INTEGRATED ALARM SERVICES GROUP, INC. (a Delaware corporation) 12% Senior Secured Notes due 2011 REGISTRATION RIGHTS AGREEMENT November 16, 2004
$125,000,000
INTEGRATED
ALARM SERVICES GROUP, INC.
(a
Delaware corporation)
12%
Senior Secured Notes due 2011
November
16, 2004
November
16, 2004
Xxxxxx
Xxxxxx & Co. Inc.
Xxxxx
Fargo Securities, LLC
as
Representatives of the several Initial Purchasers
c/o
Xxxxxx
Xxxxxx & Co. Inc.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Ladies
and Gentlemen:
This
Registration Rights Agreement (this "Agreement")
is
made and entered into between Integrated Alarm Services Group, Inc., a Delaware
corporation (the "Company"),
the
guarantors listed on the signature page hereto (the "Guarantors")
and
Xxxxxx Xxxxxx & Co. Inc. and Xxxxx Fargo Securities, LLC, as representatives
(in such capacity, the "Representatives") of the several purchasers named in
Schedule I hereto (the "Initial
Purchasers").
This
Agreement is entered into in connection with the Purchase Agreement, dated
November 10, 2004, by and between the Company, the Guarantors and the Initial
Purchasers (the "Purchase
Agreement"),
which
provides for the issuance and sale by the Company to the Initial Purchasers
of
$125,000,000 aggregate principal amount of the Company's 12% Senior Secured
Notes Due 2011 (the "Notes").
In
order to induce the Initial Purchasers to enter into the Purchase Agreement,
the
Company and the Guarantors have agreed to provide the registration rights set
forth in this Agreement for the benefit of the Initial Purchasers and their
direct and indirect transferees. The parties hereby agree as
follows:
1. Definitions.
Capitalized terms used herein without definition shall have their respective
meanings set forth in the Purchase Agreement. As used in this Agreement, the
following capitalized defined terms shall have the following
meanings:
"Act"
means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Additional
Interest"
has the
meaning set forth in Section 4 hereto.
"Affiliate"
means,
with respect to any specified person, any other person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
specified person. For purposes of this definition, control of a person means
the
power, direct or indirect, to direct or cause the direction of the management
and policies of such person whether by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement"
has the
meaning set forth in the preamble hereto.
"Business
Day"
means
any day excluding Saturday, Sunday or any other day which is a legal holiday
under the laws of New York, New York or is a day on which banking institutions
therein located are authorized or required by law or other governmental action
to close.
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"Closing
Date"
shall
mean the Closing Date as defined in the Purchase Agreement.
"Commission"
means
the Securities and Exchange Commission.
"Consummate"
means,
with respect to a Registered Exchange Offer, the completion of all of the
following: (a) the filing and effectiveness under the Act of the Exchange Offer
Registration Statement relating to the Exchange Notes to be issued in the
Registered Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Registered
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 2(c)(ii) hereof, (c) the Company's acceptance for exchange
of all Transfer Restricted Notes duly tendered and not validly withdrawn
pursuant to the Registered Exchange Offer and (d) the delivery of duly executed
and authenticated Exchange Notes by the Company to the registrar under the
Indenture in the same aggregate principal amount as the aggregate principal
amount of Transfer Restricted Notes duly tendered and not validly withdrawn
by
Holders thereof pursuant to the Registered Exchange Offer and the delivery
of
such Exchange Notes to such Holders. The term "Consummation" has a meaning
correlative to the foregoing.
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
"Exchange
Notes"
means
debt securities of the Company substantially identical in all material respects
to the Notes other than the issue date (except that the Additional Interest
provisions and the transfer restrictions pertaining to the Notes will be
modified or eliminated, as appropriate), to be issued under the
Indenture.
"Exchange
Offer Registration Period"
means
the 180-day period following the Consummation of the Registered Exchange Offer,
exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement;
provided,
however,
that in
the event that all resales of Exchange Notes (including any resales by
Participating Broker-Dealers) covered by such Exchange Offer Registration
Statement have been made, the Exchange Offer Registration Statement need not
thereafter remain continuously effective for such period.
"Exchange
Offer Registration Statement"
means a
registration statement of the Company and the Guarantors on an appropriate
form
under the Act with respect to the Registered Exchange Offer, all amendments
and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Filing
Date"
has the
meaning set forth in Section 2(a) hereto.
"Holder"
means
any holder from time to time of Transfer Restricted Notes or Exchange Notes
(including the Initial Purchasers).
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"Indenture"
means
the indenture relating to the Notes and the Exchange Notes, dated as of November
16, 2004, between the Company and Xxxxx Fargo Bank, N.A., as Trustee, as the
same may be amended, supplemented, waived or otherwise modified from time to
time in accordance with the terms thereof.
"Initial
Purchasers"
has the
meaning set forth in the preamble hereto.
"Losses"
has the
meaning set forth in Section 8(d) hereto.
"Majority
Holders"
means
the Holders of a majority of the aggregate principal amount of Transfer
Restricted Notes registered under a Registration Statement.
"Managing
Underwriters"
means
the investment banker or investment bankers and manager or managers that shall
administer an underwritten offering under a Shelf Registration
Statement.
"Notes"
has the
meaning set forth in the preamble hereto.
"Participating
Broker-Dealer"
means
any Holder (which may include the Initial Purchasers) that is a broker-dealer
electing to exchange Notes acquired for its own account as a result of
market-making activities or other trading activities for Exchange
Notes.
"Private
Exchange Notes"
has the
meaning set forth in Section 2(f) hereof.
"Prospectus"
means
the prospectus included in any Registration Statement (including a prospectus
that discloses information previously omitted from a prospectus filed as part
of
an effective registration statement in reliance upon Rule 430A under the Act
or
any similar rule that may be adopted by the Commission), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Transfer Restricted Notes covered by such
Registration Statement, and all amendments and supplements to the
Prospectus.
"Purchase
Agreement"
has the
meaning set forth in the preamble hereto.
"Registered
Exchange Offer"
means
an offer by the Company to issue and deliver a like principal amount of Exchange
Notes in exchange for Transfer Restricted Notes.
"Registration
Expenses"
shall
mean any and all expenses incident to performance of or compliance by the
Company and the Guarantors with this Agreement, including without limitation:
(i) all Commission, stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees, (ii) all fees and expenses incurred
in connection with compliance with state securities or blue sky laws (including
reasonable fees and disbursements of counsel for any underwriters or Holders
in
connection with blue sky
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qualification of any of the Exchange Notes or Transfer
Restricted Notes), (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees, (v) all fees and disbursements relating
to the qualification of the Indenture under applicable securities laws, (vi)
the
fees and disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the fees and disbursements of one counsel for the
Holders (which counsel shall be selected by the Majority Holders and which
counsel may also be counsel for the Initial Purchasers) and (viii) the fees
and
disbursements of the independent public accountants of the Company, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, but excluding fees and expenses
of
counsel to the underwriters (other than fees and expenses set forth in clause
(ii) above) or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Transfer
Restricted Notes by a Holder.
"Registration
Statement"
means
any Exchange Offer Registration Statement or Shelf Registration Statement that
covers any of the Transfer Restricted Notes (including any guarantees of each
thereof) pursuant to the provisions of this Agreement, amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto,
and all material incorporated by reference therein.
