Document:

EX-10.1

 ADVISORY AGREEMENT 

This Advisory Agreement, dated as of [—], 2012, is among TriLinc Advisors, LLC, a
Delaware limited liability company, and TriLinc Global Impact Fund, LLC, a Delaware limited liability company (the “Agreement”). 
 W I T N E S S E T H 
 WHEREAS, the Company (as hereinafter defined) desires to
avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor (hereinafter defined) and to have the Advisor undertake the duties and responsibilities hereinafter set forth
herein on the terms set forth in this Agreement; and 
 WHEREAS, the Advisor is willing to undertake to render such services on
the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, the parties hereto agree as follows: 
 ARTICLE 1 

DEFINITIONS 
 The following defined terms used in this Advisory Agreement shall have the meanings specified below: 
 “Acquisition Expenses” has the meaning set forth in the Operating Agreement. 
 “Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et. seq., as the same may be amended from time to time. All references herein to sections of the Act
shall include any corresponding provisions of succeeding law. 
 “Advisor” means (i) TriLinc Advisors,
LLC, a Delaware limited liability company, or (ii) any successor advisor to the Company. 
 “Affiliate”
has the meaning set forth in the Operating Agreement. For the purposes of this Agreement, the Advisor shall not be deemed to be an Affiliate of the Company, and vice versa. 
 “Board of Managers” means the Board of Managers of the Company. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto.
Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time.

 “Company” means TriLinc Global Impact Fund, LLC, a Delaware limited liability company. 

 “Front End Fees” has the meaning set forth in the Operating Agreement.

 “GAAP” is defined in Article 6. 
 “Gross Assets” is defined in Section 9.01. 
 “Gross
Proceeds” has the meaning set forth in the Operating Agreement. 
 “Independent Manager” has the
meaning set forth in the Operating Agreement. 
 “Investment in Company Assets” means the amount of capital
contributions actually paid or allocated to the origination or purchase of assets by the Company (including working capital reserves allocable thereto, except that working capital reserves in excess of 3% shall not be included) and other cash
payments such as interest and taxes, but excluding Front End Fees. 
 “Manager” means a member of the Board of
Managers of the Company. 
 “Dealer Manager” means SC Distributors, LLC, a Delaware limited liability company,
or such other entity selected by the Board of Managers to act as the managing dealer for the Offering. 

“Members” means the holders of record of Units. 

“Offering” means a public offering of Units pursuant to any Prospectus. 

“Operating Agreement” means the Amended and Restated Limited Liability Company Agreement of the Company, as amended from
time to time. 
 “Organization and Offering Expenses” has the meaning set forth in the Operating Agreement.

 “Net Assets” means the (a) cumulative proceeds generated from sales of the Company’s Units,
including proceeds from the Distribution Reinvestment Plan, net of Front End Fees and (b) reduced for (i) Distributions paid to the Company’s Members that represent return of capital and (ii) amounts paid for unit repurchases
pursuant to the unit repurchase program. 
 “Person” means an individual, corporation, partnership, estate,
trust, a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity. 
 “Preferred Return” is defined in Section 9.02. 

“Pre-incentive Fee Net Investment Income” means interest income, dividend income and any other income accrued during the
calendar quarter, minus the Company’s operating expenses for the quarter, including the asset management fee and operating expenses reimbursed to the Advisor. Pre-incentive fee net investment income does not include any realized capital gains,
realized capital losses or unrealized capital appreciation or depreciation. 

  
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 “Prospectus” means the Company’s final prospectus for any public
offering within the meaning of Section 2(10) of the Securities Act of 1933, as amended. 
 “Securities”
means any class or series of units of or interests in the Company, including units, preferred units, special units and any other evidences of equity or beneficial or other interests, voting trust certificates, bonds, debentures, notes or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in, temporary or interim
certificates for, receipts for, guarantees of, or warrants, options or rights to subscribe to, purchase or acquire, any of the foregoing. 
 “Sub-Advisor” means any Person or entity that has been engaged by the Advisor to source, evaluate and monitor investments of the Company or perform other duties of the Advisor pursuant to
this Agreement and has entered into a sub-advisory agreement with the Advisor and, possibly, with the Company or a subsidiary of the Company. 
 “Units” means units of limited liability company interest in the Company. 
 “Termination Date” means the date of termination of this Agreement. 
 “TriLinc” means TriLinc Global, LLC and its Affiliates. 
 ARTICLE
2 
 APPOINTMENT 
 The Company hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment. 

ARTICLE 3 

DUTIES OF THE ADVISOR 
 The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets, and for overseeing the performance of the Sub-Advisors, to
the fullest extent allowed by law. The Advisor shall, either directly or by engaging an Affiliate, the Dealer Manager, the Sub-Advisors or another third party, perform the following duties: 

3.01 Offering Services. The Advisor shall manage and supervise: 

(i) Development of the product offering, including the determination of the specific terms of the Securities to be offered by the
Company, preparation of all offering and related documents, and obtaining all required regulatory approvals of such documents; 

(ii) Along with the Dealer Manager, approval of the participating broker dealers and negotiation of the related selling agreements;

 (iii) Coordination of the due diligence process relating to participating broker dealers and their review of any Prospectus
and other Offering and Company documents; 

  
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 (iv) Preparation and approval of all marketing materials contemplated to be used by the
Dealer Manager or others in the Offering of the Company’s Securities; 
 (v) Along with the Dealer Manager, negotiation and
coordination with the transfer agent for the receipt, collection, processing and acceptance of subscription agreements, commissions, and other administrative support functions; 

(vi) Creation and implementation of various technology and electronic communications related to the Offering of the Company’s
Securities; and 
 (vii) All other services related to organization of the Company or the Offering, whether performed and
incurred by the Advisor or its Affiliates. 
 3.02 Acquisition Services. The Advisor shall (or shall retain other Persons
to): 
 (i) Serve as the Company’s investment and financial advisor and provide relevant market research and economic and
statistical data in connection with the assets of the Company, investment objectives and policies; 
 (ii) Subject to the
investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments will be made; (c) acquire,
originate and dispose of assets and other investments on behalf of the Company (including through joint ventures); (d) arrange for financing and refinancing and make other changes in the asset or capital structure of investments in the assets
and other investments of the Company; (e) select joint venture partners and structure corresponding agreements; and (f) enter into agreements for investments of the Company; 

(iii) Provide global macro-economic forecasting, including in-depth analyses of developing economic regions and specific countries,
global trends and currency movements; 
 (iv) Provide in-depth asset class analysis, including liquidity, risk and return
attributes as part of initial and ongoing asset allocation; 
 (v) Find, due diligence and select Sub-Advisors who will be
responsible for: 
  

	 	(a)	sourcing, underwriting, presenting and executing appropriate investments consistent with the Company’s investment policies and objectives;

  

	 	(b)	managing the Company’s relationship with borrowers and other investment counterparts; and 

 

	 	(c)	managing investment documentation and monitoring investment compliance with all relevant covenants, representations and warranties; 

  
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 (vi) Originate, underwrite and analyze potential investment opportunities consistent with
the Company’s investment policies and objectives and with the Company’s investment guidelines and restrictions as described in the Prospectus or as otherwise provided to the Advisor; 

(vii) Structure and negotiate the terms and conditions of the Company’s investments; 

(viii) Make investments on the Company’s behalf based on the underwriting guidelines approved by the Board of Managers and in
compliance with the Company’s investment objectives and policies and with the Company’s investment guidelines and restrictions as described in the Prospectus or as otherwise provided to the Advisor; 

(ix) Perform borrower level and market specific due diligence on prospective investments and create due diligence reports summarizing the
results of such work; and 
 (x) Consult with the Company’s officers and the Board of Managers and provide assistance with
the evaluation and approval of potential investment dispositions and sales, including reports to the Board of Managers regarding the foregoing. 
 3.03 Asset Management Services. The Advisor shall (or shall retain other Persons to): 
 (i) Investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including but
not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers and insurance agents and any and all Persons
acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services; 

(ii) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning
the value of investments of the Company; 
 (iii) Monitor and evaluate the performance of investments of the Company;

 (iv) Provide daily management services to the Company and perform and supervise the various management and operational
functions related to the Company’s investments; 
 (v) Supervise, monitor and evaluate the performance of Sub-Advisors and
individual investments in accordance with the Company’s investment policies and objectives; 
 (vi) Coordinate and manage
relationships between the Company and any joint venture partners; 
 (vii) Provide portfolio management functions; 

  
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 (viii) Oversee, monitor and asset manage in-place portfolio assets in each of the regions in
which the Sub-Advisors operate; 
 (ix) Evaluate the Company’s investments to ensure such investments meet the
Company’s impact objectives and regularly monitor and report on the economic, social and/or environmental impact of the Company’s investments; 
 (x) Enforce rights and recourse of the Company granted pursuant to investment documents where appropriate; 
 (xi) Supervise, monitor and evaluate the performance of investments and collateral assets; 
 (xii) Evaluate the Company’s investments to ensure such investments meet the Company’s environmental, social and governance (ESG) criteria and regularly monitor and report on the ESG practices;
and 
 (xiii) Pursue transaction modifications. 
 3.04 Accounting and Other Administrative Services. The Advisor shall (or shall retain other Persons to): 
 (i) Manage and perform the various administrative functions necessary for the management of the day-to-day operations of the Company; 

(ii) From time-to-time, or at any time reasonably requested by the Managers, make reports to the Managers on the Advisor’s
performance of services to the Company under this Agreement; 
 (iii) Coordinate with the Company’s independent accountants
and auditors to prepare and deliver to the Company’s audit committee an annual report covering the Advisor’s compliance with certain material aspects of this Agreement; 

(iv) Provide or arrange for administrative services and items, legal and other services, office space, office furnishings, personnel and
other overhead items necessary and incidental to the Company’s business and operations; 
 (v) Provide financial and
operational planning services; 
 (vi) Maintain accounting data and any other information concerning the activities of the
Company as shall be needed to prepare and file all periodic financial reports and returns required to be filed by the Company with the Securities and Exchange Commission and any other regulatory agency, including annual financial statements;

 (vii) Maintain all appropriate books and records of the Company; 

  
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 (viii) Oversee tax and compliance services and risk management services and coordinate with
appropriate third parties, including independent accountants and other consultants, on related tax matters; 
 (ix) Supervise
the performance of such ministerial and administrative functions as may be necessary in connection with the daily operations of the Company; 
 (x) Provide the Company with all necessary cash management services; 
 (xi) Manage
and coordinate with the transfer agent regarding the distribution process and payments to Members; 
 (xii) Consult with the
officers and Managers of the Company and assist in evaluating and obtaining adequate insurance coverage based upon risk management determinations; 
 (xiii) Assist in the administration of distribution reinvestment plans, transfers, redemptions, and all exception requests; 
 (xiv) Provide the officers and Managers with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited
to compliance with the Sarbanes-Oxley Act of 2002; 
 (xv) Consult with the officers and the Board of Managers relating to the
corporate governance structure and appropriate policies and procedures related thereto; and 
 (xvi) Oversee all reporting,
record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law including the Sarbanes-Oxley Act. 
 3.05 Member Services. The Advisor shall (or shall retain other Persons to): 

(i) Manage communications with the Members, including answering phone calls, preparing and sending written and electronic reports,
providing recommendations for marketing materials and other communications; 
 (ii) Assist in public relations activities
relating to the Company including, but not limited to, the development and administration of press releases, media relations, media coverage and by-lined articles and the development of websites to provide access for investors to financial
reporting, financial advisor access to sales materials, and general information relating to the Company, such as government filings and informational presentations; and 
 (iii) Establish technology infrastructure to assist in providing Member support and service. 

  
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 3.06 Financing Services. The Advisor shall (or shall retain other Persons to):

 (i) Identify and evaluate potential financing and refinancing sources, engaging a third-party broker if necessary;

 (ii) Negotiate terms, arrange and execute financing agreements; 

(iii) Manage relationships between the Company and its lenders; and 

(iv) Monitor and oversee the service of the Company’s debt facilities and other financings. 

3.07 Disposition Services. The Advisor shall (or shall retain other Persons to): 

(i) Consult with the Board of Managers and provide assistance with the evaluation and approval of potential asset dispositions, sales or
other liquidity events and reinvestment of returned capital; and 
 (ii) Structure and negotiate the terms and conditions of
transactions pursuant to which investments may be sold. 
 3.08 Other Services. The Advisor shall perform any other
services reasonably requested by the Company. 
 3.09 Sub-Advisors. The Advisor shall be responsible for overseeing any
Sub-Advisors it retains and for paying all fees and other compensation of such Sub-Advisors. 
 ARTICLE 4 

AUTHORITY OF ADVISOR 
 4.01 General. All rights and powers to manage and control the day-to-day business and affairs of the Company shall be vested in the Advisor to the fullest extent allowed by law. The Advisor shall
have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the Company or third parties,
including the Sub-Advisors and the Dealer Manager, as it may from time to time deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to applicable law and the limitations on the rights and powers of the
Advisor specifically set forth in this Agreement or the Operating Agreement. 
 4.02 Powers of the Advisor . Subject to
the express limitations set forth in this Agreement, and to the right of the Advisor to delegate its responsibilities pursuant to Section 4.01, the power to direct the management, operation and policies of the Company shall to the fullest
extent allowed by law be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform
all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement. 

  
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 4.03 Approval by the Managers. Notwithstanding the foregoing, the Advisor may not
take any action on behalf of the Company without the prior approval of the Board of Managers or duly authorized committees thereof if the Operating Agreement or the Act require the prior approval of the Board of Managers. The prior approval of
the Conflicts Committee of the Board of Managers shall be required for each transaction between the Company and the Advisor or its Affiliates. 
 4.04 Fiduciary Obligation. The Advisor has a fiduciary responsibility to the Company and to the Members. 
 ARTICLE 5 
 BANK ACCOUNTS 

The Advisor will maintain one or more bank accounts in the name of the Company and will collect and deposit into any such account or
accounts, and disburse from any such account or accounts, any money on behalf of the Company. Notwithstanding the foregoing, no funds shall be commingled with the funds of the Advisor. 

ARTICLE 6 

RECORDS AND FINANCIAL STATEMENTS 
 The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with United States generally
accepted accounting principles (“GAAP”), which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company
and shall be available for inspection by the Board of Managers and by counsel, auditors and other authorized agents of the Company, at any time or from time to time during normal business hours. Such books and records shall include all information
necessary to calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the
Company’s assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial reports which by their
nature require a deviation from GAAP. The Advisor shall maintain necessary liaison with the Company’s independent accountants and shall provide such accountants with such reports and other information as the Company shall request. 

ARTICLE 7 

LIMITATION ON ACTIVITIES 
 Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action which, in its sole judgment made in good faith, would (i) jeopardize the Company’s status
as a “partnership” for federal income tax purposes or would result in the Company being classified as a “publicly traded partnership” within the meaning of Section 7704(b) of the Code or any rules, regulations or safe-harbor
guidelines promulgated thereunder, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended, 

  
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(iii) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company or its Securities, or (iv) violate the Operating Agreement. In the event an
action would violate any of (i) through (iv) of the preceding sentence but such action has been ordered by the Board of Managers acting on behalf of the Company, the Advisor shall notify the Board of Managers of the Advisor’s judgment
of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board of Managers. In such event the Advisor shall, to the fullest extent allowed by law, have no
liability for acting in accordance with the specific instructions of the Board of Managers so given. Notwithstanding the foregoing, none of the Advisor, its Affiliates, the Sub-Advisors and none of their managers, directors, officers, employees and
equityholders, shall be liable to the Company, the Board of Managers or the Members for any act or omission by such Persons or individuals, except as provided in this Agreement. THE PARTIES HERETO INTEND THAT THE LIMITATION OF LIABILITY SET FORTH
IN THIS SECTION BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE LIMITATION OF LIABILITY SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY NOTWITHSTANDING ANY
STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT OF THE PARTIES
THAT, TO THE EXTENT PROVIDED IN THIS SECTION, THE LIMITATION OF LIABILITY SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY TO A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE, GROSS NEGLIGENCE OR
STRICT LIABILITY. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE LAWS. 
 ARTICLE
8 
 RELATIONSHIP WITH MANAGERS AND OFFICERS 
 Managers, directors, officers and employees of the Advisor or any direct or indirect Affiliate of the Advisor may serve as Managers, and as officers of the Company, except that no manager, director,
officer or employee of the Advisor or any of its Affiliates who also is a Manager or officer of the Company shall receive any compensation from the Company for serving as a Manager or officer other than reasonable reimbursement for travel and
related expenses incurred in attending meetings of the Board of Managers. 
 ARTICLE 9 

FEES 

9.01 Asset Management Fees. The Company shall pay the Advisor in cash, as compensation for services including those described in
Article 3, an asset management fee in accordance with this Section 9.01, as well as reimburse the Advisor for all expenses incurred by the Advisor in connection with such services as required by Article 10. The asset management fee shall be
calculated quarterly at an annual rate of 2.00% of the Company’s Gross Assets payable quarterly in arrears. For purposes of calculating the asset management fee, the term “Gross Assets” means the total fair value of the Company’s
assets at the end of the quarter, other 

  
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than intangibles and after the deduction of associated allowances and reserves, as determined by the Advisor in its sole discretion. For the first quarter of the Company’s operations, the
asset management fee shall be calculated based on the initial value of the Company’s Gross Assets. Subsequently, the asset management fee shall be calculated based on the Company’s Gross Assets at the end of each completed calendar
quarter. Asset management fees for any partial quarter will be appropriately prorated. 
 9.02
Subordinated Incentive Fee on Income. The Company shall pay the Advisor in cash, as compensation for services including those described in Article 3, a subordinated incentive fee on income in accordance with this Section 9.02, as well as
to reimburse the Advisor for all expenses incurred by the Advisor in connection with such services as required by Article 10. The subordinated incentive fee on income is calculated and payable quarterly in arrears based upon Pre-incentive Fee Net
Investment Income for the immediately preceding quarter, and shall be subordinated to a preferred return on Net Assets at the end of the immediately preceding quarter equal to 1.50% per quarter (an annualized rate of 6.00%). No subordinated
incentive fee on income shall be payable in any calendar quarter in which Pre-incentive Fee Net Investment Income does not exceed the preferred quarterly return of 1.50% (the “Preferred Return”), on Net Assets at the end of the
immediately preceding quarter. For any calendar quarter in which pre-incentive fee net investment income is greater than the Preferred Return, but less than 1.875% (the “Hurdle”), the subordinated incentive fee on income shall equal
the amount of Pre-incentive Fee Net Investment Income in excess of the Preferred Return. For any calendar quarter in which the Pre-incentive Fee Net Investment Income exceeds the Hurdle at the end of the immediately preceding quarter, the
subordinated incentive fee on income shall equal 20% of Pre-incentive Fee Net Investment Income. 
 9.03 Incentive Fee on
Capital Gains. The Company shall pay the Advisor in cash, as compensation for services including those described in Article 3, an incentive fee on capital gains in accordance with this Section 9.03, as well as to reimburse the Advisor for
all expenses incurred by the Advisor in connection with such services as required by Article 10. An incentive fee on capital gains earned on the Company’s investments shall be determined and payable in arrears as of the end of each calendar
year (or upon termination of this Agreement) and shall equal 20% of the Company’s incentive fee capital gains, which will equal the Company’s realized capital gains on a cumulative basis from inception, calculated as of the end of each
calendar year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid capital gains incentive fees. 

ARTICLE 10 

EXPENSES 

10.01 General. In addition to the compensation paid to the Advisor pursuant to Article 9 hereof, the Company shall pay directly or
reimburse the Advisor for all of the expenses paid or incurred by the Advisor or Affiliates in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to: 

(i) Acquisition Expenses incurred in connection with the selection and acquisition of assets including such expenses incurred related to
assets pursued or considered but not ultimately acquired by the Company; 

  
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 (ii) the actual out-of-pocket cost of goods and services used by the Company and obtained
from entities not Affiliated with the Advisor, including brokerage fees paid in connection with the purchase and sale of assets; 
 (iii) taxes and assessments on income or Assets and taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business or income; 

(iv) out-of-pocket costs associated with insurance required in connection with the business of the Company or by its officers and the
Managers; 
 (v) all out-of-pocket expenses in connection with meetings of the Board of Managers and Members; 

(vi) personnel and related employment direct costs incurred by the Advisor or Affiliates (a) in performing the services described in
Section 3.04 and in providing professional services for the Company in-house, including legal services, tax services, internal audit services, technology-related services and services in connection with compliance with the Sarbanes-Oxley Act of
2002, or (b) as otherwise approved by Independent Managers, including but not limited to salary, benefits, burdens and overhead of all employees directly involved in the performance of such services, plus all out-of-pocket costs incurred;

 (vii) out-of-pocket expenses of maintaining communications with Members, including the cost of preparation, printing, and
mailing annual reports and other Member reports, proxy statements and other reports required by governmental entities; 
 (viii)
audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Independent Managers or any committee of the Board of Managers;

 (ix) out-of-pocket costs for the Company to comply with all applicable laws, regulation and ordinances; 

(x) all other out-of-pocket costs incurred by the Advisor in performing its duties hereunder; and 

(xi) all other out-of-pocket costs necessary for the operation of the Company and its assets. 

The Company shall also reimburse the Advisor or Affiliates of the Advisor for all expenses incurred on behalf of the Company prior to the
execution of this Agreement. Notwithstanding anything to the contrary herein, the Company shall not reimburse the Advisor for (i) rent or depreciation, capital equipment or other costs of its own administrative items, (ii) salaries, fringe
benefits, travel expenses and other administrative items incurred or allocated to any controlling person of the Advisor or (iii) the salaries and benefits paid to the Company’s named executive officers. For purposes of this
Section 10.01, “controlling person” means persons with responsibilities similar to those of an executive, or a member of the Board of Managers, or any person who holds more than 10% of the Advisor’s equity securities or who has
the power to control the Advisor. 

  
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 10.02 Reimbursement to Advisor. Expenses incurred by the Advisor on behalf of the
Company and payable pursuant to this Section 10 shall be reimbursed to the Advisor within 10 days after the Advisor provides the Company with an invoice and/or supporting documentation relating to such reimbursement. 

10.03 Organization and Offering Expenses. The Company shall reimburse the Advisor and its Affiliates for Organization and Offering
Expenses it may incur on the Company’s behalf but only to the extent that the reimbursement would not cause the selling commissions, the Dealer Manager fees and the other Organization and Offering Expenses borne by the Company to exceed 15.0%
of Gross Proceeds of each Offering as of the date of the reimbursement. The total amount of all Organization and Offering Expenses shall be reasonable and shall be included in Front End Fees for purposes of the limit on such Front End Fees set forth
in Section 10.05. 
 10.04 Operating Expenses. The Company shall reimburse the expenses incurred by the Advisor or
its Affiliates in connection with providing administrative and other operational services under Sections 3.02 through 3.08. 

10.05 Limitation on Fees and Expenses. All Front End Fees shall be reasonable and shall not exceed 18% of the Gross Proceeds of
any offering, regardless of the source of payment The percentage of Gross Proceeds of any offering committed to Investment in Company Assets shall be at least 82%. All items of compensation to underwriters or dealers, including, but not limited to,
selling commissions, expenses, rights of first refusal, consulting fees, finders’ fees and all other items of compensation of any kind or description paid by the Company, directly or indirectly, shall be taken into consideration in computing
the amount of allowable Front End Fees. 
 ARTICLE 11 
 OTHER SERVICES 
 Should (i) the Company request that the Advisor or
any manager, officer or employee thereof render services for the Company other than as set forth in this Agreement or (ii) there are changes to the regulatory environment in which the Advisor or Company operates that would increase
significantly the level of services performed such that the costs and expenses borne by the Advisor for which the Advisor is not entitled to separate reimbursement for personnel and related employment direct costs and overhead under Article 10 of
this Agreement would increase significantly, such services shall be separately compensated at such rates and in such amounts as are agreed by the Advisor and the Independent Managers, subject to the limitations contained in the Operating Agreement,
and shall be deemed to be “other services” pursuant to the terms of this Agreement. 

  
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 ARTICLE 12 
 RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES AND 
 OBLIGATIONS OF
THE ADVISOR 
 12.01 Relationship. To the fullest extent allowed by law, the Company and the Advisor are not partners
or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation,
the rendering of advice to other Persons and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee, or
equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and
service to each and every other participant therein. The Advisor shall promptly disclose to the Board of Managers the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, which creates or could create a
conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest in any other Person. 
 12.02 Time Commitment. The Advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to
conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement. The Company acknowledges that the Advisor and other Affiliates of TriLinc and their respective employees, officers and agents may
also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates. 
 12.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company which is
consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the Company even if the opportunity is
of character which, if presented to the Company, could be taken by the Company. In the event an investment opportunity is located, the allocation procedure set forth under the caption “Conflicts of Interest—Allocation of Investment
Opportunities” in any Prospectus (as may be amended from time to time) shall govern the allocation of the opportunity among the Company and Affiliates of the Advisor. 
 12.04 Representations of the Advisor. The Advisor represents to the Company that (i) it is registered with the Securities and Exchange Commission as a registered investment advisor or
(ii) it is not required to be registered or licensed with any federal, state, local or foreign regulatory or self-regulatory authority in order to carry out its intended business, including, without, limitation, that which is contemplated under
the terms of this Agreement; and furthermore, that it will obtain any necessary licenses or permits to perform its obligations hereunder. 

  
 14 

 ARTICLE 13 
 THE TRILINC NAME 
 TriLinc and its Affiliates have a proprietary interest
in the name “TriLinc”. TriLinc hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “TriLinc” during the term of this Agreement. Accordingly, and in
recognition of this right, if at any time the Company ceases to retain TriLinc or an Affiliate thereof to perform the services of Advisor, the Company will, promptly after receipt of written request from TriLinc, cease to conduct business under or
use the name “TriLinc” or any derivative thereof and the Company shall change the name of the Company to a name that does not contain the name “TriLinc” or any other word or words that might, in the reasonable discretion of
TriLinc, be susceptible of indication of some form of relationship between the Company and TriLinc or any Affiliate thereof. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any
references to the word “TriLinc”. Consistent with the foregoing, it is specifically recognized that TriLinc or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other
investment vehicles and financial and service organizations having “TriLinc” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company. 

ARTICLE 14 

TERM AND TERMINATION OF THE AGREEMENT 
 14.01 Term. This Agreement shall have an initial term of one year from the date of the Agreement. This Agreement may be renewed for an unlimited number of successive one-year terms upon mutual
consent of the parties. Any such renewal must be approved by a majority of the Independent Managers. The Company (through the Independent Managers) will evaluate the performance of the Advisor annually before renewing the Agreement, and each such
renewal shall be for a term of no more than one year. 
 14.02 Termination by Either Party. This Agreement may be
terminated upon 120 days’ written notice without cause or penalty by either party. If the Advisor fails to give such notice, the withdrawing Advisor shall pay all expenses incurred as a result of its withdrawal. 

14.03 Termination by the Company. This Agreement may be terminated immediately by the Company upon (i) any fraudulent
conduct, criminal conduct, willful misconduct or the negligent breach of fiduciary duty of or by the Advisor, (ii) a material breach of this Agreement by the Advisor not cured within 10 business days after the Advisor receives written notice of
such breach, or (iii) an event of the bankruptcy of the Advisor or commencement of any bankruptcy or similar insolvency proceedings of the Advisor. 
 14.04 Termination by the Advisor. This Agreement may be terminated immediately by the Advisor in the event of (i) the bankruptcy of the Company or commencement of any bankruptcy or similar
insolvency proceedings of the Company, or (ii) any material breach of this Agreement by the Company not cured by the Company within 10 days after written notice thereof. 

  
 15 

 14.05 Payments on Termination and Survival of Certain Rights and Obligations.

 (i) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it
shall be entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement. 

(ii) The Advisor shall promptly upon termination: 
 (a) pay over to the Company all money collected pursuant to this Agreement, if any, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; 

(b) deliver to the Managers a full accounting, including a statement showing all payments collected by it and a statement of all money
held by it, covering the period following the date of the last accounting furnished to the Managers; 
 (c) deliver to the
Managers all assets and documents of the Company then in the custody of the Advisor; and 
 (d) cooperate with the Company to
provide an orderly transition of advisory functions. 
 Upon the expiration or termination of this Agreement, neither party
shall have any further rights or obligations under this Agreement, except that Articles 13, 14, 16 and 17 shall survive the termination or expiration of this Agreement. 
 14.06 Other Matters. Upon termination of this Agreement, the Company may terminate the Advisor’s interest in the Company’s revenues, expenses, income, losses, distributions and capital by
payment of an amount equal to the then present fair market value of the terminated Advisor’s interest, determined by agreement of the terminated Advisor and the Company. If the Company and the Advisor cannot agree upon such amount, then such
amount will be determined in accordance with the then current rules of the American Arbitration Association. The expenses of such arbitration shall be borne equally by the terminated Advisor and the Company. 

ARTICLE 15 

ASSIGNMENT 

This Agreement may be assigned by the Advisor to an Affiliate with the consent of the Company by approval of a majority of the
Independent Managers. The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board of Managers. This Agreement shall not be assigned by the Company without the consent of the
Advisor. 

  
 16 

 ARTICLE 16 
 INDEMNIFICATION AND LIMITATION OF LIABILITY 
 16.01 Indemnification by
the Company. The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their respective managers, officers, directors, partners and employees, from all liability, claims, damages or losses arising in the performance
of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by the
laws of the State of Delaware and the Operating Agreement, provided that: (i) the Advisor and its Affiliates, as applicable, have determined that the course of conduct which caused the loss or liability was in the best interests of the Company,
(ii) the Advisor and its Affiliates, as applicable, were acting on behalf of or performing services for the Company, (iii) the indemnified claim was not the result of negligence, misconduct, or fraud of the indemnified person or resulted
from a breach of the agreement by the Advisor and (iv) in the event the loss, liability or expense arises from or out of an alleged violation of federal or state securities laws by the Advisor or its Affiliates, the conditions set forth in at
least one of clauses (i), (ii) or (iii) of Section 17.2(b) of the Operating Agreement must be satisfied (deeming, for purposes of this Agreement, that the Advisor and its Affiliates are each an “Indemnitee” as such term is
used in such clauses) for the Company to provide such indemnification. Any indemnification of the Advisor or its Affiliates may be made only out of the assets of the Company and not from the Members. 

