail Attrition Rate”
|
4.10
|
“Weighted
Average Retail Attrition Rate Trigger Event”
|
4.10
|
33
Section
1.03. Incorporation
by Reference of Trust Indenture Act.
Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture.
The
following TIA terms used in this Indenture have the following
meanings:
“indenture
securities” means the Notes;
“indenture
security Holder” means a Holder of a Note;
“indenture
to be qualified” means this Indenture;
“indenture
trustee” or “institutional trustee” means the Trustee; and
“obligor”
on the Notes means the Company and any successor obligor upon the
Notes.
All
other
terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule under the TIA
have
the meanings so assigned to them.
Section
1.04. Rules
of Construction.
(a) Unless
the context otherwise requires:
(i) a
term
has the meaning assigned to it;
(ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(iii) “or”
is
not exclusive;
(iv) words
in
the singular include the plural, and in the plural include the
singular;
(v) provisions
apply to successive events and transactions; and
(vi) references
to sections of or rules under the Securities Act shall be deemed to include
substitute, replacement of successor sections or rules adopted by the Commission
from time to time.
34
ARTICLE
TWO
Section
2.01. Form
and Dating.
(a) The
Initial Notes issued on the Issue Date will be offered and sold by the
Company
pursuant to a Purchase Agreement. The Initial Notes issued on the Issue
Date
will be resold initially only to QIBs in reliance on Rule 144A and
to a
limited number of institutional “accredited investors” as defined in Rule
501(a)(1), (2), (3) and (7) under the Securities Act. Initial Notes shall
be
issued initially in the form of one or more Global Notes without interest
coupons and with the Global Note Legend and the Private Placement Legend,
which
shall be deposited on behalf of the purchasers of the Initial Notes represented
thereby with the Custodian and registered in the name of the Depositary
or a
nominee of the Depositary, duly executed by the Company and authenticated
by the
Trustee as provided in this Indenture.
(b) The
Initial Notes, the Exchange Notes, the Private Exchange Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit
A
which is hereby incorporated in, and expressly made a part of, this Indenture.
The Notes may have notations, legends or endorsements required by law,
stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). Each Note shall be dated the date of its authentication.
The
terms of the Notes set forth in Exhibit A are part of the terms
of this
Indenture.
(c) This
Section 2.01(c) shall apply only to a Global Note deposited with
or on
behalf of the Depositary. The Company shall execute and the Trustee shall,
in
accordance with this Section 2.01(b), authenticate and deliver initially
one or more Global Notes that (a) shall be registered in the name
of the
Depositary for such Global Note or Global Notes or the nominee of such
Depositary and (b) shall be delivered by the Trustee to such Depositary
or
pursuant to such Depositary's instructions or held by the Trustee as custodian
for the Depositary. Indirect Participants and Participants shall have no
rights
under this Indenture with respect to any Global Note held on their behalf
by the
Depositary or by the Trustee as the custodian of the Depositary or under
such
Global Note, and the Company, the Trustee and any agent of the Company
or the
Trustee shall be entitled to treat the Depositary as the absolute owner
of such
Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing
herein shall prevent the Company, the Trustee or any agent of the Company
or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Participants, the operation of customary practices of such Depositary
governing the exercise of the rights of a holder of a beneficial interest
in any
Global Note.
(d) Except
as
provided in this Section 2.01 or 2.06, owners of beneficial interests in
Global
Notes shall not be entitled to receive interests in, or physical delivery
of,
Definitive Notes.
35
Section
2.02. Execution
and Authentication.
Two
Officers of the Company shall sign the Notes by manual or facsimile signature.
If
an
Officer whose signature is on a Note no longer holds that office at the
time the
Trustee authenticates the Note, the Note shall be valid
nevertheless.
A
Note
shall not be valid until an authorized signatory of the Trustee manually
signs
the certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.
The
Trustee may appoint an authenticating agent reasonably acceptable to the
Company
to authenticate the Notes. Unless limited by the terms of such appointment,
an
authenticating agent may authenticate Notes whenever the Trustee may do
so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights
as any
Registrar, Paying Agent or agent for service of notices and
demands.
The
Trustee shall authenticate and deliver: (1) on the Issue Date, an
aggregate
principal amount of $125,000,000 12% Senior Secured Notes due 2011,
(2) any Additional Notes for an original issue in an aggregate principal
amount specified in the written order of the Company pursuant to this Section
2.02 and (3) Exchange Notes or Private Exchange Notes for issue
only in a
Registered Exchange Offer or a Private Exchange, respectively, pursuant
to a
Registration Rights Agreement, for a like principal amount of Initial Notes
issued on the Issue Date, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer
or an
Assistant Secretary of the Company. Such order shall specify the amount
of the
Notes to be authenticated and the date on which the original issue of Notes
is
to be authenticated and, in the case of any issuance of Additional Notes
pursuant to Section 2.13, shall certify that such issuance is in
compliance
with Section 4.07.
Section
2.03. Registrar
and Paying Agent.
(a) The
Company shall maintain an office or agency where Notes may be presented
for
registration of transfer or for exchange (“Registrar”) and an office or agency
where Notes may be presented for payment (“Paying Agent”). The Registrar shall
keep a register of the Notes and of their transfer and exchange. The Company
may
appoint one or more co-registrars and one or more additional paying agents.
The
term “Registrar” includes any co-registrar and the term “Paying Agent” includes
any additional paying agent. The Company may change any Paying Agent or
Registrar without prior notice to any Holder. The Company shall notify
the
Trustee in writing of the name and address of any Agent not a party to
this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or
any of
its Subsidiaries may act as Paying Agent or Registrar.
(b) The
Company initially appoints DTC to act as Depositary with respect to the
Global
Notes.
36
(c) The
Company initially appoints the Trustee to act as the Registrar and Paying
Agent
and to act as Custodian with respect to the Global Notes.
Section
2.04. Paying
Agent to Hold Money in Trust.
On
or
prior to 11:00 AM New York City time on each due date of the principal
and
interest on any Note, the Company shall deposit with the Paying Agent a
sum
sufficient to pay such principal and interest when so becoming due. The
Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that the Paying Agent shall hold in trust for the benefit of Noteholders
or the
Trustee all money held by the Paying Agent for the payment of principal
of or
interest on the Notes and shall notify the Trustee of any default by the
Company
in making any such payment. If the Company or a Subsidiary acts as Paying
Agent,
it shall segregate the money held by it as Paying Agent and hold it as
a
separate trust fund. The Company at any time may require a Paying Agent
to pay
all money held by it to the Trustee and to account for any funds disbursed
by
the Paying Agent. Upon complying with this Section 2.04, the Paying Agent
shall
have no further liability for the money delivered to the Trustee.
Section
2.05. Holder
Lists.
The
Trustee shall preserve in as current a form as is reasonably practicable
the
most recent list available to it of the names and addresses of Noteholders.
If
the Trustee is not the Registrar, the Company shall furnish, or cause the
Registrar to furnish, to the Trustee, in writing at least five Business
Days
before each interest payment date and at such other times as the Trustee
may
request in writing, a list in such form and as of such date as the Trustee
may
reasonably require of the names and addresses of Noteholders.
Section
2.06. Transfer
and Exchange.
(a) When
Definitive Notes are presented to the Registrar with a request:
(i) to
register the transfer of such Definitive Notes; or
(ii) to
exchange such Definitive Notes for an equal principal amount of Definitive
Notes
of other authorized denominations,
the
Registrar shall register the transfer or make the exchange as requested
if its
reasonable requirements for such transaction are met; provided,
however,
that
the Definitive Notes surrendered for transfer or exchange:
(i) shall
be
duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, duly executed
by the
Holder thereof or its attorney duly authorized in writing; and
(ii) if
such
Definitive Notes are required to bear a Private Placement Legend, they
are being
transferred or exchanged pursuant to an effective registration
37
statement
under the Securities Act, pursuant to clause (A), (B) or (C) below, and
are
accompanied by the following additional information and documents, as
applicable:
(A) if
such
Definitive Notes are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer, a certification
from
such Holder to that effect; or
(B) if
such
Definitive Notes are being transferred to the Company, a certification
to that
effect; or
(C) if
such
Definitive Notes are being transferred (x) pursuant to an exemption from
registration in accordance with Rule 144A or Rule 144 under the Securities
Act;
or (y) in reliance upon another exemption from the requirements of the
Securities Act: (i) a certification to that effect (in the form set forth
on the
reverse of the Security) and (ii) if the Company so requests, an opinion
of
counsel or other evidence reasonably satisfactory to it as to the compliance
with the restrictions set forth in the Private Placement Legend.
(b) A Definitive
Security may not be exchanged for a beneficial interest in a Global
Security
(c) A
Global
Note may not be transferred as a whole except by the Depositary to a nominee
of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
In
the
event that Global Note is exchanged for Definitive Notes, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be exchanged
only in accordance with such procedures as are substantially consistent
with the
provisions of this Section 2.3 (including the certification requirements
set forth on the reverse of the Initial Notes intended to ensure that such
transfers comply with Rule 144A or another applicable exemption under the
Securities Act, as the case may be) and such other procedures as may from
time
to time be adopted by the Company.
(d) (i)(A) Except
as
permitted by the following paragraphs (ii), (iii) and (iv), each
certificate evidencing the Global Notes (and all Notes issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially
the
following form:
THIS
NOTE
(OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT
PROVIDED BY RULE 144A THEREUNDER.
38
THE
HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS
NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
TO THE
COMPANY, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (III) PURSUANT TO
AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV),
IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO
IN (A) ABOVE.
(B) Each
Definitive Security shall also bear the following additional
legend:
IN
CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
(C) Each
Global Note shall bear the following legend:
THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT
TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE, (III)
THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION
2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
(ii) Upon
any
sale or transfer of a Transfer Restricted Security Note (including any
Transfer
Restricted Note represented by a Global Note) pursuant to Rule 144 under
the
Securities Act, the Registrar shall permit the transferee thereof to exchange
such Transfer Restricted Note for a Definitive Note that does not bear
the
legend set forth above and rescind any restriction on the transfer of such
Transfer Restricted Note, if the transferor thereof certifies in writing
to the
Registrar that such sale or transfer was made in
reliance on Rule 144 (such certification to be in the form set forth
on the
reverse of the Note).
39
(iii) After
a
transfer of any Initial Notes or Private Exchange Notes pursuant to and
during
the period of the effectiveness of a Shelf Registration Statement with
respect
to such Initial Notes or Private Exchange Notes, as the case may be, all
requirements pertaining to legends on such Initial Notes or such Private
Exchange Notes will cease to apply, the requirements requiring any such
Initial
Notes or such Private Exchange Notes issued to certain Holders be issued
in
global form will cease to apply, and a certificated Initial Note or Private
Exchange Note or an Initial Note or Private Exchange Note in global form,
in
each case without restrictive transfer legends, will be available to the
transferee of the Holder of such Initial Note or Private Exchange Note
upon
exchange of such transferring Holder's certificated Initial Note or Private
Exchange Note or directions to transfer such Holder's interest in the Global
Note, as applicable.
(iv) Upon
the
consummation of a Registered Exchange Offer with respect to the Initial
Notes,
all requirements pertaining to such Initial Notes that Initial Notes issued
to
certain Holders be issued in global form will still apply with respect
to
Holders of such Initial Notes that do not exchange their Initial Notes,
and
Exchange Notes in certificated or global form, in each case without the
Private
Placement Legend will be available to Holders that exchange such Initial
Notes
in such Registered Exchange Offer.
(v) Upon
the
consummation of a Private Exchange with respect to the Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued
to
certain Holders be issued in global form will still apply with respect
to
Holders of such Initial Notes that do not exchange their Initial Notes,
and
Private Exchange Notes in global form with the Global Security Legend and
Private Placement Legend hereto will be available to Holders that exchange
such
Initial Notes in such Private Exchange.
(e) At
such
time as all beneficial interests in a Global Note have either been exchanged
for
Definitive Notes, redeemed, purchased or canceled, such Global Note shall
be
returned to the Depositary for cancellation or retained and canceled by
the
Trustee. At any time prior to such cancellation, if any beneficial interest
in a
Global Note is exchanged for Definitive Notes, redeemed, purchased or canceled,
the principal amount of Notes represented by such Global Note shall be
reduced
and an adjustment shall be made on the books and records of the Trustee
(if it
is then the Custodian for such Global Note) with respect to such Global
Note, by
the Trustee or the Custodian, to reflect such reduction.
(f) The
Trustee shall have no responsibility or obligation to any beneficial owner
of a
Global Note, a member of, or a participant in the Depositary or other Person
with respect to the accuracy of the records of the Depositary or its nominee
or
of any participant or member thereof, with respect to any ownership interest
in
the Notes or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depositary) of any notice (including
any
notice of redemption) or the payment of any amount, under or with respect
to
such Notes. All notices and communications to be given to the Holders and
all
payments to be made to Holders under the Notes shall be given or
40
made
only
to or upon the order of the registered Holders (which shall be the Depositary
or
its nominee in the case of a Global Note). The rights of beneficial owners
in
any Global Note shall be exercised only through the Depositary subject
to the
applicable rules and procedures of the Depositary. The Trustee may rely
and
shall be fully protected in relying upon information furnished by the
Depositary
with respect to its members, participants and any beneficial
owners.
The
Trustee shall have no obligation or duty to monitor, determine or inquire
as to
compliance with any restrictions on transfer imposed under this Indenture
or
under applicable law with respect to any transfer of any interest in any
Note
(including any transfers between or among Depositary participants, members
or
beneficial owners in any Global Note) other than to require delivery of
such
certificates and other documentation or evidence as are expressly required
by,
and to do so if and when expressly required by, the terms of this Indenture,
and
to examine the same to determine substantial compliance as to form with
the
express requirements hereof.
(g) A
Global
Note deposited with the Depositary or with the Trustee as Custodian for
the
Depositary pursuant to Section 2.1 shall be transferred to the beneficial
owners thereof in the form of Definitive Notes in an aggregate principal
amount
equal to the principal amount of such Global Note, in exchange for such
Global
Note, only if such transfer complies with Section 2.06 hereof and
(i) the Depository notifies the Company that it is unwilling or
unable to
continue as Depositary for such Global Note and the Depositary fails to
appoint
a successor depository or if at any time such Depositary ceases to be a
“clearing agency” registered under the Exchange Act, in either case, and a
successor depository is not appointed by the Company within 90 days
of such
notice, or (ii) an Event of Default has occurred and is continuing
or (iii)
the Company, in its sole discretion, notifies the Trustee in writing that
it
elects to cause the issuance of Definitive Notes under this
Indenture.
Any
Global Note that is transferable to the beneficial owners thereof pursuant
to
this Section 2.06(g) shall be surrendered by the Depositary to the
Trustee
located at its principal corporate trust office in the Borough of Manhattan,
The
City of New York, to be so transferred, in whole or from time to time in
part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations. Any portion of
a Global
Note transferred pursuant to this Section 2.06(g) shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount
and
any integral multiple thereof and registered in such names as the Depositary
shall direct. Any Definitive Note delivered in exchange for an interest
in the
Transfer Restricted Note shall, except as otherwise provided by
Section 2.06(d) hereof, bear the applicable legend.
Subject
to the provisions of this Section 2.06, the registered Holder of
a Global
Note shall be entitled to grant proxies and otherwise authorize any Person,
including Participants and Indirect Participants, to take any action which
a
Holder is entitled to take under this Indenture or the Notes.
In
the
event of the occurrence of one of the events specified in this
Section 2.06(g), the Company shall promptly make available to the
Trustee a
reasonable supply of Definitive Notes in definitive, fully registered form
without interest coupons. In the event that such
Definitive Notes are not issued, the Company expressly acknowledges, with
respect to the right of any Holder to pursue a remedy under this Indenture,
the
right of any beneficial owner of Notes to pursue such remedy with respect
to the
portion of the Global Note that represents such beneficial owner's Notes
as if
such Definitive Notes had been issued.
41
Section
2.07. Replacement
Notes.
If
a
mutilated Note is surrendered to the Registrar or if the Holder of a Note
claims
that the Note has been lost, destroyed or wrongfully taken, the Company
shall
issue and the Trustee shall authenticate a replacement Note if the requirements
of Section 8-405 of the Uniform Commercial Code are met and the
Holder
satisfies any other reasonable requirements of the Trustee. If required
by the
Trustee or the Company, such Holder shall furnish an indemnity bond sufficient
in the judgment of the Company and the Trustee to protect the Company,
the
Trustee, the Paying Agent, the Registrar and any co-registrar from any
loss
which any of them may suffer if a Note is replaced. The Company and the
Trustee
may charge the Holder for their expenses in replacing a Note.
Every
replacement Note is an additional Obligation of the Company.
Section
2.08. Outstanding
Notes.
Notes
outstanding at any time are all Notes authenticated by the Trustee except
for
those canceled by it, those delivered to it for cancellation and those
described
in this Section 2.08 as not outstanding. A Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
If
a Note
is replaced pursuant to Section 2.07, it ceases to be outstanding
unless
the Trustee and the Company receive proof satisfactory to them that the
replaced
Note is held by a bona fide
purchaser.
If
the
Paying Agent segregates and holds in trust, in accordance with this Indenture,
on a redemption date or maturity date money sufficient to pay all principal
and
interest payable on that date with respect to the Notes (or portions thereof)
to
be redeemed or maturing, as the case may be, and the Paying Agent is not
prohibited from paying such money to the Noteholders on that date pursuant
to
the terms of this Indenture, then
on
and after that date such Notes (or portions thereof) cease to be outstanding
and
interest on them ceases to accrue.
Section
2.09. Temporary
Notes.
Until
definitive Notes are ready for delivery, the Company may prepare and the
Trustee
shall authenticate temporary Notes. Temporary Notes shall be substantially
in
the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company
shall
prepare and the Trustee shall authenticate definitive Notes and deliver
them in
exchange for temporary Notes upon surrender of such temporary Notes at
the
office or agency of the Company, without charge to the Holder.
42
Section
2.10. Cancellation.
The
Company at any time may deliver Notes to the Trustee for cancellation.
The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment.
The
Trustee and no one else shall cancel and destroy (subject to the record
retention requirements of the Exchange Act) all Notes surrendered for
registration of transfer, exchange, payment or cancellation and deliver
a
certificate of such destruction to the Company unless the Company directs
the
Trustee to deliver copies of canceled Notes to the Company. The Company
may not
issue new Notes to replace Notes they have redeemed, paid or delivered
to the
Trustee for cancellation.
Section
2.11. Defaulted
Interest.
If
the
Company defaults in a payment of interest on the Notes, the Company shall
pay
defaulted interest (plus interest on such defaulted interest to the extent
lawful) in any lawful manner. The Company may pay the defaulted interest
to the
persons who are Noteholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment
date to
the reasonable satisfaction of the Trustee and shall promptly mail or cause
to
be mailed to each Noteholder a notice that states the special record date,
the
payment date and the amount of defaulted interest to be paid.
Section
2.12. CUSIP
Numbers.
The
Company in issuing the Notes may use “CUSIP” numbers (if then generally in use)
and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a
convenience to Holders; provided,
however,
that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice
of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected
by
any defect in or omission of such numbers.
Section
2.13. Issuance
of Additional Notes.
After
the
Issue Date, the Company shall be entitled, subject to compliance with
Section 4.07, to issue Additional Notes under this Indenture, which
Notes
shall have identical terms as the Initial Notes issued on the Issue Date,
other
than with respect to the date of issuance and issue price. All the Notes
issued
under this Indenture shall be treated as a single class for all purposes
of this
Indenture including waivers, amendments, redemptions and offers to purchase.
Any
Additional Notes subsequently issued will be secured, equally and ratably
with
the Notes, by the Second Priority Liens on the Collateral. As a result,
the
issuance of any Additional Notes will have the effect of diluting the value
of
the security interest in the Collateral for the then outstanding
Notes.
With
respect to any Additional Notes, the Company shall set forth in a resolution
of
its Board of Directors and an Officers' Certificate, a copy of each which
shall
be delivered to the Trustee, the following information:
43
(i) the
aggregate principal amount of such Additional Notes to be authenticated
and delivered pursuant to this Indenture and the provision of Section 4.07
that
the
Company is relying on to issue such Additional Notes; and
(ii) the
issue
price, the issue date and the CUSIP number of such Additional Notes;
provided,
however,
that no
Additional Notes may be issued at a price that would cause such Additional
Notes
to have more than a de minimis amount of “original issue discount” within the
meaning of Section 1273 of the Code.
ARTICLE
THREE
Section
3.01. Notices
to Trustee.
If
the
Company elects to redeem the Notes pursuant to the optional redemption
provisions set forth in the Notes, it shall furnish to the Trustee, at
least 30
days but not more than 60 days before a redemption date, an Officers’
Certificate setting forth (i) the provision of the Notes pursuant to which
the
redemption shall occur, (ii) the redemption date, (iii) the principal amount
of
Notes to be redeemed and (iv) the redemption price.
Section
3.02. Selection
of Notes to Be Redeemed.