"Shelf
Registration"
means a
registration effected pursuant to Section 3 hereof.
"Shelf
Registration Event Date"
has the
meaning set forth in Section 3(a) hereof.
"Shelf
Registration Period"
has the
meaning set forth in Section 3(c) hereof.
"Shelf
Registration Statement"
means a
"shelf" registration statement of the Company filed pursuant to the provisions
of Section 3 hereof, which covers some or all of the Transfer Restricted
Notes, as applicable, on an appropriate form under Rule 415 under the
Act,
or any similar rule that may be adopted by the Commission, and which may be
in
the format of an amendment to the Exchange Offer Registration Statement if
permitted by the Commission, all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Transfer
Restricted Notes"
means
each Note upon original issuance thereof and at all times subsequent thereto,
each Exchange Note as to which Section 3(a)(iii) or Section 3(a)(v)
apply
upon original issuance and at all times subsequent thereto, until in the case
of
any such Note or Exchange Note, as the case may be, the earliest to occur of
(i) the date on which such Note has been exchanged by a person other
than a
Participating Broker-Dealer for an Exchange Note (other than with respect to
an
Exchange Note as to which Section 3(a)(iii) or Section 3(a)(v) apply), (ii)
with
respect to Exchange Notes received by Participating Broker-Dealers in the
Registered Exchange Offer, the date on which such Exchange Note has been sold
by
such Participating Broker-Dealer by means of the Prospectus contained in the
Exchange Offer Registration Statement, (iii) a Shelf Registration Statement
covering such Note or Exchange Note, as the case may be, has been declared
effective by the Commission and such Note or Exchange Note, as the case may
be,
has been disposed of in accordance with the plan of distribution
set forth in such effective Shelf Registration Statement, (iv) the date on
which
such Note or Exchange Note, as the case may be, is distributed to the public
pursuant to Rule 144 under circumstances in which any legend borne by such
Note
relating to restrictions on transferability thereof, under the Act or otherwise,
is removed by the Company, or (v) such Note or Exchange Note, as the
case
may be, ceases to be outstanding for purposes of the Indenture.
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"Trust
Indenture Act"
means
the Trust Indenture Act of 1939, as amended.
"Trustee"
means
the trustee with respect to the Notes or Exchange Notes, as applicable, under
the Indenture.
2.
Registered
Exchange Offer; Resales of Exchange Notes by Participating Broker-Dealers;
Private Exchange.
(a) The
Company and the Guarantors shall prepare and, not later than 90 days from the
Closing Date, shall file with the Commission the Exchange Offer Registration
Statement with respect to the Registered Exchange Offer (the date of such filing
hereinafter referred to as the "Filing Date"). The Company and the Guarantors
shall use their reasonable best efforts (i) to cause the Exchange Offer
Registration Statement to be declared effective under the Act within 180 days
from the Closing Date and (ii) to have such Exchange Offer Registration
Statement remain effective until the closing of the Registered Exchange Offer.
The Company shall commence the Registered Exchange Offer promptly after the
Exchange Offer Registration Statement has been declared effective by the
Commission and use its reasonable best efforts to Consummate the Registered
Exchange Offer by the 210th
day
after the Closing Date.
(b)
The
objective of such Registered Exchange Offer is to enable each Holder electing
to
exchange Transfer Restricted Notes for Exchange Notes (assuming that such Holder
(x) is not an Affiliate of the Company, (y) is not a broker-dealer that acquired
the Transfer Restricted Notes in a transaction other than as a part of its
market-making or other trading activities and (z) if such Holder is not a
broker-dealer, acquires the Exchange Notes in the ordinary course of such
Holder's business, is not participating in the distribution of the Exchange
Notes and has no arrangements or intentions with any person to make a
distribution of the Exchange Notes) to resell such Exchange Notes from and
after
their receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial proportion
of
the several states of the United States. Each Holder participating in the
Registered Exchange Offer shall be required to represent to the Company that
at
the time of the tender of its Notes pursuant to the Registered Exchange Offer
each of the items listed in subsections (x), (y) and (z) of this Section 2(b)
is
true.
(c)
In
connection with the Registered Exchange Offer, the Company shall:
(i) mail
to
each Holder a copy of the Prospectus forming part of the Exchange Offer
Registration Statement, together with an appropriate letter of transmittal
and
related documents;
(ii) keep
the
Registered Exchange Offer open for acceptance for not less than 20 Business
Days
(or longer if required by applicable law) after the date notice thereof is
mailed to Holders;
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(iii) permit
Holders to withdraw tendered Notes at any time prior to 5:00 p.m. New York
City
time on the last Business Day on which the Registered Exchange Offer shall
remain open;
(iv) utilize
the services of a depositary for the Registered Exchange Offer with an address
in the Borough of Manhattan, The City of New York; and
(v) comply
in
all material respects with all applicable laws relating to the Registered
Exchange Offer.
(d)
As
soon as practicable after the close of the Registered Exchange Offer, the
Company shall:
(i)
accept for exchange all the Notes validly tendered and not withdrawn pursuant
to
the Registered Exchange Offer;
(ii)
deliver to the Trustee for cancellation all of the Notes so accepted for
exchange; and
(iii)
execute and cause the Trustee promptly to authenticate and deliver to each
Holder Exchange Notes equal in principal amount to the Transfer Restricted
Notes
of such Holder so accepted for exchange.
(e)
The
Initial Purchasers and the Company acknowledge that, pursuant to interpretations
by the staff of the Commission of Section 5 of the Act, and in the absence
of an applicable exemption therefrom, each Participating Broker-Dealer is
required to deliver a prospectus meeting the requirements of the Act in
connection with a sale of any Exchange Notes received by such Participating
Broker-Dealer pursuant to the Registered Exchange Offer in exchange for Transfer
Restricted Notes acquired for its own account as a result of market-making
activities or other trading activities. Accordingly, the Company will allow
Participating Broker-Dealers and other persons, if any, with similar prospectus
delivery requirements to use the Prospectus contained in the Exchange Offer
Registration Statement during the Exchange Offer Registration Period in
connection with the resale of such Exchange Notes and shall:
(i) include
the information set forth in (a) Annex A hereto on the cover of the Prospectus
forming a part of the Exchange Offer Registration Statement; (b) Annex B hereto
in the forepart of the Prospectus forming a part of the Exchange Offer
Registration Statement in a section setting forth details of the Registered
Exchange Offer; (c) Annex C hereto in the plan of distribution section of the
Prospectus forming a part of the Exchange Offer Registration Statement, and
(d)
Annex D hereto in the letter of transmittal delivered pursuant to the Registered
Exchange Offer, in each case substantially in the form specified therein,
subject to applicable Commission requirements; and
(ii) use
its
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective under the Act during the Exchange Offer Registration
Period for delivery of the Prospectus included therein by Participating
Broker-Dealers in connection with sales of Exchange Notes received pursuant
to
the Registered Exchange Offer, as contemplated by Section 5(h)
below.