16.02 Indemnification by the Advisor. The Advisor shall indemnify and hold harmless the Company from contract or other liability,
claims, damages, taxes or losses and related expenses, including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the
Advisor’s or any Sub-Advisor’s bad faith, fraud, willful misconduct or reckless disregard of its duties, but the Advisor shall not be held responsible for any action of the Board of Managers in following or declining to follow any of the
Advisor’s advice or recommendation. THE PARTIES HERETO INTEND THAT THE INDEMNITIES SET FORTH IN THIS AGREEMENT BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE
INDEMNITIES SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, AND TO THE EXTENT PROVIDED IN THIS AGREEMENT, APPLY NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON AN INDEMNIFIED
PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY OR GROSS NEGLIGENCE. IT IS THE INTENT OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN THIS AGREEMENT, THE INDEMNITIES SET FORTH HEREIN SHALL, TO THE
FULLEST EXTENT ALLOWED BY LAW, APPLY TO AN INDEMNIFIED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY OR GROSS NEGLIGENCE. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES
OF ALL STATE LAWS. 

  
 17 

 16.03 Advisor’s Liability 

(i) Notwithstanding any other provisions of this Agreement, in no event shall the Company make any claim against Advisor or its
Affiliates on account of any good faith interpretation by Advisor of the provisions of this Agreement (even if such interpretation is later determined to be a breach of this Agreement) or any alleged errors in judgment made in good faith and in
accordance with this Agreement in connection with the operations of the Company hereunder by Advisor or the performance of any advisory or technical services provided by or arranged by the Advisor. The provisions of this Section 16.03(a) shall
not be deemed to release Advisor from liability for its gross negligence. 
 (ii) The Company shall not object to any
expenditure made by the Advisor in good faith in the course of its performance of its obligations under this Agreement or in settlement of any claim arising out of the operation of the Company unless such expenditure is specifically prohibited by
this Agreement. The provisions of this Section 16.03(ii) shall not be deemed to release Advisor from liability for its gross negligence. 
 (iii) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR DAMAGES BASED ON LOSS OF INCOME, PROFIT OR SAVINGS OR INDIRECT, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES OF THE OTHER PARTY OR
PERSON, INCLUDING THIRD PARTIES, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE, AND ALL SUCH DAMAGES ARE EXPRESSLY DISCLAIMED. IN NO EVENT WILL ADVISOR’S AGGREGATE LIABILITY UNDER THIS AGREEMENT EVER EXCEED
THE TOTAL AMOUNT OF FEES IT ACTUALLY RECEIVES FROM THE COMPANY PURSUANT TO ARTICLE 9. 
 (iv) THE PARTIES HERETO INTEND
THAT THE RELEASE FROM LIABILITY SET FORTH IN SECTION 16.03 BE CONSTRUED AND APPLIED AS WRITTEN NOTWITHSTANDING ANY RULE OF CONSTRUCTION TO THE CONTRARY. WITHOUT LIMITING THE FOREGOING, THE RELEASE FROM LIABILITY SHALL, TO THE FULLEST EXTENT ALLOWED
BY LAW, APPLY NOTWITHSTANDING ANY STATE’S “EXPRESS NEGLIGENCE RULE” OR SIMILAR RULE THAT WOULD DENY COVERAGE BASED ON A PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR STRICT LIABILITY. IT IS THE INTENT
OF THE PARTIES THAT, TO THE EXTENT PROVIDED IN SECTION 16.03, THE RELEASE FROM LIABILITY SET FORTH HEREIN SHALL, TO THE FULLEST EXTENT ALLOWED BY LAW, APPLY TO A RELEASED PERSON’S SOLE, CONCURRENT OR CONTRIBUTORY ACTIVE OR PASSIVE NEGLIGENCE OR
STRICT LIABILITY. THE PARTIES AGREE THAT THIS PROVISION IS “CONSPICUOUS” FOR PURPOSES OF ALL STATE LAWS. 
 ARTICLE
17 
 MISCELLANEOUS 
 17.01 Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Operating Agreement, or accepted by the party to whom 

  
 18 

 
it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein: 

To the Company or the Managers: 
 TriLinc Global Impact Fund, LLC 
 1230 Rosecrans Ave, Suite 605, 

Manhattan Beach, California 90266 
 Attention: 
 To the Advisor: 

TriLinc Advisors, LLC1230 
 Rosecrans Ave, Suite 605, 
 Manhattan Beach, California 90266 

Attention: 

Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this
Section 17.01. 
 17.02 Modification. This Agreement shall not be changed, modified, terminated, or discharged, in
whole or in part, except by an instrument in writing signed by all parties hereto, or their respective successors or assignees. 

17.03 Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 
 17.04 Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware applicable to contracts to be made and performed
entirely in such state. 
 17.05 Entire Agreement. This Agreement contains the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

 17.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in
writing and is signed by the party asserted to have granted such waiver. 

  
 19 

 17.07 Gender. Words used herein regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 17.08 Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to
be used in the construction or interpretation hereof. 
 17.09 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. 
 [The remainder of this page is intentionally left blank. Signature page follows.] 

  
 20 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year
first above written. 
  

			
	TRILINC ADVISORS, LLC
		
	 By:
	 	 
	 Name:
	 	
	 Title:
	 	

  

			
	 TRILINC GLOBAL IMPACT FUND, LLC

		
	 By:
	 	 
	 Name:
	 	
	 Title:
	 	

  
 21eh1201324_ex0401.htm

EXHIBIT 4.1

 

Execution Version

 

 

HARBINGER GROUP INC.

as Issuer

 

 

and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Trustee

 

 

 

 

Indenture

Dated as of December 24, 2012

 

 

7.875%

 Senior Secured Notes

due 2019

 

 

 

 

 

  

  

  

 

CROSS-REFERENCE TABLE

 

 

	TIA Sections  	 Indenture Sections
	 	 	 	 
	
§

	
310

	
(a)

	
7.10

	
 

	
 

	
(b)

	
7.03, 7.08

	
§

	
311

	  	
7.03

	
§

	
312

	  	
12.02

	
§

	
313

	  	
7.06, 11.02

	
§

	
314

	
(a)

	
4.14, 4.15

	
 

	
 

	
(b)

	
11.02

	
 

	
 

	
(c)

	
12.04

	
 

	
 

	
(d)

	
11.02

	
 

	
 

	
(e)

	
12.05

	
§

	
315

	
(a)

	
7.01, 7.02

	
 

	
 

	
(b)

	
7.02, 7.05

	
 

	
 

	
(c)

	
7.01, 7.02

	
 

	
 

	
(d)

	
7.02

	
 

	
 

	
(e)

	
6.12, 7.02

	
§

	
316

	
(a)

	
2.05, 6.02, 6.04, 6.05

	
 

	
 

	
(b)

	
6.06, 6.07

	
 

	
 

	
(c)

	
12.02

	
§

	
317

	
(a) (1)

	
6.08

	
 

	
 

	
(a) (2)

	
6.09

	
 

	
 

	
(b)

	
2.03

	
§

	
318

	  	
12.01

 

 

 

 

 

 

  

2

  

 

RECITALS

 

	
ARTICLE 1

	
Definitions And Incorporation By Reference

	 	 
	
Section 1.01.  Definitions

	
2

	 	 
	
ARTICLE 2

	
The Notes

	 	 
	
Section 2.01.  Form, Dating and Denominations; Legends

	
29

	
Section 2.02.  Execution and Authentication; Exchange Notes; Additional Notes

	
30

	
Section 2.03.  Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust

	
32

	
Section 2.04.  Replacement Notes

	
32

	
Section 2.05.  Outstanding Notes

	
32

	
Section 2.06.  Temporary Notes

	
33

	
Section 2.07.  Cancellation

	
33

	
Section 2.08.  CUSIP and CINS Numbers

	
34

	
Section 2.09.  Registration, Transfer and Exchange

	
34

	
Section 2.10.  Restrictions on Transfer and Exchange

	
37

	
Section 2.11.  Temporary Offshore Global Notes

	
39

	 	 
	
ARTICLE 3

	
Redemption; Offer to Purchase

	 	 
	
Section 3.01.  Optional Redemption

	
40

	
Section 3.02.  Redemption with Proceeds of Equity Offering

	
41

	
Section 3.03.  Method and Effect of Redemption

	
41

	
Section 3.04.  Offer to Purchase

	
42

	 	 
	
ARTICLE 4

	
Covenants

	 	 
	
Section 4.01.  Payment Of Notes

	
44

	
Section 4.02.  Maintenance of Office or Agency

	
45

	
Section 4.03.  Existence

	
45

	
Section 4.04.  Payment of Taxes and other Claims

	
46

	
Section 4.05.  Maintenance of Properties and Insurance

	
46

	
Section 4.06.  Limitation on Debt and Disqualified Stock

	
46

	
Section 4.07.  Limitation on Restricted Payments

	
50

	
Section 4.08.  Limitation on Liens

	
54

	
Section 4.09.  Limitation on Sale and Leaseback Transactions

	
55

	
Section 4.10.  Limitation on Dividend and other Payment Restrictions Affecting Subsidiaries

	
56

 

 

  

3

  

 

 

	
Section 4.11.  Repurchase of Notes Upon a Change of Control

	
58

	
Section 4.12.  Limitation on Asset Sales

	
59

	
Section 4.13.  Limitation on Transactions with Affiliates

	
62

	
Section 4.14.  Financial Reports

	
64

	
Section 4.15.  Reports to Trustee

	
65

	
Section 4.16.  No Investment Company Registration

	
66

	
Section 4.17.  Maintenance of Liquidity

	
66

	
Section 4.18.  Maintenance of Collateral Coverage

	
66

	
Section 4.19.  Impairment of Security Interest; Further Assurances

	
66

	
Section 4.20.  Guaranties by Subsidiaries

	
67

	 	 
	
ARTICLE 5

	
Consolidation, Merger or Sale of Assets

	 	 
	
Section 5.01.  Consolidation, Merger or Sale of Assets by the Company; No Lease of All or Substantially All Assets

	
67

	
Section 5.02.  Consolidation, Merger or Sale of Assets by a Guarantor

	
68

	 	 
	
ARTICLE 6

	
Default and Remedies

	 	 
	
Section 6.01.  Events of Default

	
69

	
Section 6.02.  Acceleration

	
71

	
Section 6.03.  Other Remedies

	
71

	
Section 6.04.  Waiver of Past Defaults

	
72

	
Section 6.05.  Control by Majority

	
72

	
Section 6.06.  Limitation on Suits

	
72

	
Section 6.07.  Rights of Holders to Receive Payment

	
73

	
Section 6.08.  Collection Suit by Trustee

	
73

	
Section 6.09.  Trustee May File Proofs of Claim

	
73

	
Section 6.10.  Priorities

	
74

	
Section 6.11.  Restoration of Rights and Remedies

	
74

	
Section 6.12.  Undertaking for Costs

	
74

	
Section 6.13.  Rights and Remedies Cumulative

	
75

	
Section 6.14.  Delay or Omission Not Waiver

	
75

	
Section 6.15.  Waiver of Stay, Extension or Usury Laws

	
75

	 	 
	
ARTICLE 7

	
The Trustee

	 	 
	
Section 7.01.  General

	
75

	
Section 7.02.  Certain Rights of Trustee

	
76

	
Section 7.03.  Individual Rights of Trustee

	
77

	
Section 7.04.  Trustee’s Disclaimer

	
78

	
Section 7.05.  Notice of Default

	
78

	
Section 7.06.  Reports by Trustee to Holders

	
78

 

 

  

4

  

 

 

	
Section 7.07.  Compensation And Indemnity

	
78

	
Section 7.08.  Replacement of Trustee

	
79

	
Section 7.09.  Successor Trustee by Merger

	
80

	
Section 7.10.  Eligibility

	
80

	
Section 7.11.  Money Held in Trust

	
80

	 	 
	
ARTICLE 8

	
Defeasance and Discharge

	 	 
	
Section 8.01.  Discharge of Company’s Obligations

	
81

	
Section 8.02.  Legal Defeasance

	
82

	
Section 8.03.  Covenant Defeasance

	
83

	
Section 8.04.  Application of Trust Money

	
83

	
Section 8.05.  Repayment to Company

	
83

	
Section 8.06.  Reinstatement

	
84

	 	 
	
ARTICLE 9

	
Amendments, Supplements and Waivers

	 	 
	
Section 9.01.  Amendments Without Consent of Holders

	
84

	
Section 9.02.  Amendments With Consent of Holders

	
85

	
Section 9.03.  Effect of Consent

	
86

	
Section 9.04.  Trustee’s Rights and Obligations

	
87

	
Section 9.05.  Conformity With Trust Indenture Act

	
87

	 	 
	
ARTICLE 10

	
Guaranties

	 	 
	
Section 10.01.  The Guaranties

	
88

	
Section 10.02.  Guaranty Unconditional

	
88

	
Section 10.03.  Discharge; Reinstatement

	
89

	
Section 10.04.  Waiver by the Guarantors

	
89

	
Section 10.05.  Subrogation and Contribution

	
89

	
Section 10.06.  Stay of Acceleration

	
89

	
Section 10.07.  Limitation on Amount of Guaranty

	
89

	
Section 10.08.  Execution and Delivery of Guaranty

	
90

	
Section 10.09.  Release of Guaranty

	
90

	 	 
	
ARTICLE 11

	
Security Arrangements

	 	 
	
Section 11.01.  Collateral Agent

	
90

	
Section 11.02.  Security

	
91

	
Section 11.03.  Authorization of Actions to be Taken

	
92

	
Section 11.04.  Determinations Relating To Collateral

	
93

	
Section 11.05.  Release of Liens

	
93

 

 

  

5

  

 

	
Section 11.06.  Permitted Ordinary Course Activities with Respect to Collateral.

	
95

	 	 
	
ARTICLE 12

	
Miscellaneous

	 	 
	
Section 12.01.  Trust Indenture Act of 1939

	
96

	
Section 12.02.  Noteholder Communications; Noteholder Actions

	
96

	
Section 12.03.  Notices

	
97

	
Section 12.04.  Certificate and Opinion as to Conditions Precedent

	
98

	
Section 12.05.  Statements Required in Certificate or Opinion

	
98

	
Section 12.06.  Payment Date Other Than a Business Day

	
99

	
Section 12.07.  Governing Law; Submission to Jurisdiction; Waiver of Jury Trial

	
99

	
Section 12.08.  No Adverse Interpretation of Other Agreements

	
99

	
Section 12.09.  Successors

	
99

	
Section 12.10.  Duplicate Originals

	
99

	
Section 12.11.  Separability

	
100

	
Section 12.12.  Table of Contents and Headings

	
100

	
Section 12.13.  No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders

	
100

	
Section 12.14.  U.S.A. Patriot Act

	
100

	
Section 12.15.  Force Majeure

	
100

	
Section 12.16.  Benefits of Indenture

	
100

	
Section 12.17.  Rules by Trustee and Agents

	
101

 

 

 

 

 

 

 

 

 

 

  

6

  

 

	
EXHIBITS

	 
	
EXHIBIT A

	
Form of Note

	
EXHIBIT B

	
Form of Supplemental Indenture

	
EXHIBIT C

	
Restricted Legend

	
EXHIBIT D

	
DTC Legend

	
EXHIBIT E

	
Regulation S Certificate

	
EXHIBIT F

	
Rule 144A Certificate

	
EXHIBIT G

	
Institutional Accredited Investor Certificate

	
EXHIBIT H

	
Certificate of Beneficial Ownership

	
EXHIBIT I

	
Temporary Offshore Global Note Legend

 

 

 

 

 

 

 

 

 

 

 

 

  

7

  

 

INDENTURE, dated as of December 24, 2012, between Harbinger Group Inc., a Delaware corporation, as the Company, and Wells Fargo Bank, National Association, a national banking association, as Trustee.

 

RECITALS

 

The Company has duly authorized the execution and delivery of the Indenture to provide for the issuance of up to $700,000,000 aggregate principal amount of the Company’s 7.875% Senior Secured Notes due 2019, and, if and when issued, any Additional Notes, together with any Exchange Notes issued therefor as provided herein (the “Notes”).  All things necessary to make the Indenture a valid agreement of the Company, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes (in the case of the Additional Notes, when duly authorized), when executed by the Company and authenticated and delivered by the Trustee and duly issued by the Company, the valid obligations of the Company as hereinafter provided.

 

This Indenture is subject to, and will be governed by, the provisions of the Trust Indenture Act that are required to be a part of and govern indentures qualified under the Trust Indenture Act.

 

THIS INDENTURE WITNESSETH

 

For and in consideration of the premises and the purchase of the Notes by the Holders thereof, the parties hereto covenant and agree, for the equal and proportionate benefit of all Holders, as follows:

 

 

 

 

 

 

 

 

  

  

  

 

ARTICLE 1

Definitions And Incorporation By Reference

 

Section 1.01.  Definitions.

 

 “Additional Interest” means additional interest owed to the Holders pursuant to a Registration Rights Agreement.

 

“Additional Notes” means any Notes issued under the Indenture in addition to the Original Notes, including any Exchange Notes issued in exchange for such Additional Notes, having the same terms in all respects as the Original Notes, or in all respects except with respect to issue price and interest paid or payable on or prior to the first interest payment date after the issuance of such Additional Notes.

 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agent” means any Registrar, Paying Agent or Authenticating Agent.

 

“Agent Member” means a member of, or a participant in, the Depositary.

 

“Applicable Premium” means, with respect to any Note on any redemption date, the greater of (1) 1.0% of the principal amount of such Note; or (2) the excess of (a) the present value at such redemption date of (i) the redemption price of such Note at January 15, 2016 (as stated in the table in Section 3.01), plus (ii) all required interest payments due on such Note through January 15, 2016 excluding accrued but unpaid interest to the applicable redemption date, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal amount of the Note.

 

 “Asset Sale” means any sale, lease, transfer or other disposition of any assets by the Company or any Guarantor, including by means of a merger, consolidation or similar transaction and including any sale by the Company or any Guarantor of the Equity Interests of any Subsidiary (each of the above referred to as a “disposition”), provided that the following are not included in the definition of “Asset Sale”:

 

 

 

  

2

  

 

(1)         a disposition to the Company or a Guarantor, including the sale or issuance by the Company or any Guarantor of any Equity Interests of any Subsidiary to the Company or any Guarantor;

 

(2)         the disposition by the Company or any Guarantor in the ordinary course of business of (i) Cash Equivalents and cash management investments, (ii) damaged, worn out or obsolete assets, (iii) rights granted to others pursuant to leases or licenses, or (iv) inventory and other assets acquired and held for resale in the ordinary course of business (it being understood that any Equity Interests of any direct Subsidiary of the Company or any Guarantor and the assets of an operating business, unit, division or line of business shall not constitute inventory or other assets acquired and held for resale in the ordinary course of business);

 

(3)         the sale or discount of accounts receivable arising in the ordinary course of business;

 

(4)         a transaction covered by Article 5;

 

(5)         a Restricted Payment permitted under, or an Investment not prohibited by, Section 4.07;

 

(6)         the issuance of Disqualified Equity Interests pursuant to Section 4.06;

 

(7)         any disposition in a transaction or series of related transactions of assets with a fair market value of less than $5,000,000;

 

(8)         any disposition of Equity Interests of a Subsidiary pursuant to an agreement or other obligation with or to a Person from whom such Subsidiary was acquired or from whom such Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

 

(9)         any surrender or waiver of contract rights pursuant to a settlement, release, recovery on or surrender of contract, tort or other claims of any kind;

 

(10)         foreclosure or any similar action with respect to any property or other asset of the Company or any of its Subsidiaries;

 

(11)         dispositions in connection with Permitted Liens; and

 

(12)         dispositions of marketable securities, other than shares of Spectrum common stock, constituting less than 5% of the Total Assets; 

 

 

 

  

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provided that such disposition is at fair market value and the consideration consists of Cash Equivalents.

 

“Attributable Debt” means, in respect of a Sale and Leaseback Transaction, at the time of determination, the present value, discounted at the interest rate implicit in the Sale and Leaseback Transaction determined in accordance with GAAP, of the total obligations of the lessee for rental payments during the remaining term of the lease in the Sale and Leaseback Transaction.

 

“Authenticating Agent” refers to a Person engaged to authenticate the Notes in the stead of the Trustee.

 

“Authorized Representatives” means the Trustee and the agent or other representative of the holders of any series of future Debt.

 

“Average Life” means, with respect to any Debt or Disqualified Equity Interests, the quotient obtained by dividing (i) the sum of the products of (x) the number of years from the date of determination to the dates of each successive scheduled principal payment of such Debt or such redemption or similar payment with respect to such Disqualified Equity Interests and (y) the amount of such principal, or redemption or similar payment by (ii) the sum of all such principal, or redemption or similar payments.

 

“bankruptcy default” has the meaning assigned to such term in Section 6.01.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” shall have a corresponding meaning.

 

 “Board of Directors” means:

 

(1) with respect to a corporation, the board of directors of the corporation or, except with respect to the definition of Change of Control, any duly authorized committee thereof having the authority of the full board with respect to the determination to be made;

 

(2) with respect to a limited liability company, any managing member thereof or, if managed by managers, the board of managers thereof, or any duly 

 

 

 

 

 

  

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authorized committee thereof having the authority of the full board with respect to the determination to be made;

 

(3) with respect to a partnership, the Board of Directors of the general partner of the partnership; and

 

(4) with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Board Resolution” means a resolution duly adopted by the Board of Directors which is certified by the Secretary or an Assistant Secretary of the Company and remains in full force and effect as of the date of its certification.

 

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City or in the city where the Corporate Trust Office of the Trustee is located are authorized by law to close.

 

“Capital Lease” means, with respect to any Person, any lease of any property which, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person.

 

“Capital Stock” means, with respect to any Person, any and all shares of stock of a corporation, partnership interests or other equivalent interests (however designated, whether voting or non-voting) in such Person’s equity, entitling the holder to receive a share of the profits and losses, and a distribution of assets, after liabilities, of such Person.

 

“Cash Collateral Coverage Ratio” means, on any date of determination, the ratio of (i) the Fair Market Value of the Collateral (but only to the extent the Notes are secured by a first-priority Lien pursuant to the Security Agreements on such Collateral that is subject to no prior Liens) consisting of Cash Equivalents to (ii) the principal amount of Debt secured by Liens on the Collateral outstanding on such date.

 

“Cash Equivalents” means

 

(1)         United States dollars, or money in other currencies received in the ordinary course of business;

 

(2)         U.S. Government Obligations or certificates representing an ownership interest in U.S. Government Obligations with maturities not exceeding one year from the date of acquisition;

 

(3)         (i) demand deposits, (ii) time deposits and certificates of deposit with maturities of one year or less from the date of acquisition, (iii) bankers’ acceptances with maturities not exceeding one year from the date of acquisition, and (iv) overnight bank deposits, in each case with any 

 

 

 

 

  

5

  

 

bank or trust company organized or licensed under the laws of the United States or any state thereof having capital, surplus and undivided profits in excess of $500 million whose short-term debt is rated “A-2” or higher by S&P or “P-2” or higher by Moody’s;

 

(4)         repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

 

(5)         commercial paper rated at least P-1 by Moody’s or A-1 by S&P and maturing within six months after the date of acquisition; and

 

(6)         money market funds at least 95% of the assets of which consist of investments of the type described in clauses (1) through (5) above.

 

“Certificate of Beneficial Ownership” means a certificate substantially in the form of Exhibit H.

 

 “Certificated Note” means a Note in registered individual form without interest coupons.

 

“Change of Control” means the occurrence of any of the following:

 

(1) the direct or indirect sale, 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 properties or assets of the Company and its Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than a Permitted Holder;

 

(2) the adoption of a plan relating to the liquidation or dissolution of the Company;

 

(3) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the ultimate Beneficial Owner, directly or indirectly, of 35% or more of the voting power of the Voting Stock of the Company other than a Permitted Holder; provided that such event shall not be deemed a Change of Control so long as one or more Permitted Holders shall Beneficially Own more of the voting power of the Voting Stock of the Company than such person or group; or

 

(4) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors.

 

 

 

 

  

6

  

 

For purposes of this definition, (i) any direct or indirect holding company of the Company shall not itself be considered a Person for purposes of clauses (1) or (3) above or a “person” or “group” for purposes of clauses (1) or (3) above, provided that no “person” or “group” (other than the Permitted Holders or another such holding company) Beneficially Owns, directly or indirectly, more than 50% of the voting power of the Voting Stock of such company, and a majority of the Voting Stock of such holding company immediately following it becoming the holding company of the Company is Beneficially Owned by the Persons who Beneficially Owned the voting power of the Voting Stock of the Company immediately prior to it becoming such holding company and (ii) a Person shall not be deemed to have beneficial ownership of securities subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.

 

“Change of Control Offer” has the meaning assigned to such term in Section 4.11.

 

“Change of Control Payment” has the meaning assigned to such term in Section 4.11.

 

“Change of Control Payment Date” has the meaning assigned to such term in Section 4.11.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of the assets (other than Excluded Property) that are owned or hereafter acquired by the Company or by any Guarantor to the extent pledged or required to be pledged to secure the Notes.

 

“Collateral Agent” means Wells Fargo Bank, National Association, in its capacity as the Collateral Agent, or any collateral agent or trustee appointed pursuant to the Collateral Trust Agreement.

 

“Collateral Coverage Ratio” means, at the date of determination, the ratio of (i) the Fair Market Value of the Collateral (but only to the extent the Notes are secured by a first-priority Lien on such Collateral pursuant to the Security Agreements that is subject to no prior Lien) to (ii) the principal amount of Debt secured by Liens on the Collateral outstanding on such date.

 

“Collateral Requirement” means the requirement that all documents and instruments, including Uniform Commercial Code financing statements, control agreements and mortgages, required by law to be filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect or record such Liens as valid Liens with priority set forth in the Security Documents free of any other Liens except for Permitted Collateral Liens, shall have been 

 

 

 

 

 

  

7

  

 

filed, registered or recorded and any Collateral for which perfection may be obtained through control or possession, such control or possession is provided.

 

 “Collateral Trust Agreement” means the collateral trust agreement, dated as of January 7, 2011, among the Company, the Collateral Agent, the Trustee and the trustee in respect of the Company’s 10.625% Senior Secured Notes due 2015, as supplemented by each supplement and each applicable joinder agreement, including that certain Joinder to Collateral Trust Agreement, dated as of the Issue Date by the Trustee and as amended from time to time.

 

“Commission” means the Securities and Exchange Commission.

 

“Company” means the party named as such in the first paragraph of the Indenture or any successor obligor under the Indenture and the Notes pursuant to Article 5.

 

“Consolidated Net Income” means, for any period, the aggregate net income (or loss) of the Company and its Subsidiaries for such period determined on a consolidated basis in conformity with GAAP, provided that the following (without duplication) will be excluded in computing Consolidated Net Income:

 

(1)         the net income (or loss) of any Person that is not a Guarantor, except that net income shall be included to the extent of the dividends or other distributions actually paid in cash to the Company or any of the Guarantors by such Person during such period;

 

(2)         any net income (or loss) of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition;

 

(3)         any net after-tax gains or losses attributable to or associated with the extinguishment of Debt or Hedging Agreements;

 

(4)         the cumulative effect of a change in accounting principles;

 

(5)         any non-cash expense realized or resulting from stock option plans, employee benefit plans or post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred stock or other rights;

 

(6)         to the extent covered by insurance and actually reimbursed, or, so long as such Person has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (a) not denied by the applicable carrier in writing within 180 days and (b) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), 

 

 

 

  

8

  

 

expenses with respect to liability or casualty events or business interruption;

 

(7)         any expenses or charges related to any issuance of Equity Interests, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of Debt (including amortization or write offs of debt issuance or deferred financing costs, premiums and prepayment penalties), in each case, whether or not successful, including any such expenses or charges attributable to the issuance and sale of the Notes and the consummation of the exchange offer pursuant to the Registration Rights Agreement;

 

(8)         any expenses or reserves for liabilities to the extent that the Company or any Subsidiary of the Company is entitled to indemnification therefor under binding agreements; provided that any liabilities for which the Company or such Subsidiary is not actually indemnified shall reduce Consolidated Net Income in the period in which it is determined that the Company or such Subsidiary will not be indemnified;

 

(9) to the extent specifically included in the unconsolidated Statement of Operations of the Company, (a) unrealized gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP shall be excluded (until realized, at which time such gains or losses shall be included); and (b) unrealized gains and losses with respect to hedging obligations for currency exchange risk shall be excluded (until realized, at which time such gains or losses shall be included); and

 

(10) to the extent specifically included in the unconsolidated Statement of Operations of the Company, any charges resulting from the application of FASB ASC 350, Intangibles—Goodwill and Other, ASC 815, Accounting for Derivative Instruments and Hedging Activities,  Accounting Standards Codification Topic 360-10-35-15, Impairment or Disposal of Long-Lived Assets, Accounting Standards Codification Topic 480-10-25-4, Distinguishing Liabilities from Equity—Overall Recognition, or Accounting Standards Codification Topic 820 Fair Value Measurements and Disclosures, the amortization of intangibles arising pursuant to FASB ASC 805, Business Combinations, non-cash interest expense resulting from the application of Accounting Standards Codification Topic 470-20 Debt—Debt with Conversion Options—Recognition, and any non-cash income tax expense that results from the inability to include deferred tax liabilities related to indefinite lived intangible assets as future reversals of temporary differences under FASB ASC 740-10-30-18, non-cash charges arising from the springing maturity feature of the Notes, and restructuring and related charges and acquisition and related integration charges.