(a) If
less
than all of the Notes are to be redeemed at any time, the Trustee shall
select
the Notes to be redeemed among the Holders of the Notes in compliance with
the
requirements of the principal national securities exchange, if any, on
which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis,
by lot
or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular
Notes to
be redeemed shall be selected, unless otherwise provided herein, not less
than
30 nor more than 60 days prior to the redemption date by the Trustee from
the
outstanding Notes not previously called for redemption.
(b) The
Trustee shall promptly notify the Company in writing of the Notes selected
for
redemption and, in the case of any Note selected for partial redemption,
the
principal amount at maturity thereof to be redeemed. No Notes in amounts
of
$1,000 or less shall be redeemed in part. Notes and portions of Notes selected
shall be in amounts of $1,000 or whole multiples of $1,000; except that
if all
of the Notes of a Holder are to be redeemed, the entire outstanding amount
of
Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.
Except as provided in the preceding sentence, provisions of this Indenture
that
apply to Notes called for redemption also apply to portions of Notes called
for
redemption.
44
Section
3.03. Notice
of Redemption.
(a) At
least
30 days but not more than 60 days before a redemption date, the Company
shall
mail or cause to be mailed, by first class mail, a notice of redemption
to each
Holder whose Notes are to be redeemed at its registered address.
(b) The
notice shall identify the Notes to be redeemed and shall state:
(i) the
redemption date;
(ii) the
redemption price;
(iii) if
any
Note is being redeemed in part, the portion of the principal amount at
maturity
of such Note to be redeemed and that, after the redemption date upon surrender
of such Note, a new Note or Notes in principal amount equal to the unredeemed
portion of the original Note shall be issued in the name of the Holder
thereof
upon cancellation of the original Note;
(iv) the
name
and address of the Paying Agent;
(v) that
Notes called for redemption must be surrendered to the Paying Agent to
collect
the redemption price and become due on the date fixed for
redemption;
(vi) that,
unless the Company defaults in making such redemption payment, interest,
if any,
on Notes called for redemption ceases to accrue on and after the redemption
date;
(vii) the
paragraph of the Notes and/or Section of this Indenture pursuant to which
the
Notes called for redemption are being redeemed; and
(viii) that
no
representation is made as to the correctness or accuracy of the CUSIP number,
if
any, listed in such notice or printed on the Notes.
(c) At
the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at its expense; provided, however, that the Company shall
have delivered to the Trustee, at least 45 days prior to the redemption
date, an
Officers’ Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph. The notice, if mailed in the manner provided herein shall be
presumed
to have been given, whether or not the Holder receives such notice.
Section
3.04. Effect
of Notice of Redemption.
Once
notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes
called for redemption become irrevocably due and payable on the redemption
date
at the redemption price. A notice of redemption may not be
conditional.
45
Section
3.05. Deposit
of Redemption Price.
(a) One
Business Day prior to the redemption date, the Company shall deposit with
the
Trustee or with the Paying Agent money sufficient to pay the redemption
price of
and accrued interest and Liquidated Damages, if any, on all Notes to be
redeemed
on that date. The Trustee or the Paying Agent shall promptly return to
the
Company any money deposited with the
(b) Trustee
or the Paying Agent by the Company in excess of the amounts necessary to
pay the
redemption price of, and accrued interest on, all Notes to be
redeemed.
(c) If
the
Company complies with the provisions of the preceding paragraph, on and
after
the redemption date, interest shall cease to accrue on the Notes or the
portions
of Notes called for redemption. If a note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then
any
accrued and unpaid interest shall be paid to the Person in whose name such
Note
was registered at the close of business on such record date. If any Note
called
for redemption shall not be so paid upon surrender for redemption because
of the
failure of the Company to comply with the preceding paragraph, interest
shall be
paid on the unpaid principal, from the redemption date until such principal
is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section
4.01
hereof.
Section
3.06. Notes
Redeemed in Part.
Upon
surrender of a Note that is redeemed in part, the Company shall issue and
the
Trustee shall authenticate for the Holder at the expense of the Company
a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered. No Notes in denominations of $1,000 or less shall be redeemed
in
part.
Section
3.07. Repurchase
Offers.
In
the
event that, pursuant to Section 4.10, 4.11 or 4.19 hereof, the Company
shall be
required to commence an offer to all Holders to purchase their respective
Notes
(a “Repurchase Offer”), it shall follow the procedures specified in such
Sections and, to the extent not inconsistent therewith, the procedures
specified
below.
The
Repurchase Offer shall remain open for a period of no less than 30 days
and no
more than 90 days following its commencement, except to the extent that
a longer
period is required by applicable law (the “Offer Period”). No later than three
Business Days after the termination of the offer Period (the “Purchase Date”),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10, 4.11 or Section 4.19 hereof (the “Offer
Amount”) or, if less than the Offer Amount has been tendered, all Notes tendered
in response to the Repurchase Offer. Payment for any Notes so purchased
shall be
made in the same manner as interest payments are made.
If
the
Purchase Date is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest and Liquidated
Damages, if any, shall be paid to the Person in whose name a Note is registered
at the close of business on such record date, and no additional interest
or
Liquidated Damages shall be payable to Holders who tender Notes pursuant
to the
Repurchase Offer.
Upon
the
commencement of a Repurchase Offer, the Company shall send, by first class
mail,
a notice to the Trustee and each of the Holders. The notice shall contain
all
instructions and matters necessary to enable such Holders to tender Notes
pursuant to the Repurchase Offer. The Repurchase Offer shall be made to
all
Holders. The notice, which shall govern the terms of the Repurchase Offer,
shall
state:
46
(i) that
the
Repurchase Offer is being made pursuant to this Section 3.07 and Section
4.10, 4.11 or Section 4.19
hereof,
and the length of time the Repurchase Offer shall remain open;
(ii) the
Offer
Amount, the purchase price and the Purchase Date;
(iii) that
any
Note not tendered or accepted for payment shall continue to accrue interest
and
Liquidated Damages, if any;
(iv) that,
unless the Company defaults in making such payment, any Note (or portion
thereof) accepted for payment pursuant to the Repurchase Offer shall cease
to
accrue interest and Liquidated Damages, if any, after the Purchase
Date;
(v) that
Holders electing to have a Note purchase pursuant to a Repurchase offer
may
elect to have Notes purchased in integral multiples of $1,000 only;
(vi) that
Holders electing to have a Note purchased pursuant to any Repurchase Offer
shall
be required to surrender the Note, with the form entitled “Option of Holder to
Elect Purchase” on the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a depositary, if appointed by the Company, or
a Paying
Agent at the address specified in the notice at least three days before
the
Purchase Date;
(vii) that
Holders shall be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later
than the
expiration of the Offer Period, a telegram, telex, facsimile transmission
or
letter setting forth the name of the Holder, the principal amount of the
Note
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(viii) that,
if
the aggregate amount of Notes surrendered by Holders exceeds the Offer
Amount,
the Trustee shall, subject in the case of a Repurchase offer made pursuant
to Section
4.10, 4.11 or Section 4.19, select the Notes to be purchased on a pro rata
basis
(with such adjustments as may be deemed appropriate by the Trustee so that
only
Notes in denominations of $1,000, or integral multiples thereof, shall
be
purchased); and
(ix) that
Holders whose Notes were purchased only in part shall be issued new Notes
equal
in principal amount to the unpurchased portion of the Notes surrendered
(or
transferred by book-entry transfer).
47
On
the
Purchase Date, the Company shall, to the extent lawful, subject in the
case of a
Repurchase Offer made pursuant to Section 4.10, 4.11 or Section 4.19,
accept
for payment on a pro rata basis to the extent necessary, the Offer Amount
of
Notes (or portions thereof) tendered pursuant to the Repurchase offer,
or if
less than the Offer Amount has been tendered, all Notes tendered, and shall
deliver to the Trustee an Officers’ Certificate stating that such Notes (or
portions thereof) were accepted for payment by the Company in accordance
with
the terms of this Section 3.07. The Company, the Depositary or the Paying
Agent,
as the case may be, shall promptly
(but in any case not later than three days after the Purchase Date) mail
or
deliver to each tendering Holder an amount equal to the purchase price
of Notes
tendered by such Holder, as the case may be, and accepted by the Company
for
purchase, and the Company, shall promptly issue a new Note. The Trustee,
upon
written request from the Company shall authenticate and mail or deliver
such new
Note to such Holder, in a principal amount at maturity equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the respective Holder thereof. The
Company
shall publicly announce the results of the Repurchase Offer on the Purchase
Date.
The
Company shall comply, to the extent applicable, with the requirements of
Section
14(e) of the Exchange Act, and any other securities laws and regulations
to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to a Repurchase Offer. To the extent that the provisions
of any securities laws or regulations conflict the provisions of this Section
3.07, Section 4.10, 4.11 or Section 4.19, the Company shall comply with
the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 3.07, 4.10, 4.11 or 4.19 by virtue
of
such compliance.
ARTICLE
FOUR
Section
4.01. Payment
of Notes.
(a) The
Company shall pay or cause to be paid the principal of, premium, if any,
and
interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the
date
due if the Paying Agent, if other than the Company or one of its Subsidiaries,
holds as of 11:00 a.m. Eastern Time on the due date money deposited by
the
Company in immediately available funds and designated for and sufficient
to pay
all principal, premium, if any, and interest then due. The Company shall
pay all
Liquidated Damages, if any, in the same manner on the dates and in the
amounts
set forth in the Registration Rights Agreement.
(b) The
Company shall, subject to applicable law, pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal
at the
rate equal to 1% per annum in excess of the then applicable interest rate
on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments
of
interest, and Liquidated Damages (without regard to any applicable grace
period)
at the same rate to the extent lawful.
Section
4.02. Maintenance
of Office or Agency.
(a) The
Company shall maintain in the Borough of Manhattan, The City of New York,
an
office or agency (which may be an office of the Trustee or an agent of
the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands
to or
upon the Company in respect of the Notes and this Indenture may be served.
The
Company shall give prompt written notice to the Trustee of the location,
and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail
to
furnish the
48
(b) Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee.
(c) The
Company may also from time to time designate one or more other offices
or
agencies where the Notes may be presented or surrendered for any or all
such
purposes and may from time to time rescind such designations; provided,
however,
that no such designation or rescission shall in any manner relieve the
Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any
change in
the location of any such other office or agency.
(d) The
Company hereby designates the Corporate Trust Office of the Trustee as
one such
office or agency of the Company in accordance with Section 2.04 of this
Indenture.
Section
4.03. Commission
Reports.
(a) Whether
or not required by the Commission, so long as any Notes are outstanding,
the
Company will furnish to the Holders of Notes, within the time periods specified
in the Commission’s rules and regulations (including any permitted
extensions):
(i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company
were required to file such Forms, including a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report on the annual financial statements
by the
Company’s certified independent accountants. Each quarterly and annual report
filed on Form 10-Q or 10-K shall include (A) the Company’s Weighted Average
Retail Attrition Rate for the three fiscal quarters ended at the end of
the
period covered by such report and (B) the Company’s Retail Attrition Rate for
the fiscal quarter ended at the end of the period covered by such report;
and
(ii) all
current reports that would be required to be filed with the Commission
on Form
8-K if the Company were required to file such reports,
provided
that the Company shall not be required to deliver any such quarterly report
or
information or current report if such report or information is filed with
the
Commission and made publicly available on the Commission’s XXXXX
website.
(b) In
addition, whether or not required by the Commission, the Company will file
a
copy of all of the information and reports referred to in clauses (a)(i)
and
(ii) above with the Commission for public availability within the time
periods
specified in the Commission’s rules and regulations (unless the Commission will
not accept such a filing). In addition, the Company and the Subsidiary
Guarantors have agreed that, for so long as any Notes remain outstanding,
they
will furnish to the Holders, upon their request, the information required
to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) If
the
Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then the quarterly and annual financial information required by Section
4.03(a)
4.03(a)
49
(d) shall
include a reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” of the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations
of
the Unrestricted Subsidiaries of the Company.
Section
4.04. Compliance
Certificate.
(a) The
Company and each Subsidiary Guarantor (to the extent that such Subsidiary
Guarantor is so required under the TIA) shall deliver to the Trustee, within
90
days after the end of each fiscal year, an Officers’ Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the
best of
his or her knowledge, the Company has kept, observed, performed and fulfilled
its obligations under this Indenture and is not in default in the performance
or
observance of any of the terms, provisions and conditions of this Indenture
(or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and
what
action the Company is taking or proposes to take with respect thereto)
and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred,
a
description of the event and what action the Company is taking or proposes
to
take with respect thereto.
(b) So
long
as not contrary to the then current recommendations of the American Institute
of
Certified Public Accountants, the year-end financial statements delivered
pursuant to Section 4.03(a) above shall be accompanied by a written statement
of
the Company’s independent public accountants (which shall be a firm of
established national reputation) that in making the examination necessary
for
certification of such financial statements, nothing has come to their attention
that would lead them to believe that the Company has violated any provisions
of
Article Four or Article Five hereof or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood
that
such accountants shall not be liable directly or indirectly to any Person
for
any failure to obtain knowledge of any such violation. If such a certification
is contrary to the then current recommendations of the American Institute
of
Certificate Public Accountants with respect to any year-end financial statements
being delivered to the Trustee pursuant to Section 4.03(a), the Company
shall
deliver an Officer’s Certificate to such effect to the Trustee at the time such
year-end financial statements are so delivered to the Trustee.
(c) The
Company shall, so long as any of the Notes are outstanding, deliver to
the
Trustee, forthwith upon any Officer becoming aware of any Default or Event
of
Default, an Officer’s Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect
thereto.
50
Section
4.05. Taxes.
The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior
to
delinquency, any taxes, assessments, and governmental levies except such
as are
contested in good faith and by appropriate proceedings or where the failure
to
effect such payment is not adverse in any material respect to the Holders
of the
Notes.
Section
4.06. Stay,
Extension and Usury Laws.
The
Company and each of the Subsidiary Guarantors covenant (to the extent that
it
may lawfully do so) that it shall not at any time insist upon, plead, or
in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension
or usury law wherever enacted, now or at any time hereafter in force, that
may
affect the covenants or the performance of this Indenture; and the Company
and
each of the Subsidiary Guarantors (to the extent that it may lawfully do
so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that they shall not, by resort to any such law, hinder, delay or impede
the
execution of any power herein granted to the Trustee, but shall suffer
and
permit the execution of every such power as though no such law has been
enacted.
Section
4.07. Limitation
on Indebtedness.
(a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, (collectively,
“Incur”), with respect to any Indebtedness (including Acquired Debt), and the
Company will not, and will not permit any of its Restricted Subsidiaries
to,
issue any Disqualified Stock (other than to the Company or a Wholly Owned
Restricted Subsidiary); provided,
however,
that
the Company and any Restricted Subsidiary may (1) incur Indebtedness (including
Acquired Debt) and issue shares of Disqualified Stock if the Company’s
Consolidated Fixed Charge Coverage Ratio at the time of the incurrence
of such
Indebtedness or issuance of such Disqualified Stock, after giving pro forma
effect thereto (including a pro forma application of the use of proceeds
therefrom), is greater than 3.0 to 1.0 (2) incur Subordinated Indebtedness
(including Acquired Subordinated Debt) if the Company’s Consolidated Fixed
Charge Coverage Ratio at the time of the incurrence of such Indebtedness,
after
giving pro forma effect thereto (including a pro forma application of the
use of
proceeds therefrom), is greater than 2.5 to 1.0.
(b) Section
4.07(a) shall not prohibit the incurrence of any of the following items
of
Indebtedness or issuance of Disqualified Stock (collectively, “Permitted
Debt”):
(i) the
incurrence by the Company and the Restricted Subsidiaries of Indebtedness
pursuant to the Credit Agreement (including letter of credit obligations)
in an
aggregate principal amount outstanding under this clause (i) at any one
time not
to exceed $30 million, less the aggregate amount of all Net Proceeds of
Asset
Sales applied by the Company or any Restricted Subsidiary to repay any
Indebtedness under the Credit Agreement (and, in the case of any revolving
credit Indebtedness under the Credit Agreement,
to effect a corresponding permanent commitment reduction thereunder) pursuant
to
Section 4.11;
51
(ii) the
incurrence by the Company of Existing Indebtedness;
(iii) the
incurrence by the Company of Indebtedness represented by (A) the Notes
issued on
the Issue Date and any guarantees of such Notes by the Subsidiary Guarantors
or
(B) Exchange Notes in respect of such Notes or any Additional Notes and
any
guarantees of such Exchange Notes by the Subsidiary Guarantors;
(iv) the
incurrence by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Indebtedness in exchange for, or the net proceeds of which
are used
to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted by this Indenture to be Incurred under
Section
4.07(a) or clauses (ii), (iii), (iv) and (viii) of this Section 4.07(b),
or the
issuance by the Company or any of its Restricted Subsidiaries of Permitted
Refinancing Disqualified Stock in exchange for, or the net proceeds of
which are
used to refund, refinance or replace Disqualified Stock (other than intercompany
Disqualified Stock) that was permitted by this Indenture to be
issued;
(v) the
incurrence by the Company or any of its Restricted Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided,
however,
that:
(A) if
the
Company or any Subsidiary Guarantor is the obligor, such Indebtedness must
be
unsecured, evidenced by a promissory note and expressly subordinated to
the
prior payment in full in cash of all obligations under the Notes,
and
(B) (i)
any
subsequent issuance or transfer of Equity Interests that results in any
such
Indebtedness being held by a Person other than the Company or a Restricted
Subsidiary of the Company, and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary of the Company shall be deemed, in each case, to constitute
an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as
the case may be, that was not permitted by this Section 4.07(b)(v);
(vi) the
incurrence by the Company or any of its Restricted Subsidiaries of Hedging
Obligations, provided that such obligations are entered into for bona fide
hedging purposes and not for speculative purposes;
(vii) the
incurrence by the Company and its Restricted Subsidiaries of additional
Indebtedness in an aggregate amount not to exceed $5.0 million at any one
time
outstanding (which amount may, but need not, be incurred under the Credit
Agreement);
(viii) the
incurrence by the Company or its Restricted Subsidiaries of Indebtedness
represented by Capital Lease Obligations, mortgage financings or purchase
52
money
obligations, in each case incurred for the purpose of financing all or
any part
of the purchase price or cost of construction or improvement of property,
plant
or equipment used in the business of the Company or such Restricted Subsidiary
at the time of such incurrence (whether through a direct purchase of assets
or
the Capital Stock of any Person owning solely those assets) in an aggregate
principal amount not to exceed $2.0 million at any time outstanding;
and
(ix) the
guarantee by the Company or any Subsidiary Guarantor of Indebtedness of
the
Company or a Restricted Subsidiary of the Company that was permitted to
be
incurred by another provision of this Section 4.07.
For
purposes of determining compliance with this Section 4.07, in the event
that an
item of Indebtedness meets the criteria of more than one of the categories
of
Permitted Debt described in Sections 4.07(b)(i) through (ix) above or is
entitled to be Incurred pursuant to Section 4.07(a), the Company may, in
its
sole discretion:
(A) at
the
time the proposed Indebtedness is incurred, classify all or a portion of
that
item of indebtedness on the date of its incurrence under either Section
4.07(a)
or under any category of Permitted Debt described in clauses (i) through
(ix) of
this Section 4.07(b); and
(B) reclassify
at any later date all or a portion of that or any other item of Indebtedness
as
being or having been incurred in any manner that complies with this Section
4.07;
provided,
that, in each case, Indebtedness under the Credit Agreement outstanding
on the
date the Notes are first issued under this Indenture is deemed to be incurred
pursuant to Section 4.07(b)(i).
Accrual
of interest, accretion or amortization of original issue discount and the
payment of interest on any Indebtedness in the form of additional Indebtedness
with the same terms shall not be deemed to be an incurrence of Indebtedness
for
purposes of this Section 4.07.
Section
4.08. Limitation
on Restricted Payments.
(a) The
Company shall not make, and shall not permit any Restricted Subsidiary
to make,
directly or indirectly any Restricted Payment unless, at the time of, and
after
giving effect to, such proposed Restricted Payment:
(i) no
Default or Event of Default shall have occurred and be continuing or would
occur
as a consequence thereof;
(ii) the
Company would, at the time of such Restricted Payment and after giving
pro forma
effect thereto as if such Restricted Payment had been made at the beginning
of
the applicable Latest Full Fiscal Quarter, have been permitted to Incur
at least
$1.00 of additional Indebtedness pursuant to the Consolidated Fixed Charge
Coverage Ratio test set forth in Section 4.07(a); and
53
(iii) such
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Company and its Restricted Subsidiaries after the
Closing
Date (excluding Restricted Payments permitted by clauses (ii), (iii) and
(iv) of
Section 4.08(b) below), is less than the sum, without duplication,
of:
(A) 50%
of
the Consolidated Net Income of the Company for the period (taken as one
accounting period) beginning October 1, 2004 to the end of the Company’s most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net
Income for such period is a deficit, less 100% of such deficit),
plus
(B) 100%
of
the aggregate net proceeds, including the Fair Market Value of property
other
than cash as determined by the Board of Directors in good faith, received
by the
Company since the Closing Date (i) from the issue or sale of Equity Interests
of
the Company (other than Disqualified Stock) (including, without limitation,
in a
merger, consolidation, acquisition of property or any other form of transaction
involving the issue or sale of Capital Stock (other than Disqualified Stock)),
(ii) from the issue or sale of Disqualified Stock or debt securities of
the
Company that have been converted into such Equity Interests (other than
Equity
Interests (or Disqualified Stock or convertible debt securities) sold to
a
Restricted Subsidiary of the Company), and (iii) from other capital
contributions to the Company (including, without limitation, through the
merger
or consolidation of a Person with and into the Company not involving the
issuance or delivery of securities or any other consideration by the Company
or
any Restricted Subsidiary); plus
(C) the
amount equal to the net reduction in Investments (other than Permitted
Investments) made by the Company or any of its Restricted Subsidiaries
in any
Person after the Closing Date resulting from, and without duplication (i)
repurchases or redemptions of such Investments by such Person, proceeds
realized
upon the sale of such Investment to an unaffiliated purchaser and repayments
of
loans or advances or other transfers of assets by such Person to the Company
or
any Restricted Subsidiary of the Company, or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case
as
provided in the definition of “Investment”), not to exceed the amount of
Investments previously made by the Company or any of its Restricted
Subsidiaries, which amount was included in the calculation of Restricted
Payments; provided,
however,
that no
amount shall be included under this clause (C) to the extent it is already
included in Consolidated Net Income.