7
(f)
In
the event that the Initial Purchasers determine that they are not eligible
to
participate in the Registered Exchange Offer with respect to the exchange of
Transfer Restricted Notes constituting any portion of an unsold allotment,
at
the request of the Initial Purchasers, the Company shall issue and deliver
to
such Initial Purchasers, or to any party purchasing Transfer Restricted Notes
or
Exchange Notes registered under the Shelf Registration Statement from the
Initial Purchasers, in exchange for such Transfer Restricted Notes, a like
principal amount of Exchange Notes to the extent permitted by applicable law
(the "Private
Exchange Notes").
The
Company shall use its reasonable best efforts to cause the CUSIP Service Bureau
to issue the same CUSIP number for such Exchange Notes as for Exchange Notes
issued pursuant to the Registered Exchange Offer.
3.
Shelf
Registration.
(a) If
(i) the Company and the Guarantors are not permitted to file the Exchange Offer
Registration Statement or to Consummate the Registered Exchange Offer in
accordance with Section 2 hereof because the Registered Exchange Offer is not
permitted by applicable law or the applicable interpretations of the staff
of
the Commission, (ii) for any other reason the Registered Exchange Offer is
not
Consummated by the 210th
day
after the Closing Date, (iii) any Holder notifies the Company on or prior to
the
210th
day
after the Closing Date that (A) such Holder is not eligible to participate
in
the Registered Exchange Offer due to applicable law or the applicable
interpretations of the staff of the Commission, (B) the Exchange Notes such
Holder would receive would not be freely tradable, (C) such Holder is a
Participating Broker-Dealer that cannot publicly resell the Exchange Notes
that
it acquires in the Registered Exchange Offer without delivering a Prospectus
and
the Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for resales following the Consummation of the
Registered Exchange Offer, or (D) the Holder is a broker-dealer and owns Notes
it has not exchanged and that it acquired directly from the Company or one
of
its Affiliates, (iv) the Initial Purchasers so requests with respect to Notes
that are not eligible to be exchanged for Exchange Notes in the Registered
Exchange Offer and are held by it following Consummation of the Registered
Exchange Offer, or (v) in the case where an Initial Purchasers participates
in
the Registered Exchange Offer or acquires Private Exchange Notes pursuant to
Section 2(f) hereof, the Initial Purchasers does not receive freely tradable
Exchange Notes in exchange for Notes constituting any portion of an unsold
allotment (it being understood that, for purposes of this Section 3, (x) the
requirement that the Initial Purchasers deliver a Prospectus containing the
information required by Items 507 and/or 508 of Regulation S-K under the Act
in
connection with sales of Exchange Notes acquired in exchange for such Transfer
Restricted Notes shall result in such Exchange Notes being not "freely tradable"
and (y) the requirement that a Participating Broker-Dealer deliver a Prospectus
in connection with sales of Exchange Notes acquired in the Registered Exchange
Offer in exchange for Transfer Restricted Notes acquired as a result of
market-making activities or other trading activities shall not result in such
Exchange Notes being not "freely tradable") (the date on which any event
specified in clause (i) through (v) above occurs, the "Shelf Registration Event
Date"), the following provisions shall apply:
(b)
The
Company and the Guarantors shall, in addition to or in lieu of conducting the
Exchange Offer, on or prior to the 30th
day
following such Shelf Registration Event Date, prepare and file with the
Commission a Shelf Registration Statement relating to the offer and sale of
the
Notes and the Exchange Notes, as applicable, by the Holders
8
thereof
from time to time in accordance with the methods of distribution elected by
such
Holders and set forth in such Shelf Registration Statement, and shall use their
reasonable best efforts to cause the Shelf Registration Statement to be declared
effective by the Commission within 60 days after filing the Shelf Registration
Statement with the Commission. With respect to Exchange Notes received by the
Initial Purchasers in exchange for Notes constituting any portion of an unsold
allotment, the Company may, if permitted by current interpretations by the
Commission's staff, file a post-effective amendment to the Exchange Offer
Registration Statement containing the information required by Regulation S-K
Items 507 and/or 508, as applicable, in satisfaction of its obligations under
this paragraph (b) with respect thereto, and any such Exchange Offer
Registration Statement, as so amended, shall be referred to herein as, and
governed by the provisions herein applicable to, a Shelf Registration
Statement.
(c)
The
Company and the Guarantors shall use their reasonable best efforts to keep
such
Shelf Registration Statement continuously effective, supplemented and amended
as
required by the Act in order to permit the Prospectus forming a part thereof
to
be usable by Holders until the earlier of (i) two years from the date the Shelf
Registration Statement has been declared effective exclusive of any period
during which any stop order shall be in effect suspending the effectiveness
of
the Shelf Registration Statement, and (ii) such time as there are no longer
any
Transfer Restricted Securities outstanding (the "Shelf Registration Period").
The Company and the Guarantors shall be deemed not to have used their reasonable
best efforts to keep the Shelf Registration Statement effective during the
Shelf
Registration Period if they voluntarily take any action that would result in
Holders of the Notes or Exchange Notes covered thereby not being able to offer
and sell such notes during that period, unless such action is (x) required
by
applicable law or (y) pursuant to Section 3(d) hereof and, in either case,
so
long as the Company and the Guarantors promptly thereafter comply with the
requirements of Section 5(k) hereof, if applicable.
(d)
The
Company may suspend the use of the Prospectus that forms a part of the Shelf
Registration Statement for a period not to exceed 60 days in any six-month
period or an aggregate of 90 days in any twelve-month period for valid business
reasons (not including avoidance of its obligations hereunder) to avoid
premature public disclosure of a pending corporate transaction, including
pending acquisitions or divestitures of assets, mergers and combinations and
similar events; provided that
(i) the
Company promptly thereafter complies with the requirements of Section 5(k)
hereof, if applicable; (ii) the period during which the Shelf Registration
Statement is required to be effective and usable shall be extended by the number
of days during which such Shelf Registration Statement was not effective or
usable pursuant to the foregoing provisions; and (iii) the Additional Interest
shall accrue on the Notes as provided in Section 4 hereof.
4.
Additional
Interest.
(a)
The
parties hereto agree that Holders of Transfer Restricted Notes will suffer
damages if the Company and the Guarantors fail to perform their obligations
under Section 2 or Section 3 hereof and that it would not be feasible to
ascertain the extent of such damages. Accordingly, in the event that (i) the
applicable Registration Statement is not filed with the Commission on or prior
to the date specified herein for such filing, (ii) the applicable Registration
Statement has not been declared effective by the Commission on or
9
prior to
the date specified herein for such effectiveness after such obligation arises,
(iii) if the Registered Exchange Offer is required to be Consummated hereunder,
the Registered Exchange Offer has not been Consummated by the Company within
the
time period set forth in the last sentence of Section 2(a) hereof, (iv) prior
to
the end of the Exchange Offer Registration Period or the Shelf Registration
Period, the Commission shall have issued a stop order suspending the
effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, or proceedings have been initiated
with respect to the Registration Statement under Section 8(d) or 8(e) of the
Act, or (v) the Prospectus forming a part of a Registration Statement ceases
to
be useable in connection with resales of the Transfer Restricted Notes covered
by such Registration Statement prior to the end of the Exchange Offer
Registration Period or the Shelf Registration Period (whether or not as a result
of the initiation of a suspension period pursuant to Section 3(d) hereof) (each
such event referred to in clauses (i) through (v), a "Registration Default"),
then additional interest with respect to the Transfer Restricted Notes
("Additional Interest") will accrue with respect to the first 90-day period
immediately following the occurrence of such Registration Default in an amount
equal to 0.25% per annum per $1,000 principal amount of such Notes and will
increase by an additional 0.25% per annum per $1,000 principal amount of such
Notes for each subsequent 90-day period until such Registration Default has
been
cured, up to an aggregate maximum amount of Additional Interest of 1.00% per
annum per $1,000 principal amount of Notes for all Registration Defaults.