 

 

 

 

 

  

9

  

 

“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 such Board of Directors on the Issue Date; or

 

(2)         was nominated for election or elected to such Board of Directors with the approval of the Permitted Holders or a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

 

“Contribution Debt” means Debt or Disqualified Equity Interests of the Company or any Guarantor with a Stated Maturity after the Stated Maturity of the Notes in an aggregate principal amount or liquidation preference not greater than (i) half (in the case of Debt referred to in clause (1) below) and (ii) twice (in the case of unsecured Debt or Disqualified Equity Interests), the aggregate gross amount of cash proceeds received from the issuance and sale of Qualified Equity Interests of the Company or a capital contribution to the common equity of the Company; provided that:

 

(1)   Contribution Debt may be secured by Liens on the Collateral (provided that no such Contribution Debt may be so secured unless, on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, (x) the aggregate principal amount of Debt outstanding and incurred under this clause (1), together with other Pari-Passu Obligations (including the Notes) does not exceed $850,000,000 and (y) the Company would be in compliance with the covenants under Section 4.17 and Section 4.18 (calculated as if the Incurrence date was a date on which such covenant is required to be tested under Section 4.18)),

 

(2)   such cash has not been used to make a Restricted Payment and shall thereafter be excluded from any calculation under paragraph (a)(3)(B) of Section 4.07 (it being understood that if any such Debt or Disqualified Stock Incurred as Contribution Debt is redesignated as Incurred under any provision other than paragraph (b)(13) of Section 4.06, the related issuance of Equity Interests may be included in any calculation under paragraph (a)(3)(B) of Section 4.07), and

 

(3)   such Contribution Debt (a) is Incurred within 180 days after the making of such cash contributions and (b) is so designated as Contribution Debt pursuant to an Officers’ Certificate on the Incurrence date thereof.

 

Any cash received from the issuance and sale of Qualified Equity Interests of the Company or a capital contribution to the common equity of the Company 

 

 

 

 

  

10

  

 

may only be applied to incur secured Debt pursuant to clause (i) of the first paragraph above or unsecured Debt or Disqualified Equity Interests pursuant to clause (ii) of such paragraph.  For example, if the Company issues Qualified Equity Interests and receives $100 of cash proceeds, the Company may either incur $50 of secured Debt (subject to the conditions set forth in such clause (i)) or $200 of unsecured Debt or Disqualified Equity Interests, but may not incur $50 of secured Debt and $150 of unsecured Debt.

 

“Corporate Trust Office” means the office of the Trustee at which the corporate trust business of the Trustee is principally administered, which at the date of the Indenture is located at 625 Marquette Avenue, 11th Floor, MAC N9311-110, Minneapolis, MN 55470.

 

“Date of Determination” has the meaning assigned to such term in Section 12.02.

 

 “Debt” means, with respect to any Person, without duplication,

 

(1)         all indebtedness of such Person for borrowed money;

 

(2)         all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)         all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments, excluding obligations in respect of trade letters of credit or bankers’ acceptances issued in respect of trade payables;

 

(4)         all obligations of such Person to pay the deferred and unpaid purchase price of property or services which would have been recorded as liabilities under GAAP, excluding trade payables arising in the ordinary course of business;

 

(5)         all obligations of such Person as lessee under Capital Leases (other than the interest component thereof);

 

(6)         all Debt of other Persons Guaranteed by such Person to the extent so Guaranteed;

 

(7)         to the extent not otherwise included, all Debt of other Persons secured by a Lien on any asset of such Person, whether or not such Debt is assumed by such Person; provided that the amount of such Debt shall be the lesser of (A) the fair market value of such asset at such date of determination and (B) the amount of such Debt;

 

 (8)         all obligations of such Person under Hedging Agreements; and

 

 

 

 

  

11

  

 

(9)         all Disqualified Equity Interests of such Person;

 

provided, however, that notwithstanding the foregoing, Debt shall be deemed not to include (1) deferred or prepaid revenues, (2) any liability for federal, state, local or other taxes owed or owing to any governmental entity or (3) contingent obligations incurred in the ordinary course of business and not in respect of borrowed money.

 

The amount of Debt of any Person will be deemed to be:

 

(A)         with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation;

 

(B)         with respect to Debt secured by a Lien on an asset of such Person but not otherwise the obligation, contingent or otherwise, of such Person, the lesser of (x) the fair market value of such asset on the date the Lien attached and (y) the amount of such Debt;

 

(C)         with respect to any Debt issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt;

 

(D)         with respect to any Hedging Agreement, the net amount payable if such Hedging Agreement terminated at that time due to default by such Person; and

 

(E)         otherwise, the outstanding principal amount thereof.

 

“Default” means any event that is, or after notice or passage of time or both would be, an Event of Default.

 

 “Depositary” means the depositary of each Global Note, which will initially be DTC.

 

“Designated Non-cash Consideration” means any non-cash consideration received by the Company or any Guarantor in connection with an Asset Sale that is designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate executed by an Officer of the Company or such Guarantor at the time of such Asset Sale.  Any particular item of Designated Non-cash Consideration will cease to be considered to be outstanding once it has been sold for cash or Cash Equivalents (which shall be considered Net Cash Proceeds of an Asset Sale when received).

 

 “Disqualified Equity Interests” means Equity Interests that by their terms or upon the happening of any event are:

 

 

 

  

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(1)         required to be redeemed or redeemable at the option of the holder prior to the Stated Maturity of the Notes for consideration other than Qualified Equity Interests, or

 

(2)         convertible at the option of the holder into Disqualified Equity Interests or exchangeable for Debt;

 

provided that (i) only the portion of the Equity Interests which is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to the Stated Maturity of the Notes shall be deemed to be Disqualified Equity Interests, (ii) if such Equity Interests are issued to any employee or to any plan for the benefit of employees of the Company or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Company in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, death or disability and (iii) Equity Interests will not constitute Disqualified Equity Interests solely because of provisions giving holders thereof the right to require repurchase or redemption upon an “asset sale” or “change of control” occurring prior to the Stated Maturity of the Notes if those provisions:

 

(A)         are no more favorable to the holders than Section 4.11 and Section 4.12, and

 

(B)         specifically state that repurchase or redemption pursuant thereto will not be required prior to the Company’s repurchase of the Notes as required by the Indenture.

 

“Disqualified Stock” means Capital Stock constituting Disqualified Equity Interests.

 

“Domestic Subsidiary” means any Subsidiary formed under the laws of the United States of America or any jurisdiction thereof.

 

 “DTC” means The Depository Trust Company, a New York corporation, and its successors.

 

“DTC Legend” means the legend set forth in Exhibit D.

 

“Equity Interests” means all Capital Stock and all warrants or options with respect to, or other rights to purchase, Capital Stock, but excluding Debt convertible into equity.

 

“Equity Offering” means a primary offering, whether by way of private placement or registered offering, after the Issue Date, of Qualified Stock of the Company other than an issuance registered on Form S-4 or S-8 or any successor 

 

 

 

 

 

  

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thereto or any issuance pursuant to employee benefit plans or otherwise in compensation to officers, directors or employees.

 

 “Event of Default” has the meaning assigned to such term in Section 6.01.

 

“Excess Proceeds” has the meaning assigned to such term in Section 4.12.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Exchange Notes” means the Notes of the Company issued pursuant to the Indenture in exchange for, and in an aggregate principal amount equal to, the Initial Notes or any Initial Additional Notes in compliance with the terms of a Registration Rights Agreement and containing terms substantially identical to the Initial Notes or any Initial Additional Notes (except that (i) such Exchange Notes will be registered under the Securities Act and will not be subject to transfer restrictions or bear the Restricted Legend, and (ii) the provisions relating to Additional Interest will be eliminated).

 

 “Exchange Offer” means an offer by the Company to the Holders of the Initial Notes or any Initial Additional Notes to exchange outstanding Notes for Exchange Notes, as provided for in a Registration Rights Agreement.

 

 “Exchange Offer Registration Statement” means the Exchange Offer Registration Statement as defined in a Registration Rights Agreement.

 

“Excluded Property” means

 

(i)         motor vehicles, the perfection of a security interest in which is excluded from the Uniform Commercial Code in the relevant jurisdiction;

 

(ii)         voting Equity Interests in any Foreign Subsidiary, to the extent (but only to the extent) required to prevent the Collateral from including more than 65% of all voting Equity Interests in such Foreign Subsidiary;

 

(iii)         any interest in a joint venture or non-Wholly Owned Subsidiary to the extent and for so long as the attachments of security interest created therein would violate any joint venture agreement, organizational document, shareholders agreement or equivalent agreement relating to such joint venture or Subsidiary;

 

(iv)         any rights of the Company or any Guarantor in any contract or license if under the terms thereof, or any applicable law with respect thereto, the valid grant of a security interest therein to the Collateral Agent is prohibited and such prohibition has not been waived or the consent of 

 

 

 

 

  

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the other party to such contract or license has not been obtained or, under applicable law, such prohibition cannot be waived;

 

(v)         certain deposit accounts, the balance of which consists exclusively of (a) withheld income taxes and federal, state, local and foreign employment taxes in such amounts as are required to be paid to the Internal Revenue Service or any other applicable governmental authority and (b) amounts required to be paid over to an employee benefit plan on behalf of or for the benefit of employees of the Company or any Guarantor;

 

(vi)         other property that the Collateral Agent may determine from time to time that the cost of obtaining a Lien thereon exceeds the benefits of obtaining such a Lien (it being understood that the Collateral Agent shall have no obligation to make any such determination);

 

(vii)         any intent-to-use U.S. trademark application to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application or the mark that is the subject of such application under applicable law;

 

(viii)           Equity Interests of Zap.Com Corporation until such time as the Company determines that such Equity Interests should be pledged as Collateral, such determination (which shall be irrevocable) to be made by an Officers’ Certificate delivered by the Company to the Collateral Agent; and

 

(ix)         an amount in Cash Equivalents not to exceed $1,000,000 deposited for the purpose of securing, leases of office space, furniture or equipment;

 

provided however that “Excluded Property” shall not (i) apply to any contract or license to the extent the applicable prohibition is ineffective or unenforceable under the Uniform Commercial Code (including Sections 9-406 through 9-409) or any other applicable law, or (ii) limit, impair or otherwise affect Collateral Agent’s unconditional continuing security interest in and Lien upon any rights or interests of the Company or such Guarantor in or to moneys due or to become due under any such contract or license (including any accounts).

 

“Exco Joint Venture” means EXCO/HGI Production Partners, LP and the transactions relating to the formation and governance of such joint venture, as described in the Offering Circular.

 

 

 

 

 

  

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“Existing Preferred Stock” means the Company’s Series A Participating Convertible Preferred Stock and Series A-2 Participating Convertible Preferred Stock outstanding on the Issue Date and any accretion thereafter.

 

“Fair Market Value” means:

 

(i)         in the case of any Collateral that (a) is listed on a national securities exchange or (b) is actively traded in the over-the-counter-market and represents equity in a Person with a market capitalization of at least $500,000,000 on each trading day in the preceding 60 day period prior to such date, the product of (a) (i) the sum of the volume weighted average prices of a unit of such Collateral for each of the 20 consecutive trading days immediately prior to such date, divided by (ii) 20, multiplied by (b) the number of units pledged as Collateral;

 

(ii)         in the case of any Collateral that is not so listed or actively traded (other than Cash Equivalents), the fair market value thereof (defined as the price that would be negotiated in an arms’-length transaction for cash between a willing buyer and willing seller, neither of which is acting under compulsion), as determined by a written opinion of a nationally recognized investment banking, appraisal, accounting or valuation firm that is not an Affiliate of the Company; provided that (i) such written opinion may be based on a desktop appraisal conducted by such banking, appraisal, accounting or valuation firm for any date of determination that is not the end of the fiscal year for the Company and (ii) the fair market value thereof determined by such written opinion may be determined as of a date as early as 30 days prior to the end of the applicable fiscal period on which a covenant under this Indenture is required to be tested (the end of such period being referred to as the “Test Date”); and

 

(iii) in the case of Cash Equivalents, the face value thereof.

 

The “volume weighted average price” means the per share of common stock (or per minimum denomination or unit size in the case of any security other than common stock) volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page for the ‘‘<equity> AQR” page corresponding to the “ticker” for such common stock or unit (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such trading day (or if such volume-weighted average price is unavailable, the market value of one share of such common stock (or per minimum denomination or unit size in the case of any security other than common stock) on such trading day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the trustee). The “volume weighted average price” will be determined without regard 

 

 

 

 

 

  

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to after-hours trading or any other trading outside of the regular trading session trading hours.

 

In the case of any assets referenced in clause (ii) above tested on a date of determination other than in connection with a Test Date, for purposes of calculating compliance with a covenant under this Indenture, the Company will be permitted to rely on the value as determined by the written opinion given for the most recently completed Test Date.

 

For the avoidance of doubt:

 

(i)         if the Company will be in compliance with an applicable covenant at a Test Date even if an asset constituting Collateral had no value, it shall not be required to obtain an appraisal of such Collateral (in which case such Collateral shall be assumed to have no value for such purpose); and

 

(ii)         if the Company will be in compliance with an applicable covenant at a Test Date if an asset constituting Collateral has a minimum specified value, an appraisal establishing that such Collateral is worth at least such minimum specified value shall be sufficient (in which case such Collateral shall be assumed to have such minimum specified value for such purpose).

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date.

 

 “Global Note” means a Note in registered global form without interest coupons.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part; provided that the term “Guarantee” does not include endorsements for collection or deposit in the 

 

 

 

 

  

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ordinary course of business.  The term “Guarantee” used as a verb has a corresponding meaning.

 

“Guarantor” means each Subsidiary that executes a supplemental indenture to the Indenture providing for the guaranty of the payment of the Notes, or any successor obligor under its Note Guaranty pursuant to Article 5, in each case unless and until such Guarantor is released from its Note Guaranty pursuant to the Indenture.

 

 “Hedging Agreement” means (i) any interest rate swap agreement, interest rate cap agreement or other agreement designed to manage fluctuations in interest rates, (ii) any foreign exchange forward contract, currency swap agreement or other agreement designed to manage fluctuations in foreign exchange rates or (iii) any commodity swap, forward contract or other agreement designed to manage fluctuations in commodity prices.

 

“Holder” or “Noteholder” means the registered holder of any Note.

 

 “IAI Global Note” means a Global Note resold to Institutional Accredited Investors bearing the Restricted Legend.

 

“Increased Amount” has the meaning assigned to such term in Section 4.08.

 

“Incur” and “Incurrence” means, with respect to any Debt or Capital Stock, to incur, create, issue, assume or Guarantee such Debt or Capital Stock.  If any Person becomes a Guarantor on any date after the date of the Indenture, the Debt and Capital Stock of such Person outstanding on such date will be deemed to have been Incurred by such Person on such date for purposes of Section 4.06, but will not be considered the sale or issuance of Equity Interests for purposes of Section 4.12.  The accrual of interest, accretion of original issue discount or payment of interest in kind or the accretion or payment in kind, accumulation of dividends on any Equity Interests will not be considered an Incurrence of Debt.

 

“Indenture” means this indenture, as amended or supplemented from time to time.

 

 “Initial Additional Notes” means Additional Notes issued in an offering not registered under the Securities Act and any Notes issued in replacement thereof, but not including any Exchange Notes issued in exchange therefor.

 

 “Initial Notes” means the Notes issued on the Issue Date and any Notes issued in replacement thereof, but not including any Exchange Notes issued in exchange therefor.

 

 

 

 

  

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“Initial Purchasers” means the initial purchasers party to a purchase agreement with the Company relating to the sale of the Initial Notes or Initial Additional Notes by the Company.

 

 “Institutional Accredited Investor” means an institutional “accredited investor” (as defined) in Rule 501(a), (2), (3) or (7) under the Securities Act.

 

 “Institutional Accredited Investor Certificate” means a certificate substantially in the form of Exhibit G hereto.

 

 “interest”, in respect of the Notes, unless the context otherwise requires, refers to interest and Additional Interest, if any.

 

 “Interest Payment Date” means each January 15 and July 15 of each year, commencing July 15, 2013.

 

“Investment” means

 

(1)         any direct or indirect advance, loan or other extension of credit to another Person,

 

(2)         any capital contribution to another Person, by means of any transfer of cash or other property or in any other form,

 

(3)         any purchase or acquisition of Equity Interests, bonds, notes or other Debt, or other instruments or securities issued by another Person, including the receipt of any of the above as consideration for the disposition of assets or rendering of services, or

 

(4)         any Guarantee of any obligation of another Person.

 

 “Issue Date” means the date on which the Original Notes are originally issued under the Indenture.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or Capital Lease).

 

“LightSquared” means LightSquared Inc.

 

“Liquid Collateral Coverage Ratio” means the ratio of (i) the Fair Market Value of the Collateral (but only to the extent the Notes are secured by a first-priority Lien pursuant to the Security Agreements on such Collateral that is subject to no prior Lien) consisting of (a) shares of common stock of Spectrum (so long as (A) such stock is listed on a national securities exchange or is actively traded on the over-the-counter market and (B) at least 15% of the outstanding shares of such stock is owned by persons other than the Company, its Subsidiaries 

 

 

 

 

  

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and the Permitted Holders), (b) shares, interests or other equivalent interests of any class of Capital Stock of a Person (other than Spectrum) so long as (A) such class of shares, interests, or other equivalent interests of Capital Stock is listed on a national securities exchange and (B) at least 15% of the outstanding shares, interests or other equivalent interests of such class of Capital Stock is owned by persons other than the Company, its Subsidiaries and the Permitted Holders and (c) Cash Equivalents to (ii) the principal amount of Debt secured by Liens on the Collateral outstanding on such date.

 

 “Moody’s” means Moody’s Investors Service, Inc. and its successors.

 

“Net Cash Proceeds” means, with respect to any Asset Sale, the proceeds of such Asset Sale in the form of cash (including (i) payments in respect of deferred payment obligations to the extent corresponding to principal, but not interest, when received in the form of cash, and (ii) proceeds from the conversion of other consideration received when converted to cash), net of

 

(1)         brokerage commissions, underwriting commissions and other fees and expenses related to such Asset Sale, including fees and expenses of counsel, accountants, consultants and investment bankers;

 

(2)         provisions for taxes as a result of such Asset Sale taking into account the consolidated results of operations of the Company and its Subsidiaries;

 

(3)         payments required to be made to holders of minority interests in Subsidiaries as a result of such Asset Sale or (except in the case of Collateral) to repay Debt outstanding at the time of such Asset Sale  that is secured by a Lien on the property or assets sold;

 

(4)         appropriate amounts to be provided as a reserve against liabilities associated with such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and indemnification obligations associated with such Asset Sale, with any subsequent reduction of the reserve other than by payments made and charged against the reserved amount to be deemed a receipt of cash; and

 

(5) payments of unassumed liabilities (not constituting Debt) relating to the assets sold at the time of, or within 30 days after the date of, such Asset Sale.

 

 “Non-U.S. Person” means a Person that is not a U.S. person, as defined in Regulation S.

 

 “Notes” has the meaning assigned to such term in the Recitals.

 

 

 

 

  

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“Note Guaranty” means the guaranty of the Notes by a Guarantor pursuant to the Indenture.

 

“Obligations” means, with respect to any Debt, all obligations (whether in existence on the Issue Date or arising afterwards, absolute or contingent, direct or indirect) for or in respect of principal (when due, upon acceleration, upon redemption, upon mandatory repayment or repurchase pursuant to a mandatory offer to purchase, or otherwise), premium, interest, penalties, fees, indemnification, reimbursement and other amounts payable and liabilities with respect to such Debt, including all interest accrued or accruing after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for such interest is allowed as a claim in such case or proceeding.

 

“Offer to Purchase” has the meaning assigned to such term in Section 3.04.

 

“Offering Circular” means the offering circular, dated December 14, 2012, relating to the sale of the Notes.

 

“Officer” means the chairman of the Board of Directors, the president or chief executive officer, any vice president, the chief operating officer, the chief financial officer, the treasurer or any assistant treasurer, or the secretary or any assistant secretary, of the Company.

 

“Officers’ Certificate” means a certificate signed in the name of the Company (i) by the chairman of the Board of Directors, the president or chief executive officer, the chief operating officer or a vice president and (ii) by the chief financial officer, the treasurer or any assistant treasurer or the secretary or any assistant secretary and delivered to the Trustee.

 

“Offshore Global Note” means a Global Note representing Notes issued and sold pursuant to Regulation S.

 

“Opinion of Counsel” means a written opinion signed by legal counsel, who may be an employee of or counsel to the Company, satisfactory to the Trustee.

 

“Original Notes” means the Initial Notes and any Exchange Notes issued in exchange therefor.

 

“Pari-Passu Obligations” means any Debt secured equally and ratably by Liens on the Collateral; provided that an Authorized Representative in respect thereof has executed a joinder to the Collateral Trust Agreement.

 

 

 

 

  

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“Paying Agent” refers to a Person engaged to perform the obligations of the Trustee in respect of payments made or funds held hereunder in respect of the Notes.

 

 “Permanent Offshore Global Note” means an Offshore Global Note that does not bear the Temporary Offshore Global Note Legend.

 

 “Permitted Debt” has the meaning assigned to such term in Section 4.06.

 

“Permitted Collateral Liens” means: (1) Liens on the Collateral to secure Obligations in respect of the Notes (excluding any Additional Notes); (2) Liens on the Collateral that rank pari passu with or junior to the Liens securing the Obligations in respect of the Notes and that secure Obligations in respect of Debt (including any Additional Notes) Incurred pursuant to clause (1), (2) or (14) of the definition of Permitted Debt; (3) Liens to secure any Permitted Refinancing Debt (or successive Permitted Refinancing Debt) as a whole, or in part, of any Obligations secured by any Lien referred to in clauses (1) or (2) of this definition; and (4) Liens on the Collateral of the types described in clauses (4), (5), (6), (13), (14) and (15) of the definition of Permitted Liens.

 

“Permitted Holders” means

 

(1)         each of Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P. and Global Opportunities Breakaway Ltd;

 

(2)         any Affiliate of any Person specified in clause (1), other than another portfolio company thereof (which means a company (other than the Company and its investees) actively engaged in providing goods and services to unaffiliated customers) or a company controlled by a “portfolio company”; or

 

(3)         any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned 50% or more by Persons specified in clauses (1) or (2) or any group in which the Persons specified in clauses (1) and (2) own more than a majority of the Voting Stock and Capital Stock held by such group.

 

 “Permitted Liens” means

 

(1)         Liens existing on the Issue Date not otherwise permitted;

 

(2)         Permitted Collateral Liens;

 

(3)         pledges or deposits under worker’s compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts or leases, or to secure public or 

 

 

 

  

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statutory obligations, surety bonds, customs duties and the like, or for the payment of rent, in each case incurred in the ordinary course of business and not securing Debt;

 

(4)         Liens imposed by law, such as carriers’, vendors’, warehousemen’s and mechanics’ liens, in each case for sums not yet due or being contested in good faith and by appropriate proceedings;

 

(5)         Liens in respect of taxes and other governmental assessments and charges which are not yet due or which are being contested in good faith by appropriate proceedings, provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

 

 (6)        Liens incurred in the ordinary course of business not securing Debt and not in the aggregate materially detracting from the value of the properties or their use in the operation of the business of the Company and the Guarantors;

 

(7)         Liens on property of a Person at the time such Person becomes a Guarantor, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Company or any other Guarantor (other than pursuant to after-acquired property clauses in effect with respect to such Lien at the time of acquisition on property of the type that would have been subject to such Lien notwithstanding the occurrence of such acquisition);

 

 (8)        Liens on property or the Equity Interests of any Person at the time the Company or any Guarantor acquires such property or Person, including any acquisition by means of a merger or consolidation with or into the Company or a Guarantor of such Person, provided such Liens were not created in contemplation thereof and do not extend to any other property of the Company or any Guarantor;

 

(9)         Liens securing Debt or other obligations of the Company or a Guarantor to the Company or a Guarantor;

 

(10)       Liens securing obligations under Hedging Agreements not incurred in violation of the Indenture; provided that, with respect to Hedging Agreements relating to Debt for borrowed money, such Debt is permitted under the Indenture and such Liens only extend to the same property securing such Debt;

 

 (11)      extensions, renewals or replacements of any Liens referred to in clauses (1), (7) or (8) in connection with the refinancing of the obligations secured thereby, provided that such Lien does not extend to any other property and, except as contemplated by the definition of 

 

 

 

 

  

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“Permitted Refinancing Debt”, the amount secured by such Lien is not increased;

 

(12)       other Liens (not on the Collateral) securing obligations in an aggregate amount not exceeding $5,000,000;

 

(13)       licenses or leases or subleases as licensor, lessor or sublessor of any of its property, including intellectual property, in the ordinary course of business;

 

(14)       Liens securing office leases and office furniture and equipment in an aggregate amount not to exceed $2,500,000;

 

 (15)      Liens on property securing Debt permitted pursuant to Section 4.06(b)(14);

 

(16)       Liens consisting of deposits made in the ordinary course of business to secure liability to insurance carriers; and

 

(17)       Liens arising by virtue of any statutory or common law provisions relating to bankers’ Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution.

 

 “Permitted Refinancing Debt” has the meaning assigned to such term in Section 4.06.

 

“Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, including a government or political subdivision or an agency or instrumentality thereof.

 

“Preferred Stock” means, with respect to any Person, any and all Capital Stock which is preferred as to the payment of dividends or distributions, upon liquidation or otherwise, over another class of Capital Stock of such Person.

 

“principal” of any Debt means the principal amount of such Debt (or if such Debt was issued with original issue discount, the face amount of such Debt less the remaining unamortized portion of the original issue discount of such Debt), together with, unless the context otherwise indicates, any premium then payable on such Debt.

 

 “Qualified Equity Interests” means all Equity Interests of a Person other than Disqualified Equity Interests.

 

“Qualified Stock” means all Capital Stock of a Person other than Disqualified Stock.

 

 

 

  

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 “refinance” has the meaning assigned to such term in Section 4.06(b)(5).

 

“Register” has the meaning assigned to such term in Section 2.09.

 

“Registrar” means a Person engaged to maintain the Register.

 

 “Registration Rights Agreement” means (i) the Registration Rights Agreement dated on or about the Issue Date among the Company and the Initial Purchasers party thereto with respect to the Initial Notes, and (ii) with respect to any Additional Notes, any registration rights agreements among the Company and the Initial Purchasers party thereto relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes or exchange them for Notes registered under the Securities Act.

 

“Regular Record Date” for the interest payable on any Interest Payment Date means the January 1 or July 1 (whether or not a Business Day) next preceding such Interest Payment Date.

 

 “Regulation S” means Regulation S under the Securities Act.

 

 “Regulation S Certificate” means a certificate substantially in the form of Exhibit E hereto.

 

“Replacement Assets” has the meaning assigned to such term in Section 4.12.

 

 “Restricted Legend” means the legend set forth in Exhibit C.

 

“Restricted Payment” has the meaning assigned to such term in Section 4.07.

 

 “Restricted Period” means the relevant 40-day distribution compliance period as defined in Regulation S.

 

 “Rule 144A” means Rule 144A under the Securities Act.

 

 “Rule 144A Certificate” means (i) a certificate substantially in the form of Exhibit F hereto or (ii) a written certification addressed to the Company and the Trustee to the effect that the Person making such certification (x) is acquiring such Note (or beneficial interest) for its own account or one or more accounts with respect to which it exercises sole investment discretion and that it and each such account is a qualified institutional buyer within the meaning of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A, and (z) acknowledges that it has received such information regarding the Company as it has requested pursuant to Rule 144A(d)(4) or has determined not to request such information.

 

 

 

  

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 “S&P” means Standard & Poor’s Ratings Group, a division of McGraw Hill, Inc. and its successors.

 

“Sale and Leaseback Transaction” means, with respect to any Person, an arrangement whereby such Person enters into a lease of property previously transferred by such Person to the lessor.

 

“Securities Act” means the Securities Act of 1933.

 

“Security and Pledge Agreement” means the security and pledge agreement, dated as of January 7, 2011, among the Company and the Collateral Agent, as supplemented by each supplement and each applicable joinder agreement, including that certain Pari-Passu Joinder Agreement, dated as of the Issue Date by the Trustee and as amended by that certain Amendment No. 1 to the Security and Pledge Agreement, dated as of the Issue Date, between the Company, the Collateral Agent, the Trustee and the trustee in respect of the Company’s 10.625% Senior Secured Notes due 2015, and as further amended from time to time.

 

“Security Documents” means (i) the Security and Pledge Agreement, (ii) the Collateral Trust Agreement and (iii) the security documents granting a security interest in any assets of any Person to secure the Obligations under the Notes and the Note Guarantees, as each may be amended, restated, supplemented or otherwise modified from time to time.

 

 “Shelf Registration Statement” means the Shelf Registration Statement as defined in a Registration Rights Agreement.

 

“Significant Subsidiary” means any Subsidiary, or group of Subsidiaries, that would, taken together, be a “significant subsidiary” as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities Act, as such regulation is in effect on the Issue Date.

 

 “Spectrum” means Spectrum Brands Holdings, Inc., a Delaware corporation.

 

“Spectrum Brands Acquisition” means the business combination of Spectrum and Russell Hobbs, Inc. pursuant to the Agreement and Plan of Merger, dated as of February 9, 2010, as amended, by and among Spectrum, Russell Hobbs, Inc., Spectrum Brands, Inc., Battery Merger Corp. and Grill Merger Corp, and the other transactions ancillary to or contemplated by such agreement and the payment of the costs in respect thereof, which occurred on or about June 16, 2010.

 

“Spectrum Registration Rights Agreement” means that certain Registration Rights Agreement, dated as of February 9, 2010, by and among 

 

 

 

 

  

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Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., Global Opportunities Breakaway Ltd., Spectrum, Avenue International Master, L.P., Avenue Investments, L.P., Avenue Special Situations Fund IV, L.P., Avenue Special Situations Fund V, L.P. and Avenue-CDP Global Opportunities Fund, L.P.

 

“Spectrum Stockholder Agreement” means that certain Stockholder Agreement, dated as of February 9, 2010, by and among Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., Global Opportunities Breakaway Ltd. and Spectrum.

 

“Stated Maturity” means (i) with respect to any Debt, the date specified as the fixed date on which the final installment of principal of such Debt is due and payable or (ii) with respect to any scheduled installment of principal of or interest on any Debt, the date specified as the fixed date on which such installment is due and payable as set forth in the documentation governing such Debt, not including any contingent obligation to repay, redeem or repurchase prior to the regularly scheduled date for payment.