(b) Section
4.08(a) shall not prohibit:
54
(i) the
payment of any dividend or the making of any distribution in 60 days after
the
date of declaration thereof, if at the date of declaration the payment
or
distribution complied with the provisions of this Indenture;
(ii) the
redemption, repurchase, retirement, defeasance or other acquisition of
any
subordinated Indebtedness or Capital Stock of the Company or any warrants,
options or other rights to acquire shares of any such Capital Stock either
(a)
solely in exchange for Equity Interests of the Company other than Disqualified
Stock, (b) through the application of the net proceeds of a substantially
concurrent sale for cash (other than to a Restricted Subsidiary of the
Company)
of Equity Interests of the Company other than Disqualified Stock or (c)
in the
case of Disqualified Stock, solely in exchange for, or through the application
of the net proceeds of a substantially concurrent sale for cash (other
than to a
Restricted Subsidiary of the Company) of, Permitted Refinancing Disqualified
Stock; provided, in each case, that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement, defeasance
or
other acquisition shall be excluded from Section 4.08(a)(iii)(B);
(iii) the
defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness in exchange for, or with the net cash proceeds from, an Incurrence
of Permitted Refinancing Indebtedness;
(iv) repurchases
of Capital Stock deemed to occur upon the exercise of stock options or
warrants
if such Capital Stock represents all or a portion of the exercise price
thereof;
or
(v) Restricted
Payments in the aggregate amount of $2.5 million,
provided,
however, that in each case, no Event of Default shall have occurred or
be
continuing at the time of such payment or as a result thereof. In determining
the aggregate amount of Restricted Payments made subsequent to the Closing
Date,
amounts expended pursuant to clauses (i) and (v) under this Section 4.08(b)
shall be included in such calculations.
(c) The
amount of all Restricted Payments (other than cash) shall be the Fair Market
Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The
Fair
Market Value of any non-cash Restricted Payment shall be determined in
good
faith by the Board of Directors whose resolution with respect thereto shall
be
delivered to the Trustee. The Board of Directors’ determination shall be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing, if the Fair Market Value exceeds $2.5
million. Not later than the date of making any Restricted Payment, the
Company
shall deliver to the Trustee an Officers’ Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which
the
calculations required by this Section 4.08 were computed, together with
a copy
of any fairness opinion or appraisal required by this Indenture.
55
(d) The
Board
of Directors may designate any Restricted Subsidiary to be an Unrestricted
Subsidiary in accordance with the terms of this Indenture if such designation
would not cause a Default. For purposes of making such determination, all
outstanding Investments by the Company and its Restricted Subsidiaries
(except
to the extent repaid in cash) in the Subsidiary so designated will be deemed
to
be Restricted Payments at the time of such designation and will reduce
the
amount available for Restricted Payments under Section 4.08. All such
outstanding Investments will be deemed to constitute Investments in an
amount
equal to the Fair Market Value of such Investments at the time of such
designation as determined in good faith by the Board of Directors. Such
designation will only be permitted if such Restricted Payment would be
permitted
at such time and if such Restricted Subsidiary otherwise meets the definition
of
an Unrestricted Subsidiary.
(e) Any
such
designation by the Board of Directors shall be evidenced to the Trustee
by
filing with the Trustee a certified copy of the resolution of the Board
of
Directors giving effect to such designation and an Officers’ Certificate
certifying that such designation complied with the foregoing conditions.
If, at
any time, any Unrestricted Subsidiary would fail to meet the definition
of an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of
the
Company as of such date (and, if such Indebtedness is not permitted to
be
incurred as of such date under Section 4.08, the Company shall be in default
thereof).
(f) The
Board
of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary, provided that:
(i) such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if such Indebtedness
is
permitted under Section 4.08, calculated on a pro forma basis as if such
designation had occurred at the beginning of the relevant Latest Full Fiscal
Quarter and, to the extent such Indebtedness is secured by a Lien, such
Lien is
permitted under Section 4.09;
(ii) all
outstanding Investments owned by such Unrestricted Subsidiary shall be
deemed to
be made as of the time of such designation and such designation shall only
be
permitted if such Investments would be permitted under Section 4.08 after
giving
effect to any transactions subject to paragraph (a)(iii)(C) of this section;
and
(iii) no
Default or Event of Default would be in existence immediately following
such
designation.
Section
4.09. Limitation
on Liens.
The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create, incur, assume or suffer to exist any Lien securing
Indebtedness on any asset now owned or hereafter acquired, or any income
or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
56
Section
4.10. Repurchase
Offer Following Excess Retail Attrition.
(a) If
the
Weighted Average Retail Attrition with respect to any three consecutive
fiscal
quarters exceeds 18% (a “Weighted Average Retail Attrition Rate Trigger Event”),
the Company shall be required to make an offer, to commence within 45 days
of
the Trigger Determination Date, to all holders of the Notes to purchase
10% of
the Notes then outstanding (but in any event not less than $12.5 million
of
Notes) at an offer price in cash in an amount equal to 100% of the principal
amount thereof, plus accrued and unpaid interest and additional interest,
if
any, thereon to the date of purchase, in accordance with the procedures
sets
forth in Section 3.07. If the aggregate principal amount of the Notes tendered
into such offer exceeds the amount the Company is required to repurchase,
the
Trustee shall select the Notes to be purchased on a pro rata basis.
(b) If
the
Retail Attrition Rate exceeds 18% for the fiscal quarter immediately succeeding
any Weighted Average Retail Attrition Rate Trigger Event (a “Retail Attrition
Rate Trigger Event”), the Company shall be required to make an offer, to
commence within 45 days of the Trigger Determination Date, to all holders
of the
Notes to purchase 10% of the Notes then outstanding (but in any event not
less
than $12.5 million of Notes) at an offer price in cash in an amount equal
to
100% of the principal amount thereof, plus accrued and unpaid interest
and
additional interest, if any, thereon to the date of purchase, in accordance
with
the procedures sets forth in Section 3.07. If the aggregate principal amount
of
the Notes tendered into such offer exceeds the amount the Company is required
to
repurchase, the Trustee shall select the Notes to be purchased on a pro
rata
basis.
(c) In
no
event, shall the Company be required to make an offer with respect to a
Weighted
Average Retail Attrition Rate Trigger Event and a Retail Attrition Rate
Trigger
Event with respect to the same fiscal quarter end.
“Cancelled
RMR” means RMR attributable to alarm monitoring contracts with respect to which
the Company has received effective notice of cancellation under such
contracts.
“Disqualified
RMR” means RMR attributable to alarm monitoring contracts with related account
receivable balances over 90 days from the invoice date.
“Qualified
RMR” means RMR attributable to alarm monitoring contracts with no related
account receivable balances over 90 days from the invoice date.
“Replacement
RMR” means Cancelled RMR or Disqualified RMR that has been replaced by the
selling Dealer with the new RMR as required by the original sales contract
with
the Dealer.
“Retail
Attrition Rate” means, with respect to any fiscal quarter and for our retail
alarm monitoring portfolio, the quotient of: (i) the sum of (a) Cancelled
RMR
plus
(b) the
increase (or minus the decrease) in Disqualified RMR minus
(c)
Replacement RMR; divided
by
(ii) the
average of the Qualified RMR at the end of the month for all the months
in the
fiscal quarter and the end of the month preceding the fiscal quarter. Such
quotient shall then be annualized by multiplying
it by four to determine whether a Weighted Average Retail Attrition Trigger
Event or Retail Attrition Trigger Event has occurred.
57
“RMR”
means
the recurring monthly revenue with respect to a retail alarm monitoring
contract
on a basis consistent with the calculation of RMR as reported in the Company’s
filings with the Commission.
‘‘Trigger
Determination Date’’ means with respect to a Weighted Average Retail Attrition
Rate Trigger Event or Retail Attrition Rate Trigger Event, (i) if the fiscal
period with which the determination is made is the first, second or third
fiscal
quarter, the date on which the Company files its Quarterly Report on Form
10-Q
with respect to such fiscal period (or, in the event the Company is not
required
to or does not file any such Quarterly Report with respect to a fiscal
quarter,
the 45th day after the end of such fiscal quarter) or (ii) if the fiscal
period
with respect to which the determination is made is the last fiscal quarter,
the
date which is 45 days after the end of such fiscal quarter. In the event
a
Weighted Average Retail Attrition Rate Trigger Event or Retail Attrition
Rate
Trigger Event occurs with respect to the last fiscal quarter, the Company
will
provide prompt notice of such Event to the Trustee and the holders of the
Notes
in the manner provided in Section 3.07.
“Weighted
Average Retail Attrition Rate” means, with respect to any consecutive fiscal
quarters, the weighted average of the Retail Attrition Rate for the given
quarters with the Qualified RMR at the end of a fiscal quarter being the
weight
for the attrition rate for that particular fiscal quarter.
Section
4.11. Limitation
on Asset Sales.
(a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, consummate any Asset Sale unless:
(i) the
Company or such Restricted Subsidiary receives consideration at the time
of the
Asset Sale at least equal to the Fair Market Value of the assets or Equity
Interests issued or sold or otherwise disposed of;
(ii) the
Fair
Market Value is determined in good faith by the management of the Company
or, if
such Asset Sale involves consideration excess of $2.5 million, by the Board
of
Directors as evidenced by a board resolution; and
(iii) at
least
80% of the consideration paid to the Company or such Restricted Subsidiary
in
connection with such Asset Sale is in the form of Qualified
Consideration.
(b) Within
365 days after the receipt of any Net Proceeds from an Asset Sale, the
Company
or the Restricted Subsidiary may apply such Net Proceeds, at the Company’s or
such Restricted Subsidiary’s option:
(i) to
the
extent the assets and property sold pursuant to such Asset Sale constitute
Collateral, to repay Indebtedness under the New Credit Facility and permanently
reduce the commitments thereunder; or
58
(ii) to
acquire Replacement Assets; provided, that, the Company or the applicable
Restricted Subsidiary promptly grants to the Trustee a security interest
in such
Replacement Assets pursuant to the requirements of the Indenture, which
security
interest shall be a Second Priority Lien; or
(iii) to
the
acquisition of a majority of the assets of a Permitted Business, or a majority
of the Voting Stock of a Person engaged in a Permitted Business (provided
that
such Person will become on the date of acquisition thereof a Restricted
Subsidiary), the making of a capital expenditure or the acquisition of
other
long-term assets (including, without limitation, security monitoring accounts
or
agreements) that are used or useful in a Permitted Business, provided,
that the
Company or the applicable Restricted Subsidiary promptly grants to the
Collateral Trustee a security interest in such assets or voting stock pursuant
to the requirements of this Indenture, which security interest shall be
a Second
Priority Lien; or
(iv) a
combination of prepayment and investment permitted by the foregoing clauses
(i),
(ii) and (iii).
(c) Pending
application of Net Proceeds pursuant to this Section 4.11, the Company
may
temporarily reduce revolving credit borrowings or otherwise invest such
Net
Proceeds in any manner that is not prohibited by this Indenture.
(d) Any
Net
Proceeds from Asset Sales that are not applied or invested as provided
in the
preceding paragraph will be deemed to constitute “Excess Proceeds.” When the
aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will
be
required to make an offer to all holders of Notes and other Indebtedness
ranking
on a parity with the Notes containing provisions similar to those set forth
in
this Indenture with respect to offers to purchase with the proceeds of
sales of
assets (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes
and other Indebtedness ranking on a parity with the Notes, pro rata, that
may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof (or the accreted value of
such
Indebtedness, if such other Indebtedness is issued at a discount), plus
accrued
and unpaid interest, if any, thereon to the date of purchase, in accordance
with
the procedures set forth in this Indenture. To the extent that any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company
may use
such Excess Proceeds for any purpose not otherwise prohibited by this Indenture.
If the aggregate principal amount of Notes and other Indebtedness ranking
on a
parity with the Notes tendered into such Asset Sale Offer exceeds the amount
of
Excess Proceeds, the Trustee shall select the Notes and other Indebtedness
ranking on a parity with the Notes to be purchased on a pro rata basis.
Upon
completion of such offer to purchase, the amount of Excess Proceeds shall
be
reset at zero.
Section
4.12. Limitation
on Restrictions on Distributions from Restricted
Subsidiaries.
(a) The
Company shall not, and shall not permit any Restricted Subsidiary to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the right of any Restricted Subsidiary
to:
59
(i) pay
dividends or make any other distributions on its Capital Stock to the Company
or
any of its Restricted Subsidiaries or pay any indebtedness owed to the
Company
or its Restricted Subsidiaries;
(ii) make
loans or advances to the Company or any of its Restricted Subsidiaries;
or
(iii) transfer
any of its properties or assets to the Company or any of its Restricted
Subsidiaries.
(b) The
preceding restrictions set forth in Section 4.12(a) above shall not apply
to
encumbrances or restrictions existing under or by reason of:
(i) Existing
Indebtedness as in effect on the date of this Indenture;
(ii) agreements
existing on the date of this Indenture, and any amendments, modifications,
restatements, renewals, extensions, supplements, refundings, replacements
or
refinancings thereof, provided that such amendments, modifications,
restatements, renewals, extensions, supplements, refundings, replacements
or
refinancings are no more restrictive, taken as a whole, with respect to
dividend
and other payment restrictions than those contained in agreements as in
effect
on the date of this Indenture, as determined in good faith by the Board
of
Directors;
(iii) this
Indenture and the Notes and/or the Collateral Documents;
(iv) the
Credit Agreement and/or the documentation for the First Priority Liens;
provided
that the restrictions contained in any such agreement are no more restrictive,
taken as a whole (as determined in good faith by the Board of Directors),
than
those contained in such agreements as of the date hereof;
(v) applicable
law;
(vi) any
instrument governing Indebtedness or Capital Stock of a Person acquired
by the
Company or any of its Restricted Subsidiaries as in effect at the time
of such
acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties
or
assets of any Person, other than the Person, or the property or assets
of the
Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be
incurred;
(vii) customary
non-assignment provisions in leases, licenses and other agreements entered
into
in the ordinary course of business;
60
(viii) purchase
money obligations for property acquired in the ordinary course of business
that
impose restrictions of the nature described in this Section 4.08(a)(iii)
on the
property so acquired;
(ix) any
agreement for the sale of a Restricted Subsidiary (whether by stock sale,
asset
sale, merger, consolidation or otherwise) that restricts distributions
by such
Restricted Subsidiary pending its sale;
(x) Permitted
Refinancing Indebtedness, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole (as determined in good faith by the Board
of
Directors), than those contained in the agreements governing the Indebtedness
being refinanced;
(xi) secured
Indebtedness otherwise permitted to be incurred pursuant to the provisions
under
Section 4.09 that limits the right of the debtor to dispose of the assets
securing such Indebtedness;
(xii) customary
provisions with respect to the disposition or distribution of assets or
property
in joint venture agreements and other similar agreements entered into in
the
ordinary course of business; or
(xiii) restrictions
on cash or other deposits or net worth imposed by customers under contracts
entered into in the ordinary course of business.
Section
4.13. Limitation
on Transactions with Affiliates.
(a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries
to,
directly or indirectly, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into, make, amend, renew or extend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate
Transaction”), unless:
(i) such
Affiliate Transaction is on terms that are no less favorable to the Company
or
such Restricted Subsidiary than those that might reasonably have been obtained
in a comparable arm’s-length transaction by the Company or such Restricted
Subsidiary with an unrelated Person;
(ii) if
such
Affiliate Transaction or series of related Affiliate Transactions involves
aggregate consideration in excess of $2.0 million, either (x) the Board
of
Directors (including a majority of the disinterested members of the Board
of
Directors) approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clause (i) of this
paragraph as evidenced by a resolution of the Board of Directors promptly
delivered to the Trustee or (y) if there are no disinterested members of
the
Board of Directors, the Company complies with the fairness
opinion requirement of this Section 4.12(a)(iii) with respect to such Affiliate
Transaction; and
61
(iii) if
such
Affiliate Transaction or series of related Affiliate Transactions involves
aggregate consideration in excess of $5.0 million, the Company delivers
to the
Trustee an opinion as to the fairness to the Company or such Restricted
Subsidiary of such Affiliate Transaction from a financial point of view
issued
by an accounting, appraisal or investment banking firm of national
standing.
(b) The
following items shall not be deemed to be Affiliate Transactions and, therefore,
will not be subject to the provisions of this Section 4.12(a):
(i) any
employment agreement, employee benefit plan or stock option plan entered
into by
the Company or any of its Restricted Subsidiaries or the issuance of securities
or other payments, awards or grants in cash, securities or otherwise pursuant
thereto in the ordinary course of business that has been approved by a
majority
of the disinterested members of the Board of Directors;
(ii) transactions
between or among the Company and its Wholly Owned Restricted
Subsidiaries;
(iii) Restricted
Payments that are permitted by the provisions of Section 4.08
hereof;
(iv) reasonable
and customary directors’ fees, indemnification and similar arrangements and
payments thereunder by the Company or any of its Restricted
Subsidiaries;
(v) loans
or
advances to employees of the Company or any of its Restricted Subsidiaries
in
the ordinary course of business, provided that the aggregate amount of
all such
loans and advances at any time outstanding shall not exceed $1.0
million;
(vi) any
agreement as in effect as of the date of this Indenture or any amendment
thereto
(so long as any such amendment, taken as a whole, is not disadvantageous
to the
Holders of the Notes in any material respect) or any transaction contemplated
thereby; and
(vii) the
issuance of Capital Stock or other Equity Interests of the Company (other
than
Disqualified Stock) or the making of other capital contributions to the
Company.
Section
4.14. Limitation
on Purchases of Retail Alarm Monitoring Contracts Following Certain
Events.
The
Company shall not purchase or agree to purchase during any Purchase Suspension
Period, any retail alarm monitoring contracts or notes receivable secured
by
retail alarm monitoring contracts for an aggregate purchase price exceeding
$2
million, if the Company’s Weighted Average Retail Attrition Rate for any three
consecutive fiscal quarters
62
exceeds
18% or if its Retail Attrition Rate for any fiscal quarter exceeds 18%
(each
such event being referred to as a ‘‘Purchase Suspension Trigger’’), provided,
that the foregoing shall not prohibit the Company from purchasing any retail
alarm monitoring contracts or notes receivable secured by retail alarm
monitoring contracts pursuant to a written agreement entered into during
a
period in which we were not prohibited from agreeing to make such purchase
pursuant to this provision.
(a) The
Company shall not transfer, convey, sell, lease or otherwise dispose of,
and
shall not permit any of its Restricted Subsidiaries to issue, transfer,
convey,
sell, lease or otherwise dispose of, any Equity Interests in any Restricted
Subsidiary of the Company (other than the issuance of directors’ qualifying
shares or an immaterial number of shares required by applicable law to
be held
by a Person other than the Company or a Restricted Subsidiary and excluding
any
pledge of Equity Interests of any Restricted Subsidiary) to any Person
(other
than the Company or a Wholly Owned Restricted Subsidiary of the Company),
except:
(i) if,
immediately after giving effect to such issuance, transfer, conveyance,
sale,
lease or other disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment in such Person remaining
after giving effect to such issuance or sale would have been permitted
to be
made under Section 4.07 hereof if made on the date of such issuance or
sale;
(ii) sales
of
Common Stock of a Restricted Subsidiary by the Company or a Restricted
Subsidiary, provided that the Company or such Restricted Subsidiary complies
with Section 4.11; or
(iii) sales
of
Disqualified Stock or Preferred Stock of a Subsidiary Guarantor by the
Company
or a Subsidiary Guarantor that are otherwise permitted under Section 4.07,
provided that the Company or such Subsidiary Guarantor complies with Section
4.11.
Section
4.16. Additional
Subsidiary Guarantees.
(a) If
the
Company or any of its Subsidiaries shall acquire or create another Subsidiary
then such newly acquired or created Subsidiary shall execute a supplemental
indenture becoming a Subsidiary Guarantor in accordance with the terms
of this
Indenture.
(b) A
Subsidiary Guarantor may not sell or otherwise dispose of all or substantially
all of its assets to, or consolidate with or merge with or into (whether
or not
such Subsidiary Guarantor is the surviving Person), another Person, other
than
the Company or another Subsidiary Guarantor, unless:
(i) immediately
after giving effect to that transaction, no Default or Event of Default
exists;
and
(ii) either:
63
(A) the
Person acquiring the property in any such sale or disposition or the Person
formed by or surviving any such consolidation or merger (if other than
the
Subsidiary Guarantor) is a corporation, partnership, limited liability
company
or business trust organized or existing under the laws of the United States,
any
state thereof or the District of Columbia and assumes all the obligations
of
that Subsidiary Guarantor under the Indenture, its Subsidiary Guarantee
and the
Registration Rights Agreement pursuant to a supplemental indenture satisfactory
to the Trustee; or
(B) such
sale
or other disposition complies with the “Limitation on Asset Sale” covenant of
the Indenture, including the application of the Net Proceeds
therefrom.
(c) The
Subsidiary Guarantee of a Subsidiary Guarantor will be released in connection
with any sale of all of the Capital Stock of a Subsidiary Guarantor to
a Person
that is not (either before or after giving effect to such transaction)
the
Company or another Subsidiary of the Company, if the sale of all such Capital
Stock of that Subsidiary Guarantor complies with Section 4.11
herein.
Section
4.17. Business
Activities.
The
Company shall not, and shall not permit any Restricted Subsidiary to, engage
in
any business other than Permitted Businesses, except to such extent as
would not
be material to the Company and its Restricted Subsidiaries taken as a
whole.
Section
4.18. Payments
for Consent.
Neither
the Company nor any of its Restricted Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of
this
Indenture or the Notes unless such consideration is offered to be paid
or is
paid to all Holders of the Notes that consent, waive or agree to amend
in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
(a) If
a
Change of Control occurs, each Holder of Notes shall have the right to
require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of that Holder’s Notes pursuant to an offer by the Company (a
“Change of Control Offer”) at an offer price (a “Change of Control Payment”) in
cash equal to 101% of the aggregate principal amount of Notes repurchased
plus
accrued and unpaid interest, and additional interest if any, to the date
of
purchase. Within 30 days following any Change of Control, the Company shall
mail
a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on a
date (the
“Change of Control Payment Date”) specified in such notice, which date shall be
no earlier than
64
(b) 30
days
and no later than 90 days from the date such notice is mailed, pursuant
to the
procedures described in Section 3.07.
(c) By
11:00
a.m. Eastern Time on the Change of Control Payment Date, the Company shall,
to
the extent lawful:
(i) accept
for payment all Notes or portions thereof properly tendered pursuant to
the
Change of Control Offer;
(ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment
in
respect of all Notes or portions thereof properly tendered; and
(iii) deliver
or cause to be delivered to the Trustee the Notes properly accepted together
with an Officers’ Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company.
(d) The
Paying Agent shall promptly mail to each Holder of Notes properly tendered
the
Change of Control Payment for such Notes, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book entry) to each
Holder
a new Note equal in principal amount to any unpurchased portion of the
Notes
surrendered, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof.
(e) Prior
to
complying with any of the provisions of this Section 4.19, but in any event
within 90 days following a Change of Control, the Company shall either
repay all
outstanding Senior Debt or obtain the requisite consents, if any, under
all
agreements governing outstanding Senior Debt to permit the repurchase of
Notes
required by this Section 4.19. The Company will publicly announce the results
of
the Change of Control offer on or as soon as practicable after the Change
of
Control Payment Date.
(f) This
Section 4.19 will be applicable whether or not any other provisions of
this
Indenture are applicable.
(g) Notwithstanding
anything to the contrary in this Section 4.19, the Company shall not be
required
to make a Change of Control Offer upon a Change of Control if a third party
makes the Change of Control Offer in the manner, at the times and otherwise
in
compliance with the requirements set forth in this Section 4.19 and all
other
provisions of this Indenture applicable to a Change of Control Offer made
by the
Company and purchases all Notes properly tendered and not withdrawn under
such
Change of Control Offer.
(h) The
Company shall comply, to the extent applicable, with the requirements of
Section
14(e) of the Exchange Act and any other securities laws or regulations
in
connection with the repurchase of Notes as a result of a Change of Control.
To
the extent that the provisions of any securities laws or regulations conflict
with the provisions of the covenant described hereunder, the Company shall
comply with the applicable securities laws and regulations and shall not
be
deemed to have breached its obligations under the covenant described hereunder
by virtue of its compliance with such securities laws or
regulations.
65
ARTICLE
FIVE
Section
5.01. Merger,
Consolidation or Sale of Assets.
(a) The
Company shall not consolidate or merge with or into (whether or not the
Company
is the surviving corporation), or sell, assign, transfer, lease, convey
or
otherwise dispose of all or substantially all of its properties or assets
in one
or more related transactions, to another Person unless:
(i) the
Company is the surviving corporation or the Person formed by or surviving
any
such consolidation or merger (if other than the Company) or to which such
sale,
assignment, transfer, lease, conveyance or other disposition shall have
been
made is a corporation, partnership, limited liability company or business
trust
organized or existing under the laws of the United States, any state thereof
or
the District of Columbia;
(ii) the
Person formed by or surviving any such consolidation or merger (if other
than
the Company) or the Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the obligations
of the Company under the Notes and this Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee;
(iii) immediately
after such transaction no Default or Event of Default exists; and
(iv) except
in
the case of a merger of the Company with or into a Wholly Owned Restricted
Subsidiary of the Company, immediately after giving effect to such transaction
on a pro forma basis, the Company or the Person formed by or surviving
any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been
made:
(A) will
have
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction; and
(B) will,
on
the date of such transaction after giving pro forma effect thereto and
any
related financing transactions as if such transaction had occurred at the
beginning of the applicable Latest Full Fiscal Quarter, be permitted to
incur at
least $1.00 of additional Indebtedness pursuant to the Consolidated Fixed
Charge
Coverage Ratio test set forth in Section 4.07(a);
provided,
however, that Section 5.01(a)(iv) above shall not apply if the principal
purpose
of such transaction is to change the state of incorporation of the Company
and
any such transaction shall not have as one of its purposes the evasion
of the
foregoing limitations.
66
Section
5.02. Successor
Corporation Substituted.
Upon
any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance
or
other disposition of all or substantially all of the assets of the Company
in
accordance with Section 5.01 hereof, the successor corporation formed by
such
consolidation or into or with which the Company is merged or to which such
sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of
such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the “Company” shall refer instead to
the successor corporation and not to the Company), and may exercise every
right
and power of, the Company under this Indenture with the same effect as
if such
successor Person had been named as the Company herein; provided, however,
that
the predecessor Company shall not be relieved from the obligation to pay
the
principal of, premium, if any, and interest and Liquidated Damages, if
any, on
the Notes except in the case of a sale, assignment, transfer, conveyance
or
other disposition of all of the Company’s assets that meets the requirements of
Section 5.01 hereof; provided, further, that the predecessor Company shall
not
be relieved from the obligation to pay the principal of, premium, if any,
and
interest and Liquidated Damages, if any, on the Notes in the case of a
lease of
all or substantially all of its property and assets.
ARTICLE
SIX
Section
6.01. Events
of Default.
(a) Each
of
the following constitutes an “Event of Default” under this
Indenture:
(i) the
Company defaults in any payment of interest on any Note when the same becomes
due and payable and such default continues for a period of 30 days;
(ii) the
Company default in the payment of the principal of any Note when the same
becomes due and payable at its Stated Maturity, upon optional redemption,
upon
declaration of acceleration, upon required repurchase or otherwise;
(iii) the
Company or any of its Restricted Subsidiaries defaults in the performance
of, or
breaches, any covenants, warranty or other agreement contained in Sections
4.10,
4.11, 4.19 or 5.01;
(iv) the
Company or any Restricted Subsidiary defaults in the performance of, or
breaches, any covenant, warranty or other agreement contained in this Indenture
or in the Notes (other than a default in the performance or breach of a
covenant, warranty or agreement which is specifically dealt with in
Section 6.01(a) (1), (2) or (3)) and such default or breach continues
for
30 days after the notice specified below;
67
(v) the
occurrence of any default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any
Indebtedness
for money borrowed by the Company or any of its Restricted Subsidiaries
(or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee exists as of the date
of
the Indenture, or is created thereafter, if that default:
(A) is
caused
by a failure to pay at the Stated Maturity the principal of, or interest
or
premium, if any, on such Indebtedness (a “Payment Default”); or
(B) results
in the acceleration of such Indebtedness prior to its Stated
Maturity,
and,
in
each case, the principal amount of any such Indebtedness, together with
the
aggregate principal amount of any other such Indebtedness under which there
has
been a Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more;
(vi) the
Company or any of its Restricted Subsidiaries defaults in its obligation
to pay
one or more final, non-appealable judgments aggregating in excess of $5.0
million (which are not covered by insurance as to which the insurer has
not
disclaimed coverage) that remain undischarged for a period (during which
execution shall not be effectively stayed) of 60 days;
(vii) any
Subsidiary Guarantee ceases to be in full force and effect (other than
in
accordance with the terms of such Subsidiary Guarantee), default
by any Subsidiary Guarantor in the performance of any covenant set forth
in its
Subsidiary Guarantee, a Subsidiary Guarantee ceases to be in full force
and
effect (other than in accordance with the terms of such Subsidiary Guarantee)
or
a Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary
Guarantee and such default continues for 10 days;
(viii) the
Company or any Restricted Subsidiary of the Company pursuant to or within
the
meaning of Bankruptcy Law:
(A) commences
a voluntary case,
(B) consents
to the entry of an order for relief against it in an involuntary
case,
(C) makes
a
general assignment for the benefit of its creditors, or
(D) generally
is not paying its debts as they become due; or
(ix) a
court
of competent jurisdiction enters an order or decree under any Bankruptcy
Law
that:
(A) is
for
relief against the Company or any of its Restricted Subsidiaries in an
involuntary case; or
68
(B) appoints
a custodian of the Company or any of its Restricted Subsidiaries or for
all or
substantially all of the property of the Company or any of its Restricted
Subsidiaries, or
(C) orders
the liquidation of the Company or any of its Restricted
Subsidiaries;
and
the
order or decree remains unstayed and in effect for 60 consecutive days;
and
(x) with
respect to any Collateral, (A) any material Lien under the Collateral Documents,
at any time, ceases to be in full force and effect for any reason other
than in
accordance with the terms of the Collateral Documents and this Indenture
and
other than the satisfaction in full of all obligations under this Indenture
and
discharge of this Indenture, (B) any security interest created thereunder
or
under this Indenture is declared invalid or unenforceable, (C) the Company
or
any Subsidiary Guarantor asserts, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable
or (D)
any Person commences a foreclosure proceeding in respect of any material
portion
of the Collateral.
(b) The
foregoing will constitute Events of Default whatever the reason for any
such
Event of Default and whether it is voluntary or involuntary or is effected
by
operation of law or pursuant to any judgment, decree or order of any court
or
any order, rule or regulation of any administrative or governmental
body.
(c) A
Default
under clause (iv) of Section 6.01(a) is not an Event of Default until the
Trustee or the holders of at least 25% in principal amount of the outstanding
Notes notify the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such notice
must
specify the Default, demand that it be remedied and state that such notice
is a
“Notice of Default”.
Section
6.02. Acceleration.
(a) In
the
case of an Event of Default specified in clauses (viii) or (ix) of Section
6.01(a) hereof, with respect to the Company or any Restricted Subsidiary
of the
Company, all outstanding Notes will become due and payable immediately
without
further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of
the outstanding Notes may declare the principal of an accrued but unpaid
interest on all the Notes to be due and payable. Upon such declaration,
such
principal and interest shall be due and payable immediately. If an Event
of
Default described in Section 6.01(a)(viii) or (ix) occurs and is continuing,
the
principal of and interest on all the Notes will ipso
facto
become
and be immediately due and payable without any declaration or other act
on the
part of the Trustee or any Holders of the Notes. Under certain circumstances,
the Holders of at least a majority in principal amount of the outstanding
Notes
may rescind any such acceleration with respect to the Notes and its
consequences.
69
(b) In
the
event of a declaration of acceleration of the Notes because an Event of
Default
described in Section 6.01(a)(v) has occurred and is continuing, the declaration
of acceleration of the Notes shall be automatically annulled if the event
of
default or payment default triggering such Event of Default pursuant to
Section
6.01(a)(v) shall be remedied or cured by the Company or a Restricted Subsidiary
of the Company or waived by the holders of the relevant Indebtedness within
20
days after the declaration of acceleration of the Notes with respect thereto
and
if (A) the annulment of the acceleration of the Notes would not conflict
with
any judgment or decree of a court of competent jurisdiction and (B) all
existing
Events of Default, except nonpayment of principal, premium or interest
on the
Notes that became due solely because of the acceleration of the Notes,
have been
cured or waived.
Section
6.03. Other
Remedies.
(a) If
an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy to collect the payment of principal, premium, if any, interest,
and
Liquidated Damages, if any, with respect to, the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
(b) The
Trustee may maintain a proceeding even if it does not possess any of the
Notes
or does not produce any of them in the proceeding. A delay or omission
by the
Trustee or any Holder of a Note in exercising any right or remedy accruing
upon
an Event of Default shall not impair the right or remedy or constitute
a waiver
of or acquiescence in the Event of Default. All remedies are cumulative
to the
extent permitted by law.
Section
6.04. Rescission,
Cancellation and Waiver of Past Defaults.
(a) The
Holders of a majority in principal amount of the Notes then outstanding
by
notice to the Trustee may, on behalf of the Holders of all of the Notes,
rescind
and cancel a declaration of acceleration pursuant to Section 6.02 hereof,
and
its consequences if:
(i) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction;
(ii) all
existing Defaults and Events of Default have been cured or waived except
nonpayment of principal of or interest on the Notes that has become due
solely
by such declaration of acceleration;
(iii) to
the
extent the payment of such interest is lawful, interest (at the same rate
specified in the Notes) on overdue installments of interest and overdue
payments
of principal, premium, if any, and interest which has become due otherwise
than
by such declaration of acceleration, has been paid;
(iv) the
Company has paid the Trustee its reasonable compensation and reimbursed
the
Trustee for its reasonable expenses, disbursements and advances;
and
70
(v) in
the
event of cure or waiver of a Default or Event of Default of the type described
in Section 6.01(a)(viii) or (ix), the Trustee has received an Officers’
Certificate and Opinion of Counsel that such Default or Event of Default
has
been cured or waived.
(b) The
holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may, on behalf of the Holders of all
of the
Notes, waive any existing Default or Event of Default and its consequences
under
this Indenture except a continuing Default or Event of Default in the payment
of
principal of or interest on the Notes.
The
Company shall deliver to the Trustee an Officers’ Certificate stating that the
requisite percentage of Holders have consented to any such rescission,
cancellation or waiver and attaching copies of such consents. In case of
any
such rescission, cancellation or waiver, the Company, the Trustee and the
Holders shall be restored to their former positions and rights hereunder
and
under the Notes, respectively. This Section 6.04 and Section 9.02 shall
be in
lieu of Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of
the TIA
is hereby expressly excluded from this Indenture and the Notes, as permitted
by
the TIA. Upon any such rescission, cancellation or waiver, such Default
shall
cease to exist, and any Event of Default arising therefrom shall be deemed
to
have been cured for every purpose of this Indenture; but no such waiver
shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section
6.05. Control
by Majority.
Holders
of a majority in principal amount of the then outstanding Notes may direct
the
time, method and place of conducting any proceeding for exercising any
remedy
available to the Trustee or exercising any trust or power conferred on
it.
However, the Trustee may refuse to follow any direction that conflicts
with law
or this Indenture that the Trustee determines may be unduly prejudicial
to the
rights of other Holders of Notes or that may involve the Trustee in personal
liability.
Section
6.06. Limitation
on Suits.
(a) A
Holder
may not pursue any remedy with respect to this Indenture or the Notes
unless:
(i) the
Holder gives the Trustee written notice of a continuing Event of
Default;
(ii) the
Holders of at least 25% in aggregate principal amount of outstanding Notes
make
a written request to the Trustee to pursue the remedy;
(iii) such
Holder or Holders offer and, if requested, provide to the Trustee security
and
indemnity satisfactory to the Trustee against any costs, liability or expense
that might be incurred by it in connection with the request or
direction;
(iv) the
Trustee does not comply with the request within 60 days after receipt of
the
request and the offer and, if requested, the provision of indemnity;
and
71
(v) during
such 60-day period, the Holders of a majority in aggregate principal amount
of
the outstanding Notes do not give the Trustee a direction that is inconsistent
with the request.
(b) A
Holder
of a Note may not use this Indenture to prejudice the rights of another
Holder
of a Note or to obtain a preference or priority over another Holder of
a
Note.
Section
6.07. Rights
of Holders of Notes to Receive Payment.
Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note
to
receive payment of principal, premium, if any, interest on, and Liquidated
Damages, if any, with respect to, the Note, on or after the respective
due dates
expressed in the Note (including in connection with an offer to purchase),
or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
However, any such payment received by a Holder is subject to the subordination
provisions of Article Ten.
Section
6.08. Collection
Suit by Trustee.
If
an
Event of Default specified in Section 6.01(a)(i) or (a)(ii) occurs and
is
continuing, the Trustee is authorized to recover judgment in its own name
and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, interest, and Liquidated Damages, if any,
remaining unpaid on the Notes and interest on overdue principal and premium,
if
any, and, to the extent lawful, interest and Liquidated Damages, if any,
and
such further amount as shall be sufficient to cover the costs and expenses
of
collection, including the reasonable compensation, expenses, disbursements
and
advances of the Trustee, its agents and counsel.
Section
6.09. Trustee
May File Proofs of Claim.
The
Trustee is authorized to file such proofs of claim and other papers or
documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders of
the
Notes allowed in any judicial proceedings relative to the Company or any
Subsidiary Guarantor (or any other obligor upon the Notes), its creditors
or its
property and shall be entitled and empowered to collect, receive and distribute
any money or other securities or property payable or deliverable on any
such
claims and any custodian in any such judicial proceeding is hereby authorized
by
each Holder to make such payments to the Trustee, and in the event that
the
Trustee shall consent to the making of such payments directly to the Holders,
to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and
any other amounts due the Trustee under Section 7.07 hereof. To the extent
that
the payment of any such compensation, expenses, disbursements and advances
of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under
Section 7.07 hereof out of the estate in any such proceeding, shall be
denied
for any reason, payment of the same shall be secured by a Lien on, and
shall be
paid out of, any and all distributions, dividends, money, securities and
other
72
properties
that the Holders may be entitled to receive in such proceeding whether
in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes
or
the rights of any Holder, or to authorize the Trustee to vote in respect
of the
claim of any Holder in any such proceeding.
Section
6.10. Priorities.
(a) If
the
Trustee collects any money pursuant to this Article, it shall pay out the
money
in the following order:
First:
to
the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof,
including payment of all compensation, expense and liabilities incurred,
and all
advances made, by the Trustee and the costs and expenses of
collection;
Second:
subject to Article Ten, to Holders of Notes for amounts due and unpaid
on the
Notes for principal, premium, if any, interest and Liquidated Damages,
if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, premium, if any, interest,
and
Liquidated Damages, if any, respectively; and
Third:
to
the Company or to such party as a court of competent jurisdiction shall
direct.
(b) The
Trustee may fix a record date and payment date for any payment to Holders
of
Notes pursuant to this Section 6.10.
Section
6.11. Undertaking
for Costs.
In
any
suit for the enforcement of any right or remedy under this Indenture or
in any
suit against the Trustee for any action taken or omitted by it as a Trustee,
a
court in its discretion may require the filing by any party litigant in
the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith
of
the claims or defenses made by the party litigant. This Section does not
apply
to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section
6.07
hereof, or a suit by Holders of more than ten percent in principal amount
of the
then outstanding Notes.
73
ARTICLE
SEVEN
Section
7.01. Duties
of Trustee.
Except
to
the extent, if any, provided otherwise in the Trust Indenture Act of 1939
(as
from time to time in effect):
(a) If
an
Event of Default has occurred and is continuing, the Trustee shall exercise
such
of the rights and powers vested in it by this Indenture, and use the same
degree
of care and skill in its exercise, as a prudent person would exercise or
use
under the circumstances in the conduct of such person’s own
affairs.
(b) Except
during the continuance of an Event of Default:
(i) the
duties of the Trustee shall be determined solely by the express provisions
of
this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied
covenants
or obligations shall be read into this Indenture against the Trustee;
and
(ii) in
the
absence of bad faith on its part, the Trustee may conclusively rely, as
to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to
the
requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The
Trustee may not be relieved from liabilities for its own negligent action,
its
own negligent failure to act, or its own willful misconduct, except
that:
(i) this
paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the
Trustee shall not be liable for any error of judgment made in good faith
by a
Responsible Officer, unless it is proved that the Trustee was negligent
in
ascertaining the pertinent facts; and
(iii) the
Trustee shall not be liable with respect to any action it takes or omits
to take
in good faith in accordance with a direction received by it pursuant to
Section
6.05 hereof.
(d) Whether
or not therein expressly so provided, every provision of this Indenture
that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c)
of this
Section 7.01.
(e) No
provision of this Indenture shall require the Trustee to expend or risk
its own
funds or incur any liability. The Trustee shall be under no obligation
to
exercise any of its rights and powers under this Indenture at the request
of any
Holders, unless such Holder shall have offered to the Trustee security
and
indemnity satisfactory to it against any loss, costs, liability or expense
that
might be incurred by it in connection with the request or
direction.
(f) Money
held in trust by the Trustee need not be segregated from other funds except
to
the extent required by law.
74
Section
7.02. Certain
Rights of Trustee.
(a) The
Trustee may conclusively rely upon any document believed by it to be genuine
and
to have been signed or presented by the proper Person. The Trustee need
not
investigate any fact or matter stated in the document.
(b) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable
for any action it takes or omits to take in good faith in reliance on such
Officers’ Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall
be full
and complete authorization and protection from liability in respect of
any
action taken, suffered or omitted by it hereunder in good faith and in
reliance
thereon.
(c) The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due
care.
(d) The
Trustee shall not be liable for any action it takes or omits to take in
good
faith that it believes to be authorized or within the rights or powers
conferred
upon it by this Indenture.
(e) Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an
Officer
of the Company.
(f) The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders
unless such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities
that
might be incurred by it in compliance with such request or
direction.
(g) The
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof
or
unless written notice of such event is sent to the Trustee in accordance
with
Section 12.02 hereof, and such notice references the Notes.
Section
7.03. Individual
Rights of Trustee.
The
Trustee in its individual or any other capacity may become the owner or
pledgee
of Notes and may become a creditor of, or otherwise deal with, the Company
or
any of its Affiliates with the same rights it would have if it were not
Trustee.
However, in the event that the Trustee acquires any conflicting interest
as
described in the Trust Indenture Act of 1939 (as in effect at such time),
it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue as trustee or resign. Any Agent may do the same
with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
75
Section
7.04. Trustee’s
Disclaimer.
The
Trustee shall not be responsible for and makes no representation as to
the
validity or adequacy of this Indenture, it shall not be accountable for
the
Company’s use of the proceeds from the Notes or any money paid to the Company or
upon the Company’s direction under any provision of this Indenture, it shall not
be responsible for the use or application of any money received by any
Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other
than
its certificate of authentication. Notwithstanding the effective date of
this
Indenture or anything to the contrary contained in this Indenture, the
Trustee
shall have no liability or responsibility for any act or event relating
to this
Indenture or the transactions related thereto which occurs prior to the
date of
this Indenture, and shall have no contractual obligations or fiduciary
duties to
the Company, any Subsidiary Guarantors, the Holders of the Notes and the
holders
of beneficial interests therein, or any other Person until the date of
this
Indenture.
Section
7.05. Notice
of Defaults.
If
a
Default or Event of Default occurs and is continuing and if it is known
to the
Trustee, the Trustee shall mail to Holders of Notes a notice of the Default
or
Event of Default within 90 days after it occurs. Except in the case of
a Default
or Event of Default in payment of principal, premium, interest or Liquidated
Damages on any Note, the Trustee may withhold the notice if and so long
as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
Section
7.06. Reports
by Trustee to Holders of the Notes.
(a) Within
60
days after each May 15 beginning with May 15, following the date hereof,
and for
so long as Notes remain outstanding, the Trustee shall mail to the Holders
of
the Notes a brief report dated as of such reporting date that complies
with TIA
§ 313(a) (but if no event described in TIA § 313(a) has occurred within the
twelve months preceding the reporting date, no report need be transmitted).
The
Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit
by mail all reports as required by TIA § 313(c).
(b) A
copy of
each report at the time of its mailing to the Holders of Notes shall be
mailed
to the Company and filed with the Commission and each stock exchange on
which
the Notes are listed in accordance with TIA § 313(d). The Company shall promptly
notify the Trustee when the Notes are listed on any stock exchange or any
delisting thereof.
Section
7.07. Compensation
and Indemnity.
(a) The
Company shall pay to the Trustee from time to time reasonable compensation
for
its acceptance of this Indenture and services hereunder in accordance with
a
written schedule provided by the Trustee to the Company. The Trustee’s
compensation shall not be limited by any law on compensation of a trustee
of an
express trust. The
76
Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition
to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and
counsel.
(b) The
Company shall indemnify the Trustee against any and all losses, liabilities
or
expenses incurred by it arising out of or in connection with the acceptance
or
administration of its duties under this Indenture, including the costs
and
expenses of enforcing this Indenture against the Company (including this
Section
7.07) and defending itself against any claim (whether asserted by either
of the
Company or any Holder or any other person) or liability in connection with
the
exercise or performance of any of its powers or duties hereunder, except
to the
extent any such loss, liability or expense may be attributable to its
negligence, bad faith or willful misconduct. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure
by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee
shall
cooperate in the defense. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably
withheld.
(c) The
obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture and resignation of removal
of the
Trustee.
(d) To
secure
the Company’s payment obligations in this Section, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture
and
resignation or removal of the Trustee.
(e) When
the
Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01(a)(viii) and (ix) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The
Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent
applicable.
Section
7.08. Replacement
of Trustee.
(a) A
resignation or removal of the Trustee and appointment of a successor Trustee
shall become effective only upon the successor Trustee’s acceptance of
appointment as provided in this Section 7.08.
(b) The
Trustee may resign in writing at any time and be discharged from the trust
hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Notes may remove the Trustee by
so
notifying the Trustee and the Company in writing. The Company may remove
the
Trustee if:
(i) the
Trustee fails to comply with Section 7.10 hereof;
(ii) the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered
with respect to the Trustee under any Bankruptcy Law;
77
(iii) a
custodian or public officer takes charge of the Trustee or its property;
or
(iv) the
Trustee becomes incapable of acting.
(c) If
the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Company shall promptly appoint a successor Trustee.
Within
one year after the successor Trustee takes office, the Holders of a majority
in
principal amount of the then outstanding Notes may appoint a successor
Trustee
to replace the successor Trustee appointed by the Company.
(d) If
a
successor Trustee does not take office within 30 days after the retiring
Trustee
resigns or is removed, the retiring Trustee, the Company, or the Holders
of
Notes of at least 10% in principal amount of the then outstanding Notes
may
petition at the expense of the Company any court of competent jurisdiction
for
the appointment of a successor Trustee.
(e) If
the
Trustee, after written request by any Holder who has been a Holder for
at least
six months, fails to comply with Section 7.10, such Holder may petition
any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
(f) A
successor Trustee shall deliver a written acceptance of its appointment
to the
retiring Trustee and to the Company. Thereupon, the resignation or removal
of
the retiring Trustee shall become effective, and the successor Trustee
shall
have all the rights, powers and duties of the Trustee under this Indenture.
The
successor Trustee shall mail a notice of its succession to Holders. The
retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all sums owing to the Trustee hereunder have
been
paid and subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the
Company’s obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.
Section
7.09. Successor
Trustee by Merger, Etc.
If
the
Trustee consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another Person, the successor Person
without any further act shall be the successor Trustee.
Section
7.10. Eligibility;
Disqualification.
There
shall at all times be a Trustee hereunder that is a corporation organized
and
doing business under the laws of the United States of America or of any
state
thereof that is authorized under such laws to exercise corporate trustee
power,
that is subject to supervision or examination by federal or state authorities
and that has a combined capital and surplus of at least $150.0 million
(or a
direct or indirect wholly-owned subsidiary of a bank or trust company,
or a bank
holding company, having a combined capital and surplus of $150.0 million)
as set
forth in its most recent published annual report of condition.
78
This
Indenture shall always have a Trustee who satisfies the requirements of
TIA
§310(a)(1), (2) and (5). The Trustee is subject to TIA §310(b).
Section
7.11. Preferential
Collection of Claims Against Company.
The
Trustee is subject to TIA §311(a), excluding any creditor relationship listed in
TIA §311(b). A Trustee who has resigned or been removed shall be subject to
TIA
§ 311(a) to the extent indicated therein. The Trustee hereby waives any
right to
set-off any claim that it may have against the Company in any capacity
(other
than as Trustee and Paying Agent) against any of the assets of the Company
held
by the Trustee; provided, however, that if the Trustee is or becomes a
lender of
any other Indebtedness permitted hereunder to be pari passu with the Notes,
then
such waiver shall not apply to the extent of such Indebtedness.
ARTICLE
EIGHT
Section
8.01. Option
to Effect Legal Defeasance or Covenant Defeasance.
The
Company may, at the option of the Board of Directors evidenced by a resolution
set forth in an Officers’ Certificate, at any time, elect to have either Section
8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance
with the
conditions set forth below in this Article Eight.
Section
8.02. Legal
Defeasance and Discharge.
Upon
the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, the Company shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been discharged from
its
obligations with respect to all outstanding Notes and all obligations of
the
Subsidiary Guarantors shall be deemed to have been discharged with respect
to
their obligations under the Subsidiary Guarantees on the date the conditions
set
forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose,
Legal Defeasance means that the Company and the Subsidiary Guarantors shall
be
deemed to have paid and discharged the entire Indebtedness represented
by the
outstanding Notes and Subsidiary Guarantees, respectively, which shall
thereafter be deemed to be “outstanding” only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and
(b)
below, and to have satisfied all its other obligations under such Notes
and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to
receive
from the trust fund described in Section 8.04 hereof, and as more fully
set
forth in such Section, payments in respect of the principal, interest or
premium, if any, on such Notes when such payments are due, (b) the Company’s
obligations with respect to such Notes under Article 2 concerning issuing
temporary Notes, registration of Notes and mutilated, destroyed, lost or
stolen
Notes and the Company’s obligations under Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s
and the Subsidiary Guarantor’s obligations in connection therewith and (d) this
Article 8. Subject to
compliance
with this Article 8, the Company may exercise its option under this Section
8.02
notwithstanding the prior exercise of its option under Section 8.03
hereof.
79
Section
8.03. Covenant
Defeasance.
Upon
the
Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, the Company shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from its obligations under
the
covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13,
4.14,
4.15, 4.16, 4.17, 4.18 and 4.19 hereof with respect to the outstanding
Notes on
and after the date the conditions set forth in Section 8.04 are satisfied
(hereinafter, “Covenant Defeasance”), and the Notes shall thereafter be deemed
not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Notes shall
not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company
and
the Subsidiary Guarantors may omit to comply with and shall have no liability
in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein
to
any such covenant or by reason of any reference in any such covenant to
any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01
hereof,
but, except as specified above, the remainder of this Indenture and such
Notes
shall be unaffected thereby. In addition, upon the Company’s exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, subject
to
the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(a)(iii) through (vii) shall not constitute Events of Default.
Section
8.04. Conditions
to Legal or Covenant Defeasance.
(a) The
following shall be the conditions to the application of either Section
8.02 or
8.03 hereof to the outstanding Notes:
(i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of
the Holders of the Notes, cash in U.S. dollars, non-callable U.S. Government
Obligations, or a combination thereof, in such amounts as will be sufficient,
in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, or interest and premium, if any, on the outstanding
Notes on the stated maturity or on the applicable redemption date, as the
case
may be, and the Company must specify whether the Notes are being defeased
to
maturity or to a particular redemption date;
(ii) in
the
case of Legal Defeasance, the Company shall have delivered to the Trustee
an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that (a) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (b) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in
either case to the effect that, and based thereon such opinion of counsel
shall
confirm that, the Holders of
80
the
outstanding Notes will not recognize income, gain or loss for federal income
tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as
would have been the case if such Legal Defeasance had not occurred;
(iii) in
the
case of Covenant Defeasance, the Company shall have delivered to the Trustee
an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize
income,
gain or loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same amounts,
in the
same manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
(iv) no
Default or Event of Default shall have occurred and be continuing either:
(a) on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit); or (b) insofar
as
Events of Default from bankruptcy or insolvency events are concerned, at
any
time in the period ending on the 123rd day after the date of
deposit;
(v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or
violation
of, or constitute a default under any material agreement or instrument
(other
than this Indenture) to which the Company or any of its Subsidiaries is
a party
or by which the Company or any of its Subsidiaries is bound;
(vi) the
Company must deliver to the Trustee an Officers’ Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders
of
Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or
others;
(vii) if
the
Notes are to be redeemed prior to their stated maturity, the Company must
deliver to the Trustee irrevocable instructions to redeem all of the Notes
on
the specified redemption date; and
(viii) the
Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
Section
8.05. Deposited
Money and Government Securities to Be Held in Trust;
Other
Miscellaneous Provisions.
(a) Subject
to Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee pursuant to
Section
8.04 hereof in respect of the outstanding Notes shall be held in trust
and
applied by the Trustee, in accordance with the provisions of such Notes
and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine,
to
the Holders of such Notes of all sums due and to become due thereon in
respect
of principal, premium and Liquidated Damages, if any, and interest, but
such
money need not be segregated from other funds except to the extent required
by
law.
81
(b) The
Company shall pay and indemnify the Trustee against any tax, fee or other
charge
imposed on or assessed against the cash or non-callable Government Securities
deposited pursuant to Section 8.04 hereof or the principal and interest
received
in respect thereof other than any such tax, fee or other charge which by
law is
for the account of the Holders of the outstanding Notes.
(c) Anything
in this Article Eight to the contrary notwithstanding, the Trustee shall
deliver
or pay to the Company from time to time upon the request of the Company
any
money or non-callable Government Securities held by it as provided in Section
8.04 hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the
Trustee (which may be the opinion delivered under Section 8.04(a) hereof),
are
in excess of the amount thereof that would then be required to be deposited
to
effect an equivalent Legal Defeasance or Covenant Defeasance.
Section
8.06. Repayment
to the Company.
Any
money
deposited with the Trustee or any Paying Agent, or then held by the Company,
in
trust for the payment of the principal of, premium, if any, or interest
on any
Note and remaining unclaimed for two years after such principal, and premium,
if
any, or interest has become due and payable shall be paid to the Company
on its
request or (if then held by the Company) shall be discharged from such
trust;
and the Holder of such Note shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent
with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or
such
Paying Agent, before being required to make any such repayment, may at
the
expense of the Company cause to be published once, in the New York Times
and The
Wall Street Journal (national edition), notice that such money remains
unclaimed
and that, after a date specified therein, which shall not be less than
30 days
from the date of such notification or publication, any unclaimed balance
of such
money then remaining shall be repaid to the Company.
Section
8.07. Reinstatement.
If
the
Trustee or Paying Agent is unable to apply any United States dollars or
non-callable Government Securities in accordance with Section 8.02 or 8.03
hereof, as the case may be, by reason of any order or judgment of any court
or
governmental authority enjoining, restraining or otherwise prohibiting
such
application, then the Company’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant
to
Section 8.02 or 8.03 hereof and, in the case of a Legal Defeasance, the
Subsidiary Guarantors’ obligations under their respective Subsidiary Guarantees
shall be revised and reinstated as though no deposit had occurred pursuant
to
Section 8.02 hereof, in each case until such time as the Trustee or Paying
Agent
is permitted to apply all such money in accordance with Section 8.02 or
8.03
hereof, as the case may be; provided, however, that, if the Company makes
any
payment of principal of, premium, if any, or interest on any Note following
the
reinstatement of its obligations, the Company shall be subrogated to the
rights
of the Holders of such Notes to receive such payment from the money held
by the
Trustee or Paying Agent.
82
ARTICLE
NINE
Section
9.01. Without
Consent of Holders of Notes.
(a) Notwithstanding
Section 9.02 of this Indenture, the Company, the Subsidiary Guarantors,
and the
Trustee may amend or supplement this Indenture, the Notes or the Collateral
Documents without the consent of any Holder of a Note:
(i) to
cure
any ambiguity, omission, defect or inconsistency;
(ii) to
provide for uncertificated Notes in addition to or in place of certificated
Notes;
(iii) to
provide for the assumption of the Company’s or any Subsidiary Guarantor’s
obligations to Holders of Notes in the case of a merger or consolidation
or sale
of all or substantially all of the Company’s or such Subsidiary Guarantor’s
assets;
(iv) to
add
any additional assets as Collateral;
(v) to
release Collateral from the Lien of the Indenture and the Collateral Documents
when permitted or required by the Collateral Documents or the Indenture;
(vi) upon
any
amendment, waiver or consent to the First Priority Collateral Documents
granting
the First Priority Liens on the Collateral, amending, waiving or consenting
to
the comparable provisions of the Collateral Documents as and to the extent
set
forth in the Intercreditor Agreement;
(vii) to
make
any change that would provide any additional rights or benefits to the
Holders
of Notes or that does not adversely affect the legal rights under this
Indenture
of any such Holder in any material respect;
(viii) to
comply
with requirements of the Commission in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act; or
(ix) to
reflect the release of any Subsidiary Guarantor from its Subsidiary Guarantee
or
add any Subsidiary Guarantor pursuant to and in the manner provided by
this
Indenture.
(b) Upon
the
request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental Indenture,
and
upon receipt by the Trustee of any documents requested under Section 7.02(b)
hereof, the Trustee shall join with the Company in the execution of any
amended
or supplemental Indenture authorized or permitted by the terms of this
Indenture
and to make any further appropriate agreements and stipulations that may
be
therein contained, but the Trustee shall not be obligated to
enter
into such amended or supplemental Indenture that affects its own rights,
duties
or immunities under this Indenture or otherwise.
83
Section
9.02. With
Consent of Holders of Notes.
(a) Except
as
otherwise provided in this Section 9.02, the Company, the Subsidiary Guarantors
and the Trustee may amend or supplement this Indenture with the consent
of the
Holders of at least a majority in aggregate principal amount of the Notes
then
outstanding (including, without limitation, consents obtained in connection
with
a purchase of, or tender offer or exchange offer for, Notes), and, subject
to
Sections 6.04 and 6.07 hereof, any past default or compliance with any
provisions may also be waived (except a default in the payment of principal,
premium or interest and certain covenants and provisions of this Indenture
which
cannot be amended without the consent of each Holder of an outstanding
Note)
with the consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding (including consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the
Notes).
(b) The
Company may, but shall not be obligated to, fix a record date for the purpose
of
determining the Persons entitled to consent to any indenture supplemental
hereto. If a record date is fixed, the Holders on such record date, or
its duly
designated proxies, and only such Persons, shall be entitled to consent
to such
supplemental indenture, whether or not such Holders remain Holders after
such
record date; provided that unless such consent shall have become effective
by
virtue of the requisite percentage having been obtained prior to the date
which
is 90 days after such record date, any such consent previously given shall
automatically and without further action by any Holder be cancelled and
of no
further effect.
(c) Upon
the
request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amendment or supplement to this Indenture,
and upon the filing with the Trustee of evidence satisfactory to the Trustee
of
the consent of the Holders of Notes as aforesaid, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee
shall
join with the Company in the execution of such amendment or supplement
unless
such amendment or supplement directly affects the Trustee’s own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee
may
in its discretion, but shall not be obligated to, enter into such amendment
or
supplement.
(d) It
shall
not be necessary for the consent of the Holders of Notes under this Section
9.02
to approve the particular form of any proposed amendment, supplement or
waiver,
but it shall be sufficient if such consent approves the substance
thereof.
(e) After
an
amendment, supplement or waiver under this Section becomes effective, the
Company shall mail to the Holders of Notes affected thereby a notice briefly
describing the amendment, supplement or waiver. Any failure of the Company
to
mail such notice, or any defect therein, shall not, however, in any way
impair
or affect the validity of any such amendment, supplement or waiver. Subject
to
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
amount of the then outstanding Notes (including Additional Notes, if any)
may
waive compliance in a particular instance by the Company with any provision
84
of
this
Indenture, or the Notes. However, without the consent of each Holder affected,
an amendment or waiver under this Section 9.02 may not (with respect to
any
Notes held by a non-consenting Holder):
(i) reduce
the amount of Notes whose Holders must consent to an amendment, supplement
or
waiver;
(ii) reduce
the principal of or change the fixed maturity of any Note or change the
date on
which any Notes may be subject to redemption or repurchase, reduce the
redemption or repurchase price of the Notes, or waive any payment with
respect
to the redemption of the Notes (except as would otherwise be permitted
under
this Section 9.02(e)(ix));
(iii) reduce
the rate of or change the time for payment of interest on any Note;
(iv) waive
a
Default or Event of Default in the payment of principal, premium or interest
on
the Notes (except a rescission of acceleration of the Notes by the Holders
of at
least a majority in aggregate principal amount of the Notes and a waiver
of the
payment default that resulted from such acceleration);
(v) make
any
Note payable in currency other than U.S. dollars;
(vi) make
any
change in the provisions of this Indenture relating to waivers of past
Defaults
or the rights of Holders of Notes to receive payments of principal, interest
or
premium, if any, on the Notes;
(vii) release
any Subsidiary Guarantor from any of its obligations under its Subsidiary
Guarantee or this Indenture, except in accordance with the terms of this
Indenture;
(viii) impair
the right to institute suit for the enforcement of any payment on or with
respect to the Notes or the Subsidiary Guarantees;
(ix) after
the
Company’s obligation to purchase the Notes arises under this Indenture, amend,
change or modify the obligation of the Company to make and consummate an
Asset
Sale Offer with respect to any Asset Sale in accordance with Section 4.11
or the
obligation of the Company to make and consummate a Change of Control Offer
in
the event of a Change of Control in accordance with Section 4.19, including,
in
each case, amending, changing or modifying any definition relating
thereto;
(x) amend
or
modify any of the provisions of this Indenture or the related definitions
affecting the subordination or ranking of the Notes or any Subsidiary Guarantee
in any manner adverse to the Holders of the Notes or any Subsidiary Guarantee;
(xi) except
as
permitted by this Indenture, the Collateral Documents or the Intercreditor
Agreement, release the Company or any Guarantor from the Collateral Documents
or
release all or substantially all the collateral granted thereunder;
or
85
(xii) make
any
change in the preceding amendment and waiver provisions.
Section
9.03. Compliance
with Trust Indenture Act.
Every
amendment or supplement to this Indenture or the Notes shall be set forth
in a
document that complies with the TIA as then in effect.
Section
9.04. Revocation
and Effect of Consents.
Until
an
amendment, supplement or waiver becomes effective, a consent to it by a
Holder
of a Note is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note
may
revoke the consent as to its Note if the Trustee receives written notice
of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section
9.05. Notation
on or Exchange of Notes.
(a) The
Trustee may place an appropriate notation about an amendment, supplement
or
waiver on any Note thereafter authenticated. The Company in exchange for
all
Notes may issue and the Trustee shall, upon receipt of an Authentication
Order,
authenticate new Notes that reflect the amendment, supplement or
waiver.
(b) Failure
to make the appropriate notation or issue a new Note shall not affect the
validity and effect of such amendment, supplement or waiver.
Section
9.06. Trustee
to Sign Amendments, Etc.
The
Trustee shall sign any amendment or supplement to this Indenture or any
Note
authorized pursuant to this Article Nine if the amendment or supplement
does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture or Note
until
its Board of Directors approves it. In executing any amendment or supplement
or
Note, the Trustee shall be entitled to receive and (subject to Section
7.01
hereof) shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel stating that the execution of such amendment or supplement
is
authorized or permitted by this Indenture and all conditions precedent
and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied.
86
ARTICLE
TEN
Section
10.01. Satisfaction
and Discharge.
(a) This
Indenture shall be discharged and shall cease to be of further effect as
to all
Notes issued thereunder, when:
(i) either:
(A) all
Notes
that have been authenticated (except lost, stolen or destroyed Notes that
have
been replaced or paid and Notes for whose payment money has theretofore
been
deposited in trust and thereafter repaid to the Company) have been delivered
to
the Trustee for cancellation; or
(B) all
Notes
that have not been delivered to the Trustee for cancellation have become
due and
payable by reason of the sending of a notice of redemption or otherwise
or will
become due and payable within one year and the Company or any Subsidiary
Guarantor has irrevocably deposited or caused to be deposited with the
Trustee
as trust funds in trust solely for the benefit of the Holders, cash in
U.S.
dollars, non-callable Government Securities, or a combination thereof,
in such
amounts as will be sufficient without consideration of any reinvestment
of
interest, to pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium and Liquidated
Damages, if any, and accrued interest to the date of maturity or
redemption;
(ii) no
Default or Event of Default shall have occurred and be continuing on the
date of
any deposit referred to in clause (a)(i)(B) or shall occur as a result
of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or
any
Subsidiary of the Company is a party or by which the Company or any Subsidiary
of the Company is bound;
(iii) the
Company has paid or caused to be paid all sums payable by it under this
Indenture; and
(iv) the
Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes
at
maturity or the redemption date, as the case may be.
(b) In
addition, the Company must deliver an Officers’ Certificate and an Opinion of
Counsel (which opinion may be subject to customary assumptions and exclusions)
to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
87
(c) Notwithstanding
the above, the Trustee shall pay to the Company from time to time upon
its
request any cash or Government Securities held by it as provided in this
section
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification delivered to the Trustee,
are
in excess of the amount thereof that would then be required to be deposited
to
effect a satisfaction and discharge under this Article Eleven.
Section
10.02. Deposited
Money and Government Securities to Be Held in Trust;
Other
Miscellaneous Provisions.
Subject
to Section 10.03 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee pursuant to
Section
10.01 hereof in respect of the outstanding Notes shall be held in trust
and
applied by the Trustee, in accordance with the provisions of such Notes
and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine,
to
the Holders of such Notes of all sums due and to become due thereon in
respect
of principal, premium and Liquidated Damages, if any, and interest, but
such
money need not be segregated from other funds except to the extent required
by
law.
Section
10.03. Repayment
to the Company.
Any
money
deposited with the Trustee or any Paying Agent, or then held by the Company,
in
trust for the payment of the principal of, premium and Liquidated Damages,
if
any, or interest on any Note and remaining unclaimed for two years after
such
principal, and premium or Liquidated Damages, if any, or interest has become
due
and payable shall be paid to the Company on its request or (if then held
by the
Company) shall be discharged from such trust; and the Holder of such Note
shall
thereafter look only to the Company for payment thereof, and all liability
of
the Trustee or such Paying Agent with respect to such trust money, and
all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to
make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times or The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining shall
be
repaid to the Company.
ARTICLE
ELEVEN
Section
11.01. Guarantees.
Each
Subsidiary Guarantor hereby unconditionally and irrevocably guarantees,
jointly
and severally, to each Holder and to the Trustee and its successors and
assigns
(a) the full and punctual payment of principal of and interest on
the Notes
when due, whether at maturity, by acceleration, by redemption or otherwise,
and
all other monetary obligations of the Company under this Indenture and
the Notes
and (b) the full and punctual performance within applicable grace
periods
of all other obligations of the Company under this Indenture, the Notes,
the
Purchase Agreement and the Collateral Documents (all the foregoing obligations
of the Company being hereinafter collectively called the “Guaranteed
Obligations”). Each Subsidiary
88
Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed,
in
whole or in part, without notice or further assent from such Subsidiary
Guarantor and that such Subsidiary Guarantor will remain bound under this
Article 11 notwithstanding any extension or renewal of any
Obligation.
Each
Subsidiary Guarantor waives presentation to, demand of, payment from and
protest
to the Company of any of the Guaranteed Obligations and also waives notice
of
protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default
under the Notes or the Guaranteed Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (1) the
failure of
any Holder or the Trustee to assert any claim or demand or to enforce any
right
or remedy against the Company or any other Person (including any Subsidiary
Guarantor) under this Indenture, the Notes or any other agreement or otherwise;
(2) any extension or renewal of any thereof; (3) any rescission,
waiver, amendment or modification of any of the terms or provisions of
this
Indenture, the Notes or any other agreement; (4) the release of
any
security held by any Holder or the Trustee for the Guaranteed Obligations
or any
of them; (5) the failure of any Holder or the Trustee to exercise
any right
or remedy against any other guarantor of the Guaranteed Obligations; or
(6) except as set forth in Section 11.06, any change in the ownership
of
such Subsidiary Guarantor.
Each
Subsidiary Guarantor further agrees that its Subsidiary Guaranty herein
constitutes a guarantee of payment, performance and compliance when due
(and not
a guarantee of collection) and waives any right to require that any resort
be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
Except
as
expressly set forth in Sections 8.02, 11.02 and 11.06, the obligations
of
each Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim
of
waiver, release, surrender, alteration or compromise, and shall not be
subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever
or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise. Without limiting the generality of the foregoing,
the
obligations of each Subsidiary Guarantor herein shall not be discharged
or
impaired or otherwise affected by the failure of any Holder or the Trustee
to
assert any claim or demand or to enforce any remedy under this Indenture,
the
Securities or any other agreement, by any waiver or modification of any
thereof,
by any default, failure or delay, willful or otherwise, in the performance
of
the obligations, or by any other act or thing or omission or delay to do
any
other act or thing which may or might in any manner or to any extent vary
the
risk of such Subsidiary Guarantor or would otherwise operate as a discharge
of
such Subsidiary Guarantor as a matter of law or equity.
Each
Subsidiary Guarantor further agrees that its Guarantee herein shall continue
to
be effective or be reinstated, as the case may be, if at any time payment,
or
any part thereof, of principal
of or interest on any Obligation is rescinded or must otherwise be restored
by
any Holder or the Trustee upon the bankruptcy or reorganization of the
Company
or otherwise.
89
In
furtherance of the foregoing and not in limitation of any other right which
any
Holder or the Trustee has at law or in equity against any Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay the principal
of or
interest on any Obligation when and as the same shall become due, whether
at
maturity, by acceleration, by redemption or otherwise, or to perform or
comply
with any other Obligation, each Subsidiary Guarantor hereby promises to
and
shall, upon receipt of written demand by the Trustee, forthwith pay, or
cause to
be paid, in cash, to the Holders or the Trustee an amount equal to the
sum of
(A) the unpaid amount of such Guaranteed Obligations, (B) accrued
and
unpaid interest on such Guaranteed Obligations (but only to the extent
not
prohibited by law) and (C) all other monetary Guaranteed Obligations of
the
Company to the Holders and the Trustee.
Each
Subsidiary Guarantor agrees that it shall not be entitled to any right
of
subrogation in respect of any Obligations guaranteed hereby until payment
in
full of all Obligations. Each Subsidiary Guarantor further agrees that,
as
between it, on the one hand, and the Holders and the Trustee, on the other
hand,
(i) the maturity of the Guaranteed Obligations hereby may be accelerated
as
provided in Article 6 for the purposes of such Subsidiary Guarantor's Subsidiary
Guaranty herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Guaranteed Obligations guaranteed
hereby, and (ii) in the event of any declaration of acceleration
of such
Guaranteed Obligations as provided in Article 6, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due
and
payable by such Subsidiary Guarantor for the purposes of this
Section.
Each
Subsidiary Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any Holder
in
enforcing any rights under this Section.
Section
11.02. Limitation
on Liability.
Any
term
or provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by
any
Subsidiary Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Subsidiary
Guarantor, voidable under applicable law relating to fraudulent conveyance
or
fraudulent transfer or similar laws affecting the rights of creditors
generally.
Section
11.03. Successors
and Assigns.
Except
as
set forth in Section 11.06, this Article 11 shall be binding upon
each
Subsidiary Guarantor and its successors and assigns and shall enure to
the
benefit of the successors and assigns of the Trustee and the Holders and,
in the
event of any transfer or assignment of rights by any Holder or the Trustee,
the
rights and privileges conferred upon that party in this Indenture and in
the
Securities shall automatically extend to and be vested in such transferee
or
assignee, all subject to the terms and conditions of this
Indenture.
Section
11.04. No
Waiver.
Neither
a
failure nor a delay on the part of either the Trustee or the Holders in
exercising any right, power or privilege under this Article 11 shall operate
as
a waiver thereof, nor shall a single or partial exercise thereof preclude
any
other or further exercise of any right, power or privilege. The rights,
remedies
and benefits of the Trustee and the Holders herein expressly specified
are
cumulative and not exclusive of any other rights, remedies or benefits
which
either may have under this Article 11 at law, in equity, by statute or
otherwise.
90
Section
11.05. Intentionally
Omitted.
Section
11.06. Release
of Subsidiary
Guarantor.
A
Subsidiary Guarantor will be released from its obligations under this Article
11
(other than any obligation that may have arisen under Section
11.07)
(a) upon
the
sale or other disposition (including by way of consolidation or merger)
of a
Subsidiary Guarantor, including the sale or disposition of Capital Stock
of a
Subsidiary Guarantor following which such Subsidiary Guarantor is no longer
a
Subsidiary,
(b) upon
the
sale or disposition of all or substantially all the assets of such Subsidiary
Guarantor,
(c) upon
defeasance of the Securities pursuant to Article 8, or
(d) upon
the
full satisfaction of the Company’ obligations under this Indenture;
provided,
however,
that in
the case of clauses (a) and (b) above, (i) such sale or other disposition
is made to a Person other than the Company or a Subsidiary of the Company
and
(ii) such sale or disposition is otherwise permitted by this Indenture.
At
the request of the Company, the Trustee shall execute and deliver an appropriate
instrument evidencing such release.
Section
11.07. Contribution.
Each
Subsidiary Guarantor that makes a payment under its Subsidiary Guaranty
shall be
entitled upon payment in full of all Guaranteed Obligations under this
Indenture
to a contribution from each other Subsidiary Guarantor in an amount equal
to
such other Subsidiary Guarantor's pro rata
portion
of such payment based on the respective net assets of all the Subsidiary
Guarantors at the time of such payment determined in accordance with
GAAP.
ARTICLE
TWELVE
Section
12.01. Collateral;
Additional Collateral; Substitute Collateral.
(a) In
order
to secure the due and punctual payment of the principal of, premium, if
any, and
interest on the Notes, and all other obligations of the Company and the
Guarantors under this Indenture and the Collateral Documents, when and
as the
same shall be due and payable, the Company, the
Subsidiary Guarantors and
the
Collateral Trustee have simultaneously with the execution of this Indenture
entered into the Collateral Documents to create on a second priority basis
security interests in substantially all of the Company’s and the Company’s
existing and future Subsidiaries’ tangible and intangible property (real,
personal or otherwise).
91
(b) The
Collateral Trustee, the Company, and the Subsidiary Guarantors, each
hereby agree that the Collateral Trustee holds its interest in the Collateral
in
trust for its benefit and for the benefit of the Holders pursuant to the
terms
of the Collateral Documents. Each of the Company and the Subsidiary Guarantors
covenants and agrees that it shall execute, acknowledge and deliver to
the
Collateral Trustee such further assignments, transfers, assurances or other
instruments and shall do or cause to be done all such acts and things as
may be
necessary or proper to assure and confirm to the Collateral Trustee that
it
holds duly created, enforceable and perfected Liens upon the Collateral,
or any
part thereof, as from time to time constituted, and the right, title and
interest in and to the Collateral Documents so as to render the same available
for the security and benefit of this Indenture and of the Notes.
(c) The
Collateral Trustee shall act as the collateral trustee pursuant to the
Intercreditor Agreement and Second Priority Documents and shall be authorized
to
appoint co-Collateral Trustees as necessary in its sole discretion. Except
as
otherwise explicitly provided herein or in the Intercreditor Agreement
or Second
Priority Documents, neither the Collateral Trustee nor any of its respective
officers, directors, employees or agents shall be liable for failure to
demand,
collect or realize upon any of the Collateral or for any delay in doing
so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any other person or to take any other action whatsoever
with
regard to the Collateral or any part thereof. The Collateral Trustee shall
be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither the Collateral Trustee nor any of
its
officers, directors, employees or agents shall be responsible for any act
or
failure to act hereunder, except for its own willful misconduct, gross
negligence or bad faith.
(d) (i)
Each
Holder, by its acceptance of the Notes, consents and agrees to the terms
of the
Intercreditor Agreement and the Second Priority Documents as the same may
be in
effect or may be amended from time to time in accordance with their terms.
(ii) By
their
acceptance of the Notes, the Holders hereby authorize and instruct the
Trustee,
as Collateral Trustee, to (A) enter into the Second Priority Documents,
(B)
bind
the
Holders on the terms set forth in the Second Priority Documents and (C)
perform
and observe its obligations under the Collateral Documents.
92
(iii) By
their
acceptance of the Notes, the Holders hereby authorize and instruct the
Collateral Trustee to (A) enter into the Intercreditor Agreement, (B) bind
the
olders
on
the terms set forth in the Intercreditor Agreement, and (C) perform and
observe
its obligations under the Intercreditor Agreement.
Section
12.02. Additional
Collateral; Acquisition of Assets or Property.
Concurrently
with the acquisition by the Company or any Subsidiary Guarantor of any
Property
comprising the Collateral hereafter acquired by the Company or any Subsidiary
Guarantor, the Company shall, or shall cause such Subsidiary Guarantor,
as the
case may be, to, as promptly as practicable, subject to obtaining the consents
contemplated by the next succeeding paragraph:
(i) execute
and deliver to the Collateral Trustee, such Collateral Documents and take
such
other actions as shall be necessary to create, perfect and protect a Lien
in
favor of the Collateral Trustee on such assets or property (to the extent
required to be perfected in accordance with the terms of the Collateral
Documents);
(ii) with
respect to any fee interest in any tract (or series of tracts at the same
location) of real property after the Issue Date by the Company or any Subsidiary
Guarantor, promptly (A) execute and deliver a Second Priority Mortgage
in favor
of the Collateral Trustee, creating a second priority security interest
for the
benefit of the Holders of the Notes, covering such real property, and (B)
deliver to the Collateral Trustee title and extended coverage insurance
covering
such real property in an amount at least equal to the purchase price of
such
real property, with local fixture filings being made in respect of fixtures
associated with such real property as well as a current ALTA survey thereof,
together with a surveyor’s certificate; and
(iii) promptly
deliver to the Collateral Trustee such opinions of counsel, if any, as
the
Collateral Trustee may reasonably require with respect to this Section
12.01(b)
(including opinions as to enforceability and perfection of security interests),
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to such Collateral Trustee.
(b) If
the
granting or perfection of a security interest in such property requires
the
consent or agreement of a third party, the Company will use commercially
reasonable efforts to obtain such consent as promptly as practicable with
respect to the Lien for the benefit of the Collateral Trustee.
(c)
Section
12.03. [Intentionally
Omitted]
Section
12.04. Release
of Collateral.
(a) The
Liens
in favor of the Collateral Trustee under the Collateral Documents will
be
released in whole: (i) upon payment in full of the principal of, and accrued
and
unpaid interest and premium, if any, and additional interest, if any, on
all
outstanding Notes and payment in full of all other Obligations with respect
to
the Notes that are due and payable at or prior to the time such principal,
accrued and unpaid interest and premium are paid; or (ii) upon defeasance
of the
Notes or a discharge of the Indenture in accordance with the provisions
described in Article Eight..
(b) The
Liens
in favor of the Collateral Trustee under the Collateral Documents will
be
released with respect to any asset constituting Collateral, if:
(i) The
asset
has been sold or otherwise disposed of by the Company or a Subsidiary Guarantor
to a Person other than the Company or a Restricted Subsidiary in a transaction
permitted by and in accordance with the Indenture, at the time of such
sale or
disposition; or
93
(ii) The
Collateral Trustee and the New Credit Facility Agent, in accordance with
the
provisions set forth in the Intercreditor Agreement, exercise any remedies
in
respect to such asset, including any sale or other disposition
thereof.
The
Company, subject to compliance with Section 4.07, has the ability to issue
Additional Notes having identical terms and conditions to the
Notes.
Section
12.05. Possession
and Use of Collateral.
Subject
to and in accordance with the provisions of this Indenture, the
Intercreditor Agreement and the Collateral Documents,
so long
as the Collateral Trustee has not exercised rights or remedies with respect
to
the Collateral in connection with an Event of Default that has occurred
and is
continuing, except as provided in the Intercreditor Agreement and the Collateral
Documents, the Company and the Subsidiary Guarantors shall have the right
to
remain in possession and retain exclusive control of and to exercise all
rights
with respect to the Collateral, to freely, operate, manage, develop, lease,
use,
consume and enjoy the Collateral, to alter or repair any Collateral so
long as
such alterations and repairs do not impair the Liens of the Collateral
Documents
thereon, and otherwise comply with Section 12.03 hereof, and to collect,
receive, use, invest and dispose of the profits, revenues, proceeds and
other
income thereof.
94
Section
12.06. Authorization
of Actions to Be Taken by the Collateral Trustee Under the Collateral Documents
and the Intercreditor Agreement.
Subject
to the provisions of the Collateral Documents and the Intercreditor
Agreement:
(a) the
Collateral Trustee may, in its sole discretion and without the consent
of the
Holders, take all actions it deems necessary or appropriate in order to
(i)
enforce any of the terms of the Collateral Documents; and (ii) collect
and
receive any and all amounts payable in respect of the obligations of the
Company, the Subsidiary Guarantors hereunder and under the Collateral Documents;
and
(b) the
Collateral Trustee shall have power to institute and to maintain such suits
and
proceedings as it may deem reasonably necessary to prevent any impairment
of the
Collateral by any act that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits and proceedings as the Collateral
Trustee may deem reasonably necessary to preserve or protect its interests
and
the interests of the Holders in the Collateral (including the power to
institute
and maintain suits or proceedings to restrain the enforcement of or compliance
with any legislative or other governmental enactment, rule or order that
may be
unconstitutional or otherwise invalid if the enforcement of, or compliance
with,
such enactment, rule or order would impair the security interest thereunder
or
be prejudicial to the interests of the Holders or of the Collateral
Trustee).
By
acquiring a Note and without any further action on its part, each Holder
hereby
consents to the terms of the Intercreditor Agreement and authorizes and
directs
the Collateral Trustee to take each action that the Collateral Trustee
is
required to take pursuant to the terms of the Intercreditor
Agreement.
Section
12.07. Recording,
Registration and Opinions.
(a) As
required by the provisions of Section 314(b) of the TIA, the Company and,
if
applicable, the Subsidiary Guarantors shall take or cause to be taken all
action
required to perfect, maintain, preserve and protect the Lien on and security
interest in the Collateral granted by the Second Priority Documents (subject
only to Permitted Liens), including without limitation, the filing of financing
statements, continuation statements, mortgages and any instruments of further
assurance, in such manner and in such places as may be required by law
fully to
preserve and protect the rights of the Holders and the Collateral Trustee
under
this Indenture and the Second Priority Documents to all property comprising
the
Collateral. The Company shall from time to time promptly pay all financing,
continuation statements and mortgage recording, registration and/or filing
fees,
charges and taxes relating to this Indenture and the Second Priority Documents,
any amendments thereto and any other instruments of further assurance required
hereunder or pursuant to the Second Priority Documents. The Collateral
Trustee
shall have no obligation to, nor shall it be responsible for any failure
to, so
register, file or record.
(b) The
Company shall furnish to the Trustee on the anniversary of the Issue Date
in
each year, beginning with 2005, an Opinion of Counsel, dated as of such
date,
which complies with TIA § 314(b)(2), either (i)(x) stating that, in the
opinion of such counsel, such action has been taken with respect to the
delivery
of Collateral, recordings, registrations, filings, re-recordings,
re-registrations and refilings of this Indenture, the Collateral Documents
and
all supplemental indentures, financing statements, continuation statements
and
other instruments of further assurance as are necessary to maintain the
perfected Liens of the Collateral Documents under applicable law in those
items
of Collateral that can be perfected by the filing, recordings, registrations
or
delivery and reciting with respect to such Liens on and security interests
in
the Collateral the details of such action or referring to prior Opinions
of
Counsel in which such details are given, and (y) stating that, based on
relevant
laws as in effect on the date of such Opinion of Counsel, all financing
statements, continuation statements, and other documents have been executed
and
filed that are necessary, as of such date and during the succeeding 12
months,
fully to maintain the perfection of the security interests of the Collateral
Trustee hereunder and under the Collateral Documents with respect to the
Collateral; provided
that if
there is a required filing of a continuation statement or other instrument
within such 12 month period and such continuation statement or other instrument
is not effective if filed at the time of the opinion, such opinion may
so state
and in that case the Company shall cause a continuation statement or other
instrument to be timely filed so as to maintain such Liens and security
interests and shall provide a further Opinion of Counsel to the effect
of this
clause (i) upon the filing of the relevant continuation statement or other
instrument; or (ii) stating that, in the opinion of such counsel, no such
action
is necessary to maintain such Liens or security interests.
(c) In
the
event that the Company or any Guarantor wish the Collateral Trustee to
execute a
release of any Collateral from the lien of the Second Priority Documents
in
accordance with this Indenture, the Intercreditor Agreement and the Second
Priority Documents, it shall furnish the Collateral Trustee an Officers’
Certificate complying with Section 13.04 certifying that all conditions
precedent have been met and that no consent of the Holders is required
together
with any documents required by any other provision
95
of
this
Indenture and delivery as required by this Indenture, an Opinion of Counsel
to
the effect that such accompanying documents constitute all the documents
required by this Indenture, by Section 314(d) of the TIA or that no such
documents are so required. If such release is given pursuant to the automatic
release provisions of the Intercreditor Agreement, the Officers’ Certificate
shall also be accompanied by evidence that the Collateral has been released
under the First Priority Documents. Upon the receipt of such documents
the
Trustee shall execute, or shall cause the Collateral Trustee to execute,
a
release of the Collateral. The Trustee, however, shall have no duty to
confirm
the legality or validity of such documents, its sole duty being to certify
that
it has received such documentation which on their face conform to Section
314(d)
of the TIA.
ARTICLE
THIRTEEN
Section
13.01. Trust
Indenture Act Controls.
If
any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by TIA §318(c), the imposed duties shall control.
Section
13.02. Notices.
(a) Any
notice or communication by the Company or any Subsidiary Guarantor, on
the one
hand, or the Trustee on the other hand, to the other is duly given if in
writing
and delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing
next
day delivery, to the others’ address:
If
to the
Company or any Subsidiary Guarantor:
Integrated
Alarm Services Group, Inc.
One
Capital Center
00
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxx
If
to the
Trustee:
Xxxxx
Fargo Bank, N.A.
000
Xxxxx
Xxxxxx
Xxxxx
000
Xxxxxxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxx X’Xxxxxxx
(b) The
Company, the Subsidiary Guarantors or the Trustee, by notice to the others
may
designate additional or different addresses for subsequent notices or
communications.
(c) All
notices and communications (other than those sent to Holders) shall be
deemed to
have been duly given: at the time delivered by hand, if personally delivered;
three Business Days after being deposited in the mail, postage prepaid,
if
mailed; when receipt acknowledged, if telecopied; and the next Business
Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery. The Trustee may accept signatures to original
documents to the same effect as if it had received the original of such
documents.
96
(d) Any
notice or communication to a Holder shall be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air
courier
guranteeing
next day delivery to its address shown on the register kept by the Registrar.
Any notice or communication shall also be so mailed to any Person described
in
TIA §313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
(e) If
a
notice or communication is mailed in the manner provided above within the
time
prescribed, it is duly given, whether or not the addressee receives
it.
(f) If
the
Company mails a notice or communication to Holders, it shall mail a copy
to the
Trustee and each Agent at the same time.
Section
13.03. Communication
by Holders of Notes with Other Holders of Notes.
Holders
may communicate pursuant to TIA §312(b) with other Holders with respect to its
rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA §312(c).
Section
13.04. Certificate
and Opinion as to Conditions Precedent.
Upon
any
request or application by the Company to the Trustee to take any action
under
this Indenture, the Company shall furnish to the Trustee:
(i) an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 13.05
hereof)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been satisfied; and
(ii) an
Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee
(which shall include the statements set forth in Section 13.05 hereof)
stating
that, in the opinion of such counsel (who may rely upon and Officers’
Certificate as to matters of fact), all such conditions precedent and covenants
have been satisfied.
Section
13.05. Statements
Required in Certificate or Opinion.
Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant
to
TIA §314(a)(4)) shall comply with the provisions of TIA §314(e) and shall
include:
(i) a
statement that the Person making such certificate or opinion has read such
covenant or condition;
(ii) a
brief
statement as to the nature and scope of the examination or investigation
upon
which the statements or opinions contained in such certificate or opinion
are
based;
(iii) a
statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and
97
(iv) a
statement as to whether or not, in the opinion of such Person, such condition
or
covenant has been satisfied.
Section
13.06. Rules
by Trustee and Agents.
The
Trustee may make reasonable rules for action by or at a meeting of Holders.
The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.
Section
13.07. No
Personal Liability of Directors, Officers, Employees and
Stockholders.
No
director, officer, employee, incorporator or shareholder of the Company
or any
Subsidiary Guarantor, as such, shall have any liability for any obligations
of
the Company or the Subsidiary Guarantors under the Notes, this Indenture,
the
Subsidiary Guarantees or for any claim based on, in respect of, or by reason
of,
such obligations or their creation. Each Holder of Notes by accepting a
Note
waives and releases all such liability. This waiver and release are part
of the
consideration for issuance of the Notes. The waiver may not be effective
to
waive liabilities under the federal securities laws.
Section
13.08. Governing
Law.
THE
LAWS
OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES.
Section
13.09. Consent
to Jurisdiction.
Any
legal
suit, action or proceeding arising out of or based upon this Indenture
or the
transactions contemplated hereby (“Related Proceedings”) may be instituted in
the federal courts of the United States of America located in the City
of New
York, Borough of Manhattan, or the courts of the State of New York in each
case
located in the City of New York (collectively, the “Specified Courts”), and each
party irrevocably submits to the non-exclusive jurisdiction of such courts
in
any such suit, action or proceeding. Service of any process, summons, notice
or
document by mail (to the extent allowed under any applicable statute or
rule of
court) to such party’s address set forth above shall be effective service of
process for any suit, action or other proceeding brought in any such court.
The
parties irrevocably and unconditionally waive any objection to the laying
of
venue of any suit, action or other proceeding in the Specified Courts and
irrevocably and unconditionally waive and agree not to plead or claim in
any
such court has been brought in an inconvenient forum.
Section
13.10. No
Adverse Interpretation of Other Agreements.
This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or any of its Subsidiaries or of any other Person.
Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
98
Section
13.11. Successors.
All
agreements of the Company or any Subsidiary Guarantor in this Indenture
and the
Notes shall bind its successors. All agreements of the Trustee in this
Indenture
shall bind its successors.
Section
13.12. Severability.
In
case
any provision in this Indenture or the Notes shall be invalid, illegal
or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section
13.13. Counterpart
Originals.
The
parties may sign any number of copies of this Indenture. Each signed copy
shall
be an original, but all of them together represent the same
agreement.
Section
13.14. Acts
of Holders.
(a) Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by the Holders may
be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee
and,
where it is hereby expressly required, to the Company. Such instrument
or
instruments (and the action embodied therein and evidenced thereby) are
herein
sometimes referred to as the “Act” of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company if made in the manner
provided in this Section 12.14.
99
(b) The
fact
and date of the execution by any Person of any such instrument or writing
may be
proved by the affidavit of a witness of such execution or by a certificate
of a
notary public or other officer authorized by law to take acknowledgments
of
deeds, certifying that the individual signing such instrument or writing
acknowledged to such witness, notary or officer the execution thereof.
Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient
proof
of authority. The fact and date of the execution of any such instrument
or
writing, or the authority of the Person executing the same, may also be
proved
in any other manner which the Trustee deems sufficient.
(c) Notwithstanding
anything to the contrary contained in this Section 12.14, the principal
amount
and serial numbers of Notes held by any Holder, and the date of holding
the
same, shall be proved by the register of the Notes maintained by the Registrar
as provided in Section 2.04 hereof.
(d) If
the
Company shall solicit from the Holders of the Notes any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may,
at its option, by or pursuant to a resolution of its Board of Directors,
fix in
advance a record date for the determination of Holders entitled to give
such
request, demand, authorization, direction, notice, consent, waiver or other
Act,
but the Company shall have no obligation to do so. Notwithstanding TIA
§316(c),
such record date shall be the record date specified in or pursuant to such
resolution, which shall be a date not earlier than the date 30 days prior
to the
first solicitation of Holders generally in connection therewith or the
date of
the most recent list of Holders forwarded to the Trustee prior to such
solicitation pursuant to Section 2.06 hereof and not later than the date
such
solicitation is completed. If such a record date is fixed, such request,
demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the
close of
business on such record date shall be deemed to be Holders for the purposes
of
determining whether Holders of the requisite proportion of the then outstanding
Notes have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that
purpose the then outstanding Notes shall be computed as of such record
date;
provided that no such authorization, agreement or consent by the Holders
on such
record date shall be deemed effective unless it shall become effective
pursuant
to the provisions of this Indenture not later than eleven months after
the
record date.
(e) Any
request, demand, authorization, direction, notice, consent, waiver or other
Act
of the Holder of any Note shall bind every future Holder of the same Note
and
the Holder of every Note issued upon the registration or transfer thereof
or in
exchange therefor or in lieu thereof in respect of anything done, omitted
or
suffered to be done by the Trustee or the Company in reliance thereon,
whether
or not notation of such action is made upon such Note.
(f) Without
limiting the foregoing, a Holder entitled hereunder to take any action
hereunder
with regard to any particular Note may do so itself with regard to all
or any
part of the principal amount of such Note or by one or more duly appointed
agents each of which may do so pursuant to such appointment with regard
to all
or any part of such principal amount.
Section
13.15. Benefit
of Indenture.
Nothing,
in this Indenture or the Notes, express or implied, shall give to any Person,
other than the parties hereto, any Paying Agent, any Registrar and its
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section
13.16. Table
of Contents, Headings, Etc.
The
Table
of Contents, Cross-Reference Table and Headings of the Articles and Sections
of
this Indenture have been inserted for convenience of reference only, are
not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
100
INTEGRATED
ALARM SERVICES GROUP, INC.
By:_/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx X. XxXxxx
Title:
Chairman & CEO
CRITICOM
INTERNATIONAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MONITAL
SIGNAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MORLYN
FINANCIAL GROUP, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
XXXXX
SECURITY GROUP, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
GUARDIAN
GROUP, LLC
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
101
INTEGRATED
ALARMS SERVICES, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Chairman
& CEO
MADISON
PROTECTION, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
EVEREST
VIDEO SYSTEMS, L.L.C.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
INTEGRATED
ALARM AND SECURITY, LLC
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Manager
ALERT
ALARM COMPANY, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
AMERICAN
BURGLAR & FIRE ALARM CO.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
102
NORCO
ALARMS, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
SECURITY
GENERAL CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
AMERICAN
HOME SECURITY, INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
SHIELD
SIGNAL CORP.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
TELEGUARD
SECURITY SYSTEMS INC.
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
XXXXXX
XXXXXX, INCORPORATED
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
MONITAL
FUNDING CORPORATION
By:
/s/
Xxxxxxx X. XxXxxx
Name:
Xxxxxxx
X. XxXxxx
Title:
Authorized
Person
[Signatures
continue on next page]
103
XXXXX
FARGO BANK, N.A., as Trustee
By: /s/
Xxxxxx X. X'Xxxxxxx
Name:
Xxxxxx X. X'Xxxxxxx
Title:
Assistant Vice President
104
EXHIBIT
A
[Face
of
Note]
[INSERT
APPROPRIATE LEGENDS]
CUSIP
45890M AB 5
No.**$[
]**
INTEGRATED
ALARM SERVICES GROUP, INC.
12%
Senior Secured Notes due 2011
Issue
Date:
Integrated
Alarm Services Group, Inc., a Delaware corporation (the “Company”, which term
includes any successor under this Indenture hereinafter referred to), for
value
received, promises to pay to CEDE & CO. or its registered assigns, the
principal sum of One Hundred Twenty-Five Million Dollars ($125,000,000)
on
November 15, 2011.
Interest
Payment Dates: May 15 and November 15, commencing May 15, 2005.
Record
Dates: May 1 and November 1.
Reference
is hereby made to the further provisions of this Note set forth on the
reverse
hereof, which further provisions shall for all purposes have the same effect
as
if set forth at this place.
INTEGRATED
ALARM SERVICES GROUP, INC.
By:
__________________________________
Name:
________________________________
Title:
_________________________________
By:
__________________________________
Name:
________________________________
Title:
_________________________________
(Trustee’s
Certificate of Authentication)
This
is
one of the 12% Senior Secured Notes due 2011 described in the within-mentioned
Indenture.
Dated:
XXXXX
FARGO BANK, N.A.,
as
Trustee
By:___________________________
Authorized
Signatory
[Reverse
Side of Note]
INTEGRATED
ALARM SERVICES GROUP, Inc.
12%
Senior Secured Notes due 2011
Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.
1. Interest.
The Company promises to pay interest on the principal amount of this Note
at 12
% per annum from the date hereof until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on May 15 and November 15 of
each
year, or if any such day is not a Business Day, on the next succeeding
Business
Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from
the most recent date to which interest has been paid or, if no interest
has been
paid, from the date of original issuance; provided that if there is no
existing
Default in the payment of interest, and if this Note is authenticated between
a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment
Date; provided further that the first Interest Payment Date shall be May
15,
2005. The Company shall pay interest (including post-petition interest
in any
proceeding under any Bankruptcy Law) on overdue principal and premium,
if any,
from time to time on demand at a rate that is 1% per annum in excess of
the rate
then in effect; it shall pay interest (including post-petition interest
in any
proceeding under any Bankruptcy Law) on overdue installments of interest
and
Liquidated Damages (without regard to any applicable grace periods) from
time to
time on demand at the same rate to the extent lawful. Interest shall be
computed
on the basis of a 360-day year of twelve 30-day months.
2. Method
of
Payment. The Company shall pay interest on the Notes (except defaulted
interest)
and Liquidated Damages, if any, to the Persons who are Holders of Notes
at the
close of business on the record date immediately preceding the Interest
Payment
Date, even if such Notes are canceled after such record date and on or
before
such Interest Payment Date, except as provided in Section 2.11 of the Indenture
with respect to defaulted interest. The Notes shall be payable as to principal,
premium and Liquidated Damages, if any, and interest at the office or agency
of
the Company maintained for such purpose in The City of New York, or, at
the
option of the Company, payment of interest and Liquidated Damages, if any,
may
be made by check mailed to the Holders at their addresses set forth in
the
register of Holders, and provided that payment by wire transfer of immediately
available funds shall be required with respect to principal of and interest,
premium and Liquidated Damages, if any, on, all Global Notes. Such payment
shall
be in such coin or currency of the United States of America as at the time
of
payment is legal tender for payment of public and private debts.
3. Paying
Agent and Registrar. Initially, the Trustee under the Indenture shall act
as
Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar
without notice to any Holder. The Company or any of its Subsidiaries may
act in
any such capacity.
4.
5. Indenture.
The Company issued the Notes under an Indenture dated as of November 16
, 2004
(“Indenture”) among the Company, the Subsidiary Guarantors and the Trustee. The
terms of the Notes include those stated in the Indenture and those made
part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended.
Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Holders
are referred to the Indenture and such Act for a statement of such terms.
To the
extent any provision of this Note conflicts with the express provisions
of the
Indenture, the provisions of the Indenture shall govern and be controlling.
The
Notes
are senior secured obligations of the Company. The Company shall be entitled,
subject to its compliance with Section 4.07 of the Indenture, to
issue
Additional Notes pursuant to Section 2.13 of the Indenture. The
Initial
Notes issued on the Issue Date, any Additional Notes and all Exchange Notes
or
Private Exchange Notes issued in exchange therefor will be treated as a
single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its subsidiaries to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase
capital
stock; make investments; issue or sell capital stock of subsidiaries; engage
in
transactions with affiliates; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; and consolidate,
merge or
transfer all or substantially all of their assets and the assets of their
subsidiaries. These covenants are subject to important exceptions and
qualifications.
6. Optional
Redemption. (a)
Except
as set forth in this Section 5, the Company shall not have the option to
redeem
any Notes.
(a) On
or
before November 15, 2008, the Company shall have the option to redeem the
Notes,
in whole or in part, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to the greater of the following
amounts:
•
100% of
the principal amount of the Notes being redeemed on the redemption date;
or
•
the sum
of the present values of the remaining scheduled payments of principal
and
interest on the Notes being redeemed on that redemption date (not including
any
portion of any payments of interest accrued to the redemption date), discounted
to the redemption date on a semi-annual basis at the Treasury Rate (as
defined
below), plus 50 basis points, as determined by the Reference Treasury Dealer
(as
defined below),
plus,
in
each case, accrued and unpaid interest and Liquidated Damages, if any,
on the
Notes to the redemption date. Notwithstanding the foregoing, installments
of
interest on Notes that are due and payable on an interest payment dates
falling
on or prior to a redemption date will be payable on the interest payment
date to
the registered holders as of the close of business on the relevant record
date.
The redemption price will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
“Comparable
Treasury Issue” means the United States Treasury security selected by the
Reference Treasury Dealer as having a maturity comparable to the remaining
term
of the Notes.
“Comparable
Treasury Price” means, with respect to any redemption date, (A) the average of
the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations,
or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations, or (C) if only one Reference
Treasury Dealer Quotation is received, such Quotation.
“Reference
Treasury Dealer” means (A) Xxxxx Fargo Securities LLC or ABN AMRO Incorporated
or their respective affiliates which are Primary Treasury Dealers, and
its
successors; provided, however, that if Xxxxx Fargo Securities LLC or ABN
AMRO
Incorporated shall cease to be a primary U.S. Government securities dealer
in
New York City (a ‘‘Primary Treasury Dealer’’), the Company shall substitute
therefor another Primary Treasury Dealer; and (B) any other Primary Treasury
Dealer(s) selected by the Trustee after consultation with the
Company.
“Reference
Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of
the bid
and asked prices for the Comparable Treasury Issue, expressed in each case
as a
percentage of its principal amount, quoted in writing to the Trustee by
such
Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third
business day preceding such redemption date.
“Treasury
Rate” means, with respect to any redemption date, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue,
assuming a price for the Comparable Treasury Issue, expressed as a percentage
of
its principal amount, equal to the Comparable Treasury Price for such redemption
date.
(b) On
and
after November 15, 2008, the Company shall have the option to redeem the
Notes,
in whole or in part, upon not less than 30 nor more than 60 days’ prior notice,
at the redemption prices (expressed as percentages of principal amount)
set
forth below plus accrued and unpaid interest and Liquidated Damages, if
any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on November 15 of the years indicated below (subject to
the
right of Holders on the relevant record date to receive interest and Liquidated
Damages due on the related interest payment date):
Year
|
Percentage
|
2008
|
106.0
%
|
2009
|
103.0
%
|
2010
|
100.0
%
|
(c) Notwithstanding
the foregoing, on or prior to November 15, 2007, the Company will be entitled
at
its option on one or more occasions to redeem Notes in an aggregate principal
amount not to exceed the sum of 35 % of the aggregate principal amount
of the
Notes originally issued on the Issue Date plus 100% of the aggregate principal
amount of any
Additional
Notes issued, at a redemption price (expressed as a percentage of principal
amount) of 112.0 %, plus accrued and unpaid interest to the redemption
date
(subject to the right of Holders of record on the relevant record date
to
receive interest due on the relevant interest payment date), with the Net
Cash
Proceeds from one or more Designated Offerings; provided,
however,
that
(A) at least 65% of the aggregate principal amount of the Notes originally
issued on the Issue Date remains outstanding immediately after the occurrence
of
each such redemption, other than the Notes held, directly or indirectly,
by the
Company or its Affiliates); and (B) each such redemption occurs within
90 days
after the date of the related Designated Offering.
7. Repurchase
at Option of Holder. Upon a Change of Control, any Holder of Notes will
have the
right to cause the Company to repurchase all or any part of the Notes of
such
Holder at a repurchase price equal to 101% of the principal amount of the
Notes
to be repurchased plus accrued interest to the date of repurchase (subject
to
the right of holders of record on the relevant record date to receive interest
due on the related interest payment date) as provided in, and subject to
the
terms of, the Indenture.
8. Guarantee.
The payment by the Company of the principal of, and premium and interest
on, the
Notes is fully and unconditionally guaranteed on a joint and several senior
basis by each of the Subsidiary Guarantors to the extent set forth in the
Indenture.
9. Denominations,
Transfer, Exchange. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer
of Notes
may be registered and Notes may be exchanged as provided in the Indenture.
The
Registrar and the Trustee may require a Holder, among other things, to
furnish
appropriate endorsements and transfer documents and the Company may require
a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company is not required to transfer or exchange any Note selected for
redemption. Also, the Company is not required to transfer or exchange any
Note
for a period of 15 days before a selection of Notes to be redeemed or between
a
record date and the corresponding interest payment date.
10. Persons
Deemed Owners. The registered Holder of a Note will be treated as its owner
for
all purposes.
11. Amendment,
Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes
may be amended or supplemented with the consent of the Holders of at least
a
majority in principal amount of the then outstanding Notes (including,
without
limitation, consents obtained in connection with a purchase of, or tender
offer
or exchange offer for, the Notes), and any past default or compliance with
any
provisions may also be waived (except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Indenture
which
cannot be amended without the consent of each Holder of an outstanding
Note)
with the consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding (including consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Notes).
Without
the consent of any Holder of a Note, the Indenture or the Notes may be
amended
or supplemented to, among other things, cure any ambiguity, defect or
inconsistency, or to make any change that does not adversely affect the
legal
rights under the Indenture of any such Holder.
12. Defaults
and Remedies. In the case of an Event of Default arising from certain events
of
bankruptcy or insolvency, with respect to the Company or any Restricted
Subsidiary of the Company, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes
to be
due and payable immediately by notice in writing to the Company specifying
the
Event of Default. Holders of the Notes may not enforce the Indenture or
the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes
may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any Default or Event of Default
(except a Default or Event of Default relating to the payment of principal,
premium, interest or Liquidated Damages) if it determines that withholding
notice is in their interest. Holders of a majority in principal amount
of the
then outstanding Notes by notice to the Trustee may, on behalf of the Holders
of
all of the Notes, rescind and annul a declaration of acceleration pursuant
to
Section 6.02 of the Indenture, and its consequences, and waive any related
existing Default or Event of Default if certain conditions are
satisfied.
13. Trustee
Dealings with Company. The Trustee, in its individual or any other capacity,
may
make loans to, accept deposits from, and perform services for the Company
or its
Affiliates, and may otherwise deal with the Company or its Affiliates,
as if it
were not the Trustee.
14. No
Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes or the Indenture, or for any
claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the
Notes.
The waiver may not be effective to waive liabilities under the federal
securities laws.
15. Authentication.
This Note shall not be valid until authenticated by the manual signature
of the
Trustee or an authenticating agent.
16. Additional
Rights of Holders of Restricted Global Notes and Restricted Definitive
Notes. In
addition to the rights provided to Holders under the Indenture, Holders
of
Restricted Global Notes and Restricted Definitive Notes shall have all
the
rights set forth in the Registration Rights Agreement dated as of November
16,
2004, between the Company and the parties named on the signature pages
thereof
or, in the case of Additional Notes, Holders of Restricted Global Notes
and
Restricted Definitive Notes shall have the rights set forth in one or more
registration rights agreements, if any, between the Company, the Subsidiary
Guarantors and the other parties thereto, relating to rights given by the
Company and the Subsidiary Guarantors to the purchasers of Additional
Notes.
17. CUSIP
Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers
to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption
as a convenience to Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Notes or as contained in any notice
of
redemption and reliance may be placed only on the other identification
numbers
placed thereon.
18. Copies
of
Documents. The Company shall furnish to any Holder upon written request
and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Integrated
Alarm Services Group, Inc.
One
Capital Center
00
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxx
Assignment
Form
To
assign
this Note, fill in the form below:
(I)
or
(we) assign and transfer this Note
to:__________________________________________________
(Insert
assignee’s
legal name)
___________________________________________________________________________________________________________
(Insert
assignee's soc. sec. or tax I.D. no.)
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
___________________________________________________________________________________________________________
(Print
or type assignee's name, address and zip code)
and
irrevocably appoint
_____________________________________________________________________
to
transfer this Note on the books of the Company. The agent may substitute
another
to act for him.
Date:
____________________________
Your
Signature: ______________________________________
(Sign
exactly as your name appears
on
the
face of this Note)
Signature
Guarantee*:__________________________
*
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
OPTION
OF
HOLDER TO ELECT PURCHASE
If
you want
to elect to have this Note purchased by the Company pursuant to Section
4.10,
4.11 or 4.19 of the Indenture, check the appropriate box below:
[
]
Section 4.10 [
]
Section 4.11 [
]
Section 4.19
If
you want
to elect to have only part of the Note purchased by the Company pursuant
to
Section 4.10, 4.11 or Section 4.19 of the Indenture, state the amount you
elect
to have purchased:
$__________________
Date:_____________
Your
Signature: _____________________________________
(Sign
exactly as your name
appears
on the face of this
Note)
Tax
Identification No.: ________________________________
Signature
Guarantee*:________________
*
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another
Global
Note or Definitive Note for an interest in this Global Note, have been
made:
Date
of Exchange
|
Amount
of Decrease in Principal Amount at
Maturity
of
this Global Note
|
Amount
of Increase in Principal Amount at Maturity
of
this Global Note
|
Principal
Amount at
Maturity
of
this Global Note Following such decrease
(or increase)
|
|
|||
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|
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|
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[Face
of
Note]
[INSERT
APPROPRIATE LEGENDS]
CUSIP
45890M AC 3
No.**$[
]**
INTEGRATED
ALARM SERVICES GROUP, INC.
12%
Senior Secured Notes due 2011
Issue
Date:
Integrated
Alarm Services Group, Inc., a Delaware corporation (the “Company”, which term
includes any successor under this Indenture hereinafter referred to), for
value
received, promises to pay to CEDE & CO. or its registered assigns, the
principal sum of One Hundred Twenty-Five Million Dollars ($125,000,000)
on
November 15, 2011.
Interest
Payment Dates: May 15 and November 15, commencing May 15, 2005.
Record
Dates: May 1 and November 1.
Reference
is hereby made to the further provisions of this Note set forth on the
reverse
hereof, which further provisions shall for all purposes have the same effect
as
if set forth at this place.
INTEGRATED
ALARM SERVICES GROUP, INC.
By:
______________________________________
Name:
Title:
By:
______________________________________
Name:
Title:
(Trustee’s
Certificate of Authentication)
This
is
one of the 12% Senior Secured Notes due 2011 described in the within-mentioned
Indenture.
Dated:
XXXXX
FARGO BANK, N.A.,
as
Trustee
By:___________________________
Authorized
Signatory
[Reverse
Side of Note]
INTEGRATED
ALARM SERVICES GROUP, Inc.
12%
Senior Secured Notes due 2011
Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.
19. Interest.
The Company promises to pay interest on the principal amount of this Note
at 12
% per annum from the date hereof until maturity and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on May 15 and November 15 of
each
year, or if any such day is not a Business Day, on the next succeeding
Business
Day (each an “Interest Payment Date”). Interest on the Notes shall accrue from
the most recent date to which interest has been paid or, if no interest
has been
paid, from the date of original issuance; provided that if there is no
existing
Default in the payment of interest, and if this Note is authenticated between
a
record date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such next succeeding Interest
Payment
Date; provided further that the first Interest Payment Date shall be May
15,
2005. The Company shall pay interest (including post-petition interest
in any
proceeding under any Bankruptcy Law) on overdue principal and premium,
if any,
from time to time on demand at a rate that is 1% per annum in excess of
the rate
then in effect; it shall pay interest (including post-petition interest
in any
proceeding under any Bankruptcy Law) on overdue installments of interest
and
Liquidated Damages (without regard to any applicable grace periods) from
time to
time on demand at the same rate to the extent lawful. Interest shall be
computed
on the basis of a 360-day year of twelve 30-day months.
20. Method
of
Payment. The Company shall pay interest on the Notes (except defaulted
interest)
and Liquidated Damages, if any, to the Persons who are Holders of Notes
at the
close of business on the record date immediately preceding the Interest
Payment
Date, even if such Notes are canceled after such record date and on or
before
such Interest Payment Date, except as provided in Section 2.11 of the Indenture
with respect to defaulted interest. The Notes shall be payable as to principal,
premium and Liquidated Damages, if any, and interest at the office or agency
of
the Company maintained for such purpose in The City of New York, or, at
the
option of the Company, payment of interest and Liquidated Damages, if any,
may
be made by check mailed to the Holders at their addresses set forth in
the
register of Holders, and provided that payment by wire transfer of immediately
available funds shall be required with respect to principal of and interest,
premium and Liquidated Damages, if any, on, all Global Notes. Such payment
shall
be in such coin or currency of the United States of America as at the time
of
payment is legal tender for payment of public and private debts.
21. Paying
Agent and Registrar. Initially, the Trustee under the Indenture shall act
as
Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar
without notice to any Holder. The Company or any of its Subsidiaries may
act in
any such capacity.
22. Indenture.
The Company issued the Notes under an Indenture dated as of November 16
, 2004
(“Indenture”) among the Company, the Subsidiary Guarantors and the Trustee. The
terms of the Notes include those stated in the Indenture and those made
part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended.
Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Notes are subject to all such terms, and
Holders
are referred to the Indenture and such Act for a statement of such terms.
To the
extent any provision of this Note conflicts with the express provisions
of the
Indenture, the provisions of the Indenture shall govern and be controlling.
The
Notes
are senior secured obligations of the Company. The Company shall be entitled,
subject to its compliance with Section 4.07 of the Indenture, to
issue
Additional Notes pursuant to Section 2.13 of the Indenture. The
Initial
Notes issued on the Issue Date, any Additional Notes and all Exchange Notes
or
Private Exchange Notes issued in exchange therefor will be treated as a
single
class for all purposes under the Indenture. The Indenture contains covenants
that limit the ability of the Company and its subsidiaries to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase
capital
stock; make investments; issue or sell capital stock of subsidiaries; engage
in
transactions with affiliates; transfer or sell assets; guarantee indebtedness;
restrict dividends or other payments of subsidiaries; and consolidate,
merge or
transfer all or substantially all of their assets and the assets of their
subsidiaries. These covenants are subject to important exceptions and
qualifications.
23. Optional
Redemption. (a)
Except
as set forth in this Section 5, the Company shall not have the option to
redeem
any Notes.
(a) On
or
before November 15, 2008, the Company shall have the option to redeem the
Notes,
in whole or in part, upon not less than 30 nor more than 60 days’ prior notice,
at a redemption price equal to the greater of the following
amounts:
•
100% of
the principal amount of the Notes being redeemed on the redemption date;
or
•
the sum
of the present values of the remaining scheduled payments of principal
and
interest on the Notes being redeemed on that redemption date (not including
any
portion of any payments of interest accrued to the redemption date), discounted
to the redemption date on a semi-annual basis at the Treasury Rate (as
defined
below), plus 50 basis points, as determined by the Reference Treasury Dealer
(as
defined below),
plus,
in
each case, accrued and unpaid interest and Liquidated Damages, if any,
on the
Notes to the redemption date. Notwithstanding the foregoing, installments
of
interest on Notes that are due and payable on an interest payment dates
falling
on or prior to a redemption date will be payable on the interest payment
date to
the registered holders as of the close of business on the relevant record
date.
The redemption price will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
“Comparable
Treasury Issue” means the United States Treasury security selected by the
Reference Treasury Dealer as having a maturity comparable to the remaining
term
of the Notes.
“Comparable
Treasury Price” means, with respect to any redemption date, (A) the average of
the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations,
or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations, or (C) if only one Reference
Treasury Dealer Quotation is received, such Quotation.
“Reference
Treasury Dealer” means (A) Xxxxx Fargo Securities LLC or ABN AMRO Incorporated
or their respective affiliates which are Primary Treasury Dealers, and
its
successors; provided, however, that if Xxxxx Fargo Securities LLC or ABN
AMRO
Incorporated shall cease to be a primary U.S. Government securities dealer
in
New York City (a ‘‘Primary Treasury Dealer’’), the Company shall substitute
therefor another Primary Treasury Dealer; and (B) any other Primary Treasury
Dealer(s) selected by the Trustee after consultation with the
Company.
“Reference
Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer
and any redemption date, the average, as determined by the Trustee, of
the bid
and asked prices for the Comparable Treasury Issue, expressed in each case
as a
percentage of its principal amount, quoted in writing to the Trustee by
such
Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third
business day preceding such redemption date.
“Treasury
Rate” means, with respect to any redemption date, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue,
assuming a price for the Comparable Treasury Issue, expressed as a percentage
of
its principal amount, equal to the Comparable Treasury Price for such redemption
date.
(b) On
and
after November 15, 2008, the Company shall have the option to redeem the
Notes,
in whole or in part, upon not less than 30 nor more than 60 days’ prior notice,
at the redemption prices (expressed as percentages of principal amount)
set
forth below plus accrued and unpaid interest and Liquidated Damages, if
any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on November 15 of the years indicated below (subject to
the
right of Holders on the relevant record date to receive interest and Liquidated
Damages due on the related interest payment date):
Year
|
Percentage
|
2008
|
106.0
%
|
2009
|
103.0
%
|
2010
|
100.0
%
|
(c) Notwithstanding
the foregoing, on or prior to November 15, 2007, the Company will be entitled
at
its option on one or more occasions to redeem Notes in an aggregate principal
amount not to exceed the sum of 35 % of the aggregate principal amount
of the
Notes originally issued on the Issue Date plus 100% of the aggregate principal
amount of any
Additional
Notes issued, at a redemption price (expressed as a percentage of principal
amount) of 112.0 %, plus accrued and unpaid interest to the redemption
date
(subject to the right of Holders of record on the relevant record date
to
receive interest due on the relevant interest payment date), with the Net
Cash
Proceeds from one or more Designated Offerings; provided,
however,
that
(A) at least 65% of the aggregate principal amount of the Notes originally
issued on the Issue Date remains outstanding immediately after the occurrence
of
each such redemption, other than the Notes held, directly or indirectly,
by the
Company or its Affiliates); and (B) each such redemption occurs within
90 days
after the date of the related Designated Offering.
24. Repurchase
at Option of Holder. Upon a Change of Control, any Holder of Notes will
have the
right to cause the Company to repurchase all or any part of the Notes of
such
Holder at a repurchase price equal to 101% of the principal amount of the
Notes
to be repurchased plus accrued interest to the date of repurchase (subject
to
the right of holders of record on the relevant record date to receive interest
due on the related interest payment date) as provided in, and subject to
the
terms of, the Indenture.
25. Guarantee.
The payment by the Company of the principal of, and premium and interest
on, the
Notes is fully and unconditionally guaranteed on a joint and several senior
basis by each of the Subsidiary Guarantors to the extent set forth in the
Indenture.
26. Denominations,
Transfer, Exchange. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer
of Notes
may be registered and Notes may be exchanged as provided in the Indenture.
The
Registrar and the Trustee may require a Holder, among other things, to
furnish
appropriate endorsements and transfer documents and the Company may require
a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company is not required to transfer or exchange any Note selected for
redemption. Also, the Company is not required to transfer or exchange any
Note
for a period of 15 days before a selection of Notes to be redeemed or between
a
record date and the corresponding interest payment date.
27. Persons
Deemed Owners. The registered Holder of a Note will be treated as its owner
for
all purposes.
28. Amendment,
Supplement and Waiver. Subject to certain exceptions, the Indenture or
the Notes
may be amended or supplemented with the consent of the Holders of at least
a
majority in principal amount of the then outstanding Notes (including,
without
limitation, consents obtained in connection with a purchase of, or tender
offer
or exchange offer for, the Notes), and any past default or compliance with
any
provisions may also be waived (except a default in the payment of principal,
premium or interest and certain covenants and provisions of the Indenture
which
cannot be amended without the consent of each Holder of an outstanding
Note)
with the consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding (including consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Notes).
Without
the consent of any Holder of a Note, the Indenture or the Notes may be
amended
or supplemented to, among other things, cure any ambiguity, defect or
inconsistency, or to make any change that does not adversely affect the
legal
rights under the Indenture of any such Holder.
29. Defaults
and Remedies. In the case of an Event of Default arising from certain events
of
bankruptcy or insolvency, with respect to the Company or any Restricted
Subsidiary of the Company, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes
to be
due and payable immediately by notice in writing to the Company specifying
the
Event of Default. Holders of the Notes may not enforce the Indenture or
the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes
may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any Default or Event of Default
(except a Default or Event of Default relating to the payment of principal,
premium, interest or Liquidated Damages) if it determines that withholding
notice is in their interest. Holders of a majority in principal amount
of the
then outstanding Notes by notice to the Trustee may, on behalf of the Holders
of
all of the Notes, rescind and annul a declaration of acceleration pursuant
to
Section 6.02 of the Indenture, and its consequences, and waive any related
existing Default or Event of Default if certain conditions are
satisfied.
30. Trustee
Dealings with Company. The Trustee, in its individual or any other capacity,
may
make loans to, accept deposits from, and perform services for the Company
or its
Affiliates, and may otherwise deal with the Company or its Affiliates,
as if it
were not the Trustee.
31. No
Recourse Against Others. No director, officer, employee, incorporator or
stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes or the Indenture, or for any
claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for issuance of the
Notes.
The waiver may not be effective to waive liabilities under the federal
securities laws.
32. Authentication.
This Note shall not be valid until authenticated by the manual signature
of the
Trustee or an authenticating agent.
33. Additional
Rights of Holders of Restricted Global Notes and Restricted Definitive
Notes. In
addition to the rights provided to Holders under the Indenture, Holders
of
Restricted Global Notes and Restricted Definitive Notes shall have all
the
rights set forth in the Registration Rights Agreement dated as of November
16,
2004, between the Company and the parties named on the signature pages
thereof
or, in the case of Additional Notes, Holders of Restricted Global Notes
and
Restricted Definitive Notes shall have the rights set forth in one or more
registration rights agreements, if any, between the Company, the Subsidiary
Guarantors and the other parties thereto, relating to rights given by the
Company and the Subsidiary Guarantors to the purchasers of Additional
Notes.
34. CUSIP
Numbers. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers
to be
printed on the Notes and the Trustee may use CUSIP numbers in notices of
redemption
as a convenience to Holders. No representation is made as to the accuracy
of
such numbers either as printed on the Notes or as contained in any notice
of
redemption and reliance may be placed only on the other identification
numbers
placed thereon.
35. Copies
of
Documents. The Company shall furnish to any Holder upon written request
and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Integrated
Alarm Services Group, Inc.
One
Capital Center
00
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx Xxxxxxxxx
Assignment
Form
To
assign
this Note, fill in the form below:
(I)
or
(we) assign and transfer this Note
to:_________________________________
(Insert
assignee’s
legal name)
______________________________________________________________________________________________
(Insert
assignee's soc. sec. or tax I.D. no.)
______________________________________________________________________________________________
______________________________________________________________________________________________
______________________________________________________________________________________________
(Print
or
type assignee's name, address and zip code)
and
irrevocably appoint
________________________________________________________________
to
transfer this Note on the books of the Company. The agent may substitute
another
to act for him.
Date:
________________________
Your
Signature: ___________________________________
(Sign
exactly as your name appears
on
the
face of this Note)
Signature
Guarantee*:__________________________
*
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
OPTION
OF
HOLDER TO ELECT PURCHASE
If
you
want to elect to have this Note purchased by the Company pursuant to Section
4.10, 4.11 or 4.19 of the Indenture, check the appropriate box
below:
[
]
Section 4.10 [
]
Section 4.11 [
]
Section 4.19
If
you
want to elect to have only part of the Note purchased by the Company pursuant
to
Section 4.10, 4.11 or Section 4.19 of the Indenture, state the amount you
elect
to have purchased:
$__________________
Date:_____________
Your
Signature: _____________________________________
(Sign
exactly as your name
appears
on the face of this
Note)
Tax
Identification No.: ________________________________
Signature
Guarantee*:________________
*
Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Definitive Note, or exchanges of a part of another
Global
Note or Definitive Note for an interest in this Global Note, have been
made:
Date
of Exchange
|
Amount
of Decrease in Principal Amount at
Maturity
of
this Global Note
|
Amount
of Increase in Principal Amount at Maturity
of
this Global Note
|
Principal
Amount at
Maturity
of
this Global Note Following such decrease
(or increase)
|
|
|||
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|
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