Following the cure of a Registration Default, the accrual of Additional Interest
with respect to such Registration Default will cease with respect to that
Registration Default.
(b)
The
Company shall notify the Trustee and paying agent under the Indenture (or the
trustee and paying agent under such other indenture under which any Transfer
Restricted Notes are issued) immediately upon the happening of each and every
Registration Default. The Company shall pay the Additional Interest due on
the
Transfer Restricted Notes by depositing with the paying agent (which shall
not
be the Company for these purposes) for the Transfer Restricted Notes, in trust,
for the benefit of the Holders thereof, prior to 11:00 a.m. on the next interest
payment date specified in the Indenture (or such other indenture), sums
sufficient to pay the Additional Interest then due. The Additional Interest
due
shall be payable on each interest payment date specified by the Indenture (or
such other indenture) to the record holders entitled to receive the interest
payment to be made on such date. Each obligation to pay Additional Interest
shall be deemed to accrue from and include the date of the applicable
Registration Default to, but excluding, the relevant interest payment date.
(c)
All
of the Company's and the Guarantors' obligations set forth in this Section
4
which are outstanding with respect to any Transfer Restricted Note at the time
such Note ceases to be covered by an effective Registration Statement shall
survive until such time as all such obligations with respect to such Transfer
Restricted Note have been satisfied in full (notwithstanding termination of
this
Agreement).
5.
Registration
Procedures.
In
connection with any Exchange Offer Registration Statement and, to the extent
applicable, any Shelf Registration Statement, the following provisions shall
apply:
(a)
The
Company shall furnish to the Initial Purchasers, not less than 5 Business Days
prior to the filing thereof with the Commission, a copy of any Registration
Statement, and each
amendment thereof and each amendment or supplement, if any, to the Prospectus
included therein (including all documents incorporated by reference therein)
and
shall use their reasonable best efforts to reflect in each such document, when
so filed with the Commission, such comments as the Initial Purchasers may
propose.
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(b)
The
Company shall ensure that:
(i) any
Registration Statement and any amendment thereto and any Prospectus contained
therein and any amendment or supplement thereto complies in all material
respects with the Act;
(ii) any
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and
(iii) any
Prospectus forming part of any Registration Statement, including any amendment
or supplement to such Prospectus, does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(c)
(1)
The Company shall advise the Initial Purchasers and, in the case of a Shelf
Registration Statement, the Holders of Transfer Restricted Notes covered
thereby, and, if requested by the Initial Purchasers or any such Holder, confirm
such advice in writing:
(i) when
a
Registration Statement and any amendment thereto has been filed with the
Commission and when the Registration Statement or any post-effective amendment
thereto has become effective; and
(ii) of
any
request by the Commission for amendments or supplements to the Registration
Statement or the Prospectus included therein or for additional
information.
(2)
The
Company shall advise the Initial Purchasers and, in the case of a Shelf
Registration Statement, the Holders of Transfer Restricted Notes covered
thereby, and, in the case of an Exchange Offer Registration Statement, any
Participating Broker-Dealer that has provided in writing to the Company a
telephone or facsimile number or address for notices, and, if requested by
the
Initial Purchasers or any such Holder or Participating Broker-Dealer, confirm
such advice in writing:
(i) of
the
issuance by the Commission of any stop order suspending the effectiveness of
the
Registration Statement or the initiation of any proceedings for that
purpose;
(ii) of
the
receipt by the Company of any notification with respect to the suspension of
the
qualification of the Transfer Restricted Notes included in any Registration
Statement for sale in any jurisdiction or the initiation or threatening of
any
proceeding for such purpose; and
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(iii) of
the
happening of any event that requires the making of any changes in the
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they
were
made) not misleading (which advice shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been
made).
(d)
The
Company and the Guarantors shall use their reasonable best efforts to file
any
amendments or supplements to a Registration Statement or Prospectus requested
by
the Commission and obtain the withdrawal of any order suspending the
effectiveness of any Registration Statement or the qualification of the Transfer
Restricted Notes covered thereby for sale in any jurisdiction, in each case
at
the earliest possible time.
(e)
The
Company shall furnish to each Holder of Transfer Restricted Notes included
in
any Shelf Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein and, if the Holder so requests in writing, all exhibits thereto
(including those incorporated by reference).
(f)
The
Company shall, during the Shelf Registration Period, deliver to each Holder
of
Transfer Restricted Notes included in any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including any preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company consents to
the
use of the Prospectus (including any preliminary prospectus) or any amendment
or
supplement thereto by each of the selling Holders of Transfer Restricted Notes
in connection with the offering and sale of the Transfer Restricted Notes
covered by the Prospectus or any amendment or supplement thereto.
(g)
The
Company shall furnish to each Participating Broker-Dealer that so requests,
without charge, at least one copy of the Exchange Offer Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules, any documents incorporated by reference therein and, if the
Participating Broker-Dealer so requests in writing, all exhibits thereto
(including those incorporated by reference).
(h)
The
Company shall, during the Exchange Offer Registration Period and pursuant to
the
requirements of the Act for the resale of the Exchange Notes during the period
in which a prospectus is required to be delivered under the Act (including
any
Commission no-action letters relating to the Registered Exchange Offer), deliver
to each Participating Broker-Dealer, without charge, as many copies of the
Prospectus (including any preliminary Prospectus) included in such Exchange
Offer Registration Statement and any amendment or supplement thereto as such
Participating Broker-Dealer may reasonably request; and the Company and the
Guarantors consent to the use of the Prospectus (including any preliminary
prospectus) or any amendment or supplement thereto by any such Participating
Broker-Dealer in connection with the offering and sale of the Exchange Notes,
as
provided in Section 2(e) above.
12
(i)
Prior
to the Registered Exchange Offer or any other offering of Transfer Restricted
Notes pursuant to any Registration Statement, the Company and the Guarantors
shall use their reasonable best efforts to register, qualify or cooperate with
the Holders of Transfer Restricted Notes included therein and their respective
counsel in connection with the registration or qualification of such Transfer
Restricted Notes for offer and sale under the securities or blue sky laws of
such states as any such Holders reasonably request in writing and do any and
all
other commercially reasonable acts or things necessary or advisable to enable
the offer and sale in such jurisdictions of the Transfer Restricted Notes
covered by such Registration Statement.
(j)
The
Company shall cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Transfer Restricted Notes to be sold
pursuant to any Registration Statement free of any restrictive legends and
in
denominations authorized by the indenture and registered in such names as
Holders may request.