 

“Subordinated Debt” means any Debt of the Company or any Guarantor which (i) is subordinated in right of payment to the Notes or the Note Guaranty, as applicable, pursuant to a written agreement to that effect or (ii) is unsecured.

 

“Subsidiary” means with respect to any Person, any corporation, association or other business entity of which more than 50% of the outstanding Voting Stock is owned, directly or indirectly, by, or, in the case of a partnership, the sole general partner or the managing partner or the only general partners of which are, such Person and one or more Subsidiaries of such Person (or a combination thereof). Unless otherwise specified, “Subsidiary” means a Subsidiary of the Company.

 

 “Temporary Offshore Global Note” means an Offshore Global Note that bears the Temporary Offshore Global Note Legend.

 

 “Temporary Offshore Global Note Legend” means the legend set forth in Exhibit I.

 

“Total Assets” means the total assets of the Company and its Subsidiaries on a consolidated basis, as shown on the most recent balance sheet of the Company.

 

“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, 

 

 

 

 

  

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any publicly available source of similar market data)) most nearly equal to the period from the redemption date to January 15, 2016; provided that if the period from the redemption date to January 15, 2016 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Trustee” means the party named as such in the first paragraph of the Indenture or any successor trustee under the Indenture pursuant to Article 7.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939.

 

“U.S. Global Note” means a Global Note that bears the Restricted Legend representing Notes issued and sold pursuant to Rule 144A.

 

“U.S. Government Obligations” means obligations issued or directly and fully guaranteed or insured by the United States of America or by any agent or instrumentality thereof, provided that the full faith and credit of the United States of America is pledged in support thereof.

 

“Voting Stock” means, with respect to any Person, Capital Stock of any class or kind ordinarily having the power to vote for the election of directors, managers or other voting members of the governing body of such Person.

 

“Wholly Owned” means, with respect to any Subsidiary, a Subsidiary all of the outstanding Capital Stock of which (other than any director’s qualifying shares) is owned by the Company and one or more Wholly Owned Subsidiaries (or a combination thereof).

 

Section 1.02. Rules of Construction. Unless the context otherwise requires or except as otherwise expressly provided,

 

(1)         an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(2)         “herein,” “hereof” and other words of similar import refer to the Indenture as a whole and not to any particular Section, Article or other subdivision;

 

(3)         all references to Sections or Articles or Exhibits refer to Sections or Articles or Exhibits of or to the Indenture unless otherwise indicated;

 

(4)         references to agreements or instruments, or to statutes or regulations, are to such agreements or instruments, or statutes or regulations, as amended from time to time (or to successor statutes and regulations); and

 

 

 

 

  

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(5)         in the event that a transaction meets the criteria of more than one category of permitted transactions or listed exceptions the Company may classify such transaction as it, in its sole discretion, determines.

 

 

ARTICLE 2

The Notes

 

Section 2.01.  Form, Dating and Denominations; Legends.  (a) The Notes and the Trustee’s certificate of authentication will be substantially in the form attached as Exhibit A.  The terms and provisions contained in the form of the Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of the Indenture.  However, to the extent permitted by applicable law, in the event of any inconsistency between the terms of any Note and the terms of this Indenture, the terms of this Indenture will control. The Notes may have notations, legends or endorsements required by law, rules of or agreements with national securities exchanges to which the Company is subject, or customarily uses.  Each Note will be dated the date of its authentication.  The Notes will be issuable in denominations of $2,000 in principal amount and any multiple of $1,000 in excess thereof.

 

(b) (1)   Except as otherwise provided in paragraph (c), Section 2.10(b)(3), (b)(5), or (c) or Section 2.09(b)(4), each Initial Note or Initial Additional Note (other than a Permanent Offshore Note) will bear the Restricted Legend.

 

(2)         Each Global Note, whether or not an Initial Note or Additional Note, will bear the DTC Legend.

 

(3)         Each Temporary Offshore Global Note will bear the Temporary Offshore Global Note Legend.

 

(4)         Initial Notes and Initial Additional Notes offered and sold in reliance on Regulation S will be issued as provided in Section 2.11(a).

 

(5)         Initial Notes and Initial Additional Notes offered and sold in reliance on any exception under the Securities Act other than Regulation S and Rule 144A will be issued, and upon the request of the Company to the Trustee, Initial Notes offered and sold in reliance on Rule 144A may be issued, in the form of Certificated Notes.

 

 (6)         Initial Notes and Initial Additional Notes resold to Institutional Accredited Investors will be in the form of an IAI Global Note.

 

 

 

 

  

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 (7)         Exchange Notes will be issued, subject to Section 2.09(b), in the form of one or more Global Notes.

 

(c)  (1) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 under the Securities Act (or a successor provision) without the need for current public information and that the Restricted Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, or

 

(2)         after an Initial Note or any Initial Additional Note is

 

(x)         sold pursuant to an effective registration statement under the Securities Act, pursuant to the Registration Rights Agreement or otherwise, or (y) is validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer

 

the Company may instruct the Trustee in writing to cancel the Note and issue to the Holder thereof (or to its transferee) a new Note of like tenor and amount, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend, and the Trustee will comply with such instruction.

 

(d)           By its acceptance of any Note bearing the Restricted Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Indenture and in the Restricted Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with the Indenture and such legend.

 

Section 2.02.  Execution and Authentication; Exchange Notes; Additional Notes.  (a) An Officer shall execute the Notes for the Company by facsimile or manual signature in the name and on behalf of the Company.  If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note will still be valid.

 

(b)      A Note will not be valid until the Trustee manually signs the certificate of authentication on the Note, with the signature conclusive evidence that the Note has been authenticated under the Indenture.

 

(c)      At any time and from time to time after the execution and delivery of the Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication.  The Trustee will authenticate and deliver

 

 

 

 

  

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(i)         Initial Notes for original issue in the aggregate principal amount not to exceed $700,000,000,

 

(ii)         Initial Additional Notes from time to time for original issue in aggregate principal amounts specified by the Company, and

 

(iii)        Exchange Notes from time to time for issue in exchange for a like principal amount of Initial Notes or Initial Additional Notes

 

after the following conditions have been met:

 

(1)         Receipt by the Trustee of an Officers’ Certificate specifying

 

(A)         the amount of Notes to be authenticated and the date on which the Notes are to be authenticated,

 

(B)         whether the Notes are to be Initial Notes or, Additional Notes or Exchange Notes,

 

(C)         in the case of Initial Additional Notes, that the issuance of such Notes does not contravene any provision of Article 4,

 

(D)         whether the Notes are to be issued as one or more Global Notes or Certificated Notes, and

 

(E)         other information the Company may determine to include or the Trustee may reasonably request.

 

(2)         Additional Notes that are for U.S. federal income tax purposes issued with more than de minimis original issue discount and are not fungible with other Notes shall be issued under a separate CUSIP number and shall be treated as a separate class for purposes of transfer and exchange.

 

(3)         In the case of Exchange Notes, effectiveness of an Exchange Offer Registration Statement and consummation of the exchange offer thereunder (and receipt by the Trustee of an Officers’ Certificate to that effect).  Initial Notes or Initial Additional Notes exchanged for Exchange Notes will be cancelled by the Trustee.

 

(d)      The Notes and any Additional Notes shall be treated as a single class for all purposes under this Indenture, other than as specified in clause (2) of Section 2.02(c), and shall vote together as one class on all matters with respect to the Notes.

 

 

 

 

 

  

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Section 2.03.  Registrar, Paying Agent and Authenticating Agent; Paying Agent to Hold Money in Trust.  (a) The Company may appoint one or more Registrars and one or more Paying Agents, and the Trustee may appoint an Authenticating Agent, in which case each reference in the Indenture to the Trustee in respect of the obligations of the Trustee to be performed by that Agent will be deemed to be references to the Agent.  The Company may act as Registrar or (except for purposes of Article 8) Paying Agent.  In each case the Company and the Trustee will enter into an appropriate agreement with the Agent implementing the provisions of the Indenture relating to the obligations of the Trustee to be performed by the Agent and the related rights.  The Company initially appoints the Trustee as Registrar and Paying Agent.

 

(b)      The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Notes and will promptly notify the Trustee in writing of any default by the Company in making any such payment.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require the Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed.  Upon doing so, the Paying Agent will have no further liability for the money so paid over to the Trustee.

 

Section 2.04.  Replacement Notes.  If a mutilated Note is surrendered to the Trustee or if a Holder claims that its Note has been lost, destroyed or wrongfully taken, and the Company receives evidence to its satisfaction of the ownership and loss, mutilation or destruction of such Note, the Company will issue and the Trustee will authenticate a replacement Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.  Every replacement Note is an additional obligation of the Company and entitled to the benefits of the Indenture.  An indemnity must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company and the Trustee from any loss, liability or expense they may suffer if a Note is replaced.  The Company may charge the Holder for the expenses of the Company and the Trustee in replacing a Note (including attorneys’ fees and expenses).  In case the mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay the Note instead of issuing a  replacement Note.

 

Section 2.05.  Outstanding Notes.  (a)  Notes outstanding at any time are all Notes that have been authenticated by the Trustee except for

 

(1)         Notes cancelled by the Trustee or delivered to it for cancellation;

 

 

 

 

 

  

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(2)         any Note which has been replaced pursuant to Section 2.04 unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser; and

 

(3)         on or after the maturity date or any redemption date or date for purchase of the Notes pursuant to an Offer to Purchase, those Notes payable or to be redeemed or purchased on that date for which the Trustee (or Paying Agent, other than the Company or an Affiliate of the Company) holds money sufficient to pay all amounts then due.

 

(b)           A Note does not cease to be outstanding because the Company or one of its Affiliates holds the Note, provided that in determining whether the Holders of the requisite principal amount of the outstanding Notes have given or taken any request, demand,  authorization, direction, notice, consent, waiver or other action hereunder, Notes owned by the Company or any Affiliate of the Company will be disregarded and deemed not to be outstanding (it being understood that in determining whether the Trustee is protected in conclusively relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Notes which the Trustee actually knows to be so owned will be so disregarded).  Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company or any Affiliate of the Company.  Notes that are to be acquired by the Company or an Affiliate of the Company pursuant to an exchange offer, Offer to Purchase, tender offer or other agreement shall not be deemed to be owned by such entity until legal title to such Notes or a security entitlement in respect thereof passes to such entity.

 

Section 2.06.  Temporary Notes.  Until definitive Notes are ready for delivery, the Company may prepare and the Trustee will authenticate temporary Notes.  Temporary Notes will be substantially in the form of definitive Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the Officer executing the temporary Notes, as evidenced by the execution of the temporary Notes.  If temporary Notes are issued, the Company will cause definitive Notes to be prepared without unreasonable delay.  After the preparation of definitive Notes, the temporary Notes will be exchangeable for definitive Notes upon surrender of the temporary Notes at the office or agency of the Company designated for the purpose pursuant to Section 4.02, without charge to the Holder.  Upon surrender for cancellation of any temporary Notes the Company will execute and the Trustee will authenticate and deliver in exchange therefor a like principal amount of definitive Notes of authorized denominations.  Until so  exchanged, the temporary Notes will be entitled to the same benefits under the Indenture as definitive Notes.

 

Section 2.07.  Cancellation.  The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered   

 

 

 

 

 

  

33

  

 

hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold.  Any Registrar or the Paying Agent will forward to the Trustee any Notes surrendered to it for transfer, exchange or payment.  The Trustee will cancel all Notes surrendered for transfer, exchange, payment or cancellation and dispose of them in accordance with its normal procedures or the written instructions of the Company.  The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation.

 

Section 2.08.  CUSIP and CINS Numbers.  The Company in issuing the Notes may use “CUSIP” and “CINS” numbers, and the Trustee will use CUSIP numbers or CINS numbers in notices of redemption or exchange or in Offers to Purchase as a convenience to Holders, the notice to 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 redemption or exchange or Offer to Purchase.  The Company will promptly notify the Trustee in writing of any change in the CUSIP or CINS numbers.

 

Section 2.09.  Registration, Transfer and Exchange.  (a)  The Notes will be issued in registered form only, without coupons, and the Company shall cause the Trustee to maintain a register (the “Register”) of the Notes, for registering the record ownership of the Notes by the Holders and transfers and exchanges of the Notes.

 

  (b) (1)         Each Global Note will be registered in the name of the  Depositary or its nominee and, so long as DTC is serving as the Depositary thereof, will bear the DTC Legend.

 

(2)         Each Global Note will be delivered to the Trustee as custodian for the Depositary.  Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to the Depositary, its successors or their respective nominees, except (1) as set forth in Section 2.09(b)(4) and (2) transfers of portions thereof in the form of Certificated Notes may be made upon request of an Agent Member (for itself or on behalf of a beneficial owner) by written notice given to the Trustee by or on behalf of the Depositary in accordance with customary procedures of the Depositary and in compliance with this Section and Section 2.10.

 

(3)         Agent Members will have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, the Depositary or its nominee may grant proxies and otherwise authorize 

 

 

 

 

 

  

34

  

 

any Person (including any Agent Member and any Person that holds a beneficial interest in a Global Note through an Agent Member) to take any action which a Holder is entitled to take under the Indenture or the Notes, and nothing herein will impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a holder of any security.

 

(4)         If (x) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for a Global Note and a successor depositary is not appointed by the Company within 90 days of the notice or (y) an Event of Default has occurred and is continuing and the Trustee has received a request from the Depositary, the Trustee will promptly exchange each beneficial interest in the Global Note for one or more Certificated Notes in authorized denominations having an equal aggregate principal amount registered in the name of the owner of such beneficial interest, as identified to the Trustee by the Depositary, and thereupon the Global Note will be deemed canceled.  If such Note does not bear the Restricted Legend, then the Certificated Notes issued in exchange therefor will not bear the Restricted Legend.  If such Note bears the Restricted Legend, then the Certificated Notes issued in exchange therefor will bear the Restricted Legend, provided that any Holder of any such Certificated Note issued in exchange for a beneficial interest in a Temporary Offshore Global Note will have the right upon presentation to the Trustee of a duly completed Certificate of Beneficial Ownership after the Restricted Period to exchange such Certificated Note for a Certificated Note of like tenor and amount that does not bear the Restricted Legend, registered in the name of such Holder.

 

(c)           Each Certificated Note will be registered in the name of the holder thereof or its nominee.

 

(d)           A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Trustee a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by Section 2.10.  The Trustee will promptly register any transfer or exchange that meets the requirements of this Section by noting the same in the register maintained by the Trustee for the purpose; provided that

 

(x)         no transfer or exchange will be effective until it is registered in such register and

 

(y)         the Trustee will not be required (i) to issue, register the transfer of or exchange any Note for a period of 15 days before a selection of Notes to be redeemed or purchased pursuant to an Offer to Purchase, 

 

 

 

 

 

  

35

  

 

(ii) to register the transfer of or exchange any Note so selected for redemption or purchase in whole or in part, except, in the case of a partial redemption or purchase, that portion of any Note not being redeemed or purchased, or (iii) if a redemption or a purchase pursuant to an Offer to Purchase is to occur after a Regular Record Date but on or before the corresponding Interest Payment Date, to register the transfer of or exchange any Note on or after the Regular Record Date and before the date of redemption or purchase. Prior to the registration of any transfer, the Company, the Trustee and their agents will treat the Person in whose name the Note is registered as the owner and Holder thereof for all purposes (whether or not the Note is overdue), and will not be affected by notice to the contrary.

 

From time to time the Company will execute and the Trustee will authenticate additional Notes as necessary in order to permit the registration of a transfer or exchange in accordance with this Section.

 

No service charge will be imposed in connection with any transfer or exchange of any Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than a transfer tax or other similar governmental charge payable upon exchange pursuant to subsection (b)(4)).

 

  (e) (1)         Global Note to Global Note.  If, a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Trustee will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note.  Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

 

(2)         Global Note to Certificated Note.  If a beneficial interest in a Global Note is transferred or exchanged for a Certificated Note, the Trustee will (x) record a decrease in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (y) deliver one or more new Certificated Notes in authorized denominations having an equal aggregate principal amount to the transferee (in the case of a transfer) or the owner of such beneficial interest (in the case of an 

 

 

 

 

 

 

  

36

  

 

exchange), registered in the name of such transferee or owner, as applicable.

 

(3)         Certificated Note to Global Note.  If a Certificated Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Certificated Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

 

(4)         Certificated Note to Certificated Note.  If a Certificated Note is transferred or exchanged for another Certificated Note, the Trustee will (x) cancel the Certificated Note being transferred or exchanged, (y) deliver one or more new Certificated Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Certificated Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Certificated Note, deliver to the Holder thereof one or more Certificated Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Certificated Note, registered in the name of the Holder thereof.

 

Section 2.10.  Restrictions on Transfer and Exchange.  (a) The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section and Section 2.09 and, in the case of a Global Note (or a beneficial interest therein), the applicable rules and procedures of the Depositary.  The Trustee shall refuse to register any requested transfer or exchange that does not comply with the preceding sentence.

 

(b)           Subject to paragraph (c), the transfer or exchange of any Note (or a beneficial interest therein) of the type set forth in column A below for a Note (or a beneficial interest therein) of the type set forth opposite in column B below may only be made in compliance with the certification requirements (if any) described in the clause of this paragraph set forth opposite in column C below.

 

	
A

	
B

	
C

	
U.S. Global Note

	
U.S. Global Note

	
(1)

	
U.S. Global Note

	
Offshore Global Note

	
(2)

	
U.S. Global Note

	
Certificated Note

	
(3)

	
Offshore Global Note

	
U.S. Global Note

	
(4)

 

 

 

 

 

 

  

37

  

 

 

	
A

	
B

	
C

	
Offshore Global Note

	
Offshore Global Note

	
(1)

	
Offshore Global Note

	
Certificated Note

	
(5)

	
Certificated Note

	
U.S. Global Note

	
(4)

	
Certificated Note

	
Offshore Global Note

	
(2)

	
Certificated Note

	
Certificated Note

	
(3)

(1)         No certification is required.

 

(2)         The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Regulation S Certificate; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required.

 

(3)         The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly completed Regulation S Certificate or (z) a duly completed  Institutional Accredited Investor Certificate, and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer or exchange is being made in compliance with the Securities Act and any applicable securities laws of any state of the United States; provided that if the requested transfer or exchange is made by the Holder of a Certificated Note that does not bear the Restricted Legend, then no certification is required.  In the event that (i) the requested transfer or exchange takes place after the Restricted Period and a duly completed Regulation S Certificate is delivered to the Trustee or (ii) a Certificated Note that does not bear the Restricted Legend is surrendered for transfer or exchange, upon transfer or exchange the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

 

(4)         The Person requesting the transfer or exchange must deliver or cause to be delivered to the Trustee a duly completed Rule 144A Certificate.

 

(5)         Notwithstanding anything to the contrary contained herein, no such exchange is permitted if the requested exchange involves a beneficial interest in a Temporary Offshore Global Note.  If the requested transfer involves a beneficial interest in a Temporary Offshore Global Note, the Person requesting the transfer must deliver or cause to be delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y) a duly completed Institutional Accredited Investor Certificate and/or an Opinion of Counsel and such other certifications and evidence as the Company may reasonably require in order to determine that the proposed transfer is being made in compliance with the Securities Act and any 

 

 

 

 

  

38

  

 

applicable securities laws of any state of the United States.  If the requested transfer or exchange involves a beneficial interest in a Permanent Offshore Global Note, no certification is required and the Trustee will deliver a Certificated Note that does not bear the Restricted Legend.

 

(c)           No certification is required in connection with any transfer or exchange of any Note (or a beneficial interest therein)

 

(1)                         after such Note is eligible for resale pursuant to Rule 144 under the Securities Act (or a successor provision) without the need for current public information; provided that the Company has provided the Trustee with an Officers’ Certificate to that effect, and the Company may require from any Person requesting a transfer or exchange in reliance upon this clause (1) an opinion of counsel and any other reasonable certifications and evidence in order to support such certificate; or

 

(2)(x)             sold pursuant to an effective registration statement, pursuant to the Registration Rights Agreement or otherwise or (y) which is validly tendered for exchange into an Exchange Note pursuant to an Exchange Offer.

 

Any Certificated Note delivered in reliance upon this paragraph will not bear the Restricted Legend.

 

(d)           The Trustee will retain copies of all certificates, opinions and other documents received in connection with the transfer or exchange of a Note (or a beneficial interest therein), and the Company will have the right to inspect and make copies thereof at any reasonable time upon written notice to the Trustee.

 

(e)           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 or beneficial owners of interests 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.

 

(f)           Neither the Trustee nor any Agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

 

Section 2.11.  Temporary Offshore Global Notes.  (a) Each Note originally sold by the Initial Purchasers in reliance upon Regulation S will be evidenced by 

 

 

 

 

 

  

39

  

 

one or more Offshore Global Notes that bear the Temporary Offshore Global Note Legend.

 

(b)           An owner of a beneficial interest in a Temporary Offshore Global Note (or a Person acting on behalf of such an owner) may provide to the Trustee (and the Trustee will accept) a duly completed Certificate of Beneficial Ownership at any time after the Restricted Period (it being understood that the Trustee will not accept any such certificate during the Restricted Period).  Promptly after acceptance of a Certificate of Beneficial Ownership with respect to such a beneficial interest, the Trustee will cause such beneficial interest to be exchanged for an equivalent beneficial interest in a Permanent Offshore Global Note, and will (x) permanently reduce the principal amount of such Temporary Offshore Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Offshore Global Note by the amount of such beneficial interest.

 

(c)           Notwithstanding paragraph (b), if after the Restricted Period any Initial Purchaser owns a beneficial interest in a Temporary Offshore Global Note, such Initial Purchaser may, upon written request to the Trustee accompanied by a certification as to its status as an Initial Purchaser, exchange such beneficial interest for an equivalent beneficial interest in a Permanent Offshore Global Note, and the Trustee will comply with such request and will (x) permanently reduce the principal amount of such Temporary Offshore Global Note by the amount of such beneficial interest and (y) increase the principal amount of such Permanent Offshore Global Note by the amount of such beneficial interest.

 

(d)           Notwithstanding anything to the contrary contained herein, any owner of a beneficial interest in a Temporary Offshore Global Note shall not be entitled to receive payment of principal or interest on such beneficial interest or other amounts in respect of such beneficial interest until such beneficial interest is exchanged for an interest in a Permanent Offshore Global Note or transferred for an interest in another Global Note or a Certificated Note.

 

 

ARTICLE 3

Redemption; Offer to Purchase

 

Section 3.01.  Optional Redemption.  (a) At any time and from time to time on or after January 15, 2016, the Company may redeem the Notes, in whole or in part, at a redemption price equal to the percentage of principal amount set forth below of the Notes being redeemed plus accrued and unpaid interest to the redemption date.

 

 

 

 

 

  

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Date

	 	

Percentage

	 
	
January 15, 2016

	 	 	105.906%	 
	
January 15, 2017

	 	 	103.938%	 
	
January 15, 2018 and thereafter

	 	 	100.000%	 

(b)           At any time and from time to time prior to January 15, 2016, the Company may redeem at its option some or all of the Notes at a price of 100% of the principal amount of the Notes redeemed plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

 

Section 3.02.  Redemption with Proceeds of Equity Offering.  At any time and from time to time prior to January 15, 2016, the Company may redeem Notes with the net cash proceeds received by the Company from any Equity Offering at a redemption price equal to 107.875% of the principal amount plus accrued and unpaid interest to the redemption date, in an aggregate principal amount for all such redemptions not to exceed 35% of the original aggregate principal amount of the Notes including Additional Notes, provided that

 

(1)           in each case the redemption takes place not later than 90 days after the closing of the related Equity Offering, and

 

(2)           not less than 65% of the aggregate principal amount of the Notes including Additional Notes issued under the Indenture remains outstanding immediately thereafter.

 

Section 3.03.  Method and Effect of Redemption.  (a) If the Company elects to redeem Notes, it must notify the Trustee of the redemption date and the principal amount of Notes to be redeemed by delivering an Officers’ Certificate at least 45 days before the redemption date (unless a shorter period is satisfactory to the Trustee).  If fewer than all of the Notes are being redeemed, the Officers’ Certificate must also specify a record date not less than 15 days after the date of the notice of redemption is given to the Trustee, and the Trustee will select the Notes to be redeemed pro rata, by lot or by any other method the Trustee in its sole discretion deems fair and appropriate in accordance with DTC procedures, in denominations of $2,000 principal amount and higher integral multiples of $1,000.  The notice to the Trustee under this clause (a) may be revoked prior to the mailing of notice of such redemption to the Holders.  The Trustee will notify the Company promptly of the Notes or portions of Notes to be called for redemption.  Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of the Notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to the redemption date if the notice is issued in connection with the defeasance of the Notes or a satisfaction and discharge of the Indenture.  Any redemption and any notice of redemption thereof may, at the Company’s discretion, be subject to one or more conditions precedent.

 

 

 

 

 

  

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(b)           The notice of redemption will identify the Notes to be redeemed and will include or state the following:

 

(1)         the redemption date;

 

(2)         the redemption price, including the portion thereof representing any accrued interest;

 

(3)         the place or places where Notes are to be surrendered for redemption;

 

(4)         Notes called for redemption must be so surrendered in order to collect the redemption price;

 

(5)         on the redemption date the redemption price will become due and payable on Notes called for redemption, and interest on Notes called for redemption will cease to accrue on and after the redemption date;

 

(6)         if any Note is redeemed in part, on and after the redemption date, upon surrender of such Note, new Notes equal in principal amount to the unredeemed portion will be issued; and

 

(7)         if any Note contains a CUSIP or CINS number, no representation is being made as to the correctness of the CUSIP or CINS number either as printed on the Notes or as contained in the notice of redemption and that the Holder should rely only on the other identification numbers printed on the Notes.

 

(c)           Once notice of redemption is sent to the Holders, Notes called for redemption become due and payable at the redemption price on the redemption date, and upon surrender of the Notes called for redemption, the Company shall redeem such Notes at the redemption price. Commencing on the redemption date, Notes redeemed will cease to accrue interest.  Upon surrender of any Note redeemed in part, the Holder will receive a new Note equal in principal amount to the unredeemed portion of the surrendered Note.

 

Section 3.04.  Offer to Purchase.  (a) An “Offer to Purchase” means an offer by the Company to purchase Notes as required by the Indenture.  An Offer to Purchase must be made by written offer (the “offer”) sent to the Holders.  The Company will notify the Trustee in writing at least 15 days (or such shorter period as is acceptable to the Trustee) prior to sending the offer to Holders of its obligation to make an Offer to Purchase, and the offer will be sent by the Company or, at the Company’s written request, by the Trustee in the name and at the expense of the Company.

 

(b)           The offer must include or state the following as to the terms of the Offer to Purchase:

 

 

 

 

  

42

  

 

(1)         the provision of the Indenture pursuant to which the Offer to Purchase is being made;

 

(2)         the aggregate principal amount of the outstanding Notes offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to the Indenture) (the “purchase amount”);

 

(3)         the purchase price, including the portion thereof representing accrued interest;

 

(4)         an expiration date (the “expiration date”) not less than 30 days or more than 60 days after the date of the offer, and a settlement date for purchase (the “purchase date”) not more than five Business Days after the expiration date;

 

(5)         a Holder may tender all or any portion of its Notes, subject to the requirement that any portion of a Note tendered must be in a multiple of $1,000 principal amount;

 

(6)         the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase;

 

(7)         each Holder electing to tender a Note pursuant to the offer will be required to surrender such Note at the place or places specified in the offer prior to the close of business on the expiration date (such Note being, if the Company or the Trustee so requires, duly endorsed or accompanied by a duly executed written instrument of transfer);

 

(8)         interest on any Note not tendered, or tendered but not purchased by the Company pursuant to the Offer to Purchase, will continue to accrue;

 

(9)         on the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date;

 

(10)       Holders are entitled to withdraw Notes tendered by giving notice, which must be received by the Company or the Trustee not later than the close of business on the expiration date, setting forth the name of the Holder, the principal amount of the tendered Notes, the certificate number of the tendered Notes and a statement that the Holder is withdrawing all or a portion of the tender;

 

(11)       (i) if Notes in an aggregate principal amount less than or equal to the purchase amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company will purchase all such 

 

 

 

 

  

43

  

 

Notes, and (ii) if the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, with adjustments so that only Notes in multiples of $1,000 principal amount will be purchased;

 

(12)       if any Note is purchased in part, new Notes equal in principal amount to the unpurchased portion of the Note will be issued; and

 

(13)       if any Note contains a CUSIP or CINS number, no representation is being made as to the correctness of the CUSIP or CINS number either as printed on the Notes or as contained in the offer and that the Holder should rely only on the other identification numbers printed on the Notes.

 

(c)           Prior to or on the purchase date, the Company will accept tendered Notes for purchase as required by the Offer to Purchase and deliver to the Trustee all Notes so accepted together with an Officers’ Certificate specifying which Notes have been accepted for purchase.  On the purchase date the purchase price will become due and payable on each Note accepted for purchase, and interest on Notes purchased will cease to accrue on and after the purchase date.  The Trustee will promptly return to Holders any Notes not accepted for purchase and send to Holders new Notes equal in principal amount to any unpurchased portion of any Notes accepted for purchase in part.

 

(d)           The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with any Offer to Purchase.  To the extent that the provisions of any securities laws or regulations conflict with the Offer to Purchase provisions of the Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of such compliance.

 

 

ARTICLE 4

Covenants

 

Section 4.01.  Payment Of Notes.  (a)  The Company agrees to pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and the Indenture.  Not later than 11:00 A.M. (New York City time) on the due date of any principal of or interest on any Notes, or any redemption or purchase price of the Notes, the Company will deposit with the Trustee (or Paying Agent) money in immediately available funds sufficient to pay such amounts, provided that if the Company or any Affiliate of the Company is acting as Paying 

 

 

 

 

 

  

44

  

 

Agent, it will, on or before each due date, segregate and hold in a separate trust fund for the benefit of the Holders a sum of money sufficient to pay such amounts until paid to such Holders or otherwise disposed of as provided in the Indenture.  In each case the Company will promptly notify the Trustee in writing of its compliance with this paragraph.