(k)
Upon
the occurrence of any event contemplated by Section 3(d) or
paragraph (c)(2)(iii) of this Section 5, the Company and the Guarantors
shall promptly prepare and file a post-effective amendment to any Registration
Statement or an amendment or supplement to the related Prospectus or any other
required document so that, as thereafter delivered to purchasers of the Transfer
Restricted Notes included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(l)
The
Company shall use its reasonable best efforts to cause The Depository Trust
Company ("DTC") on the first Business Day following the effective date of any
Registration Statement hereunder or as soon as possible thereafter to remove
(i)
from any existing CUSIP number assigned to the Transfer Restricted Notes or
Exchange Notes, as the case may be, any designation indicating that such notes
are "restricted securities," which efforts shall include delivery to DTC of
a
letter executed by the Company substantially in the form of Annex E hereto
and
(ii) any other stop or restriction on DTC's system with respect to the Transfer
Restricted Notes or Exchange Notes, as the case may be. In the event the Company
is unable to cause DTC to take actions described in the immediately preceding
sentence, the Company shall take such actions as the Initial Purchasers may
request to provide, as soon as practicable, a new CUSIP (if not already
obtained) number for the Transfer Restricted Notes or Exchange Notes registered
under such Registration Statement and to cause such CUSIP number to be assigned
to the Transfer Restricted Notes or Exchange Notes (or to the maximum aggregate
principal amount of the securities to which such number may be
assigned).
(m)
The
Company shall use its reasonable best efforts to comply with all applicable
rules and regulations of the Commission and shall make generally available
to
the security holders as soon as practicable after the effective date of the
applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Act and Rule 158 promulgated
thereunder.
(n)
The
Company shall cause the Indenture to be qualified under the Trust Indenture
Act
in a timely manner.
13
(o)
The
Company may require each Holder of Transfer Restricted Notes to be sold pursuant
to any Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such Transfer Restricted Notes
as
may, from time to time, be required by the Act, and the obligations of the
Company to any Holder hereunder shall be expressly conditioned on the compliance
of such Holder with such request.
(p)
The
Company shall, if requested, promptly incorporate in a Prospectus supplement
or
post-effective amendment to a Shelf Registration Statement (i) such information
as the Majority Holders provide or, if the Transfer Restricted Notes are being
sold in an underwritten offering, as the Managing Underwriters and the Majority
Holders reasonably agree should be included therein and, in either case,
provided to the Company in writing for inclusion in the Shelf Registration
Statement, or Prospectus, and (ii) such information as a Holder may provide
from
time to time to the Company in writing for inclusion in a Prospectus or any
Shelf Registration Statement, in the case of clause (i) or (ii) above,
concerning such Holder and/or underwriter and the distribution of such Holder's
Transfer Restricted Notes and, in either case, shall make all required filings
of such Prospectus supplement or post-effective amendment as soon as practicable
after being notified in writing of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(q)
In
the case of any Shelf Registration Statement, the Company and the Guarantors
shall enter into such agreements (including underwriting agreements) and take
all other customary and appropriate actions as may be reasonably requested
in
order to expedite or facilitate the registration or the disposition of any
Transfer Restricted Notes, and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures no less favorable than those set forth in Section 8 (or such
other provisions and procedures reasonably acceptable to the Majority Holders
and the Managing Underwriters, if any, with respect to all parties to be
indemnified pursuant to Section 8).
(r)
In
the case of any Shelf Registration Statement, and if requested by the Initial
Purchasers in connection with resales of Transfer Restricted Notes under the
Exchange Offer Registration Statement, the Company shall:
(i) make
reasonably available for inspection by the Holders of Transfer Restricted Notes
to be registered thereunder, any Managing Underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such Managing
Underwriter, all relevant financial and other records, pertinent corporate
documents and properties of the Company and any of its
subsidiaries;
(ii) cause
the
Company's officers, directors and employees to supply all relevant information
reasonably requested by the Holders or any such Managing Underwriter, attorney,
accountant or agent in connection with any such Registration Statement as is
customary for similar due diligence examinations; provided,
however,
that
any information that is designated in writing by the Company in good faith
as
confidential at the time of delivery of such information shall be kept
confidential by the Holders
14
or
any
such Managing Underwriter, attorney, accountant or agent, unless (x) disclosure
thereof is made in connection with a court proceeding or required by law;
provided
that
each Holder and any such Managing Underwriter, attorney, accountant or agent
will, upon learning that disclosure of such information is sought in a court
proceeding or required by law, give notice to the Company to allow the Company
to undertake appropriate action to prevent disclosure at the Company's sole
expense, or (y) such information has previously been made or becomes available
to the public generally through the Company or through a third party without
an
accompanying obligation of confidentiality;
(iii) make
such
representations, warranties and covenants to the Holders of Transfer Restricted
Notes registered thereunder and the Managing Underwriters, if any, in form,
substance and scope as are customarily made in comparable transactions and
covering matters including, but not limited to, those set forth in the Purchase
Agreement;
(iv) obtain
opinions of counsel to the Company and updates thereof (which counsel and
opinions, in form, scope and substance, shall be reasonably satisfactory to
the
Managing Underwriters, if any) addressed to each selling Holder and the Managing
Underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten offerings and such other matters as may
be
reasonably requested by such Holders and Managing Underwriters;
(v) obtain
"cold comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired
by the Company for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each
selling Holder of the Transfer Restricted Notes covered by such Shelf
Registration Statement (provided such Holder furnishes the accountants with
such
representations as the accountants customarily require in similar situations)
and the Managing Underwriters, if any, in customary form and covering matters
of
the type customarily covered in "cold comfort" letters in connection with
primary underwritten offerings; and
(vi) deliver
such documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 5(i) and with any customary conditions contained in
the
underwriting agreement or other agreement entered into by the Company or a
Guarantor.
The
foregoing actions set forth in this Section 5(r) shall be performed at (i)
the
effectiveness of such Shelf Registration Statement and each post-effective
amendment thereto and (ii) each closing under any underwriting or similar
agreement as and to the extent required thereunder.
(s)
If a
Registered Exchange Offer is to be Consummated, upon delivery of the Notes
by
Holders to the Company (or to such other Person as directed by the Company)
in
exchange for the Exchange Notes, the Company shall xxxx, or caused to be marked,
on the Notes so exchanged that such Notes are being canceled in exchange for
the
Exchange Notes. In no event shall the Notes be marked as paid or otherwise
satisfied.
15
(t)
The
Company shall use its reasonable best efforts to confirm that the ratings
applicable to the Transfer Restricted Notes will apply to the Notes covered
by a
Registration Statement.
(u)
In
the event that any broker-dealer shall underwrite any Notes or Exchange Notes
or
participate as a member of an underwriting syndicate or selling group or "assist
in the distribution" (within the meaning of the Rules of Fair Practice and
the
By-Laws of the National Association of Securities Dealers, Inc.) thereof,
whether as a Holder of such Notes or Exchange Notes or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise,
the Company and the Guarantors shall assist such broker-dealer in complying
with
the requirements of such Rules and By-Laws, including, without limitation,
by:
(i) if
such
Rules or By-Laws shall so require, engaging a "qualified independent
underwriter" (as defined in such Rules) to participate in the preparation of
the
Registration Statement, to exercise usual standards of due diligence with
respect thereto and, if any portion of the offering contemplated by such
Registration Statement is an underwritten offering or is made through a
placement or sales agent, to recommend the yield of such Notes or Exchange
Notes;
(ii) indemnifying
any such qualified independent underwriter to the extent of the indemnification
of underwriters provided in Section 8 hereof; and
(iii) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of such Rules.