 

(b)           An installment of principal or interest will be considered paid on the date due if the Trustee (or Paying Agent, other than the Company or any Affiliate of the Company) holds on that date money designated for and sufficient to pay the installment.  If the Company or any Affiliate of the Company acts as Paying Agent, an installment of principal or interest will be considered paid on the due date only if paid to the Holders.

 

(c)           The Company agrees to pay interest on overdue principal, and, to the extent lawful, overdue installments of interest at the rate per annum specified in the Notes.

 

(d)           Payments in respect of the Notes represented by the Global Notes are to be made by wire transfer of immediately available funds to the accounts specified by the Holders of the Global Notes. With respect to Certificated Notes, the Company will make all payments by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each Holder’s registered address.

 

Section 4.02.  Maintenance of Office or Agency.  The Company will maintain in the United States of America, an office or agency where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served.  The Company hereby initially designates the Corporate Trust Office of the Trustee as such office of the Company.  The Company will 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 fails to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served to the Trustee.

 

The Company may also from time to time designate one or more other offices or agencies where the Notes may be surrendered or presented for any of such purposes and may from time to time rescind such designations.  The Company will 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.

 

Section 4.03.  Existence.  The Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each of its Subsidiaries in accordance with their respective organizational documents, and the material rights, licenses and franchises of the 

 

 

 

 

 

  

45

  

 

Company and each Subsidiary, provided that the Company is not required to preserve any such right, license or franchise, or the existence of any Subsidiary, if (i) the maintenance or preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole or (ii) where the failure to so preserve such right, license, franchise or existence would not have a material adverse effect on the Company and its Subsidiaries taken as a whole; and provided further that this Section does not prohibit any transaction otherwise permitted by Section 4.12 or Article 5.

 

Section 4.04.  Payment of Taxes and other Claims.  The Company will pay or discharge, and cause each of its Subsidiaries to pay or discharge before the same become delinquent (i) all material taxes, assessments and governmental charges levied or imposed upon the Company or any Subsidiary or its income or profits or property, and (ii) all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of the Company or any Subsidiary, other than any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established or where failure to pay would not have a material adverse effect on the Company and its Subsidiaries taken as a whole.

 

Section 4.05.  Maintenance of Properties and Insurance.  (a) The Company will cause all properties used or useful in the conduct of its business or the business of any of its Subsidiaries to be maintained and kept in good condition, repair and working order as in the judgment of the Company may be necessary so that the business of the Company and its Subsidiaries may be properly and advantageously conducted at all times; provided that nothing in this Section prevents the Company or any Subsidiary from discontinuing the use, operation or maintenance of any of such properties or disposing of any of them, if such discontinuance or disposal is, in the judgment of the Company, desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole.

 

(b)           The Company will provide or cause to be provided, for itself and its Subsidiaries, insurance (including appropriate self-insurance) against loss or damage of the kinds customarily insured against by corporations similarly situated and owning like properties, such as products liability insurance and public liability insurance, with reputable insurers, in such amounts, with such deductibles and by such methods as are customary for corporations similarly situated in the industry in which the Company and its Subsidiaries are then conducting business.

 

Section 4.06.  Limitation on Debt and Disqualified Stock.  (a)  Neither the Company nor any Guarantor will Incur any Debt.

 

 (b)           Notwithstanding the foregoing, the Company and, to the extent provided below, any Guarantor may Incur the following (“Permitted Debt”):

 

 

 

 

 

  

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(1)         Debt of the Company or any Guarantor constituting Pari-Passu Obligations for which the Authorized Representative of such Debt holders has executed a joinder to the Collateral Trust Agreement pursuant to the terms of the Collateral Trust Agreement; provided that, on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, the Collateral Coverage Ratio is not less than 2.5 to 1.0;

 

(2)         Debt of the Company or any Guarantor owed to the Company or any Guarantor so long as such Debt continues to be owed to the Company or any Guarantor;

 

(3)         Subordinated Debt of the Company or any Guarantor; provided that (a) such Debt has a Stated Maturity after the Stated Maturity of the Notes and (b) on the date of the Incurrence, after giving effect to the Incurrence and the receipt and application of the proceeds therefrom, the Collateral Coverage Ratio is not less than 2.0 to 1.0, calculated as if all Debt of the Company and the Guarantors outstanding at such time was included in clause (ii) of the definition of “Collateral Coverage Ratio”;

 

(4)         Debt of the Company pursuant to the Notes (other than Additional Notes, but including the Exchange Notes) and Debt of any Guarantor pursuant to a Note Guaranty of the Notes (including Additional Notes and the Exchange Notes);

 

(5)         Debt (“Permitted Refinancing Debt”) constituting an extension or renewal of, replacement of, or substitution for, or issued in exchange for, or the net proceeds of which are used to repay, redeem, repurchase, refinance or refund, including by way of defeasance (all of the foregoing, for purposes of this clause, “refinance”) then outstanding Debt in an amount not to exceed the principal amount of the Debt so refinanced, plus premiums, fees and expenses; provided that

 

(A)         in case the Debt to be refinanced is Subordinated Debt, the new Debt, by its terms or by the terms of any agreement or instrument pursuant to which it is outstanding, is expressly made subordinate in right of payment to the Notes at least to the extent that the Debt to be refinanced is subordinated to the Notes,

 

(B)         the new Debt does not have a Stated Maturity prior to the Stated Maturity of the Debt to be refinanced, and the Average Life of the new Debt is at least equal to the remaining Average Life of the Debt to be refinanced, and

 

 

 

 

 

  

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(C)         Debt Incurred pursuant to clauses (2), (3), (6), (7), (9), (10), (11), (12) and (13) of this Section 4.06 may not be refinanced pursuant to this clause;

 

(6)         Hedging Agreements of the Company or any Guarantor entered into in the ordinary course of business for the purpose of managing risks associated with the business of the Company or its Subsidiaries and not for speculation;

 

(7)         Debt of the Company or any Guarantor with respect to (A) letters of credit and bankers’ acceptances issued in the ordinary course of business and not supporting other Debt, including letters of credit supporting performance, surety or appeal bonds, workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Debt with respect to reimbursement type obligations regarding workers’ compensation claims   and (B) indemnification, adjustment of purchase price, earn-out or similar obligations incurred in connection with the acquisition or disposition of any business or assets;

 

 (8)        Debt of the Company outstanding on the Issue Date (and, for purposes of clause (5)(C) of this Section 4.06(b), not otherwise constituting Permitted Debt);

 

(9)         Debt of the Company or any Guarantor consisting of Guarantees of Debt of the Company or any Guarantor Incurred under any other clause of this Section 4.06;

 

(10)       Debt of the Company or any Guarantor Incurred on or after the Issue Date not otherwise permitted in an aggregate principal amount at any time outstanding not to exceed $25,000,000;

 

(11)       Debt arising from endorsing instruments of deposit and from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, in each case, in the ordinary course of business; provided that such Debt is extinguished within five Business Days of Incurrence;

 

(12)       Debt of the Company or any Guarantor consisting of the financing of insurance premiums;

 

(13)       Contribution Debt; and

 

 

 

 

 

  

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(14)       Debt, which may include Capital Leases, Incurred on or after the Issue Date no later than 180 days after the date of purchase or completion of construction or improvement of property, for the purpose of financing all or any part of the purchase price or cost of construction or improvement; provided that the principal amount of any Debt Incurred pursuant to this clause may not exceed (a) $5,000,000 less (b) the aggregate outstanding amount of Permitted Refinancing Debt Incurred to refinance Debt Incurred pursuant to this clause.

 

(c)         Notwithstanding any other provision of this Section 4.06, for purposes of determining compliance with this Section 4.06, increases in Debt solely due to fluctuations in the exchange rates of currencies will not be deemed to exceed the maximum amount that the Company or a Guarantor may Incur under this Section 4.06.  For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Debt, the U.S. dollar-equivalent principal amount of Debt denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Debt was Incurred; provided that if such Debt is Incurred to refinance other Debt denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Debt does not exceed the principal amount of such Debt being refinanced.  The principal amount of any Debt Incurred to refinance other Debt, if Incurred in a different currency from the Debt being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Debt is denominated that is in effect on the date of such refinancing.

 

(d)         In the event that an item of Debt meets the criteria of more than one of the types of Debt described in this Section 4.06, the Company, in its sole discretion, will classify items of Debt and will only be required to include the amount and type of such Debt in one of such clauses and the Company will be entitled to divide and classify an item of Debt in more than one of the types of Debt described in this Section 4.06, and may, at any time after such Incurrence (based on circumstances existing at such time), change the classification of an item of Debt (or any portion thereof) to any other type of Debt described in this Section 4.06 at any time. If any Contribution Debt is redesignated as Incurred under any provision other than clause (13) of paragraph (b) above, the related issuance of Equity Interests may be included in any calculation under paragraph (a)(3)(B) of Section 4.07.

 

 

 

 

 

 

  

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(e)         Neither the Company nor any Guarantor may Incur any Debt that is subordinated in right of payment to other Debt of the Company or the Guarantor unless such Debt is also subordinated in right of payment to the Notes or the relevant Note Guaranty on substantially identical terms. This does not apply to distinctions between categories of Debt that exist by reason of any Liens or Guarantees securing or in favor of some but not all of such Debt.

 

Section 4.07.  Limitation on Restricted Payments. (a) The Company will not, and, to the extent within the Company’s control, will not permit any of its Subsidiaries (including any Guarantor) to, directly or indirectly (the payments and other actions described in the following clauses being collectively “Restricted Payments”):

 

(i)         declare or pay any dividend or make any distribution on its Equity Interests (other than dividends or distributions paid in the Company’s Qualified Equity Interests) held by Persons other than the Company or any of its Subsidiaries;

 

(ii)         purchase, redeem or otherwise acquire or retire for value any Equity Interests of the Company or any direct or indirect parent of the Company held by Persons other than the Company or any of its Subsidiaries;

 

(iii)        repay, redeem, repurchase, defease or otherwise acquire or retire for value, or make any payment on or with respect to, any Subordinated Debt of the Company or any Guarantor except a payment of interest or principal at Stated Maturity; or

 

(iv)         make any Investment in any direct or indirect parent of the Company;

 

unless, at the time of, and after giving effect to, the proposed Restricted Payment:

 

(1)         no Default has occurred and is continuing,

 

(2)         the Company could Incur at least $1.00 of Debt under paragraph (b)(1) of Section 4.06, and

 

(3)         the aggregate amount expended for all Restricted Payments made on or after the Issue Date would not, subject to paragraph (c), exceed the sum of

 

(A)         50% of the aggregate amount of the Consolidated Net Income (or, if the Consolidated Net Income is a loss, minus 100% of the amount of the loss) accrued on a cumulative basis during the period, taken as one accounting period, beginning with the first 

 

 

 

 

 

  

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fiscal quarter commencing after the Issue Date and ending on the last day of the Company’s most recently completed fiscal quarter for which internal financial statements are available, plus

 

(B)         subject to paragraph (c), the aggregate net cash proceeds and the fair market value of marketable securities or other property received by the Company (other than from a Subsidiary) after the Issue Date

 

(i)         from the issuance and sale of its Qualified Equity Interests, including by way of issuance of its Disqualified Equity Interests or Debt to the extent since converted into Qualified Equity Interests of the Company, or

 

(ii)         as a contribution to its common equity (other than Equity Interests sold to a Subsidiary), plus

 

(C)         $30,000,000.

 

The amount expended in any Restricted Payment, if other than in cash, will be deemed to be the fair market value of the relevant non-cash assets, as determined in good faith by the Board of Directors, whose determination will be conclusive and evidenced by a Board Resolution.

 

(b)           The foregoing will not prohibit:

 

(1)         the payment of any dividend, or distribution or consummation of a redemption within 60 days after the date of declaration thereof or the giving of the redemption notice, as applicable if, at the date of declaration or notice such payment would comply with paragraph (a);

 

(2)         dividends or distributions by the Exco Joint Venture or a Subsidiary payable, on a pro rata basis or on a basis more favorable than pro rata to the Company, to all holders of any class of Capital Stock of such Person;

 

(3)         the repayment, redemption, repurchase, defeasance or other acquisition or retirement for value of (a) Subordinated Debt with the proceeds of, or in exchange for, Permitted Refinancing Debt which incurrence occurs within 60 days prior to such repayment, redemption, repurchase, defeasance or other acquisition or retirement for value; provided that, such repayment would have complied with the provisions of this Indenture on such incurrence date or (b) Existing Preferred Stock with the proceeds of, or in exchange for, Subordinated Debt; provided that such 

 

 

 

 

  

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Subordinated Debt does not have a Stated Maturity prior to the Stated Maturity of the Notes;

 

(4)         the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Company (including the Existing Preferred Stock) or any direct or indirect parent in exchange for, or out of the proceeds of (i) an offering (occurring within 60 days of such purchase, redemption or other acquisition or retirement for value) of, Qualified Equity Interests of the Company or (ii) a contribution to the common equity capital of the Company;

 

(5)         the making of any Restricted Payment in exchange for, or out of the proceeds of (i) an offering (occurring within 60 days of such Restricted Payment) of Qualified Equity Interests of the Company or (ii) a contribution to the common equity capital of the Company;

 

(6)         the purchase, redemption or other acquisition or retirement for value of Equity Interests of the Company held by officers, directors or employees or former officers, directors or employees (or their estates or beneficiaries under their estates), upon death, disability, retirement, severance or termination of employment or pursuant to any agreement under which the Equity Interests were issued; provided that the aggregate cash consideration paid therefor in any fiscal year, commencing with the fiscal year during which the Issue Date occurred, does not exceed an aggregate amount equal to the sum of (x) $10,000,000 and (y) the amount of Restricted Payments permitted but not made pursuant to this clause (6) in prior fiscal years commencing with the fiscal year during which the Issue Date occurred, provided that no more than $20,000,000 may be carried forward from a prior fiscal year to a new fiscal year such that any aggregate cash consideration paid in any fiscal year shall not exceed $30,000,000;

 

(7)         the repurchase of any Subordinated Debt at a purchase price not greater than (x) 101% of the principal amount thereof in the event of  a change of control pursuant to a provision no more favorable to the holders thereof than Section 4.11 or (y) 100% of the principal amount thereof in the event of an Asset Sale pursuant to a provision no more favorable to the holders thereof than Section 4.12, provided that, in each case, prior to the repurchase the Company has made an Offer to Purchase and repurchased all Notes issued under the Indenture that were validly tendered for payment in connection with the Offer to Purchase;

 

(8)         Restricted Payments not otherwise permitted hereby in an aggregate amount not to exceed $30,000,000;

 

 

 

 

 

  

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(9)         (a) repurchases of Equity Interests deemed to occur upon the exercise of stock options or warrants if the Equity Interests represent all or a portion of the exercise price thereof (or related withholding taxes) and (b) Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Equity Interests of the Company in an aggregate amount under this clause (b) not to exceed $1,000,000;

 

(10)       payment of dividends or distributions on Disqualified Equity Interests of the Company or any Guarantor and payment of any redemption price or liquidation value of any Disqualified Equity Interest when due in accordance with its terms, in each case, to the extent that such Disqualified Equity Interest was permitted to be Incurred in accordance with the provisions of the Indenture; provided that, no Restricted Payment may be made pursuant to this clause (10) in connection with, or pursuant to the terms of, the Existing Preferred Stock;

 

(11)       in the case of any Subsidiary of the Company that, in the ordinary course of its business, makes Investments in private collective investment vehicles (including private collective investment vehicles other than those owned by Permitted Holders), Investments by such Subsidiary in private collective investment vehicles owned or managed by Permitted Holders;

 

(12)       payments by the Company used to fund costs, expenses and fees related to (i) the Hardware Acquisition (as defined in the Offering Circular), the EXCO/HGI Closing (as defined in the Offering Circular), the Tender Offer (as defined in the Offering Circular) and the offering of the Notes and the use of proceeds therefrom in each case, as disclosed in the Offering Circular, (ii) the Spectrum Brands Acquisition or (iii) future acquisitions if such costs, expenses and fees are reasonable and customary (as determined in good faith by the Company); and

 

 (13)      the payment of dividends on Qualified Equity Interests of up to 8.0% per annum of the greater of the gross proceeds received by the Company from any offering or sale of such Qualified Equity Interests after the Issue Date or the accreted value of such Equity Interests (provided that the aggregate amount of dividends paid on such Qualified Equity Interests shall not exceed the proceeds therefrom received by the Company after the Issue Date);

 

provided that, in the case of clauses (6), (7), (10) and (13) no Default has occurred and is continuing or would occur as a result thereof.

 

 

 

 

  

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(c)           Proceeds of the issuance of Qualified Equity Interests will be included under clause (3) of paragraph (a) only to the extent they are not applied as described in clause (4) or (5) of paragraph (b). Restricted Payments permitted pursuant to clauses (2) through (9), (11) and (12) will not be included in making the calculations under clause (3) of paragraph (a).

 

(d)           For purposes of determining compliance with this Section 4.07, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (1) through (13) above, or is entitled to be incurred pursuant to paragraph (a) of this Section 4.07, the Company will be entitled to divide, classify or re-classify (based on circumstances existing at the time of such re-classification) such Restricted Payment (or portion thereof) in any manner that complies with this Section 4.07 and such Restricted Payment will be treated as having been made pursuant to only such clause or clauses or the paragraph (a) of this Section 4.07.

 

(e)           Paragraph (a) of this Section 4.07 will not prohibit the payment of dividends pursuant to Section 2(a) of the Certificate of Designation of Series A-1 and the Certificate of Designation of Series A-2 governing the Existing Preferred Stock as of the Issue Date.

 

(f)           The Company and the Guarantors will not directly or indirectly make any Investment in

 

(A) LightSquared; provided that the Company and any Guarantor may acquire Equity Interests in LightSquared (which Equity Interests in LightSquared shall be pledged as Collateral) (i) solely in exchange for Qualified Equity Interests of the Company or solely as a contribution to the common equity of the Company; or (ii) if after giving effect to the Investment, the Cash Collateral Coverage Ratio would be at least 2.0 to 1.0; or

 

(B) any Persons, the Equity Interests of which would otherwise be included in the Collateral but constitute Excluded Property of a type described in clause (iii) of the definition thereof; provided that the Company may make Investments in such Persons in an aggregate amount under this clause (B) not to exceed $25,000,000.

 

In the case of clause (B), such restriction shall no longer apply (and Investments made in such Person shall no longer count against the amount set forth in the proviso) if the Equity Interests of such Person cease to constitute Excluded Property and are pledged as Collateral.

 

Section 4.08.  Limitation on Liens. Neither the Company nor any Guarantor will, create, incur, assume or otherwise cause or suffer to exist or 

 

 

 

 

 

  

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become effective any Lien of any kind (other than Permitted Liens or, in the case of the Collateral, other than Permitted Collateral Liens) securing Debt upon any of their property or assets, now owned or hereafter acquired.

 

For purposes of determining compliance with this Section 4.08, (A) a Lien securing an item of Debt need not be permitted solely by reference to one category of permitted Liens described in clauses (1) through (15) of the definition of “Permitted Liens” but may be permitted in part under any combination thereof and (B) in the event that a Lien securing an item of Debt, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of one or more of the categories of permitted Liens described in clauses (1) through (15) of the definition of “Permitted Liens”, the Company shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Lien securing such item of Debt (or any portion thereof) in any manner that complies with this Section 4.08 and will only be required to include the amount and type of such Lien or such item of Debt secured by such Lien in one of the clauses of the definition of “Permitted Liens” and such Lien securing such item of Debt will be treated as being Incurred or existing pursuant to only one of such clauses.

 

With respect to any Lien securing Debt that was permitted to secure such Debt at the time of the Incurrence of such Debt, such Lien shall also be permitted to secure any Increased Amount of such Debt provided that such Increased Amount is otherwise permitted to be Incurred. The “Increased Amount” of any Debt shall mean any increase in the amount of such Debt in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Debt with the same terms, the payment of dividends on Preferred Stock in the form of additional shares of Preferred Stock of the same class, accretion of original issue discount or liquidation preference and increases in the amount of Debt outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Debt described in subclause (7) of the definition of “Debt”.

 

Section 4.09.  Limitation on Sale and Leaseback Transactions.  Neither the Company nor any Guarantor will enter into any Sale and Leaseback Transaction with respect to any property or asset unless the Company or such Guarantor would be entitled to

 

(1)         Incur Debt in an amount equal to the Attributable Debt with respect to such Sale and Leaseback Transaction pursuant to Section 4.06, and

 

(2)         create a Lien on such property or asset securing such Attributable Debt without equally and ratably securing the Notes pursuant to Section 4.08,

 

 

 

 

 

  

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in which case, the corresponding Debt and Lien will be deemed Incurred pursuant to those provisions.

 

Section 4.10.  Limitation on Dividend and other Payment Restrictions Affecting Subsidiaries.  (a) Except as provided in paragraph (b), the Company will not, and, to the extent within the Company’s control, will not permit any Subsidiary to, create or otherwise cause or permit to exist or become effective any encumbrance or restriction of any kind on the ability of any Subsidiary to:

 

(1)         pay dividends or make any other distributions on any Equity Interests of the Subsidiary owned by the Company or any other Subsidiary,

 

(2)         pay any Debt or other obligation owed to the Company or any other Subsidiary,

 

(3)         make loans or advances to the Company or any other Subsidiary, or

 

(4)         transfer any of its property or assets to the Company or any other Subsidiary.

 

(b)           The provisions of paragraph (a) do not apply to any encumbrances or restrictions

 

(1)         existing on the Issue Date, in the Indenture or in any other agreements in effect on the Issue Date, and any extensions, renewals, replacements or refinancings of any of the foregoing; provided the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

 

(2)         existing under or by reason of applicable law, rule regulation or order;

 

(3)         existing with respect to any Person, or to the property or assets of any Person, at the time the Person is acquired by the Company or any Subsidiary, which encumbrances or restrictions (i) are not applicable to any other Person or the property or assets of any other Person (other than Subsidiaries of such Person) and (ii) do not materially adversely affect the Company’s ability to make interest and principal payments on the Notes and any extensions, renewals, replacements, or refinancings of any of the foregoing, provided the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the Noteholders than the 

 

 

 

 

  

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encumbrances or restrictions being extended, renewed, replaced or refinanced;

 

(4)         of the type described in clause (a)(4) arising or agreed to in the ordinary course of business (i) that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease or license or (ii) by virtue of any Lien on, or agreement to transfer, option or similar right (including any asset sale or stock sale agreement) with respect to any property or assets of, the Company or any Subsidiary;

 

(5)         with respect to a Subsidiary and imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Capital Stock of, or property and assets of, the Subsidiary that is permitted by Section 4.12;

 

(6)         contained in the terms governing any Debt of any Subsidiary if the encumbrances or restrictions are ordinary and customary for a financing of that type or would not, taken as a whole, materially adversely affect the Company’s ability to make interest and principal payments on the Notes;

 

(7)         required pursuant to the Indenture;

 

(8)         existing pursuant to customary provisions in partnership agreements, limited liability company organizational governance documents, joint venture and other similar agreements entered into in the ordinary course of business that restrict the transfer of ownership interests in such partnership, limited liability company, joint venture or similar Person (including, for the avoidance of doubt and without limitation, the Exco Joint Venture);

 

(9)         consisting of restrictions on cash or other deposits or net worth imposed by customers, suppliers or landlords under contracts entered into in the ordinary course of business;

 

(10)       existing pursuant to purchase money and capital lease obligations for property acquired in the ordinary course of business; and

 

(11)       restrictions or conditions contained in any trading, netting, operating, construction, service, supply, purchase or other agreement to which the Company or any of its Subsidiaries is a party entered into in the ordinary course of business; provided that such agreement prohibits the encumbrance solely of the property or assets of the Company or such Subsidiary that are the subject of such agreement, the payment rights arising thereunder or the proceeds thereof and does not extend to any other 

 

 

 

 

 

  

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asset or property of the Company or such Subsidiary or the assets or property of any other Subsidiary.

 

For purposes of determining compliance with this Section 4.10, (i) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock or other Preferred Stock shall not be deemed a restriction on the ability to make distributions on Equity Interests and (ii) the subordination of loans or advances made to the Company or any Subsidiary to other Debt Incurred by the Company or any such Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

 

Section 4.11.  Repurchase of Notes Upon a Change of Control.  (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 $2,000 or a higher multiple of $1,000) of that Holder’s Notes pursuant to an Offer to Purchase (the “Change of Control Offer”).  In such Change of Control Offer, the Company will offer a payment (such payment, a “Change of Control Payment”) in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest thereon, if any, to the date of purchase.

 

(b)           Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice (the “Change of Control Payment Date”), which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by Section 3.05 and described in such notice.

 

(c)           On or before the Change of Control Payment Date, the Company will, to the extent lawful:

 

(1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

 

(2) 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

 

(3) deliver or cause to be delivered to the Trustee the Notes so 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 will promptly mail or wire transfer to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be 

 

 

 

 

  

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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 such new Note will be in a principal amount of $2,000 or a higher integral multiple of $1,000.

 

(e)           This Section 4.11 shall be applicable regardless of whether any other Sections of this Indenture are applicable.

 

(f)           The Company will not be required to make a Change of Control Offer upon a Change of Control if (1) 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 the Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) notice of redemption has been given pursuant to the Indenture as described under Section 3.01, unless and until there is a default in payment of the applicable redemption price.

 

(g)           A Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control or another event, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

 

(h)           The Company’s obligations to make a Change of Control Offer may be waived or modified with the written consent of Holders of a majority in principal amount of outstanding Notes.

 

Section 4.12.  Limitation on Asset Sales.  Neither the Company nor any Guarantor will make any Asset Sale unless the following conditions are met:

 

(1)         The Asset Sale is for fair market value, as determined in good faith by the Board of Directors.

 

(2)         At least 75% of the consideration consists of Cash Equivalents received at closing or Replacement Assets (provided such Replacement Assets or Equity Interests of any direct Subsidiary that directly or indirectly owns such Replacement Assets are pledged as Collateral pursuant to the Security Documents).  For purposes of this clause (2):

 

 (A)         the assumption by the purchaser, or cancellation, of Debt or other obligations (other than Subordinated Debt) of the Company or a Guarantor pursuant to a customary novation agreement or acknowledgement of such cancellation; provided however, that such cancellation permanently retires such Debt (and in the case of a revolving credit facility, permanently reduces the commitment thereunder by such amount);

 

 

 

 

  

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(B)         instruments or securities received from the purchaser that are promptly, but in any event within 120 days of the closing, converted by the Company to Cash Equivalents, to the extent of the Cash Equivalents actually so received, and

 

(C)         any Designated Non-cash Consideration received by the Company or any Guarantor in such Asset Sale having an aggregate fair market value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed $25,000,000 at the time of the receipt of such Designated Non-cash Consideration (with the fair market value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value) (provided such assets or Equity Interests of any direct Subsidiary that directly or indirectly owns such assets are pledged as Collateral pursuant to the Security Documents)

 

shall be considered Cash Equivalents received at closing.

 

(3)         Within 420 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Net Cash Proceeds may be used

 

(A)         to acquire all or substantially all of the assets of an operating business, a majority of the Voting Stock of another Person that thereupon becomes a Subsidiary engaged in an operating business or to make other Investments in Persons other than Permitted Holders in the ordinary course of business (collectively, “Replacement Assets”),

 

(B)         to make a capital contribution to a Subsidiary, the proceeds of which are used by such Subsidiary to purchase an operating business, to make capital expenditures or otherwise acquire long-term assets that are to be used in an operating business (which assets or Voting Stock shall be pledged as Collateral) or to make other Investments in Persons other than Permitted Holders in the ordinary course of business; and/or

 

(C)         repay, repurchase or retire Pari-Passu Obligations and, if applicable, to correspondingly reduce commitments with respect thereto and in the case of a revolving credit facility, permanently reduce the commitment thereunder by such amount; provided that if the Company shall so reduce such Pari-Passu Obligations, it will, on a ratable basis, make an Offer to Purchase (in accordance with the procedures set forth in Section 3.04) to all holders of Notes to purchase at a purchase price equal to 100% of 

 

 

 

 

  

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the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of Notes.

 

Following the entering into of a binding agreement with respect to an Asset Sale and prior to the consummation thereof, Cash Equivalents (whether or not actual Net Cash Proceeds of such Asset Sale) used for the purposes described in this clause (3) that are designated as uses in accordance with this clause (3), and not previously or subsequently so designated in respect of any other Asset Sale, shall be deemed to be Net Cash Proceeds applied in accordance with this clause (3).

 

(4)         The Net Cash Proceeds of an Asset Sale not applied pursuant to clause (3) within 420 days of the Asset Sale constitute “Excess Proceeds”.  Excess Proceeds of less than $20,000,000 will be carried forward and accumulated; provided that until the aggregate amount of Excess Proceeds equals or exceeds $20,000,000, all or any portion of such Excess Proceeds may be used or invested in the manner described in clause (3) above and such invested amount shall no longer be considered Excess Proceeds.  When accumulated Excess Proceeds equals or exceeds such amount, the Company must, within 30 days, make an Offer to Purchase Notes having a principal amount equal to

 

(A)         accumulated Excess Proceeds, multiplied by

 

(B)         a fraction (x) the numerator of which is equal to the outstanding principal amount of the Notes and (y) the denominator of which is equal to the outstanding principal amount of the Notes and all Pari-Passu Obligations secured by Liens on the Collateral and owed to anyone other than the Company, a Subsidiary of the Company or any Permitted Holder similarly required to be repaid, redeemed or tendered for in connection with the Asset Sale,

 

rounded down to the nearest $1,000.  If the Offer to Purchase is for less than all of the outstanding Notes and Notes in an aggregate principal amount in excess of the purchase amount are tendered and not withdrawn pursuant to the offer, the Company will purchase Notes having an aggregate principal amount equal to the purchase amount on a pro rata basis, by lot or any other method that the Trustee in its sole discretion deems fair and appropriate with adjustments so that only Notes in multiples of $1,000 principal amount will be purchased.  The purchase price for the Notes will be 100% of the principal amount plus accrued interest to the date of purchase.  Upon completion of the Offer to Purchase, Excess Proceeds will be reset at zero, and any Excess Proceeds remaining after consummation of the Offer to Purchase may be used for any purpose not otherwise prohibited by the Indenture.