(v)
The
Company and the Guarantors shall use their reasonable best efforts to take
all
other steps necessary to effect the registration of the Notes or the Exchange
Notes, as the case may be, covered by a Registration Statement as contemplated
by, and in accordance with the terms of, this Agreement.
(w)
In
the case of a Shelf Registration Statement, each Holder of Notes or Exchange
Notes, as applicable, to be registered pursuant thereto agrees by acquisition
of
such Notes or Exchange Notes, as the case may be, that, upon the occurrence
of
any event contemplated by subsections (c)(2)(iii) above during the period for
which the Company is required to maintain the effectiveness of the Shelf
Registration Statement, such Holder will, upon written notice thereof from
the
Company, discontinue disposition of such Notes or Exchange Notes, as applicable,
under such Shelf Registration Statement until such Holder's receipt of copies
of
the supplemented or amended Prospectus contemplated in subsection (k) above,
or
until advised in writing by the Company that the use of the applicable
Prospectus may be resumed.
6.
Registration
Expenses.
The
Company shall bear all Registration Expenses (including the reasonable fees
and
expenses, if any, of Mayer, Brown, Xxxx & Maw LLP, counsel for the Initial
Purchasers, incurred in connection with the Registered Exchange Offer) incurred
in connection with the performance of their obligations under Sections 2, 3,
4
and 5 hereof.
16
7.
Rules
144 and 144A.
The
Company and the Guarantors shall use their reasonable best efforts to file
the
reports required to be filed by them under the Act and the Exchange Act in
a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Transfer Restricted Notes,
make publicly available other information so long as necessary to permit sales
of their securities pursuant to Rules 144 and 144A (or any successor rule
adopted by the Commission). The Company and the Guarantors each covenant that
it
will take such further action as any Holder of Transfer Restricted Notes may
reasonably request, all to the extent required from time to time to enable
such
Holder to sell Transfer Restricted Notes without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144
and
144A (including the requirements of Rule 144A(d)(4) if applicable). The Company
will provide a copy of this Agreement to prospective purchasers of Transfer
Restricted Notes identified to the Company by the Initial Purchasers upon
request. Upon the request of any Holder of Transfer Restricted Notes, the
Company shall deliver to such Holder a written statement as to whether it has
complied with such requirements. Notwithstanding the foregoing, nothing in
this
Section 7 shall be deemed to require the Company or a Guarantor to register
any
of its securities pursuant to the Exchange Act.
8.
Indemnification
and Contribution.
(a)
(i)
In connection with any Registration Statement, the Company and each Guarantor,
jointly and severally, agree to indemnify and hold harmless each Holder of
Transfer Restricted Notes covered thereby, the directors, officers and employees
of each such Holder and each person who controls any such Holder within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act against
any
losses, claims, damages or liabilities, joint or several, to which they or
such
controlling person may become subject, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
(x) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement as originally filed or in any amendment
thereof, in any preliminary Prospectus or Prospectus or in any amendment thereof
or supplement thereto, or (y) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse, as incurred, each such
indemnified party for any legal or other expenses reasonably incurred by them
in
connection with investigating, defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or action;
provided,
however,
that
the Company and the Guarantors will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information
relating to the Holder furnished to the Company by any such Holder specifically
for inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(ii)
The
Company and each Guarantor, jointly and severally, also agree to indemnify
or
contribute to Losses, as provided in Section 8(d), of each underwriter of
Transfer Restricted Notes registered under a Registration Statement, their
officers and directors and each person who controls such underwriter within
the
meaning of Section 15 of the Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the selling
Holders
provided in this Section 8(a) and shall, if requested by any Holder, enter
into
an underwriting agreement reflecting such agreement, as provided in Section
5(q)
hereof.
17
(b)
Each
Holder of Transfer Restricted Notes covered by a Registration Statement
severally agrees to indemnify and hold harmless the Company and the Guarantors
and their respective directors, officers, employees and agents and each person,
if any, who controls the Company or the Guarantors within the meaning of Section
15 of the Act or Section 20 of the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which they or such controlling
persons become subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement as originally filed or in any amendment thereof, in
any
preliminary Prospectus or Prospectus or in any amendment thereof or supplement
thereto, or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse, as incurred, each such indemnified party
for
any legal or other expenses reasonably incurred by them in connection with
investigating, defending against, or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action but only
if
and to the extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information relating to such Holder furnished to the Company by such
Holder specifically for inclusion therein. This indemnity agreement will be
in
addition to any liability which any such Holder may otherwise have.
(c)
Promptly after receipt by any person to whom indemnity may be available under
this Section 8 (the "indemnified
party")
of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any person from whom indemnity
may be sought under this Section 8 (the "indemnifying
party"),
notify such indemnifying party of the commencement thereof; but the failure
so
to notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses as determined by a court of competent
jurisdiction and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action
is
brought against any indemnified party, and such indemnified party notifies
the
relevant indemnifying party of the commencement thereof, such indemnifying
party
will be entitled to participate therein and, to the extent that it may wish,
to
assume the defense thereof, jointly with any other indemnifying party similarly
notified, with counsel satisfactory to such indemnified party; provided,
however,
that if
the named parties in any such action (including impleaded parties) include
both
the indemnified party and the indemnifying party and the indemnified party
shall
have concluded, based on advice of outside counsel, that there may be one or
more legal defenses available to it and/or other indemnified parties which
are
different from or additional to those available to the indemnifying party or
that representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them, the indemnifying
party shall not have the right to direct the defense of such action on behalf
of
such indemnified party or parties and such indemnified party or parties shall
have the right to select separate counsel to defend such action on behalf of
such indemnified
18
party
or
parties. After notice from an indemnifying party to an indemnified party of
its
election so to assume the defense thereof and approval by such indemnified
party
of counsel appointed to defend such action, such indemnifying party will not
be
liable to such indemnified party under this Section 8 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred
by
such indemnified party in connection with the defense thereof, unless
(i) such indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence or
(ii) such indemnifying party does not promptly retain counsel satisfactory
to such indemnified party or (iii) such indemnifying party has authorized the
employment of counsel for such indemnified party at the expense of the
indemnifying party. After such notice from an indemnifying party to an
indemnified party, such indemnifying party will not be liable for the costs
and
expenses of any settlement of such action effected by such indemnified party
without the written consent of such indemnifying party. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested
an
indemnifying party to reimburse the indemnified party for fees and expenses
of
counsel as contemplated by (i), (ii) or (iii) of the third sentence of this
paragraph, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (x) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (y) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. An indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or consent to
the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the indemnified party or any other person that may be entitled to
indemnification hereunder is a party to such claim, action, suit or proceeding)
unless such settlement, compromise or consent includes an unconditional release
of the indemnified party and such other persons from all liability arising
out
of such claim, action, suit or proceeding.
(d)
In
the circumstances in which the indemnity agreement provided for in the preceding
paragraphs of this Section 8 is unavailable or insufficient, for any reason,
to
hold harmless an indemnified party in respect of any, losses, claims, damages
or
liabilities (including, without limitation, legal or other expenses incurred
in
connection with investigating or defending any action or claim) (or actions
in
respect thereof) (collectively "Losses")
then
each indemnifying party, in order to provide for just and equitable
contribution, agrees to contribute to the amount paid or payable by such
indemnified party as a result of such Losses to which such indemnified party
may
be subject (i) in such proportion as is appropriate to reflect the relative
benefits received by such indemnifying party, on the one hand, and such
indemnified party, on the other hand, from the original issuance sale of the
Notes under the Purchase Agreement and the Registration Statement which resulted
in such Losses, or (ii) if the allocation provided by the foregoing clause
(i)
is unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on
the
one hand, and such indemnified party, on the other hand, in connection with
the
statements or omissions which resulted in such Losses and any other relevant
equitable considerations appropriate in the circumstances. The relative fault
of
the parties shall be determined by reference to, among other things, whether
the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Guarantors, on the one hand, or such Holder or such other indemnified
person, as the case may be, on the other hand, and the parties' intent, relative
knowledge, access to information
19
and
opportunity to correct or prevent such statement or omission, and any other
relevant equitable considerations appropriate in the circumstances. Benefits
received by the Company shall be deemed to be equal to the sum of (x) the total
net proceeds from the original issuance and sale of the Notes (before deducting
expenses) as set forth in the Final Memorandum, and (y) the total amount of
Additional Interest which the Company was not required to pay as a result of
registering the Transfer Restricted Notes covered by the Registration Statement
which resulted in such Losses. Benefits received by any Holder (other than
the
Initial Purchasers) shall be deemed to be equal to the value of receiving
Transfer Restricted Notes registered under the Act. Benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions as set forth in the Purchase Agreement. Benefits received by
any
underwriter shall be deemed to be equal to its relative share of the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. Notwithstanding any other provision of this Section 8(d), the Holders
of
the Transfer Restricted Notes shall in no case be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Transfer Restricted Notes pursuant to a
Registration Statement exceeds the amount of damages which such Holders have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission and in no case shall any underwriter
be responsible for any amount in excess of the underwriting discount or
commission applicable to the Transfer Restricted Notes purchased by such
underwriter under the Registration Statement which resulted in such Losses.
The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation that does not
take
into account the equitable considerations referred to above. Notwithstanding
the
provisions of this paragraph (d), the Initial Purchasers shall not be obligated
to make contributions hereunder that in the aggregate exceed the total
underwriting discounts and commissions received by the Initial Purchasers from
the Company in connection with the purchase of the Notes, and no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person,
if
any, who controls an indemnified party within the meaning of either Section
15
of the Act or Section 20 of the Exchange Act and each director, officer,
employee and agent of such indemnified party shall have the same rights to
contribution as such indemnified party.
(e)
The
provisions of this Section 8 will remain in full force and effect, regardless
of
any investigation made by or on behalf of any Holder, the Company, the
Guarantors or any of the directors, officers, employees, agents or controlling
persons referred to in Section 8 hereof, and will survive the sale by a Holder
of Transfer Restricted Notes covered by a Registration Statement.
9.
Underwritten
Registrations
If
any of
the Transfer Restricted Notes covered by any Shelf Registration Statement are
to
be sold in an underwritten offering, the Managing Underwriter that will
administer the offering will be selected by the Majority Holders of such
Transfer Restricted Notes included in such offering, and such Holders shall
be
responsible for all underwriting commissions and discounts in connection
therewith.
20
No
person
may participate in any underwritten offering pursuant to a Shelf Registration
Statement unless such person (i) agrees to sell such person's Transfer
Restricted Notes on the basis reasonably provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
10.
Miscellaneous.
(a)
No
Inconsistent Agreements.
Neither
the Company nor any Guarantor has, as of the date hereof, entered into nor
shall
it, on or after the date hereof, enter into any agreement that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(b)
Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Company
has
obtained the written consent of the Majority Holders; provided
that,
with
respect to any matter that directly or indirectly affects the rights of the
Initial Purchasers hereunder, the Company shall obtain the written consent
of
the Initial Purchasers. Notwithstanding the foregoing, a waiver or consent
to
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose Transfer Restricted Notes are being
sold pursuant to a Shelf Registration Statement or whose Notes are being
exchanged pursuant to an Exchange Offer Registration Statement, as the case
may
be, and which does not directly or indirectly affect the rights of other Holders
may be given by such Holders, determined on the basis of Notes being sold rather
than registered. Notwithstanding any of the foregoing, no amendment,
modification, supplement, waiver or consents to any departure from the
provisions of Section 8 hereof shall be effective as against any Holder of
Transfer Restricted Notes unless consented to in writing by such
Holder.
(c)
Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand-delivery, first-class mail, telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if
to the
Initial Purchasers, as follows:
c/o
Xxxxxx Xxxxxx & Co. Inc.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Facsimile:
Attention:
High-Yield Debt Capital Markets
21
with
a
copy mailed or delivered to:
Mayer,
Brown, Xxxx & Maw LLP
000
Xxxxx
XxXxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Facsimile:
000-000-0000
Attention: Xxxxxx
X.
Best.
(ii) if
to any
other Holder, at the most current address given by such Holder to the Company
in
accordance with the provisions of this Section 10(c), which address initially
is, with respect to each Holder, the address of such Holder maintained by the
registrar under the Indenture, with a copy in like manner to the Initial
Purchasers; and
(iii) if
to the
Company or the Guarantors, as follows:
00
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxx,
Xxx Xxxx 00000
Facsimile:
000-000-0000
Attention:
Xxxxxxx XxXxxx
with
a
copy mailed or delivered to:
Xxxxxxx,
Savage, Kaplowitz, Wolf & Marcus, LLP
000
Xxxx
00xx Xxxxxx -- 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile:
(000)
000-0000
Attention:
Xxx X. Xxxxxxxxx.
All
such
notices and communications shall be deemed to have been duly given when
received, if delivered by hand or air courier, and when sent, if sent by
first-class mail, telex or facsimile.
The
Company by notice to the others may designate additional or different addresses
for subsequent notices or communications.
(d)
Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties, including, without the need for an express
assignment or any consent by the Company or any Guarantor thereto, subsequent
Holders. The Company and the Guarantors hereby agree to extend the benefits
of
this Agreement to any Holder and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e)
Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and
the
same agreement.
22
(f)
Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(g)
Governing
Law and Consent to Jurisdiction.
This
agreement shall be governed by and construed in accordance with the laws of
the
State of New York. The Company and each Guarantor (x) submits to the
nonexclusive jurisdiction of the courts of the State of New York and of the
United States sitting in the Borough of Manhattan in respect of any action,
claim or proceeding ("Proceeding")
arising out of or relating to this Agreement or the transactions contemplated
hereby, (y) irrevocably waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the laying of venue
of
any Proceeding in the Supreme Court of the State of New York, County of New
York, or the United States District Court for the Southern District of New
York,
and any claim that any Proceeding in any such court has been brought in an
inconvenient forum, and (z) agrees that any service of process or other legal
summons in connection with any Proceeding may be served on it by mailing a
copy
thereof by registered mail, or a form of mail substantially equivalent thereto,
postage prepaid, addressed to the served party at its address as provided for
in
Section 10(c). Nothing in this section shall affect the right of the parties
to
serve process in any other manner permitted by law.