 

 

 

 

 

  

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Section 4.13.  Limitation on Transactions with Affiliates.  (a) The Company will not, and, to the extent within the Company’s control, will not permit any Subsidiary of the Company to, directly or indirectly, enter into, renew or extend any transaction or arrangement (including, without limitation, the purchase, sale, lease or exchange of property or assets, or the rendering of any service) with any Affiliate of the Company or any Subsidiary of the Company (a “Related Party Transaction”), involving payments or consideration in excess of $5,000,000 except upon fair and reasonable terms that taken as a whole are no less favorable to the Company or the Subsidiary than could be obtained in a comparable arm’s-length transaction with a Person that is not an Affiliate of the Company.

 

(b)           Any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $15,000,000 must first be approved by a majority of the relevant Board of Directors who are disinterested in the subject matter of the transaction pursuant to a resolution of such Board of Directors.  Prior to entering into any Related Party Transaction or series of Related Party Transactions with an aggregate value in excess of $25,000,000, the Company must in addition obtain a favorable written opinion from a nationally recognized investment banking, appraisal or accounting firm as to the fairness of the transaction to the Company and its Subsidiaries from a financial point of view.

 

(c)           The foregoing paragraphs do not apply to

 

(1)         any transaction between the Company and any of its Subsidiaries or between Subsidiaries of the Company;

 

(2)         the payment, by the Company or a Subsidiary, of reasonable and customary regular fees and compensation to, and reasonable and customary indemnification arrangements and similar payments on behalf of, directors of the Company or directors of such Subsidiary, respectively, who are not employees of the Company or such Subsidiary, respectively;

 

(3)         any Restricted Payments if permitted under Section 4.07;

 

(4)         transactions or payments, including the award of securities, pursuant to any employee, officer or director compensation or benefit plans or arrangements by the Company or a Subsidiary entered into in the ordinary course of business, or approved by the Board of Directors of the Company or such Subsidiary, respectively;

 

 (5)         transactions pursuant to any contract or agreement in effect on the Issue Date, as amended, modified or replaced from time to time so long as the terms of the amended, modified or new agreements, taken as a whole, are no less favorable to the Company and its Subsidiaries than those in effect on the date hereof;

 

 

 

 

  

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(6)         the entering into of a customary agreement providing registration rights, and the performance of such agreements;

 

(7)         the issuance of Equity Interests (other than Disqualified Equity Interests) of the Company to any Person or any transaction with an Affiliate where the only consideration paid by the Company or any Subsidiary is Equity Interests (other than Disqualified Equity Interests) of the Company or any contribution to the capital of the Company;

 

(8)         the entering into of any tax sharing agreement or arrangement or any other transactions undertaken in good faith for the sole purpose of improving the tax efficiency of the Company and its Subsidiaries;

 

(9)         (A) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture, (B) transactions with joint ventures entered into in ordinary course of business and consistent with past practice or industry norm (including, for the avoidance of doubt and without limitation, the Exco Joint Venture) or (C) any management services or support agreement entered into on terms consistent with past practice and approved by a majority of the Company’s or the relevant Subsidiary’s Board of Directors (including a majority of the disinterested directors) in good faith;

 

 (10)      transactions permitted by, and complying with, the provisions of Section 5.01, or any merger, consolidation or reorganization of the Company or a Subsidiary with an Affiliate, solely for the purposes of reincorporating the Company or a Subsidiary in a new jurisdiction;

 

(11)       (a) transactions between the Company or any of its Subsidiaries and any Person that is an Affiliate solely because one or more of its directors is also a director of the Company or any of its Subsidiaries; provided that such director abstains from voting as a director of the Company or a Subsidiary on any matter involving such other Person or (b) transactions entered into with any of the Company’s or its Subsidiaries or Affiliates for shared services, facilities and/or employee arrangements entered into on commercially reasonable terms (as determined in good faith by the Company);

 

(12)       Investments permitted pursuant to Section 4.07(11) on commercially reasonable terms (as determined in good faith by the Company);

 

 

 

 

  

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(13)       payments by the Company or any Subsidiary to any Affiliate for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including in connection with acquisitions or divestitures, which payments are on arms’-length terms and are approved by a majority of the members of the Company’s Board of Directors (including a majority of the disinterested directors) in good faith;

 

(14)       any transaction pursuant to which any Permitted Holder provides the Company and/or its Subsidiaries, at cost, with services, including services to be purchased from third-party providers, such as legal and accounting, tax, consulting, financial advisory, corporate governance, insurance coverage and other services, which transaction is approved by a majority of the members of the Company’s Board of Directors (including a majority of the disinterested directors) in good faith;

 

(15)       the contribution of Equity Interests of Spectrum to the Company or any Subsidiary by a Permitted Holder;

 

(16)       the entering into of customary investment management contracts between a Permitted Holder and any Subsidiary of the Company that, in the ordinary course of its business, makes Investments in private collective investment vehicles (including private collective investment vehicles other than those owned by Permitted Holders), which investment management contacts are entered into on commercially reasonable terms and approved by a majority of the members of the Company’s Board of Directors (including a majority of the disinterested directors) in good faith;

 

(17)       transactions in which the Company or any Subsidiary, as the case may be, delivers to the Trustee a letter from an independent accounting, appraisal or investment banking firm of national standing stating that such transaction is fair to the Company or such Subsidiary from a financial point of view or meets the requirements of clause (a) of this Section 4.13; and

 

(18)       with respect to transactions involving Spectrum Brands, Inc., any transaction that is permitted by the covenant, “Transactions with Affiliates” in the indenture governing Spectrum Brands, Inc.’s 6.375% Senior Notes due 2020 and 6.625% Senior Notes due 2022.

 

Section 4.14.  Financial Reports.  (a)  Whether or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company must provide the Trustee and Noteholders with, or electronically file with the Commission, within the time periods specified in those sections

 

 

 

 

 

 

  

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(1)         all quarterly and annual reports that would be required to be filed with the Commission on Forms 10-Q and 10-K if the Company were required to file such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to annual information only, a report thereon by the Company’s certified independent accountants, and

 

(2)         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.

 

In addition, whether or not required by the Commission, the Company will, if the Commission will accept the filing, file a copy of all of the information and reports referred to in clauses (1) and (2) with the Commission for public availability within the time periods specified in the Commission’s rules and regulations.  In addition, the Company will make the information and reports available to securities analysts and prospective investors upon request.

 

(b)           For so long as any of the Notes remain outstanding and constitute “restricted securities” under Rule 144, the Company will furnish to the Holders of the Notes and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(c)           Any and all Defaults or Events of Default arising from a failure to furnish or file in a timely manner a report required by this Section 4.14 shall be deemed cured (and the Company shall be deemed to be in compliance with this Section 4.14) upon furnishing or filing such report or certification as contemplated by this Section 4.14 (but without regard to the date on which such report or certification is so furnished or filed); provided that such cure shall not otherwise affect the rights of the holders under Article 6 hereunder if the principal, premium, if any, and accrued interest (including Additional Interest, if any), have been accelerated in accordance with the terms of this Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

(d)           All obligors on the Notes will comply with Section 314(a) of the Trust Indenture Act.

 

(e)           Delivery of these reports and information to the Trustee is for informational purposes only and the Trustee’s receipt of them will not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

 

Section 4.15.  Reports to Trustee.  (a)  The Company will deliver to the Trustee within 120 days after the end of each fiscal year a certificate from the 

 

 

 

 

 

 

  

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principal executive, financial, operating or accounting officer of the Company stating that the officer has conducted or supervised a review of the activities of the Company and its Subsidiaries and their performance under the Indenture and that, based upon such review, the Company has fulfilled its obligations hereunder or, if there has been a Default, specifying the Default and its nature and status.

 

(b)           The Company will deliver to the Trustee, as soon as reasonably possible and in any event within 30 days after the Company becomes aware or should reasonably become aware of the occurrence of a Default, an Officers’ Certificate setting forth the details of the Default, and the action which the Company proposes to take with respect thereto.

 

(c)           The Company will notify the Trustee in writing when any Notes are listed on any national securities exchange and of any delisting.

 

Section 4.16.  No Investment Company Registration.  Neither the Company nor any Guarantor will register, or be required to register, as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.

 

Section 4.17.  Maintenance of Liquidity.  From the Issue Date, the Company and the Guarantors shall maintain an amount in Cash Equivalents that is subject to no Liens (other than Liens under the Security Documents) in an amount equal to the Company’s obligations to pay interest on the Notes and all other Debt of the Company and the Guarantors for the next six months. In the case any such Debt bears interest at a floating rate, the Company may assume that the reference interest rate in effect on the applicable date of determination will be in effect for the remainder of such period.

 

Section 4.18.  Maintenance of Collateral Coverage.  (a) As of (i) the last day of each fiscal year and (ii) the last day of the second fiscal quarter of the Company, the Company shall not permit the Collateral Coverage Ratio to be less than 2.0 to 1.0.

 

(b)           As of the last day of each fiscal quarter of the Company, the Company shall not permit the Liquid Collateral Coverage Ratio to be less than 1.0 to 1.0.

 

Section 4.19.  Impairment of Security Interest; Further Assurances.  (a) Neither the Company nor any Guarantor will take any action, or knowingly omit to take any action, which action or omission could reasonably be expected to have the result of materially impairing the perfection or priority of security interest with respect to the Collateral for the benefit of the Trustee and the Holders of Notes.

 

 

 

 

 

 

  

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(b)           The Company and each Guarantor will make, execute, endorse, acknowledge, file, record, register and/or deliver such agreements, documents, instruments, and further assurances (including, without limitation, Uniform Commercial Code financing statements, mortgages, deeds of trust, schedules, confirmatory assignments, conveyances, transfer endorsements, certificates, real property surveys, reports, landlord waivers, bailee agreements and control agreements), and take such other actions, as may be required under applicable law or as necessary to cause the Collateral Requirement to be and remain satisfied and otherwise to create, perfect, preserve or protect the security interest in the Collateral of the secured parties under the Security Documents, all at the Company’s expense.

 

Section 4.20.  Guaranties by Subsidiaries.  If and for so long as any Subsidiary, directly or indirectly, Guarantees any Debt of the Company (other than the Notes), such Subsidiary shall provide a Note Guaranty. A Subsidiary required to provide a Note Guaranty shall execute a supplemental indenture substantially in the form of Exhibit B, and deliver an Opinion of Counsel to the Trustee to the effect that the supplemental indenture has been duly authorized, executed and delivered by the Subsidiary and constitutes a valid and binding obligation of the Subsidiary, enforceable against the Subsidiary in accordance with its terms (subject to customary exceptions).

 

 

ARTICLE 5

Consolidation, Merger or Sale of Assets

 

Section 5.01.  Consolidation, Merger or Sale of Assets by the Company; No Lease of All or Substantially All Assets.  (a) The Company will not

 

(i)          consolidate with or merge with or into any Person, or

 

(ii)         sell, convey, transfer, or otherwise dispose of all or substantially all of its assets as an entirety or substantially an entirety, in one transaction or a series of related transactions, to any Person or

 

(iii)         permit any Person to merge with or into the Company

 

unless

 

(1)         either (x) the Company is the continuing Person or (y) the resulting, surviving or transferee Person is a corporation organized and validly existing under the laws of the United States of America or any jurisdiction thereof and expressly assumes by supplemental indenture all of the obligations of the Company under the Indenture and the Notes and the Registration Rights Agreement;

 

 

 

 

  

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(2)         immediately after giving effect to the transaction, no Default has occurred and is continuing;

 

(3)         immediately after giving effect to the transaction on a pro forma basis, the Company or the resulting, surviving or transferee Person would be in compliance with the covenants under Section 4.17 and Section 4.18 (calculated as if the date of the transaction was a date on which such covenant is required to be tested under Section 4.18); and

 

(4)         the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the consolidation, merger or transfer and the supplemental indenture (if any) comply with the Indenture;

 

provided that clauses (2) and (3) do not apply (i) to the consolidation or merger of the Company with or into a Wholly Owned Subsidiary or the consolidation or merger of a Wholly Owned Subsidiary with or into the Company or (ii) if, in the good faith determination of the Board of Directors of the Company, whose determination is evidenced by a Board Resolution, the sole purpose of the transaction is to change the jurisdiction of incorporation of the Company.

 

(b)           The Company shall not lease all or substantially all of its assets, whether in one transaction or a series of transactions, to one or more other Persons.

 

(c)           The foregoing clauses (a) and (b) above shall not apply to (i) any transfer of assets by the Company to any Guarantor, (ii) any transfer of assets among Guarantors or (iii) any transfer of assets by a Subsidiary of the Company that is not a Guarantor to (x) another Subsidiary of the Company that is not a Guarantor or (y) the Company or any Guarantor.

 

(d)           Upon the consummation of any transaction effected in accordance with these provisions, if the Company is not the continuing Person, the resulting, surviving or transferee Person will succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Notes with the same effect as if such successor Person had been named as the Company in the Indenture.  Upon such substitution, except in the case of a sale, conveyance, transfer or disposition of less than all its assets the Company will be released from its obligations under the Indenture and the Notes.

 

Section 5.02.  Consolidation, Merger or Sale of Assets by a Guarantor.  (a)  No Guarantor may

 

(i)         consolidate with or merge with or into any Person,

 

 

 

 

  

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(ii)         sell, convey, transfer or dispose of, all or substantially all its assets as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person, or

 

(iii)         permit any Person to merge with or into the Guarantor

 

unless

 

(A)         the other Person is the Company or any Subsidiary of the Company that is a Guarantor or becomes a Guarantor concurrently with the transaction; or

 

  (B) (1)        either (x) the Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person  expressly assumes by supplemental indenture all of the obligations of the Guarantor under its Note Guaranty; and

 

(2)         immediately after giving effect to the transaction, no Default has occurred and is continuing; or

 

(C)         the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Subsidiary of the Company) otherwise permitted by the Indenture.

 

 

ARTICLE 6

Default and Remedies

 

Section 6.01.  Events of Default. An “Event of Default” occurs if

 

(1)           the Company defaults in the payment of the principal of any Note when the same becomes due and payable at maturity, upon acceleration or redemption, or otherwise (other than pursuant to an Offer to Purchase);

 

(2)           the Company defaults in the payment of interest (including any Additional Interest) on any Note when the same becomes due and payable, and the default continues for a period of 30 days;

 

(3)           the Company fails to make an Offer to Purchase and thereafter accept and pay for Notes tendered when and as required pursuant to Section 4.11 or Section 4.12, or the Company or any Guarantor fails to comply with Article 5;

 

(4)           the Company defaults in the performance of or breaches the covenants under Section 4.17 or Section 4.18 and such default or breach is not cured within (i) 45 days after the date of default under Section 4.18(a) or (ii) 15 

 

 

 

 

  

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days after the date of any default under Section 4.17 or Section 4.18(b) (it being understood that the date of default in the case of covenants tested at the end of a fiscal period is the last day of such fiscal period);

 

(5)           the Company defaults in the performance of or breaches any other covenant or agreement of the Company in this Indenture or under the Notes and the default or breach continues for a period of 60 consecutive days after written notice to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% or more in aggregate principal amount of the Notes;

 

(6)           the failure by the Company or any Significant Subsidiary to pay any Debt (other than intercompany Debt) within any applicable grace period after final maturity or the acceleration of any such Debt by the holders thereof because of a default, in each case, if the total amount of such Debt unpaid or accelerated exceeds $25,000,000;

 

(7)           one or more final judgments or orders for the payment of money in the aggregate for all such Persons are rendered against the Company or any of its Significant Subsidiaries and are not paid or discharged, and there is a period of 60 consecutive days following entry of the final judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed $25,000,000 (in excess of amounts which the Company’s insurance carriers have agreed to pay under applicable policies) during which a stay of enforcement, by reason of a pending appeal or otherwise, is not in effect;

 

(7)           an involuntary case or other proceeding is commenced against the Company or any Significant  Subsidiary with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of 60 days; or an order for relief is entered against the Company or any Significant Subsidiary under the federal bankruptcy laws as now or hereafter in effect;

 

(8)           the Company or any of its Significant Subsidiaries (i) commences a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any such law, (ii) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any of its Significant Subsidiaries or for all or substantially all of the property and assets of the Company or any of its Significant Subsidiaries or (iii) effects any general assignment for the benefit of creditors (an event of default specified in clause (7) or (8) a “bankruptcy default”);

 

 

 

 

 

  

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(9)           any Note Guaranty of a Significant Subsidiary ceases to be in full force and effect, other than in accordance the terms of the Indenture, or a Guarantor that is a Significant Subsidiary denies or disaffirms its obligations under its Note Guaranty; or

 

(10)           (a) the Liens created by the Security Documents shall at any time not constitute a valid and perfected Lien on any portion of the Collateral (with a Fair Market Value in excess of $25,000,000) intended to be covered thereby (to the extent perfection by filing, registration, recordation or possession is required by this Indenture or the Security Documents), (b) any of the Security Documents shall for whatever reason be terminated or cease to be in full force and effect (except for expiration in accordance with its terms or amendment, modification, waiver, termination or release in accordance with the terms of this Indenture) or (c) the enforceability of the Liens created by the Security Documents shall be contested by the Company or any Guarantor that is a Significant Subsidiary.

 

Section 6.02.  Acceleration.  (a)  If an Event of Default, other than a bankruptcy default with respect to the Company, occurs and is continuing under the Indenture, the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Company (and to the Trustee if the notice is given by the Holders), may, and the Trustee at the written request of such Holders shall, declare the principal of and accrued interest (including Additional Interest, if any) on the Notes to be immediately due and payable.  Upon a declaration of acceleration, such principal and interest will become immediately due and payable. If a bankruptcy default occurs with respect to the Company, the principal of and accrued interest on the Notes then outstanding will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

(b)           The Holders of a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee may waive all past defaults and  rescind and annul a declaration of acceleration and its consequences if

 

(1)         all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by the declaration of acceleration, have been cured or waived, and

 

(2)         the rescission would not conflict with any judgment or decree of a court of competent jurisdiction.

 

Section 6.03.  Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue, in its own name or as trustee of an express trust, any available remedy by proceeding at law or in equity to collect the payment of principal of and interest on the Notes or to enforce the performance of 

 

 

 

 

 

 

  

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any provision of the Notes or the Indenture.  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.

 

Section 6.04.  Waiver of Past Defaults.  Except as otherwise provided in Sections 6.02, 6.07 and 9.02, the Holders of a majority in principal amount of the outstanding Notes may, by notice to the Trustee, waive an existing Default and its consequences.  Upon such waiver, the Default will cease to exist, and any Event of Default arising therefrom will be deemed to have been cured, but no such waiver will extend to any subsequent or other Default or impair any right consequent thereon.

 

In the event of a declaration of acceleration of the Notes because an Event of Default described in Section 6.01(6) 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(6) shall be remedied or cured, or waived by the holders of the Debt, or the Debt that gave rise to such Event of Default shall have been discharged in full, within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) 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 6.05.  Control by Majority.  The Holders of a majority in aggregate principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction, and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes.

 

Section 6.06.  Limitation on Suits.  A Holder may not institute any proceeding, judicial or otherwise, with respect to the Indenture or the Notes, or for the appointment of a receiver or trustee, or for any other remedy under the Indenture or the Notes, unless:

 

(1)         the Holder has previously given to the Trustee written notice of a continuing Event of Default;

 

(2)         Holders of at least 25% in aggregate principal amount of outstanding Notes have made written request to the Trustee to institute 

 

 

 

 

 

  

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proceedings in respect of the Event of Default in its own name as Trustee under the Indenture;

 

(3)         Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liabilities or expenses to be incurred in compliance with such request;

 

(4)         the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

 

(5)         during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction that is inconsistent with such written request.

 

Section 6.07.  Rights of Holders to Receive Payment.  Notwithstanding anything to the contrary, the right of a Holder of a Note to receive payment of principal of or interest on its Note on or after the Stated Maturities thereof, or to bring suit for the enforcement of any such payment on or after such respective dates, may not be impaired or affected without the consent of that Holder.

 

Section 6.08.  Collection Suit by Trustee.  If an Event of Default in payment of principal or interest specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust for the whole amount of principal and accrued interest remaining unpaid, together with interest on overdue principal and, to the extent lawful, overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee hereunder.

 

Section 6.09.  Trustee May File Proofs of Claim.  The Trustee may file 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 compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee hereunder) and the Holders allowed in any judicial proceedings relating to the Company or any Guarantor or their respective creditors or property, and is entitled and empowered to collect, receive and distribute any money, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims.  Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, if the Trustee consents 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 

 

 

 

 

 

 

  

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Trustee, its agent and counsel, and any other amounts due the Trustee hereunder.  Nothing in the Indenture will be deemed to empower 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 thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.10.  Priorities.  If the Trustee collects any money pursuant to this Article (including any distributions upon the exercise of remedies under the Security Documents), it shall pay out the money in the following order:

 

First:  to the Trustee for all amounts due to it hereunder;

 

Second:  to Holders for amounts then due and unpaid for principal of and interest on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest; and

 

Third:  to the Company or as a court of competent jurisdiction may direct.

 

The Trustee, upon written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section.

 

Section 6.11.  Restoration of Rights and Remedies.  If the Trustee or any Holder has instituted a proceeding to enforce any right or remedy under the Indenture and the proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to the Holder, then, subject to any determination in the proceeding, the Company, any Guarantors, the Trustee and the Holders will be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, any Guarantors, the Trustee and the Holders will continue as though no such proceeding had been instituted.

 

Section 6.12.  Undertaking for Costs.  In any suit for the enforcement of any right or remedy under the Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may require any party litigant in such suit (other than the Trustee) to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys fees and expenses, against any party litigant (other than the Trustee) 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 or a Holder to enforce payment of principal of or interest on any Note on the respective due dates, or a suit by Holders of more than 10% in principal amount of the outstanding Notes.

 

 

 

 

  

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Section 6.13.  Rights and Remedies Cumulative.  No right or remedy conferred or reserved to the Trustee or to the Holders under this Indenture is intended to be exclusive of any other right or remedy, and all such rights and remedies are, to the extent permitted by law, cumulative and in addition to every other right and remedy hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or exercise of any right or remedy hereunder, or otherwise, will not prevent the concurrent assertion or exercise of any other right or remedy.

 

Section 6.14.  Delay or Omission Not Waiver.  No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default will impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.  Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

 

Section 6.15.  Waiver of Stay, Extension or Usury Laws.  The Company and each Guarantor covenants, to the extent that it may lawfully do so, that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company or the Guarantor from paying all or any portion of the principal of, or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of the Indenture.  The Company and each Guarantor hereby expressly waives, to the extent that it may lawfully do so, all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.

 

 

ARTICLE 7

The Trustee

 

Section 7.01.  General.  (a) The duties and responsibilities of the Trustee are as provided by the Trust Indenture Act and as set forth herein.  Whether or not expressly so provided, every provision of the Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee is subject to this Article.

 

(b)           Except during the continuance of an Event of Default, the Trustee need perform only those duties that are specifically set forth in the Indenture and no others, and no implied covenants or obligations will be read into the Indenture against the Trustee.  In case an Event of Default has occurred and is continuing, the Trustee shall exercise those rights and powers vested in it by the Indenture, 

 

 

 

 

  

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and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(c)           No provision of the Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct.

 

Section 7.02.  Certain Rights of Trustee.  Subject to Trust Indenture Act Sections 315(a) through (d):

 

(1)         In the absence of bad faith on its part, the Trustee may conclusively rely, and will be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or 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, but, in the case of any document which is specifically required to be furnished to the Trustee pursuant to any provision hereof, the Trustee shall examine the document to determine whether it conforms to the requirements of the Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).  The Trustee, in its discretion, may make further inquiry or investigation into such facts or matters as it sees fit.

 

(2)         Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel conforming to Section 13.05 and the Trustee will not be liable for any action it takes or omits to take in good faith in conclusive reliance on the certificate or opinion.

 

(3)         The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent (other than an agent who is an employee of the Trustee) appointed with due care.

 

(4)         The Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Indenture at the request or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

 

(5)         The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the 

 

 

 

 

 

  

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direction of the Holders in accordance with Section 6.05 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under the Indenture.

 

(6)         The Trustee may consult with counsel of its selection, and the advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in conclusive reliance thereon.

 

(7)         No provision of the Indenture will require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties hereunder, or in the exercise of its rights or powers, unless it receives indemnity satisfactory to it against any loss, liability or expense.

 

(8)         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 any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

 

(9)         In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

(10)         The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

 

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 otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee.  Any Agent may do the same with like rights.  However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311.  For purposes of Trust Indenture Act Section 311(b)(4) and (6):

 

(a)         “cash transaction” means any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; and

 

 

 

 

 

 

  

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(b)         “self-liquidating paper” means any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred for the purpose of financing the purchase, processing, manufacturing, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation.

 

Section 7.04.  Trustee’s Disclaimer.  The Trustee (i) makes no representation as to the validity or adequacy of the Indenture or the Notes, (ii) is not accountable for the Company’s use or application of the proceeds from the Notes and (iii) is not responsible for any statement in the Notes other than its certificate of authentication.

 

Section 7.05.  Notice of Default.  If any Default occurs and is continuing and is actually known to the Trustee, the Trustee will send notice of the Default to each Holder within 90 days after it occurs, unless the Default has been cured; provided that, except in the case of a default in the payment of the principal of or interest on any Note, the Trustee may withhold the notice if and so long as the Trustee in good faith determines that withholding the notice is in the interest of the Holders.  Notice to Holders under this Section will be given in the manner and to the extent provided in Trust Indenture Act Section 313(c).

 

Section 7.06.  Reports by Trustee to Holders.  Within 60 days after each May 15, beginning with May 15, 2013, the Trustee will mail to each Holder, as provided in Trust Indenture Act Section 313(c), a brief report dated as of such May 15, if required by Trust Indenture Act Section 313(a), and file such reports with each stock exchange upon which its Notes are listed and with the Commission as required by Trust Indenture Act Section 313(d).

 

Section 7.07.  Compensation And Indemnity.  (a) The Company will pay the Trustee compensation as agreed upon in writing for its services.  The compensation of the Trustee is not limited by any law on compensation of a Trustee of an express trust.  The Company will reimburse the Trustee upon request for all reasonable out-of-pocket expenses, disbursements and advances incurred or made by the Trustee, including the reasonable compensation and expenses of the Trustee’s agents and counsel.

 

(b)           The Company will indemnify the Trustee for, and hold it harmless against, any loss or liability or expense incurred by it without negligence, bad faith or willful misconduct on its part arising out of or in connection with the acceptance or administration of the Indenture and its duties under the Indenture and the Notes, including the reasonable costs and expenses of defending itself against any claim (whether asserted by the Company, a Holder, or any other Person) or liability and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under the Indenture 

 

 

 

 

 

  

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and the Notes.  The Trustee shall promptly notify the Company of any claim asserted against the Trustee or any of its agents for which it may seek indemnity.  The Company shall defend the claim and the Trustee shall cooperate in the defense.  The Trustee and its agents subject to the claim may have separate counsel, and the Company shall pay the reasonable fees and expenses of such counsel if the Trustee concludes, upon advice of counsel, that there exists a conflict of interest between the Company and the Trustee and its agents subject to the claim in connection with such defense.  The Company need not pay for any settlement made without its written consent, which consent shall not be unreasonably withheld.  The Company need not reimburse any expense or indemnify against any loss or liability to the extent incurred by the Trustee through the Trustee’s negligence, bad faith or willful misconduct.

 

(c)           To secure the Company’s payment obligations in this Section, the Trustee will have a lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, and interest on particular Notes.

 

Section 7.08.  Replacement of Trustee.  (a) (1) The Trustee may resign at any time by providing 30 days prior written notice to the Company.

 

(2)         The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by written notice to the Trustee.

 

(3)         If the Trustee is no longer eligible under Section 7.10 or in the circumstances described in Trust Indenture Act Section 310(b), any Holder that satisfies the requirements of Trust Indenture Act Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(4)         The Company may remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.

 

A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section.

 

 

 

 

 

 

 

  

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(b)           If the Trustee has been removed by the Holders, Holders of a majority in principal amount of the Notes may appoint a successor Trustee with the consent of the Company.  Otherwise, if the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee.  If the successor Trustee does not deliver its written acceptance within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may petition any court of competent jurisdiction at the expense of the Company for the appointment of a successor Trustee.

 

(c)           Upon delivery by the successor Trustee of a written acceptance of its appointment to the retiring Trustee and to the Company, (i) the retiring Trustee will transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07, (ii) the resignation or removal of the retiring Trustee will become effective, and (iii) the successor Trustee will have all the rights, powers and duties of the Trustee under the Indenture.  Upon request of any successor Trustee, the Company will execute any and all instruments for fully and vesting in and confirming to the successor Trustee all such rights, powers and trusts.  The Company will give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders, and include in the notice the name of the successor Trustee and the address of its Corporate Trust Office.

 

(d)           Notwithstanding replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.07 will continue for the benefit of the retiring Trustee.

 

(e)           The Trustee agrees to give the notices provided for in, and otherwise comply with, Trust Indenture Act Section 310(b).

 

Section 7.09.  Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act will be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee in the Indenture.

 

Section 7.10.  Eligibility.  The Indenture must always have a Trustee that satisfies the requirements of Trust Indenture Act Section 310(a) and has a combined capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition.

 

Section 7.11.  Money Held in Trust.  The Trustee will not be liable for interest on any money received by it except as it may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from other 

 

 

 

 

  

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funds except to the extent required by law and except for money held in trust under Article 8.

 

 

ARTICLE 8

Defeasance and Discharge

 

Section 8.01.  Discharge of Company’s Obligations.  (a) Subject to paragraph (b), the Company’s obligations under the Notes and the Indenture, and each Guarantor’s obligations under its Note Guaranty, will terminate if:

 

(1)         all Notes previously authenticated and delivered (other than (i) destroyed, lost or stolen Notes that have been replaced or (ii) Notes that are paid pursuant to Section 4.01 or (iii) Notes for whose payment money or U.S. Government Obligations have been held in trust and then repaid to the Company pursuant to Section 8.05) have been delivered to the Trustee for cancellation and the Company has paid all sums payable by it hereunder; or

 

  (2) (A)         the Notes mature within one year, or all of them are to be called for redemption within one year under arrangements satisfactory to the Trustee for giving the notice of redemption,

 

(B)         the Company irrevocably deposits in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder,

 

(C)         no Default has occurred and is continuing on the date of the deposit,

 

(D)         the deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound, and

 

(E)         the Company delivers to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the satisfaction and discharge of the Indenture have been complied with.

 

(b)           After satisfying the conditions in clause (1), only the Company’s obligations under Section 7.07 will survive.  After satisfying the conditions in clause (2), only the Company’s obligations in Article 2 and Sections 4.01, 4.02, 

 

 

 

 

  

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7.07, 7.08, 8.05 and 8.06 will survive.  In either case, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes and the Indenture other than the surviving obligations.

 

Section 8.02.  Legal Defeasance.  Following the deposit referred to in clause (1), the Company will be deemed to have paid and will be discharged from its obligations in respect of the Notes and the Indenture, other than its obligations in Article 2 and Sections 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06, and each Guarantor’s obligations under its Note Guaranty will terminate, provided the following conditions have been satisfied:

 

(1)         The Company has irrevocably deposited in trust with the Trustee, as trust funds solely for the benefit of the Holders, money or U.S. Government Obligations or a combination thereof sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certificate thereof delivered to the Trustee, without consideration of any reinvestment, to pay principal of and interest on the Notes to maturity or redemption, as the case may be, provided that any redemption before maturity has been irrevocably provided for under arrangements satisfactory to the Trustee.

 

(2)         No Default has occurred and is continuing on the date of the deposit.

 

(3)         The deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound.

 

(4)         The Company has delivered to the Trustee

 

(A)         either (x) a ruling received from the Internal Revenue Service to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case or (y) an Opinion of Counsel, based on a change in law after the date of the Indenture, to the same effect as the ruling described in clause (x), and

 

(B)         an Opinion of Counsel to the effect that the Holders have a valid first priority Note interest in the trust funds (subject to customary exceptions).

 

(5)         If the Notes are listed on a national securities exchange, the Company has delivered to the Trustee an Opinion of Counsel to the effect that the deposit and defeasance will not cause the Notes to be delisted.

 

 

 

 

 

  

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(6)         The Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case stating that all conditions precedent provided for herein relating to the defeasance have been complied with.

 

Prior to the deposit referred to in clause (1), none of the Company’s obligations under the Indenture will be discharged.  Thereafter, the Trustee upon request will acknowledge in writing the discharge of the Company’s obligations under the Notes and the Indenture except for the surviving obligations specified above.

 

Section 8.03.  Covenant Defeasance.  Following the deposit referred to in clause (1), the Company’s obligations set forth in Sections 4.04 through 4.20, and clause (3) of Section 5.01(a)(iii), and each Guarantor’s obligations under its Note Guaranty, will terminate, the Company and the Guarantors will be released from their obligations under the Security Documents and clauses (3), (4), (5), (6), (7), (8) (with respect to Significant Subsidiaries only), (9) and (10) of Section 6.01 will no longer constitute Events of Default, provided the following conditions have been satisfied:

 

(1)         The Company has complied with clauses (1), (2), (3), (4)(B), (5) and (6) of Section 8.02; and

 

(2)         the Company has delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance and will be subject to federal income tax on the same amount and in the same manner and at the same times as would otherwise have been the case.

 

Except as specifically stated above, none of the Company’s obligations under the Indenture will be discharged.

 

Section 8.04.  Application of Trust Money.  Subject to Section 8.05, the Trustee will hold in trust the money or U.S. Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, and apply the deposited money and the proceeds from deposited U.S. Government Obligations to the payment of principal of and interest on the Notes in accordance with the Notes and the Indenture.   Such money and U.S. Government Obligations need not be segregated from other funds except to the extent required by law.

 

Section 8.05.  Repayment to Company.  Subject to Sections 7.07, 8.01, 8.02 and 8.03, the Trustee will promptly pay to the Company upon written request any excess money held by the Trustee at any time and thereupon be relieved from all liability with respect to such money.  The Trustee will pay to the Company upon written request any money held for payment with respect to the Notes that remains unclaimed for two years, provided that before making such payment the 

 

 

 

 

 

 

  

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Trustee shall at the expense of the Company publish once in a newspaper of general circulation in New York City, or send to each Holder entitled to such money, notice that the money remains unclaimed and that after a date specified in the notice (at least 30 days after the date of the publication or notice) any remaining unclaimed balance of money will be repaid to the Company.  After payment to the Company, Holders entitled to such money must look solely to the Company for payment as unsecured creditors, unless applicable law designates another Person, and all liability of the Trustee with respect to such money will cease.

 

Section 8.06.  Reinstatement.  If and for so long as the Trustee is unable to apply any money or U.S. Government Obligations held in trust pursuant to Section 8.01, 8.02 or 8.03 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes will be reinstated as though no such deposit in trust had been made.  If the Company makes any payment of principal of or interest on any Notes because of the reinstatement of its obligations, it will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held in trust.

 

 

ARTICLE 9

Amendments, Supplements and Waivers

 

Section 9.01.  Amendments Without Consent of Holders.  The Company and the Trustee may amend or supplement the Indenture or the Notes (and the Company, the Trustee or the Collateral Agent may amend of supplement the Security Documents) without notice to or the consent of any Noteholder

 

(1)         to cure any ambiguity, defect or inconsistency in the Indenture or the Notes;

 

(2)         to comply with Article 5;

 

(3)         to comply with any requirements of the Commission in connection with the qualification of the Indenture under the Trust Indenture Act;

 

(4)         to evidence and provide for the acceptance of an appointment hereunder by a successor Trustee;

 

(5)         to provide for uncertificated Notes in addition to or in place of certificated Notes, provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or any successor provision;

 

 

 

 

 

  

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(6)          to provide for any Guarantee of the Notes, to secure the Notes or to confirm and evidence the release, termination or discharge of any Guarantee of or Lien securing the Notes when such release, termination or discharge is permitted by the Indenture;

 

(7)          to provide for or confirm the issuance of Additional Notes;

 

(8)          to make any other change that does not materially and adversely affect the rights of any Holder;

 

(9)          to conform the text of this Indenture or the Notes to any provision of the “Description of Notes” section of the Offering Circular, as certified by an Officers’ Certificate; or

 

(10)        to evidence the issuance of any Pari-Passu Obligations and secure such obligations with Liens on the Collateral.

 

In addition, the Company, the Collateral Agent and the Trustee may amend the Security Documents or execute or deliver such agreements, instruments or other documents (including the Spectrum Registration Rights Agreement, the Spectrum Stockholder Agreement and any other agreement with respect to equityholders’ rights to which the Company or any Guarantor is a party) to permit, or in connection with, the accession of or succession of any parties to the Security and Pledge Agreement or the Collateral Trust Agreement or this Indenture to the extent necessary to effect the pledge of the related equity interests (including in respect of any incurrence of Pari-Passu Obligations).

 

Section 9.02.  Amendments With Consent of Holders.  (a) Except as otherwise provided in Sections 6.02, 6.04 and 6.07 or paragraph (b), the Company and the Trustee may amend the Indenture and the Notes with the written consent of the Holders of a majority in principal amount of the outstanding Notes, and the Holders of a majority in principal amount of the outstanding Notes by written notice to the Trustee may waive future compliance by the Company with any provision of the Indenture or the Notes.  In addition, the Trustee is authorized to permit the Collateral Agent to amend any Security Document with the written consent of the Holders of a majority in principal amount of the outstanding Notes.

 

(b)           Notwithstanding the provisions of paragraph (a), without the consent of each Holder affected, an amendment or waiver may not

 

(1)         reduce the principal amount of or change the Stated Maturity of any installment of principal of any Note,

 

(2)         reduce the rate of or change the Stated Maturity of any interest payment on any Note,

 

 

 

 

  

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(3)         reduce the amount payable upon the redemption of any Note or change the time of any mandatory redemption or, in respect of an optional redemption, the times at which any Note may be redeemed,

 

(4)         after the time an Offer to Purchase is required to have been made, reduce the purchase amount or purchase price, or extend the latest expiration date or purchase date thereunder,

 

(5)         make any Note payable in money other than that stated in the Note,

 

(6)         impair the right of any Holder of Notes to receive any  principal payment or interest payment on such Holder’s Notes, on or after the Stated Maturity thereof, or to institute suit for the enforcement of any such payment,

 

(7)         make any change in the percentage of the principal amount of the Notes required for amendments or waivers,

 

(8)         modify or change any provision of the Indenture affecting the ranking (as to contractual right of payment) of the Notes or any Note Guaranty in a manner adverse to the Holders of the Notes, or

 

(9)         release any Note Guaranty other than as permitted by this Indenture.

 

(c)           No amendment, supplement or waiver may release all or substantially all of the Collateral without the consent of Holders of at least two-thirds in aggregate principal amount of Notes.

 

(d)           It is not necessary for Noteholders to approve the particular form of any proposed amendment, supplement or waiver, but is sufficient if their consent approves the substance thereof.

 

(e)           An amendment, supplement or waiver under this Section will become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Notes.  After an amendment, supplement or waiver under this Section becomes effective, the Company will send to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver.  The Company will send supplemental indentures to Holders upon request.  Any failure of the Company to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

Section 9.03.  Effect of Consent.  (a) After an amendment, supplement or waiver becomes effective, it will bind every Holder unless it is of the type requiring the consent of each Holder affected.  If the amendment, supplement or 

 

 

 

  

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waiver is of the type requiring the consent of each Holder affected, the amendment, supplement or waiver will bind each Holder that has consented to it and every subsequent Holder of a Note that evidences the same debt as the Note of the consenting Holder.

 

(b)           If an amendment, supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee so that the Trustee may place an appropriate notation of the changed terms on the Note and return it to the Holder, or exchange it for a new Note that reflects the changed terms.  The Trustee may also place an appropriate notation on any Note thereafter authenticated.  However, the effectiveness of the amendment, supplement or waiver is not affected by any failure to annotate or exchange Notes in this fashion.  The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of a certificate of authentication, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Section 9.04.  Trustee’s Rights and Obligations.  The Trustee shall receive, and will be fully protected in conclusively relying upon, an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article is authorized or permitted by the Indenture and is a legal, valid, and binding obligation enforceable against the Company in accordance with its own terms.  If the Trustee has received such an Opinion of Counsel, it shall sign the amendment, supplement or waiver so long as the same does not adversely affect the rights of the Trustee.  The Trustee may, but is not obligated to, execute any amendment, supplement or waiver that affects the Trustee’s own rights, duties or immunities under the Indenture.  The Trustee shall sign any amended or supplemental indenture or Note authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  The Trustee shall, as authorized by this Article 9, direct the Collateral Agent in writing to execute and deliver (i) the Spectrum Registration Rights Agreement and the Spectrum Stockholder Agreement on the date hereof (and any amendments or supplements thereto hereafter) and (ii) after the date hereof, any agreement with respect to equityholders’ rights to which the Company or any Guarantor is or becomes a party from time to time after execution of this Indenture to the extent necessary to effect the pledge of the related equity interests.  In signing any amendment, supplement or waiver or issuing any of the instructions described in the immediately preceding sentence, the Trustee shall be entitled to receive an indemnity reasonably satisfactory to it.

 

Section 9.05.  Conformity With Trust Indenture Act.  Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.

 

 

 

 

 

 

  

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ARTICLE 10

Guaranties

 

Section 10.01.  The Guaranties. Subject to the provisions of this Article, to the fullest extent permitted by applicable law, each Guarantor hereby irrevocably and unconditionally guarantees, jointly and severally, on an unsecured basis, the full and punctual payment (whether at Stated Maturity, upon redemption, purchase pursuant to an Offer to Purchase or acceleration, or otherwise) of the principal of, premium, if any, and interest on, and all other amounts payable under, each Note, and the full and punctual payment of all other amounts payable by the Company under the Indenture.  Upon failure by the Company to pay punctually any such amount, each Guarantor shall forthwith on demand pay the amount not so paid at the place and in the manner specified in the Indenture.

 

Section 10.02.  Guaranty Unconditional.  The obligations of each Guarantor hereunder are unconditional and absolute and, without limiting the generality of the foregoing, to the fullest extent permitted by applicable law, will not be released, discharged or otherwise affected by

 

(1)         any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under the Indenture or any Note, by operation of law or otherwise;

 

(2)         any modification or amendment of or supplement to the Indenture or any Note;

 

(3)         any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or its assets or any resulting release or discharge of any obligation of the Company contained in the Indenture or any Note;

 

(4)         the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Company, the Trustee or any other Person, whether in connection with the Indenture or any unrelated transactions, provided that nothing herein prevents the assertion of any such claim by separate suit or compulsory counterclaim;

 

(5)         any invalidity or unenforceability relating to or against the Company for any reason of the Indenture or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal of or interest on any Note or any other amount payable by the Company under the Indenture; or

 

(6)         any other act or omission to act or delay of any kind by the Company, the Trustee or any other Person or any other circumstance 

 

 

 

 

  

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whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of or defense to such Guarantor’s obligations hereunder.

 

Section 10.03.  Discharge; Reinstatement.  Each Guarantor’s obligations hereunder will remain in full force and effect until the principal of, premium, if any, and interest on the Notes and all other amounts payable by the Company under the Indenture have been paid in full.  If at any time any payment of the principal of, premium, if any, or interest on any Note or any other amount payable by the Company under the Indenture is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each Guarantor’s obligations hereunder with respect to such payment will be reinstated as though such payment had been due but not made at such time.

 

Section 10.04.  Waiver by the Guarantors.  To the fullest extent permitted by applicable law, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Company or any other Person.

 

Section 10.05.  Subrogation and Contribution.  Upon making any payment with respect to any obligation of the Company under this Article, the Guarantor making such payment will be subrogated to the rights of the payee against the Company with respect to such obligation, provided that the Guarantor may not enforce either any right of subrogation, or any right to receive payment in the nature of contribution, or otherwise, from any other Guarantor, with respect to such payment so long as any amount payable by the Company hereunder or under the Notes remains unpaid.

 

Section 10.06.  Stay of Acceleration.  If acceleration of the time for payment of any amount payable by the Company under the Indenture or the Notes is stayed upon the insolvency, bankruptcy or reorganization of the Company, all such amounts otherwise subject to acceleration under the terms of the Indenture are nonetheless payable by the Guarantors hereunder forthwith on demand by the Trustee or the Holders.

 

Section 10.07.  Limitation on Amount of Guaranty.  Notwithstanding anything to the contrary in this Article, each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guaranty of such Guarantor not constitute a fraudulent  conveyance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law.  To effectuate that intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under its Note Guaranty are limited to the maximum amount that would not render the Guarantor’s obligations subject to 

 

 

 

 

  

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avoidance under applicable fraudulent conveyance provisions of the United States Bankruptcy Code or any comparable provision of state law.

 

Section 10.08.  Execution and Delivery of Guaranty.  The execution by each Guarantor of a supplemental indenture (substantially in the form of Exhibit B) will evidence the Note Guaranty of such Guarantor, whether or not the person signing as an officer of the Guarantor still holds that office at the time of authentication of any Note.  The delivery of any Note by the Trustee after authentication constitutes due delivery of the Note Guaranty set forth in the Indenture on behalf of each Guarantor.

 

Section 10.09.  Release of Guaranty.  The Note Guaranty of a Guarantor will terminate upon

 

(1)         a sale or other disposition (including by way of consolidation or merger) of the Guarantor or the sale or disposition of all or substantially all the assets of the Guarantor (in each case other than to the Company or a Subsidiary) not prohibited by the Indenture,

 

(2)         a Guarantor ceases to guarantee any Debt of the Company, or

 

(3)         defeasance or discharge of the Notes, as provided in “Defeasance and Discharge”.

 

Upon delivery by the Company to the Trustee of an Officers’ Certificate and an Opinion of Counsel to the foregoing effect, the Trustee will execute any documents reasonably required in order to evidence the release of the Guarantor from its obligations under its Note Guaranty.

 

 

ARTICLE 11

Security Arrangements

 

Section 11.01.  Collateral Agent.  (a) On the Issue Date, Wells Fargo Bank, National Association will be appointed as Collateral Agent for the benefit of the Holders of the Notes and all other Pari-Passu Obligations, and shall initially act as Collateral Agent under the Security Documents.  The Trustee is hereby authorized to enter into the Collateral Trust Agreement to evidence such appointment.

 

(b)           Subject to the terms of the Collateral Trust Agreement, the Collateral Agent will hold (directly or through co-trustees or agents), and will be entitled to enforce on behalf of the Holders of Notes and the holders of all other Pari-Passu Obligations, all Liens on the Collateral.

 

 

 

 

  

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(c)           All of the rights, protections, benefits, privileges, indemnities and immunities granted to the Trustee hereunder shall inure to the benefit of the Collateral Agent acting hereunder and under the Security Documents.

 

(d)           The Collateral Agent may resign or may be removed in accordance with the provisions set forth in the Collateral Trust Agreement.

 

(e)           This Article 11 and the provisions of each Security Document are subject to the terms, conditions and benefits set forth in the Collateral Trust Agreement.

 

Section 11.02.  Security. (a) In order to secure the Obligations of the Company under this Indenture and the Notes, the Company will execute and deliver to the Trustee on the Issue Date, the joinder agreements to each of the Security and Pledge Agreement and the Collateral Trust Agreement such that the Security Documents, after giving effect to such joinder agreements effective upon the Issue Date, will create the Liens intended to be created thereunder, with the priority set forth therein and on the Collateral, to secure the Obligations.

 

(b)           If (i) any Subsidiary becomes a Guarantor, (ii) the Company or any Guarantor acquires any property (other than Excluded Property) that is not automatically subject to a perfected security interest under the Security Documents, or (iii) any Excluded Property ceases to fit within the definition thereof, the Company or such Guarantor shall notify the Collateral Agent in writing thereof and, in each case at the sole cost and expense of the Company or Guarantor and as soon as reasonably practicable after such entity becomes a Guarantor, such property’s acquisition or it no longer being Excluded Property, as the case may be, execute and deliver to the Collateral Agent such mortgages, security agreement supplements and other documentation (in form and scope, and covering such Collateral on such terms, in each case consistent with the mortgages, security agreements and other Security Documents in effect on the Issue Date), and take such additional actions (including any of the actions described in Section 4.19(b)), as are reasonably necessary to create and fully perfect (except to the extent perfection is not required thereunder) in favor of the secured parties under the Security Documents a valid and enforceable security interest in (and in the case of real property, mortgage lien on) such Collateral, which shall be free of any other Liens except for Permitted Collateral Liens.  Any security interest provided pursuant to this Section 11.02(b) shall be accompanied by such Opinions of Counsel as to the validity and perfection of the Liens on such property to the Company as customarily given by counsel in the relevant jurisdiction, in form and substance customary for such jurisdiction.  In addition, the Company shall deliver an Officers’ Certificate to the Collateral Agent certifying that the necessary measures have been taken to perfect the security interest in such property.

 

 

 

 

 

 

  

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(c)           The Company and the Guarantors shall comply with all covenants and agreements contained in the Security Documents.

 

(d)           Each Holder, by accepting a Note, agrees to all of the terms and provisions of the Security Documents, as the same may be amended from time to time pursuant to the provisions of the Indenture and the Security Documents.

 

(e)           As among the Holders, the Collateral as now or hereafter constituted shall be held for the equal and ratable benefit of the Holders without preference, priority or distinction of any thereof over any other by reason of differences in time of issuance, sale or otherwise, as security for the Obligations under this Indenture and the Notes.

 

(f)           To the extent applicable, the Company will be required to comply with Section 313(b) of the Trust Indenture Act, relating to reports, and, unless the Notes are qualified under the Trust Indenture Act, the Company will not be required to comply with Section 314(d) of the Trust Indenture Act, relating to the release of property and to the substitution therefor of any property to be pledged as Collateral for the Notes, except to the extent required by law.  To the extent applicable, any certificate or opinion required by Section 314(d) of the Trust Indenture Act may be made by an officer of the Company except in cases where Section 314(d) requires that such certificate or opinion be made by an independent engineer, appraiser or other expert.  The most recent appraisals required pursuant to the definition of “Fair Market Value” shall be deemed sufficient for such purposes to the maximum extent permitted by law. Notwithstanding anything to the contrary herein, the Company and the Guarantors will not be required to comply with all or any portion of Section 314(d) of the Trust Indenture Act if they determine, in good faith based on advice of outside counsel, that under the terms of that section and/or any interpretation or guidance as to the meaning thereof of the Commission and its staff, including “no action” letters or exemptive orders, all or any portion of Section 314(d) of the Trust Indenture Act is inapplicable to the released Collateral.

 

Section 11.03.  Authorization of Actions to be Taken.  (a) The Collateral Agent and the Trustee are authorized and empowered to execute and deliver (i) the joinder agreements, effective on the Issue Date, to each of the Security and Pledge Agreement and the Collateral Trust Agreement and (ii) the amendment to the Security and Pledge Agreement, effective on the Issue Date, and instruments and other documents related thereto, and such other Security Documents from time to time after the Issue Date, and to receive on behalf of the Holders of the Notes, any funds collected or distributed under the Security Documents to which the Collateral Agent or Trustee is a party and to make further distributions of such funds to the Holders of Notes according to the provisions of this Indenture.

 

(b)           Subject to the Collateral Trust Agreement and Article 7, unless inconsistent with applicable law, the Collateral Agent is authorized and 

 

 

 

 

 

  

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empowered to institute and maintain such suits and proceedings as are necessary to protect or enforce the Liens on the Collateral or the other rights under the Security Documents to which the Collateral Agent is a party or to prevent any impairment of Collateral by any acts that may be unlawful or in violation of such Security Documents or this Indenture, and such suits and proceedings as are necessary to preserve or protect its interests and the interests of the Holders in the Collateral, including 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 Liens or other rights under such Security Documents or hereunder or be prejudicial to the interests of Holders or the Collateral Agent.

 

Section 11.04.  Determinations Relating To Collateral.  Except for any consent, approval or action by the Collateral Agent in the ordinary course of the performance of the Collateral Agent’s duties under the Indenture or the Security Documents, in the event (i) the Collateral Agent shall receive any written request from the Company, a Guarantor or the Trustee under any Security Document for consent or approval with respect to any matter or thing relating to any Collateral or the Company’s or such Guarantor’s obligations with respect thereto, (ii) there shall be due to or from the Trustee or the Collateral Agent under the provisions of any Security Document any material performance or the delivery of any material instrument or (iii) the Collateral Agent shall become aware of any nonperformance by the Company or a Guarantor of any covenant or any breach of any representation or warranty of the Company or such Guarantor set forth in any Security Document, then, in each such event, the Collateral Agent shall be entitled to hire experts, consultants, agents and attorneys to advise the Collateral Agent on the manner in which the Collateral Agent should respond to such request or render any requested performance or respond to such nonperformance or breach.  The Collateral Agent shall be fully protected in the taking of any action recommended or approved by any such expert, consultant, agent or attorney or agreed to by the Holders of a majority in principal amount of the outstanding Notes.

 

Section 11.05.  Release of Liens. (a) The Liens on the Collateral securing the Notes may be released pursuant to the Collateral Trust Agreement:

 

(i)           upon payment in full of principal, interest and all other Obligations on the Notes issued under the Indenture or satisfaction and discharge (in accordance with Article 8) or defeasance (including pursuant to Section 8.03);

 

(ii)           upon release of a Note Guarantee (with respect to the Liens securing such Note Guarantee granted by such Guarantor);

 

(iii)           in connection with any disposition of Collateral to any Person other than the Company or any Guarantor (but excluding any transaction 

 

 

 

 

  

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subject to Article 5 where the successor will become the Company or a Guarantor) that is not prohibited by the Indenture (with respect to the Lien on such Collateral); provided that except in the case of any disposition of Cash Equivalents in the ordinary course of business, upon such disposition and after giving effect thereto, no Default shall have occurred and be continuing, and the Company would be in compliance with the covenants under Section 4.17 and Section 4.18 (calculated as if the disposition date was a date on which such covenant is required to be tested under Section 4.18);

 

(iv)           in whole or in part, with the consent of the Holders of the requisite percentage of Notes in accordance with the provisions described under Section 9.02, including the release of all or substantially all of the Collateral if approved by Holders of at least two-thirds of the aggregate principal amount of the Notes; or

 

(v)           with respect to assets that become Excluded Property.

 

Each of the releases described in clauses (i), (ii), (iii) and (v) above may be effected by the Collateral Agent upon receipt of appropriate notice of instruction, to the extent required, without the consent of the Holders or any action on the part of the Trustee.

 

(b)           Upon delivery to the Collateral Agent of an Officers’ Certificate requesting execution of an instrument confirming the release or subordination of the Liens pursuant to Section 11.05(a), as applicable, accompanied by:

 

(1)           an Opinion of Counsel confirming such release or subordination is permitted by Section 11.05(a), as applicable;

 

(2)           all instruments requested by the Company to effectuate or confirm such release or subordination; and

 

(3)           such other certificates and documents as the Collateral Agent may reasonably request to confirm the matters set forth in Section 11.05(a) or (c), as applicable,

 

the Collateral Agent is hereby authorized to, and shall, if such instruments and confirmation are reasonably satisfactory to the Collateral Agent, promptly execute and deliver such instruments.

 

(c)           All instruments effectuating or confirming any release of any Liens will have the effect solely of releasing such Liens as to the Collateral described therein, on customary terms and without any recourse, representation, warranty or liability whatsoever.

 

(d)           The Company will bear and pay all costs and expenses associated with any release or subordination of Liens pursuant to this Section 

 

 

 

 

  

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11.05, including all reasonable fees and disbursements of any attorneys or representatives acting for the Trustee or for the Collateral Agent.

 

(e)           Any release of Collateral in accordance with the provisions of this Indenture and the Security Documents will not be deemed to impair the security under this Indenture, and any officer, engineer or appraiser may rely on this Section 11.05(e) in delivering a certificate requesting release so long as all other provisions of this Indenture and the Trust Indenture Act with respect to such release have been complied with.

 

Section 11.06.  Permitted Ordinary Course Activities with Respect to Collateral. (a) So long as no Default or Event of Default under this Indenture would result therefrom (and so long as the activities below otherwise do not violate the provisions set forth in Article 4 or Article 11), the Company and the Guarantors may, without any release or consent by the Trustee or the Collateral Agent, conduct ordinary course activities with respect to Collateral, including, without limitation:

 

(i) making cash payments from cash that is at any time part of the Collateral in the ordinary course of business that are not otherwise prohibited by this Indenture;

 

(ii) abandoning, terminating, canceling, releasing or making alterations in or substitutions of any leases or contracts subject to the Lien on the Collateral;

 

(iii) surrendering or modifying any franchise, license or permit subject to the Lien on the Collateral which it may own or under which it may be operating;

 

(iv) altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances;

 

 (v) granting a license of any intellectual property;

 

 (vi) selling, transferring or otherwise disposing of inventory in the ordinary course of business;

 

 (vii) collecting accounts receivable in the ordinary course of business or selling, liquidating, factoring or otherwise disposing of accounts receivable in the ordinary course of business;

 

(viii) selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien on the Collateral which has become worn out, defective or obsolete or not used or useful in the business;

 

(ix) abandoning any intellectual property which is no longer used or useful in the Company’s business; and

 

 

 

 

 

  

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(x)           engage in any other release of any Collateral as to which release any Commission regulation or interpretation (including any no-action letter issued by the Staff of the Commission or exemption order issued by the Commission or pursuant to its delegated authority, whether issued to the Company or any other Person) provides that delivery of such opinions or certificates need not be made.

 

(b)           The Company and the Guarantors shall not be required to comply with the requirement to deliver certificates pursuant to Section 11.02(f) in respect of the release of Collateral or Liens as described in paragraph (a) of this Section and Section 11.05(a) (to the extent such release may be effected without action on the part of the Trustee); provided that the Company shall deliver to the Collateral Agent, within 30 calendar days following the end of each six-month period (with the second such six-month period being the end of each fiscal year), an Officers’ Certificate to the effect that all releases and withdrawals during the preceding six-month period (or since the Issue Date, in the case of the first such certificate) in connection with which no release or consent of the holders of the Notes or the Trustee or the Collateral Agent was obtained pursuant to this Section 11.06 were made in the ordinary course of the Company’s and the Guarantors’ business and such release and the use of proceeds in connection therewith were not prohibited by this Indenture.

 

 

ARTICLE 12

Miscellaneous

 

Section 12.01.  Trust Indenture Act of 1939.  The Indenture shall incorporate and be governed by the provisions of the Trust Indenture Act that are required to be part of and to govern indentures qualified under the Trust Indenture Act.

 

Section 12.02.  Noteholder Communications; Noteholder Actions.  (a) The rights of Holders to communicate with other Holders with respect to the Indenture or the Notes are as provided by the Trust Indenture Act, and the Company and the Trustee shall comply with the requirements of Trust Indenture Act Sections 312(a) and 312(b).  Neither the Company nor the Trustee will be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.

 

(b) (1)           Any request, demand, authorization, direction, notice, consent to amendment, supplement or waiver or other action provided by this Indenture to be given or taken by a Holder (an “act”) may be evidenced by an instrument signed by the Holder delivered to the Trustee.  The fact and date of the execution of the instrument, or the authority of the person executing it, may be proved in any manner that the Trustee deems sufficient.

 

 

 

 

 

  

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(2)         The Trustee may make reasonable rules for action by or at a meeting of Holders, which will be binding on all the Holders.

 

(c)           Any act by the Holder of any Note binds that Holder and every subsequent Holder of a Note that evidences the same debt as the Note of the acting Holder, even if no notation thereof appears on the Note.  Subject to paragraph (d), a Holder may revoke an act as to its Notes, but only if the Trustee receives the notice of revocation before the date the amendment or waiver or other consequence of the act becomes effective.

 

(d)           The Company may, but is not obligated to, fix a record date (which need not be within the time limits otherwise prescribed by Trust Indenture Act Section 316(c)) for the purpose of determining the Holders entitled to act with respect to any amendment or waiver or in any other regard, except that during the continuance of an Event of Default, only the Trustee may set a record date as to notices of default, any declaration or acceleration or any other remedies or other consequences of the Event of Default.   If a record date is fixed, those Persons that were Holders at such record date and only those Persons will be entitled to act, or to revoke any previous act, whether or not those Persons continue to be Holders after the record date.  No act will be valid or effective for more than 90 days after the record date.

 

Section 12.03.  Notices.  (a) Any notice or communication to the Company will be deemed given if in writing (i) when delivered in person or (ii) five days after mailing when mailed by first class mail, or (iii) when sent by facsimile transmission, with transmission confirmed.  Notices or communications to a Guarantor will be deemed given if given to the Company.  Any notice to the Trustee will be effective only upon receipt.  In each case the notice or communication should be addressed as follows:

 

if to the Company:

 

Harbinger Group Inc.

450 Park Avenue, 27th Floor, New York, NY 10022

Attention: Thomas A. Williams

Facsimile:  (212) 339-5801

 

if to the Trustee:

 

Wells Fargo Bank, National Association

625 Marquette Avenue, 11th Floor

MAC N9311-110

Minneapolis, MN 55470

Attention: Corporate Trust Services

Facsimile:  (612) 667-9825

 

 

 

 

  

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The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

 

(b)           Except as otherwise expressly provided with respect to published notices, any notice or communication to a Holder will be deemed given when mailed to the Holder at its address as it appears on the Register by first class mail or, as to any Global Note registered in the name of DTC or its nominee, as agreed by the Company, the Trustee and DTC.  Copies of any notice or communication to a Holder, if given by the Company, will be mailed to the Trustee at the same time.  Defect in mailing a notice or communication to any particular Holder will not affect its sufficiency with respect to other Holders.

 

(c)           Where the Indenture provides for notice, the notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and the waiver will be the equivalent of the notice.  Waivers of notice by Holders must be filed with the Trustee, but such filing is not a condition precedent to the validity of any action taken in reliance upon such waivers.

 

Section 12.04.  Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to take any action under the Indenture, the Company will furnish to the Trustee:

 

(1)         an Officers’ Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in the Indenture relating to the proposed action have been complied with; and

 

(2)         an Opinion of Counsel stating that all such conditions precedent have been complied with.

 

Section 12.05.  Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a condition or covenant provided for in the Indenture must include:

 

(1)         a statement that each person signing the certificate or opinion has read the covenant or condition and the related definitions;

 

(2)         a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinion contained in the certificate or opinion is based;

 

(3)         a statement that, in the opinion of each such person, that person has made such examination or investigation as is necessary to enable the person to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)         a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with, provided that 

 

 

 

 

 

  

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an Opinion of Counsel may rely on an Officers’ Certificate or certificates of public officials with respect to matters of fact.

 

Section 12.06.  Payment Date Other Than a Business Day.  If any payment with respect to a payment of any principal of, premium, if any, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

 

Section 12.07.  Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.  The Indenture, including any Note Guaranties, and the Notes shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws, principles thereof.  Each of the Company and any Guarantor irrevocably (i) agrees that any legal suit, action or proceeding against the Company or any Guarantor brought by any Holder arising out of or based upon this Indenture may be instituted in any United States federal court or New York State court located in the Borough of Manhattan in The City of New York (a “New York Court”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding and (iii) submits to the non-exclusive jurisdiction of a New York Court in any such suit, action or proceeding.  EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

 

Section 12.08.  No Adverse Interpretation of Other Agreements.  The Indenture may not be used to interpret another indenture or loan or debt agreement of the Company or any Subsidiary of the Company, and no such indenture or loan or debt agreement may be used to interpret the Indenture.

 

Section 12.09.  Successors.  All agreements of the Company or any Guarantor in the Indenture and the Notes will bind its successors.  All agreements of the Trustee in the Indenture will bind its successor.

 

Section 12.10.  Duplicate Originals.  The parties may sign any number of copies of the Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

 

 

 

 

  

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Section 12.11.  Separability.  In case any provision in the Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 12.12.  Table of Contents and Headings.  The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of the Indenture have been inserted for convenience of reference only, are not to be considered a part of the Indenture and in no way modify or restrict any of the terms and provisions of the Indenture.

 

Section 12.13.  No Liability of Directors, Officers, Employees, Incorporators, Members and Stockholders.  No director, officer, employee, incorporator, member, stockholder or controlling person of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or such Guarantor under the Notes, any Note Guaranty, the Indenture or the Security Documents 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.

 

Section 12.14.  U.S.A. Patriot Act.  The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee.  The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

 

Section 12.15.  Force Majeure.  In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

Section 12.16.  Benefits of Indenture.  Nothing in this Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors thereunder, any Paying Agent and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

 

 

 

 

 

  

100

  

 

Section 12.17.  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 function.

 

 

 

 

 

 

 

 

 

 

  

101

  

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties hereto have caused the Indenture to be duly executed as of the date first written above.

 

	 	
HARBINGER GROUP INC.

as Issuer

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	/s/ Ehsan Zargar	 
	 	 	Name: 	Ehsan Zargar	 
	 	 	Title: 	
Vice President, Counsel and 

Corporate Secretary

	 
	 	 	 	 	 

 

 

 

 

 

 

  

102

  

 

 

	 	
WELLS FARGO BANK, NATIONAL 

ASSOCIATION

as Trustee

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	/s/ Richard Prokosch	 
	 	 	Name: 	Richard Prokosch	 
	 	 	Title: 	
Vice President

	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT A

 

[FACE OF NOTE]

 

HARBINGER GROUP INC.

 

7.875% Senior Secured Note due 2019

 

 

	 	
[CUSIP]  [CINS] _______________

 

	No. 	 $_______________

 

 

Harbinger Group Inc., a Delaware corporation (the “Company”, which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to ____________________, or its registered assigns, the principal sum of ____________ DOLLARS ($______) [or such other amount as indicated on the Schedule of Exchange of Notes attached hereto] on July 15, 2019; provided, however, that unless the Company shall have redeemed, repurchased, otherwise retired or converted into the Company’s common stock, all of the then outstanding Existing Preferred Stock on or prior to May 13, 2018 in accordance with the terms of the applicable Certificate of Designations of each series of the Existing Preferred Stock, then the Company promises to pay such principal sum of ____________ DOLLARS ($______) on May 13, 2018.

 

[Initial]1 Interest Rate:  7.875% per annum.

 

Interest Payment Dates:  January 15 and July 15, commencing July 15, 2013.

 

Regular Record Dates:  January 1 and July 1.

 

Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which will for all purposes have the same effect as if set forth at this place.

 

 

 

 

 

 

___________________________

1For Initial Notes or Initial Additional Notes only.

 

 

 

 

 

  

  

  

 

IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers.

 

	Date:	
HARBINGER GROUP INC.

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

(Form of Trustee’s Certificate of Authentication)

 

This is one of the 7.875% Senior Secured Notes due 2019 described in the Indenture referred to in this Note.

 

Dated:

 

	 	
WELLS FARGO BANK, NATIONAL 

       ASSOCIATION, as Trustee

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
Authorized Signatory

	 
	 	 	 	 	 
	 	 	 	 	 

 

 

 

 

 

 

 

  

  

  

 

[REVERSE SIDE OF NOTE]

 

HARBINGER GROUP INC.

 

7.875% Senior Secured Note due 2019

 

1.             Principal and Interest.

 

The Company promises to pay the principal of this Note on July 15, 2019; provided, however, that unless the Company shall have redeemed, repurchased, otherwise retired or converted into the Company’s common stock, all of the then outstanding Existing Preferred Stock on or prior to May 13, 2018 in accordance with the terms of the applicable Certificate of Designations of each series of the Existing Preferred Stock, then the Company promises to pay the principal of this Note on May 13, 2018.

 

The Company promises to pay interest on the principal amount of this Note on each interest payment date, as set forth on the face of this Note, at the rate of 7.875% per annum [(subject to adjustment as provided below)]. 1

 

Interest will be payable semiannually (to the holders of record of the Notes at the close of business on the January 1 or July 1 immediately preceding the interest payment date) on each interest payment date, commencing July 15, 2013.

 

 [The Holder of this Note is entitled to the benefits of the Registration Rights Agreement, dated December 24, 2012, between the Company and the Initial Purchasers named therein (the “Registration Rights Agreement”), including the right to receive Additional Interest (as defined in the Registration Rights Agreement).]2

 

Interest on this Note will accrue from the most recent date to which interest has been paid on this Note [or the Note surrendered in exchange for this Note]3 (or, if there is no existing default in the payment of interest and if this Note is authenticated between a regular record date and the next interest payment date, from such interest payment date) or, if no interest has been paid, from [the Issue Date].4  Interest will be computed in the basis of a 360-day year of twelve 30-day months.

 

 

___________________________

1Include only for Initial Note or Initial Additional Note.

  

2Include only for Initial Note or Initial Additional Note; conform to Registration Rights Agreement.

 

3Include only for Exchange Note.

 

4For Additional Notes, should be the date of their original issue.

 

 

 

  

  

  

 

The Company will pay interest on overdue principal, premium, if any, and, to the extent lawful, interest at a rate per annum that is 1.0% in excess of 7.875%.  Interest not paid when due and any interest on principal, premium or interest not paid when due will be paid to the Persons that are Holders on a special record date, which will be the 15th day preceding the date fixed by the Company for the payment of such interest, whether or not such day is a Business Day.  At least 15 days before a special record date, the Company will send to each Holder and to the Trustee a notice that sets forth the special record date, the payment date and the amount of interest to be paid.

 

2.             Indentures; Security

 

This is one of the Notes issued under an Indenture dated as of December 24, 2012 (as amended from time to time, the “Indenture”), between the Company and Wells Fargo Bank, National Association, as Trustee.  Capitalized terms used herein are used as defined in the Indenture unless otherwise indicated.  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.  The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms.  To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture will control.

 

The Notes are senior secured obligations of the Company, secured by Liens on the Collateral pursuant to the Security Documents.  The Indenture limits the original aggregate principal amount of the Notes to $700,000,000, but Additional Notes may be issued pursuant to the Indenture, and the originally issued Notes and all such Additional Notes vote together for all purposes as a single class.

 

 3.           Redemption and Repurchase; Discharge Prior to Redemption or Maturity.

 

This Note is subject to optional redemption, and may be the subject of an Offer to Purchase, as further described in the Indenture.  There is no sinking fund or mandatory redemption applicable to this Note.

 

If the Company deposits with the Trustee money or U.S. Government Obligations sufficient to pay the then outstanding principal of, premium, if any, and accrued interest on the Notes to redemption or maturity, the Company may in certain circumstances be discharged from the Indenture, the Notes and the Security Documents or may be discharged from certain of its obligations under certain provisions of the Indenture.

 

4.            Registered Form; Denominations; Transfer; Exchange.

 

 

 

 

  

  

  

 

The Notes are in registered form without coupons in denominations of $2,000 principal amount and any multiple of $1,000 in excess thereof. A Holder may register the transfer or exchange of Notes in accordance with the Indenture.  The Trustee may require a Holder to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture.  Pursuant to the Indenture, there are certain periods during which the Trustee will not be required to issue, register the transfer of or exchange any Note or certain portions of a Note.

 

5.             Defaults and Remedies.

 

If an Event of Default, as defined in the Indenture, occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Notes may declare all the Notes to be due and payable.  If a bankruptcy or insolvency default with respect to the Company occurs and is continuing, the Notes automatically become due and payable.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Notes.  Subject to certain limitations, Holders of a majority in principal amount of the Notes then outstanding may direct the Trustee in its exercise of remedies.

 

6.             Amendment and Waiver.

 

Subject to certain exceptions, the Indenture, the Notes and the Security Documents may be amended, or default may be waived, with the consent of the Holders of a majority in principal amount of the outstanding Notes.  Without notice to or the consent of any Holder, the Company and the Trustee (and, in the case of the Security Documents, the Collateral Agent) may amend or supplement the Indenture or the Notes to, among other things, cure any ambiguity, defect or inconsistency if such amendment or supplement does not adversely affect the interests of the Holders in any material respect.

 

7.             Authentication.

 

This Note is not valid until the Trustee (or Authenticating Agent) signs the certificate of authentication on the other side of this Note.

 

8.             Governing Law.

 

This Note shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of law principles thereof.

 

9.             Abbreviations.

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the 

 

 

 

 

  

  

  

 

entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

 

The Company will furnish a copy of the Indenture to any Holder upon written request and without charge.

 

 

 

 

 

 

 

  

  

  

 

[FORM OF TRANSFER NOTICE]

 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto

 

	
Insert Taxpayer Identification No.

 

	  
	  
	
Please print or typewrite name and address including zip code of assignee

	 
	 
	  
	
the within Note and all rights thereunder, hereby irrevocably constituting and appointing

	  

attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

 

 

 

 

 

 

 

 

 

  

  

  

 

[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL CERTIFICATES BEARING A RESTRICTED LEGEND]

 

In connection with any transfer of this Note occurring prior to ______________, the undersigned confirms that such transfer is made without utilizing any general solicitation or general advertising and further as follows:

 

Check One

 

o           (1) This Note is being transferred to a “qualified institutional buyer” in compliance with Rule 144A under the Securities Act of 1933, as amended and certification in the form of Exhibit F to the Indenture is being furnished herewith.

 

o           (2) This Note is being transferred to a Non-U.S. Person in compliance with the exemption from registration under the Securities Act of 1933, as amended, provided by Regulation S thereunder, and certification in the form of Exhibit E to the Indenture is being furnished herewith.

 

or

 

o           (3) This Note is being transferred other than in accordance with (1) or (2) above and documents are being furnished which comply with the conditions of transfer set forth in this Note and the Indenture.

 

If none of the foregoing boxes is checked, the Trustee is not obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in the Indenture have been satisfied.

 

	
Date:

	
 

	 	 	 
	 	 	 	 	 
	 	 	 	
Seller

	 

 

	
 

	
By 

	 	 

 

	 	 	
NOTICE:  The signature to this assignment must correspond with the name as written upon the face of the within-mentioned instrument in every particular, without alteration or any change whatsoever.

	 	 	 

 

 

 

 

 

 

  

  

  

 

	
Signature Guarantee:5      

	  	 

 

 

	
By

	  	 
	
To be executed by an executive officer

	 

 

 

 

 

 

 

 

 

 

 

___________________________

5Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

 

 

  

  

  

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you wish to have all of this Note purchased by the Company pursuant to Section 4.11 or Section 4.12 of the Indenture, check the box: o

 

If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.11 or Section 4.12 of the Indenture, state the amount (in original principal amount) below:

 

$_____________________.

 

Date:____________

 

Your Signature:__________________________

 

(Sign exactly as your name appears on the other side of this Note)

 

Signature Guarantee:1_____________________________

 

 

 

 

 

 

 

 

 

 

___________________________

1Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Trustee, which requirements include membership or participation in the Securities Transfer Association Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Trustee in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

 

 

  

  

  

 

SCHEDULE OF EXCHANGES OF NOTES1

 

The following exchanges of a part of this Global Note for Certificated Notes or a part of another Global Note have been made:

 

	

Date of Exchange

	 	

Amount of decrease

in principal amount

of this Global Note

	 	

Amount of increase

in principal amount

of this Global Note

	 	

Principal amount of

this Global Note

following such

decrease (or

increase)

	 	

Signature of

authorized signatory of

Trustee

	  	 	  	 	  	 	  	 	  
	  	 	  	 	  	 	  	 	  

 

 

 

 

 

 

 

 

 

 

___________________________

1For Global Notes

 

 

 

  

  

  

 

EXHIBIT B

 

SUPPLEMENTAL INDENTURE

dated as of __________, ____

among

HARBINGER GROUP INC.,

The Guarantor(s) Party Hereto

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

 

 

7.875%

Senior Secured Notes due

2019

 

 

 

 

  

  

  

 

 

THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), entered into as of __________, ____, among Harbinger Group Inc., a Delaware corporation (the “Company”), [insert each Guarantor executing this Supplemental Indenture and its jurisdiction of incorporation] (each an “Undersigned”) and Wells Fargo Bank, National Association, as trustee (the “Trustee”).

 

RECITALS

 

WHEREAS, the Company and the Trustee entered into the Indenture, dated as of December 24, 2012 (the “Indenture”), relating to the Company’s 7.875% Senior Secured Notes due 2019  (the “Notes”);

 

WHEREAS, as a condition to the Trustee entering into the Indenture and the purchase of the Notes by the Holders, the Company agreed pursuant to the Indenture to cause its Subsidiaries to provide Guaranties in certain circumstances.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and intending to be legally bound, the parties to this Supplemental Indenture hereby agree as follows:

 

Section 1.  Capitalized terms used herein and not otherwise defined herein are used as defined in the Indenture.

 

Section 2.  Each Undersigned, by its execution of this Supplemental Indenture, agrees to be a Guarantor under the Indenture and to be bound by the terms of the Indenture applicable to Guarantors, including, but not limited to, Article 10 thereof.

 

Section 3.  This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York without regard to applicable conflicts of laws principles thereof.

 

Section 4.  This Supplemental Indenture may be signed in various counterparts which together will constitute one and the same instrument.

 

Section 5.  This Supplemental Indenture is an amendment supplemental to the Indenture and the Indenture and this Supplemental Indenture will henceforth be read together.

 

 

 

 

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

 

 

	 	

HARBINGER GROUP INC., as Issuer

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 	 

 

 

	 	

[GUARANTOR]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 	 

 

 

	 	

WELLS FARGO BANK, NATIONAL 

      ASSOCIATION, as Trustee

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	 	 	 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT C

 

RESTRICTED LEGEND

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER

 

(1)           REPRESENTS THAT

 

(A)         IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,

 

(B)         IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN “INSTITUTIONAL ACCREDITED INVESTOR”) OR

 

(C)         IT IS NOT A U.S. PERSON (WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT) AND

 

(2)           AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS NOTE OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY

 

(A)         TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,

 

(B)         PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT,

 

(C)         TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,

 

(D)         IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,

 

(E)         IN A PRINCIPAL AMOUNT OF NOT LESS THAN $250,000 TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, 

 

 

 

  

  

  

 

PRIOR TO SUCH TRANSFER, DELIVERS TO THE TRUSTEE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE, OR

 

(F) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE.  PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(E) OR (F) ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.  NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY RULE 144 EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT D

 

DTC LEGEND

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

 

[TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.]

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT E

 

Regulation S Certificate

 

_________, ____

 

Wells Fargo Bank – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

	 	
Re:

	
Harbinger Group Inc.

7.875% Senior Secured

Notes due 2019 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of December 24, 2012 relating to the Notes

 

Ladies and Gentlemen:

 

Terms are used in this Certificate as used in Regulation S (“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”), except as otherwise stated herein.

 

[CHECK A OR B AS APPLICABLE.]

 

	o	
A.

	
This Certificate relates to our proposed transfer of $____ principal amount of Notes issued under the Indenture.  We hereby certify as follows:

 

	
  

	
1.

	
The offer and sale of the Notes was not and will not be made to a person in the United States (unless such person is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is acting is excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such offer and sale was not and will not be specifically targeted at an identifiable group of U.S. citizens abroad.

 

	
  

	
2.

	
Unless the circumstances described in the parenthetical in paragraph 1 above are applicable, either (a) at the time the buy order was originated, the buyer was outside the United States or we and any person acting on our behalf reasonably

 

 

 

  

  

  

 

	
  

	
 

	
believed that the buyer was outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market, and neither we nor any person acting on our behalf knows that the transaction was pre-arranged with a buyer in the United States.

 

	
  

	
3.

	
Neither we, any of our affiliates, nor any person acting on our or their behalf has made any directed selling efforts in the United States with respect to the Notes.

 

	
  

	
4.

	
The proposed transfer of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

	
  

	
5.

	
If we are a dealer or a person receiving a selling concession, fee or other remuneration in respect of the Notes, and the proposed transfer takes place during the Restricted Period (as defined in the Indenture), or we are an officer or director of the Company or an Initial Purchaser (as defined in the Indenture), we certify that the proposed transfer is being made in accordance with the provisions of Rule 904(b) of Regulation S.

 

	o	
B.

	
This Certificate relates to our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.  We hereby certify as follows:

 

	
  

	
1.

	
At the time the offer and sale of the Notes was made to us, either (i) we were not in the United States or (ii) we were excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which we were acting was excluded from the definition of “U.S. person” pursuant to Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we were not a member of an identifiable group of U.S. citizens abroad.

 

	
  

	
2.

	
Unless the circumstances described in paragraph 1(ii) above are applicable, either (a) at the time our buy order was originated, we were outside the United States or (b) the transaction was executed in, on or through the facilities of a designated offshore securities market and we did not pre-arrange the transaction in the United States.

 

	
  

	
3.

	
The proposed exchange of Notes is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

 

 

 

 

 

  

  

  

 

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

 

	 	
Very truly yours,

	 
	 	 	 
	 	

[NAME OF SELLER (FOR TRANSFERS) 

     OR OWNER (FOR EXCHANGES)]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	
Address:

	 	 

 

 

Date: _________________

 

 

 

 

 

  

  

  

 

EXHIBIT F

 

Rule 144A Certificate

 

_________, ____

 

Wells Fargo Bank – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

	 	
Re:

	
Harbinger Group Inc.

7.875% Senior Secured

Notes due 2019 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of December 24, 2012 relating to the Notes

 

Ladies and Gentlemen:

 

TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.

 

This Certificate relates to:

 

[CHECK A OR B AS APPLICABLE.]

 

	o	
A.

	
Our proposed purchase of $____ principal amount of Notes issued under the Indenture.

 

	o	
B.

	
Our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

 

We and, if applicable, each account for which we are acting in the aggregate owned and invested more than $100,000,000 in securities of issuers that are not affiliated with us (or such accounts, if applicable), as of _________, 20__, which is a date on or since close of our most recent fiscal year.   We and, if applicable, each account for which we are acting, are a qualified institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”).  If we are acting on behalf of an account, we exercise sole investment discretion with respect to such account. We are aware that the transfer of Notes to us, or such exchange, as applicable, is being made in reliance upon the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.  Prior to the date of this Certificate we 

 

 

 

 

  

  

  

 

have received such information regarding the Company as we have requested pursuant to Rule 144A(d)(4) or have determined not to request such information.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

 

	 	
Very truly yours,

	 
	 	 	 
	 	

[NAME OF PURCHASER (FOR 

       TRANSFERS) OR OWNER (FOR 

        EXCHANGES)]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	
Address:

	 	 

 

 

Date: _________________

 

 

 

 

 

 

  

  

  

EXHIBIT G

 

Institutional Accredited Investor Certificate

 

Wells Fargo Bank – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

 

 

	 	
Re:

	
Harbinger Group Inc.

7.875% Senior Secured

Notes due 2019 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of December 24, 2012 relating to the Notes

 

Ladies and Gentlemen:

 

This Certificate relates to:

 

[CHECK A OR B AS APPLICABLE.]

 

	o	
A.

	
Our proposed purchase of $____ principal amount of Notes issued under the Indenture.

 

	o	
B.

	
Our proposed exchange of $____ principal amount of Notes issued under the Indenture for an equal principal amount of Notes to be held by us.

 

We hereby confirm that:

 

	
  

	
1.

	
We are an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the “Securities Act”) (an “Institutional Accredited Investor”).

 

	
  

	
2.

	
Any acquisition of Notes by us will be for our own account or for the account of one or more other Institutional Accredited Investors as to which we exercise sole investment discretion.

 

	
  

	
3.

	
We have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of an investment in the Notes and we and any accounts for which we are acting are able to bear the economic risks of and an entire loss of our or their investment in the Notes.

 

 

 

  

  

  

 

	
  

	
4.

	
We are not acquiring the Notes with a view to any distribution thereof in a transaction that would violate the Securities Act or the securities laws of any State of the United States or any other applicable jurisdiction; provided that the disposition of our property and the property of any accounts for which we are acting as fiduciary will remain at all times within our and their control.

 

	
  

	
5.

	
We acknowledge that the Notes have not been registered under the Securities Act and that the Notes may not be offered or sold within the United States or to or for the benefit of U.S. persons except as set forth below.

 

	
  

	
6.

	
The principal amount of Notes to which this Certificate relates is at least equal to $250,000.

 

We agree for the benefit of the Company, on our own behalf and on behalf of each account for which we are acting, that such Notes may be offered, sold, pledged or otherwise transferred only in accordance with the Securities Act and any applicable securities laws of any State of the United States and only (a) to the Company or any of its Subsidiaries, (b) pursuant to a registration statement which has become effective under the Securities Act, (c) to a qualified institutional buyer in compliance with Rule 144A under the Securities Act, (d) in an offshore transaction in compliance with Rule 904 of Regulation S under the Securities Act, (e) in a principal amount of not less than $250,000, to an Institutional Accredited Investor that, prior to such transfer, delivers to the Trustee a duly completed and signed certificate (the form of which may be obtained from the Trustee) relating to the restrictions on transfer of the Notes or (f) pursuant to an exemption from registration provided by Rule 144 under the Securities Act or any other available exemption from the registration requirements of the Securities Act.

 

Prior to the registration of any transfer in accordance with (c) or (d) above, we acknowledge that a duly completed and signed certificate (the form of which may be obtained from the Trustee) must be delivered to the Trustee.  Prior to the registration of any transfer in accordance with (e) or (f) above, we acknowledge that the Company reserves the right to require the delivery of such legal opinions, certifications or other evidence as may reasonably be required in order to determine that the proposed transfer is being made in compliance with the Securities Act and applicable state securities laws.  We acknowledge that no representation is made as to the availability of any Rule 144 exemption from the registration requirements of the Securities Act.

 

We understand that the Trustee will not be required to accept for registration of transfer any Notes acquired by us, except upon presentation of evidence satisfactory to the Company and the Trustee that the foregoing restrictions on transfer have been complied with.  We further understand that the Notes acquired by us will be in the form of definitive physical certificates and that such certificates will bear a legend reflecting the substance of the preceding 

 

 

 

 

 

  

  

  

 

paragraph.  We further agree to provide to any person acquiring any of the Notes from us a notice advising such person that resales of the Notes are restricted as stated herein and that certificates representing the Notes will bear a legend to that effect.

 

We agree to notify you promptly in writing if any of our acknowledgments, representations or agreements herein ceases to be accurate and complete.

 

We represent to you that we have full power to make the foregoing acknowledgments, representations and agreements on our own behalf and on behalf of any account for which we are acting.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

	 	
Very truly yours,

	 
	 	 	 
	 	

[NAME OF PURCHASER (FOR 

       TRANSFERS) OR OWNER (FOR 

        EXCHANGES)]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	
Address:

	 	 

 

 

Date: _________________

 

 

 

 

 

  

  

  

 

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

 

By:  _________________________________

 

Date:  ________________________________

 

Taxpayer ID number:  ___________________

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT H

 

[COMPLETE FORM I OR FORM II AS APPLICABLE.]

 

[FORM I]

 

Certificate of Beneficial Ownership

 

	
To:

	
Wells Fargo Bank – DAPS Reorg.

	
  

	
MACN 9303-121

	
  

	
608 2nd Avenue South

	
  

	
Minneapolis, MN 55479

	
  

	
Telephone No.: (877) 872-4605

	
  

	
Fax No.: (866) 969-1290

	
  

	
Email: DAPSReorg@wellsfargo.com OR

 

[Name of DTC Participant]]

 

	 	
Re:

	
Harbinger Group Inc.

7.875% Senior Secured

Notes due 2019 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of December 24, 2012 relating to the Notes

 

Ladies and Gentlemen:

 

We are the beneficial owner of $____ principal amount of Notes issued under the Indenture and represented by a Temporary Offshore Global Note (as defined in the Indenture).

 

We hereby certify as follows:

 

[CHECK A OR B AS APPLICABLE.]

 

	o	
A.

	
We are a non-U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended).

 

	o	
B.

	
We are a U.S. person (within the meaning of Regulation S under the Securities Act of 1933, as amended) that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

 

 

  

  

  

 

	 	
Very truly yours,

	 
	 	 	 
	 	

[NAME OF BENEFICIAL OWNER]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	
Address:

	 	 

 

 

Date: _________________

 

 

 

 

 

 

 

 

  

  

  

 

[FORM II]

 

Certificate f Beneficial Ownership

 

	
To:

	
Wells Fargo Bank – DAPS Reorg.

MAC N9303-121

608 2nd Avenue South

Minneapolis, MN 55479

Telephone No.: (877) 872-4605

Fax No.: (866) 969-1290

Email: DAPSReorg@wellsfargo.com

	 	 
	
Re:

	
Harbinger Group Inc.

7.875% Senior Secured

Notes due 2019 (the “Notes”)

Issued under the Indenture (the “Indenture”) dated

as of December 24, 2012 relating to the Notes

Ladies and Gentlemen:

 

This is to certify that based solely on certifications we have received in writing, by tested telex or by electronic transmission from Institutions appearing in our records as persons being entitled to a portion of the principal amount of Notes represented by a Temporary Offshore Global Note issued under the above-referenced Indenture, that as of the date hereof, $____ principal amount of Notes represented by the Temporary Offshore Global Note being submitted herewith for exchange is beneficially owned by persons that are either (i) non-U.S. persons (within the meaning of Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons that purchased the Notes in a transaction that did not require registration under the Securities Act of 1933, as amended.

 

We further certify that (i) we are not submitting herewith for exchange any portion of such Temporary Offshore Global Note excepted in such certifications and (ii) as of the date hereof we have not received any notification from any Institution to the effect that the statements made by such Institution with respect to any portion of such Temporary Offshore Global Note submitted herewith for exchange are no longer true and cannot be relied upon as of the date hereof.

 

You and the Company are entitled to rely upon this Certificate and are irrevocably authorized to produce this Certificate or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.

 

	 	

Yours faithfully,

	 
	 	 	 
	 	

[Name of DTC Participant]

	 
	 	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 	 
	 	 	Title: 	 	 
	 	 	
Address:

	 	 

 

 

Date: _________________

 

 

 

 

  

  

  

 

EXHIBIT I

 

THIS NOTE IS A TEMPORARY GLOBAL NOTE.  PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.

 

NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNTIL SUCH BENEFICIAL INTEREST IS EXCHANGED OR TRANSFERRED FOR AN INTEREST IN ANOTHER NOTE

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