(h)
Obligations
of New Guarantors.
If any
person becomes a Guarantor (as defined in the Indenture) after the date hereof
and while the Company has continuing obligations under this Agreement, the
Company will cause such Guarantor to become a party hereto including for
purposes of registration obligations, the guarantee of Additional Interest
on a
joint and several basis and indemnification and contribution pursuant to Section
8.
(i)
Severability.
In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected thereby, it
being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(j)
Notes
Held by the Company, etc.
Whenever
the consent or approval of Holders of a specified percentage of principal amount
of Transfer Restricted Notes or Exchange Notes is required hereunder, Transfer
Restricted Notes or Exchange Notes held by the Company or any of its Affiliates
(other than subsequent Holders of Transfer Restricted Notes or Exchange Notes
if
such subsequent Holders are deemed to be Affiliates solely by reason of their
holdings of such Notes) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(k)
Remedies.
In the
event of a breach by either the Company or any of the Guarantors of any of
their
respective obligations under this Agreement, each Holder, in addition to being
entitled to exercise all rights provided herein, in the Indenture or, in the
case of the Initial Purchasers, in the Purchase Agreement, or granted by law,
including recovery of damages, will be entitled to specific perfor-xxxxx of
its
rights under this Agreement. The Company and the Guarantors agree that monetary
damages would not be adequate compensation for any loss incurred by reason
of a
breach by either the Company or any of the Guarantors of any of the provisions
of this Agreement and hereby further agree that, in the event of any action
for
specific performance
in respect of such breach, the Company shall (and shall cause each Guarantor
to)
waive the defense that a remedy at law would be adequate.
23
[Intentionally
left blank]
24
Please
confirm that the foregoing correctly sets forth the agreement between and
between the Company and the Initial Purchasers.
Very
truly yours,
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
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
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]
25
The
foregoing Agreement is hereby confirmed
and accepted as of the date
first above written.
XXXXXX
XXXXXX & CO. INC.
By:
/s/
Xxxx Xxx Xxxxxxxxx
Name:
Xxxx Xxx Xxxxxxxxx
Title:
Chief Financial Officer
XXXXX
FARGO SECURITIES, LLC
By:
/s/
Xxxxxxx X. Xxxx
Name:
Xxxxxxx X. Xxxx
Title:
Managing Director
ABN
AMRO
INCORPORATED
By:
/s/
Xxxxx Kanler
Name:
Xxxxx Kanler
Title:
Managing Director
26
SCHEDULE
I
INITIAL
PURCHASERS
|
Initial
Purchaser
|
Aggregate
Principal
Amount
of Notes
|
||||
|
Xxxxxx
Xxxxxx Co. Inc.
|
$
|
5,000,000
|
|||
|
Xxxxx
Fargo Securities, LLC
|
115,000,000
|
||||
|
ABN
AMRO Incorporated
|
5,000,000
|
||||
|
Total
|
$
|
125,000,000
|
|||
ANNEX
A
Each
broker-dealer that receives Exchange Notes for its own account pursuant to
the
Registered Exchange Offer must acknowledge that it will deliver a prospectus
in
connection with any resale of such Exchange Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within the meaning
of
the Act. This Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer during the Exchange Offer Registration
Period in connection with resales of Exchange Notes received in exchange for
Notes where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, during the Exchange Offer Registration Period, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution."
ANNEX
B
Each
broker-dealer that receives Exchange Notes for its own account in exchange
for
Notes, where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that
it
will deliver a prospectus in connection with any resale of such Exchange Notes
during the Exchange Offer Registration Period. See "Plan of
Distribution."
ANNEX
C
PLAN
OF
DISTRIBUTION
Each
broker-dealer that receives Exchange Notes for its own account pursuant to
the
Registered Exchange Offer must acknowledge that it will deliver a prospectus
in
connection with any resale of such Exchange Notes during the Exchange Offer
Registration Period. This Prospectus, as it may be amended or supplemented
from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Notes where such Notes were acquired
as
a result of market-making activities or other trading activities. The Company
has agreed that, during the Exchange Offer Registration Period, it will make
this Prospectus, as amended or supplemented, available to any broker-dealer
for
use in connection with any such resale. In addition, until ____________ 2005,
all dealers effecting transactions in the Exchange Notes may be required to
deliver a prospectus.
The
Company will not receive any proceeds from any sale of Exchange Notes by
broker-dealers. Exchange Notes received by broker-dealers for their own account
pursuant to the Registered Exchange Offer may be sold from time to time in
one
or more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who
may
receive compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its
own
account pursuant to the Registered Exchange Offer and any broker or dealer
that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Act and any profit from any such resale
of Exchange Notes and any commissions or concessions received by any such
persons may be deemed to be underwriting compensation under the Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is
an "underwriter" within the meaning of the Act.
During
the Exchange Offer Registration Period, the Company will promptly send
additional copies of this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in the Letter
of
Transmittal. The Company has agreed to pay all expenses incident to the
Registered Exchange Offer (including the expenses of one counsel for the holders
of the Notes) other than dealers' and brokers' discounts, commissions and
counsel fees and will indemnify the holders of the Notes (including any
broker-dealers) against certain liabilities, including liabilities under the
Act.
[If
applicable, add information required by Regulation S-K Items 507 and/or
508.]
ANNEX
D
|
|
CHECK
HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES
OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
|
o Name: ______________________________
Address: _______________________________
_______________________________
The
undersigned represents that it is not an Affiliate of the Company, that any
Exchange Notes to be received by it will be acquired in the ordinary course
of
business and that at the time of the commencement of the Registered Exchange
Offer it had no arrangement with any person to participate in a distribution
of
the Exchange Notes.
In
addition,
if the undersigned is not a broker-dealer, the undersigned represents that
it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Notes. If the undersigned is a broker-dealer that will receive Exchange Notes
for its own account in exchange for Notes, it represents that the Notes to
be
exchanged for Exchange Notes were acquired by it as a result of market-making
activities or other trading activities and acknowledges that it will deliver
a
prospectus in connection with any resale of such Exchange Notes; however, by
so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Act.
ANNEX
E
FORM
OF
LETTER TO BE PROVIDED BY THE COMPANY TO
THE
DEPOSITORY TRUST COMPANY
The
Depository Trust Company
00
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
|
Re:
|
12%
Senior Notes Due 2011 (the "Notes")
of Integrated Alarm Services Group,
Inc.
|
Ladies
and Gentlemen:
Please
be
advised that the Securities and Exchange Commission has declared effective
a
Registration Statement on Form S-__ under the Securities Act of 1933, as
amended, with regard to all of the Notes referenced above. Accordingly, there
is
no longer any restriction as to whom such Notes may be sold and [any
restrictions on the CUSIP designation are no longer appropriate and may be
removed] [the new CUSIP number for the Notes provided should be used]. I
understand that upon receipt of this letter, DTC will remove any stop or
restriction on its system with respect to this issue.
As
always, please do not hesitate to call if we can be of further
assistance.
Very
truly yours,
INTEGRATED
ALARM SERVICES GROUP, INC.
By:_________________________________
Name:
Title:
