Exhibit 4.2
HMH PROPERTIES, INC.,
Issuer,
and
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
MARINE MIDLAND BANK,
Trustee
AMENDED AND RESTATED INDENTURE
Dated as of July 10, 1997
$600,000,000
9 1/2% Senior Secured Notes due 2005
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE....................................................1
SECTION 1.1. Definitions..........................................................................1
SECTION 1.2. Incorporation By Reference of TIA...................................................19
SECTION 1.3. Rules of Construction...............................................................19
ARTICLE II. THE SECURITIES...............................................................................20
SECTION 2.1. Form and Dating.....................................................................20
SECTION 2.2. Execution and Authentication........................................................20
SECTION 2.3. Registrar and Paying Agent..........................................................21
SECTION 2.4. Paying Agent to Hold Assets in Trust................................................21
SECTION 2.5. Securityholder Lists................................................................21
SECTION 2.6. Transfer and Exchange...............................................................22
SECTION 2.7. Replacement Securities..............................................................26
SECTION 2.8. Outstanding Securities..............................................................27
SECTION 2.9. Treasury Securities.................................................................27
SECTION 2.10. Temporary Securities................................................................27
SECTION 2.11. Cancellation........................................................................27
SECTION 2.12. Defaulted Interest..................................................................27
ARTICLE III. REDEMPTION...................................................................................28
SECTION 3.1. Optional Redemption.................................................................28
SECTION 3.2. Notices to Trustee and Paying Agent.................................................28
SECTION 3.3. Selection of Securities to Be Redeemed..............................................29
SECTION 3.4. Notice of Redemption................................................................29
SECTION 3.5. Effect of Notice of Redemption......................................................30
SECTION 3.6. Deposit of Redemption Price.........................................................30
SECTION 3.7. Securities Redeemed in Part.........................................................30
ARTICLE IV. COVENANTS....................................................................................31
SECTION 4.1. Payment of Securities...............................................................31
SECTION 4.2. Maintenance of Office or Agency.....................................................31
SECTION 4.3. Limitation on Restricted Payments...................................................31
SECTION 4.4. Corporate Existence.................................................................32
SECTION 4.5. Payment of Taxes and Other Claims...................................................32
SECTION 4.6. Maintenance of Properties and Insurance.............................................32
SECTION 4.7. Compliance Certificate; Notice of Default...........................................33
SECTION 4.8. Reports.............................................................................33
SECTION 4.9. Limitation on Status as Investment Company..........................................33
SECTION 4.10. Limitation on Transactions with Affiliates..........................................33
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and Disqualified Capital Stock..34
SECTION 4.12. Limitations on Dividends and other Payment Restrictions Affecting Subsidiaries......35
SECTION 4.13. Limitations on Liens................................................................35
SECTION 4.14. Limitation on Sale of Assets and Subsidiary Stock...................................35
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.............................................38
SECTION 4.16. Limitation on Investments in Non-Guarantor Subsidiaries.............................38
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ARTICLE V. SUCCESSOR CORPORATION........................................................................39
SECTION 5.1. Limitation on Merger, Sale or Consolidation.........................................39
SECTION 5.2. Successor Corporation Substituted...................................................39
ARTICLE VI. EVENTS OF DEFAULT AND REMEDIES...............................................................39
SECTION 6.1. Events of Default...................................................................39
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.............................41
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee.....................42
SECTION 6.4. Trustee May File Proofs of Claim....................................................42
SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities.........................43
SECTION 6.6. Priorities..........................................................................43
SECTION 6.7. Limitation on Suits.................................................................43
SECTION 6.8. Unconditional Right of Holders to Receive Principal, Premium and Interest...........44
SECTION 6.9. Rights and Remedies Cumulative......................................................44
SECTION 6.10. Delay or Omission Not Waiver........................................................44
SECTION 6.11. Control by Holders..................................................................44
SECTION 6.12. Waiver of Past Default..............................................................45
SECTION 6.13. Undertaking for Costs...............................................................45
SECTION 6.14. Restoration of Rights and Remedies..................................................45
ARTICLE VII. TRUSTEE......................................................................................45
SECTION 7.1. Duties of Trustee...................................................................46
SECTION 7.2. Rights of Trustee...................................................................46
SECTION 7.3. Individual Rights of Trustee........................................................47
SECTION 7.4. Trustee's Disclaimer................................................................47
SECTION 7.5. Notice of Default...................................................................48
SECTION 7.6. Reports by Trustee to Holders.......................................................48
SECTION 7.7. Compensation and Indemnity..........................................................48
SECTION 7.8. Replacement of Trustee..............................................................49
SECTION 7.9. Successor Trustee by Merger, Etc....................................................49
SECTION 7.10. Eligibility; Disqualification.......................................................50
SECTION 7.11. Preferential Collection of Claims Against Company...................................50
ARTICLE VIII. LEGAL DEFEASANCE AND COVENANT DEFEASANCE.....................................................50
SECTION 8.1. Option to Effect Legal Defeasance or Covenant Defeasance............................50
SECTION 8.2. Legal Defeasance and Discharge......................................................50
SECTION 8.3. Covenant Defeasance.................................................................50
SECTION 8.4. Conditions to Legal or Covenant Defeasance..........................................51
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions..........................................................52
SECTION 8.6. Repayment to the Company............................................................52
SECTION 8.7. Reinstatement.......................................................................52
ARTICLE IX. AMENDMENTS, SUPPLEMENTS AND WAIVERS..........................................................53
SECTION 9.1. Supplemental Indentures Without Consent of Holders..................................53
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with Consent of Holders.............53
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SECTION 9.3. Compliance with TIA.................................................................54
SECTION 9.4. Revocation and Effect of Consents...................................................55
SECTION 9.5. Notation on or Exchange of Securities...............................................55
SECTION 9.6. Trustee to Sign Amendments, Etc.....................................................55
ARTICLE X. RESERVED.....................................................................................56
ARTICLE XI. RIGHT TO REQUIRE REPURCHASE..................................................................56
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon a Change of Control...........56
ARTICLE XII. SECURITY.....................................................................................58
SECTION 12.1. Pledge of the Pledged Shares........................................................58
SECTION 12.2. Delivery of Pledged Shares and Subsequent Changes Affecting the Pledged Shares......59
SECTION 12.3. Supplements, Further Assurances.....................................................60
SECTION 12.4. Voting Rights; Dividends; Etc.......................................................60
SECTION 12.5. Collateral Agent Appointed Attorney-In-Fact.........................................61
SECTION 12.6. Collateral Agent May Perform........................................................62
SECTION 12.7. Reasonable Care.....................................................................62
SECTION 12.8. Remedies Upon Default; Decisions Relating to Exercise of Remedies; Limitations on
Exercise of Remedies..............................................................62
SECTION 12.9. Application of Proceeds.............................................................64
SECTION 12.10. Recording, Etc......................................................................64
SECTION 12.11. Termination.........................................................................65
SECTION 12.12. Continuing Security Interest........................................................65
SECTION 12.13. The Collateral Agent................................................................65
SECTION 12.14. Agreement With Collateral Agent.....................................................68
SECTION 12.15. Modifications at Such Time as any Permitted Lien Indebtedness Ceases to be
Outstanding.......................................................................68
ARTICLE XIII. GUARANTY.....................................................................................68
SECTION 13.1. Guaranty............................................................................68
SECTION 13.2. Execution and Delivery of Guaranty..................................................70
SECTION 13.3. Future Subsidiary Guarantors........................................................70
SECTION 13.4. Subsidiary Guarantor May Consolidate, Etc., on Certain Terms........................70
SECTION 13.5. Release of Subsidiary Guarantors and Collateral.....................................71
SECTION 13.6. Certain Bankruptcy Events...........................................................72
ARTICLE XIV. MISCELLANEOUS................................................................................72
SECTION 14.1. TIA Controls........................................................................72
SECTION 14.2. Notices.............................................................................72
SECTION 14.3. Communications by Holders with Other Holders........................................73
SECTION 14.4. Certificate and Opinion as to Conditions Precedent..................................73
SECTION 14.5. Statements Required in Certificate or Opinion.......................................74
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar...........................................74
SECTION 14.7. Non-Business Days...................................................................74
SECTION 14.8. Governing Law.......................................................................74
SECTION 14.9. No Adverse Interpretation of Other Agreements.......................................75
SECTION 14.10. No Recourse against Others..........................................................75
SECTION 14.11. Successors..........................................................................75
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SECTION 14.12. Duplicate Originals.................................................................75
SECTION 14.13. Severability........................................................................75
SECTION 14.14. Table of Contents, Headings, Etc....................................................75
SECTION 14.15. Qualification of Indenture..........................................................75
SECTION 14.16. Registration Rights.................................................................75
SIGNATURES .............................................................................................76
EXHIBIT A ............................................................................................A-1
iv
This AMENDED AND RESTATED INDENTURE, dated as of July 10, 1997, by and
among HMH Properties, Inc., a Delaware corporation (the "Company"), the
Subsidiary Guarantors referred to below and Marine Midland Bank, as Trustee.
WHEREAS, the Company, such Subsidiary Guarantors and the Trustee entered
into that certain Indenture dated as of May 25, 1995, as amended by that certain
First Supplemental Indenture dated as of October 20, 1995 and that certain
Second Supplemental Indenture dated as of June 6, 1997 and wish further to amend
and restate such Indenture to the extent set forth herein.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the Company's 9 1/2% Series
A Senior Secured Notes due 2005 and the Company's 9 1/2% Series B Senior Secured
Notes due 2005 exchanged for the 9 1/2% Series A Senior Secured Notes due 2005:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
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"Acceptance Amount" shall have the meaning specified in Section 4.14.
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"Acquired Indebtedness" means Indebtedness of any person existing at the
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time such person becomes a Subsidiary of the Company or is merged or
consolidated into or with the Company or one of its Subsidiaries or the assets
of such person shall have been acquired by the Company or a Subsidiary of the
Company, and not incurred in connection with or in anticipation of, such merger
or consolidation or of such person becoming a Subsidiary of the Company, or such
assets being acquired by the Company or a Subsidiary of the Company.
"Acquisition" means the purchase or other acquisition of any
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person or substantially all the assets of any person by any other person,
whether by purchase, merger, consolidation, or other transfer, and whether or
not for consideration.
"Acquisitions" means HMC Acquisition Properties, Inc., a Delaware
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corporation and an indirect subsidiary of Host Marriott Corporation.
"Acquisitions Issue Date" means the date of first issuance of the
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Acquisitions Notes under the Acquisitions Indenture.
"Acquisitions Indenture" means the Indenture dated as of December 20, 1995
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among Acquisitions, the Initial Guarantor named therein and Marine Midland Bank,
as trustee, pursuant to which Acquisitions issued the Acquisitions Notes, as
amended and restated.
"Acquisitions Notes" means the 9% Senior Notes due 2007 of Acquisitions,
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which will become the principal obligation of the Company upon consummation of
the Merger.
"Affiliate" means any person directly or indirectly controlling or
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controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise; provided, that a beneficial owner of 10% or more of the total
voting power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"Affiliate Transaction" shall have the meaning specified in Section 4.10.
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1
"Agent" means any authenticating agent, Registrar, Paying
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Agent or transfer agent.
"Agreement With Collateral Agent" shall have the meaning
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specified in Section 12.14.
"Amendment Date" means the date upon which the amendments
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effected by that certain Supplemental Indenture dated July 10, 1997 by and among
the Company, the Subsidiary Guarantors and the Trustee modifying the terms of
the Indenture became operative.
"Applicable Percentage" means (i) 15% for the 12 month period
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commencing on the Amendment Date, and (ii) 20% thereafter.
"Asset Sale" shall have the meaning specified in Section 4.14.
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"Asset Sale Offer" shall have the meaning specified in Section
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4.14.
"Average Life" means, as of the date of determination, with
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respect to any security or instrument, the quotient obtained by dividing (i) the
sum of the products obtained by multiplying (a) the number of years from the
date of determination to the date of each successive scheduled principal (or
redemption) payment of such security or instrument times (b) the amount of such
respective principal (or redemption) payment, by (ii) the sum of all such
principal (or redemption) payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
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Federal, state or foreign law for the relief of debtors.
"Beneficial Owner" or "beneficial ownership" for purposes of
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the definition of Change of Control has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether
or not applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time.
"Board of Directors" means, with respect to any Person, the
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Board of Directors of such Person or any committee of the Board of Directors of
such Person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly
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adopted resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
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and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means rental obligations under
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a lease that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as determined
in accordance with GAAP.
"Capital Stock" means, with respect to any corporation, any
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and all shares, interests, rights to purchase (other than convertible or
exchangeable Indebtedness), warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"Cash" or "cash" means such coin or currency of the United
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States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Cash Equivalents" means (i) securities issued or directly and
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fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America are pledged in support thereof), or (ii) time deposits and
certificates of deposit and
2
commercial paper issued by the parent corporation of any domestic commercial
bank of recognized standing having capital and surplus in excess of $500 million
and commercial paper issued by others rated at the time of purchase at least A-2
or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by
▇▇▇▇▇'▇ and in each case maturing within one year after the date of acquisition.
"Change of Control" means (i) any sale, transfer or other
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conveyance, whether direct or indirect, of all or substantially all of the
assets of the Company or Host Marriott (for so long as Host Marriott is a Parent
of the Company), on a consolidated basis, in one transaction or a series of
related transactions, if, immediately after giving effect to such transaction,
any "person" or "group" (as such terms are used for purposes of Sections 13 (d)
and 14 (d) of the Exchange Act, whether or not applicable) other than an
Excluded Person is or becomes the "beneficial owner," directly or indirectly, of
more than 50% of the total voting power in the aggregate normally entitled to
vote in the election of directors, managers, or trustees, as applicable, of the
transferee, (ii) any "Person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable) other
than an Excluded Person is or becomes the "beneficial owner," directly or
indirectly, of more than 50% of the total voting power in the aggregate of all
classes of Capital Stock of the Company or Host Marriott (for so long as Host
Marriott is a Parent of the Company) then outstanding normally entitled to vote
in elections of directors, (iii) during any period of 12 consecutive months
after the Issue Date, individuals who at the beginning of such 12-month period
constituted the Board of Directors of the Company or Host Marriott (for so long
as Host Marriott is a Parent of the Company) (together with any new directors
whose election by such Board or whose nomination for election by the
shareholders of the Company or Host Marriott, as applicable, was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company or Host Marriott, as
applicable, then in office, (iv) a "change of control" or similar event shall
occur under any other issue of Indebtedness of the Company, Host Marriott (for
so long as Host Marriott is a Parent of the Company) or their respective
Subsidiaries with an aggregate principal amount in excess of $20 million, or (v)
in the case of the Company only, Host Marriott ceases to own directly or
indirectly a majority of the equity interests of the Company; provided, however,
a sale by the Company of all of the Courtyards or Residence Inns, or the pro
rata distribution by Host Marriott to its shareholders of shares of the Company
or shares of any of Host Marriott's other Subsidiaries, including without
limitation HMTP, or a sale of all or substantially all of the assets of HMTP by
Host Marriott shall not, in and of itself, constitute a Change of Control for
purposes of this paragraph.
"Change of Control Offer" shall have the meaning specified in
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Section 11.1.
"Change of Control Offer Period" shall have the meaning
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specified in Section 11.1.
"Change of Control Payment" shall have the meaning specified
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in Section 11.1.
"Change of Control Payment Date" shall have the meaning
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specified in Section 11.1.
"Change of Control Put Date" shall have the meaning specified
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in Section 11.1.
"Change of Control Triggering Event" means the occurrence of
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both a Change of Control and a Rating Decline.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Collateral" means the Pledged Collateral.
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"Collateral Agent" means the person named as the "Collateral
----------------
Agent" in Section 12.13 (a), until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Collateral Agent" shall mean or include any person who is then
Collateral Agent hereunder.
"Commission" means the SEC.
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3
"Company" means the party named as such in this Indenture
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until a successor replaces it pursuant to the Indenture, and thereafter means
such successor.
"Computation Period" shall have the meaning specified in
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Section 4.3.
"Consolidated Coverage Ratio" of any person on any date of
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determination (the "Transaction Date") means the ratio, on a pro forma basis, of
(a) the aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Interest Expense of such
person (exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of, but only to the extent that the
obligations giving rise to such Consolidated Interest Expense would no longer be
obligations contributing to such person's Consolidated Interest Expense
subsequent to the Transaction Date) during the Reference Period; provided, that
for purposes of such calculation, (i) acquisitions of operations, businesses or
other income-producing assets (including any reinvestment of disposition
proceeds in income producing assets held as of and not disposed on the
Transaction Date) which occurred during the Reference Period or subsequent to
the Reference Period and on or prior to the Transaction Date shall be assumed to
have occurred on the first day of the Reference Period, (ii) transactions giving
rise to the need to calculate the Consolidated Coverage Ratio shall be assumed
to have occurred on the first day of the Reference Period, (iii) the incurrence
of any Indebtedness or issuance of any Disqualified Capital Stock during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date (and the application of the proceeds therefrom to the extent
used to refinance or retire other Indebtedness or invested in income-producing
assets held as of and not disposed on the Transaction Date) shall be assumed to
have occurred on the first day of such Reference Period, and (iv) the
Consolidated Interest Expense of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Swap and Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used.
"Consolidated EBITDA" means, for any Person and period, the
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Consolidated Net Income of such Person for such period adjusted to add thereto
(to the extent deducted from net revenues in determining Consolidated Net
Income), without duplication, the sum of (A)(i) Consolidated Interest Expense,
(ii) provisions for taxes based on income, (iii) depreciation and amortization
expense (provided, that the depreciation and amortization expense of a
Consolidated Subsidiary that is not wholly owned shall be included only to the
extent of the interest of the referent person in such Subsidiary), (iv) any
other noncash items reducing the Consolidated Net Income of such Person for such
period, (v) any dividends or distributions during such period to such Person or
a Consolidated Subsidiary of such Person from any other Person which is not a
Subsidiary of such Person or which is accounted for by such Person by the equity
method of accounting, to the extent that (a) such dividends or distributions are
not included in the Consolidated Net Income of such Person for such period and
(b) (x) the sum of such dividends and distributions, plus the aggregate amount
of dividends or distributions from such other Person since the date of this
Indenture that have been included in Consolidated EBITDA pursuant to this clause
(v), do not exceed (y) the cumulative net income of such other Person
attributable to the equity interests of the Person (or Subsidiary of the Person)
whose Consolidated EBITDA is being determined, and (vi) any cash receipts of
such Person or a Consolidated Subsidiary of such Person during such period that
represent items included in Consolidated Net Income of such Person for a prior
period which were excluded from Consolidated EBITDA of such Person for such
prior period by virtue of clause (B) of this definition, minus (B) the sum of
(i) all noncash items increasing the Consolidated Net Income of such Person for
such period and (ii) any cash expenditures of such Person during such period to
the extent such cash expenditures (x) did not reduce the Consolidated Net Income
of such Person for such period and (y) were applied against reserves or accruals
that constituted noncash items reducing the Consolidated Net Income of such
Person when reserved or accrued; all as determined on a consolidated basis for
such Person and its Subsidiaries in conformity with GAAP.
4
"Consolidated Interest Expense" of any person means, for any
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period, the aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the following
sentence, interest attributable to Capitalized Lease Obligations but excluding
the amortization of fees or expenses incurred in order to consummate the sale of
the Securities as described herein) of such person and its Consolidated
Subsidiaries during such period, including (i) original issue discount and
noncash interest payments or accruals on any Indebtedness, (ii) the interest
portion of all deferred payment obligations, and (iii) all commissions,
discounts and other fees and charges owed with respect to bankers' acceptances
and letters of credit financings and Interest Swap and Hedging Obligations, in
each case to the extent attributable to such period, and (b) the amount of
dividends accrued or payable by such person or any of its Consolidated
Subsidiaries in respect of Disqualified Capital Stock (other than by
Subsidiaries of such person to such person or such person' s Subsidiary
Guarantors); provided, however, that interest, dividends or other payments or
accruals of a Consolidated Subsidiary that is not wholly owned shall be included
only to the extent of the interest of the referent Person in such Subsidiary.
For purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined by the
Company to be the rate of interest implicit in such Capitalized Lease Obligation
in accordance with GAAP and (y) interest expense attributable to any
Indebtedness represented by the guaranty by such person or a Subsidiary of such
person of an obligation of another person shall be deemed to be the interest
expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any Person
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for any period, the net income (or loss) of such Person and its Consolidated
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP; provided, that (i) net income (or loss) of any other Person which is
not a Subsidiary of the Person or is accounted for by such specified Person by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid to the specified Person or a
Subsidiary of such Person, (ii) the net income (or loss) of any other Person
acquired by such specified Person or a Subsidiary of such Person in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, (iii) all gains and losses which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including any gain from the sale or other disposition of assets outside the
ordinary course of business or from the issuance or sale of any capital stock),
shall be excluded, and (iv) the net income, if positive, of any of such Person's
Consolidated Subsidiaries (other than Non-Guarantor Subsidiaries) to the extent
that the declaration or payment of dividends or similar distributions is not at
the time permitted by operation of the terms of its charter or bylaws or any
other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary shall be
excluded; provided, however, in the case of exclusions from Consolidated Net
Income set forth in clauses (ii) , (iii) and (iv), such amounts shall be
excluded only to the extent included in computing such net income (or loss) in
accordance with GAAP and without duplication.
"Consolidated Net Worth" of any person at any date means the
----------------------
aggregate consolidated stockholders' equity of such person (plus amounts of
equity attributable to preferred stock) and its Consolidated Subsidiaries, as
would be shown on the consolidated balance sheet of such person prepared in
accordance with GAAP, adjusted to exclude (to the extent included in calculating
such equity) (a) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries, (b) all upward revaluations and other write-ups in the book value
of any asset of such person or a Consolidated Subsidiary of such person
subsequent to the Issue Date, and (c) all investments in Subsidiaries that are
not Consolidated Subsidiaries and in persons that are not Subsidiaries.
"Consolidated Subsidiary" means, for any person, each
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Subsidiary of such person (whether now existing or hereafter created or
acquired) the financial statements of which are consolidated for financial
statement reporting purposes with the financial statements of such person in
accordance with GAAP.
"Courtyards" means the 33 Courtyard properties owned by the
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Company or its Subsidiaries at the Issue Date.
"Covenant Defeasance" shall have the meaning specified in
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Section 8.3.
5
"Custodian" means any receiver, trustee, assignee, liquidator,
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sequestrator or similar official under any Bankruptcy Law.
"Debt Incurrence Ratio" shall have the meaning specified in
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Section 4.11.
"Default" means any event or condition that is, or after
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notice or passage of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in
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Section 2.12.
"Definitive Securities" means Securities that are in the form
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of Security attached hereto as Exhibit A that do not include the information
called for by footnotes 1 and 3 thereof.
"Depositary" means, with respect to the Securities issuable or
----------
issued in whole or in part in global form, the person specified in Section 2.3
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disqualified Capital Stock" means (a) except as set forth in
--------------------------
clause (b), with respect to any person, Capital Stock of such person that, by
its terms or by the terms of any security into which it is convertible,
exercisable or exchangeable, is, or upon the happening of an event or the
passage of time would be, required to be redeemed or repurchased (including at
the option of the holder thereof) by such person or any of its Subsidiaries, in
whole or in part, on or prior to the Stated Maturity of the Securities and (b)
with respect to any Subsidiary of such person (including with respect to any
Subsidiary of the Company), any Capital Stock other than any common stock with
no preference or redemption or repayment provisions.
"DTC" shall have the meaning specified in Section 2.3.
---
"ERISA" means the Employee Retirement Income Security Act of
-----
1974, as amended from time to time, and any successor statute.
"Event of Default" shall have the meaning specified in Section
----------------
6.1.
"Excess Proceeds" shall have the meaning specified in Section
---------------
4.14.
"Excess Proceeds Date" shall have the meaning specified in
--------------------
Section 4.14.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 9 1/2% Series B Senior Secured
-------------------
Notes due 2005, issued pursuant to this Indenture in connection with the offer
to exchange the Initial Securities made by the Company and the Subsidiary
Guarantors pursuant to the Registration Rights Agreement.
"Excluded Guaranty Subsidiary" shall have the meaning
----------------------------
specified in Section 13.3.
"Excluded Person" means, in the case of the Company, Host
---------------
Marriott or any wholly owned subsidiary of Host Marriott.
"Excluded Share Subsidiary" shall have the meaning specified
-------------------------
in Section 12.1.
"Excluded Shares" shall have the meaning specified in Section
---------------
12.1.
6
"Exempted Affiliate Transactions" means (a) employee
-------------------------------
compensation arrangements approved by a majority of independent (as to such
transactions) members of the Board of Directors of the Company, (b) payments of
reasonable directors' fees and expenses, (c) transactions solely between the
Company and any of its Subsidiaries or solely among Subsidiaries of the Company,
(d) Permitted Tax Payments, (e) Permitted Sharing Arrangements, (f) Procurement
Contracts, (g) Management Agreements and (h) Restricted Payments permitted under
Section 4.3.
"Existing Assets" means assets of the Company and its
---------------
Subsidiaries existing at the Amendment Date (other than cash, Cash Equivalents
or inventory held for resale in the ordinary course of business) and including
proceeds of any sale, transfer or other disposition of such assets and assets
acquired in whole or in part with proceeds from the sale, transfer or other
disposition of any such assets.
"Existing Indebtedness" means, with respect to the Company and
---------------------
its Subsidiaries, Indebtedness existing or outstanding at the Issue Date.
"Fair Market Value" or "fair market value" means, with respect
----------------- -----------------
to any assets or properties, the amount at which such assets or properties would
change hands between a willing buyer and a willing seller, within a commercially
reasonable time, each having reasonable knowledge of the relevant facts, neither
being under a compulsion to sell or buy, as such amount is determined by (i) the
Board of Directors of the Company acting in good faith or (ii) an appraisal or
valuation firm of national or regional standing selected by the Company, with
experience in the appraisal or valuation of properties or assets of the type for
which Fair Market Value is being determined.
"Final Put Date" shall have the meaning specified in Section
--------------
4.14.
"Future Subsidiary Guarantor" shall have the meaning specified
---------------------------
in Section 13.3.
"Future Subsidiary Guarantor Shares" shall have the meaning
----------------------------------
specified in Section 12.1.
"GAAP" means United States generally accepted accounting
----
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession as in effect from time to time.
"Global Security" means a Security that contains the paragraph
---------------
referred to in footnote 1 and the additional schedule referred to in footnote 3
to the form of Security attached hereto as Exhibit A.
"Guaranty" shall have the meaning provided in Section 13.1.
--------
"HMTP" means Host Marriott Travel Plazas, Inc., a Delaware
----
corporation.
"Holder" or "Securityholder" means the Person in whose name a
------
Security is registered on the Registrar's books.
"Host Marriott" means Host Marriott Corporation, a Delaware
-------------
corporation and the ultimate Parent of the Company.
"Incur" or "incur" shall have the meaning specified in Section
----- -----
4.11.
"Incurrence Date" shall have the meaning specified in Section
---------------
4.11.
"Indebtedness" of any person means, without duplication, (a)
------------
all liabilities and obligations, contingent or otherwise, of such person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures
7
or similar instruments, (iii) representing the balance deferred and unpaid of
the purchase price of any property or services, except those incurred in the
ordinary course of its business that would constitute ordinarily a trade payable
to trade creditors, (iv) evidenced by bankers' acceptances, (v) for the payment
of money relating to a Capitalized Lease Obligation, or (vi) evidenced by a
letter of credit or a reimbursement obligation of such person with respect to
any letter of credit; (b) all net obligations of such person under Interest Swap
and Hedging Obligations; (c) all liabilities and obligations of others of the
kind described in the preceding clause (a) or (b) that such person has
guaranteed or that is otherwise its legal liability or which are secured by any
assets or property of such person; and (d) all obligations to purchase, redeem
or acquire any Capital Stock.
"Indenture" means this Indenture, as amended or supplemented
---------
from time to time in accordance with the terms hereof.
"Initial Distributions" means (i) the distribution to the
---------------------
Company's Parent of all the net proceeds of the sale of the Initial Securities
and (ii) the consummation of the Transfers, whether occurring prior to, on or
after the Issue Date.
"Initial Purchasers" means ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
------------------
Securities Corporation, ▇▇▇▇▇▇▇, Sachs & Co., BT Securities Corporation,
Citicorp Securities, Inc., ▇▇▇▇▇▇▇▇▇▇ Securities, Salomon Brothers Inc. and
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
"Initial Securities" means the 9 1/2 % Series A Senior Secured
------------------
Notes due 2005 issued under this Indenture.
"Interest Payment Date" means the stated due date of an
---------------------
installment of interest on the Securities.
"Interest Swap and Hedging Obligation" means any obligation of
------------------------------------
any Person pursuant to any interest rate swaps, caps, collars and similar
arrangements providing protection against fluctuations in interest rates. For
purposes of this Indenture, the amount of such obligations shall be the amount
determined in respect thereof as of the end of the then most recently ended
fiscal quarter of such Person, based on the assumption that such obligation had
terminated at the end of such fiscal quarter, and in making such determination,
if any agreement relating to such obligation provides for the netting of amounts
payable by and to such Person thereunder or if any such agreement provides for
the simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligations shall be the net amount so determined, plus
any premium due upon default by such Person.
"Investment" by any person in any other person means (without
----------
duplication) (a) the acquisition (whether by purchase, merger, consolidation or
otherwise) by such person (whether for cash, property, services, securities or
otherwise) of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities, including any options or warrants, of
such other person or any agreement to make any such acquisition; (b) the making
by such person of any deposit with, or advance, loan or other extension of
credit to, such other person (including the purchase of property from another
person subject to an understanding or agreement, contingent or otherwise, to
resell such property to such other person) or any commitment to make any such
advance, loan or extension (but excluding accounts receivable or deposits
arising in the ordinary course of business); (c) other than the guarantees of
Indebtedness of the Company or any Subsidiary to the extent permitted by Section
4.11, the entering into by such person of any guarantee of, or other credit
support or contingent obligation with respect to, Indebtedness or other
liability of such other person; (d) the making of any capital contribution by
such person to such other person; and (e) the designation by the Board of
Directors of the Company of any person to be an Unrestricted Subsidiary. The
Company shall be deemed to make an Investment in an amount equal to the Fair
Market Value of the net assets of any Subsidiary (or, if neither the Company nor
any of its Subsidiaries has theretofore made an Investment in such Subsidiary,
in an amount equal to the Investments being made) at the time that such
Subsidiary is designated an Unrestricted Subsidiary, and any property
transferred to an Unrestricted Subsidiary from the Company or a Subsidiary shall
be deemed an Investment valued at its Fair Market Value at the time of such
transfer.
8
"Investment Grade" means a currently effective rating by S&P
----------------
of BBB- (or subsequent equivalent rating) or higher, and Moody's of Baa3 (or
subsequent equivalent rating) or higher (or if S&P or Moody's or both shall not
make a rating of the Securities publicly available, a nationally recognized
securities rating agency or agencies, as the case may be, reasonably selected by
the Company in good faith, which shall be substituted for S&P or Moody's or
both, as the case may be).
"Issue Date" means the date of first issuance of the
----------
Securities under this Indenture.
"Leaseback Subsidiary" means a Subsidiary of the Company which
--------------------
has no assets other than (i) leases, management agreements, rights to deferred
sales proceeds, and other rights pertaining to Residence Inns sold to an
unaffiliated person by the Company or its Subsidiaries and leased back by such
Subsidiary, (ii) working capital and other assets associated with the Residence
Inns leased by such Subsidiary and (iii) a de minimis amount of other assets
related to the foregoing.
"Legal Defeasance" shall have the meaning specified in Section
----------------
8.2.
"Lien" means any mortgage, lien, pledge, charge, security
----
interest, or other encumbrance of any kind, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"Management Agreements" means the management agreements and
---------------------
franchise agreements between the Company and Marriott International or another
person relating to the operation of the Company's lodging properties.
"Marriott International" means Marriott International, Inc., a
----------------------
Delaware corporation, and its Subsidiaries.
"Maturity Date" means, when used with respect to any Security,
-------------
the date specified on such Security as the fixed date on which the final
installment of principal of such Security is due and payable (in the absence of
any acceleration thereof pursuant to the provisions of the Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Offer to
Purchase).
"Merger" means the merger of Acquisitions with and into the
------
Company.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its
-------
successors.
"Net Cash Proceeds" means the aggregate amount of Cash or Cash
-----------------
Equivalents received by the Company, in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for cash on or
after the Issue Date, the amount of cash originally received by the Company upon
the issuance of such securities (including options, warrants, rights and
convertible or exchangeable debt) less, in each case, (i) the sum of all
payments, fees, commissions and (in the case of Asset Sales, reasonable and
customary) expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses) incurred in connection
with such Asset Sale or sale of Qualified Capital Stock, and (ii) (in the case
of an Asset Sale only) less the amount (estimated reasonably and in good faith
by the Company) of income, franchise, sales and other applicable taxes required
to be paid by the Company or any of its respective Subsidiaries in connection
with such Asset Sale; provided, however, that in the case of Cash or Cash
Equivalents received, or expenses paid or payable, by a Subsidiary that is not a
wholly owned Subsidiary of the Company, only that portion of the receipts and
expenses which are equal to the Company's proportionate ownership of such
Subsidiary shall be included in calculating Net Cash Proceeds.
9
"Net Non-Guarantor Investment" means the amount equal to the
----------------------------
aggregate Investments made by the Company and the Subsidiary Guarantors in
Non-Guarantor Subsidiaries from and after the Amendment Date, minus the
aggregate amount of any dividends, distributions or other payments received from
and after the Amendment Date by the Company and/or any Subsidiary Guarantor(s)
in respect of Investments in Non-Guarantor Subsidiaries.
"New Notes" means senior notes of the Company ranking pari
---------
passu as to payment of principal and interest with the Securities in an
aggregate principal amount not to exceed $600 million which New Notes the
Company currently intends to issue on or before September 30, 1997.
"New Notes Issuance Date" means the date on which the New
-----------------------
Notes are issued.
"Non-Guarantor Subsidiary" means any Subsidiary that is not a
------------------------
Subsidiary Guarantor.
"Non-recourse Purchase Money Indebtedness" means Indebtedness
----------------------------------------
of the Company or its Subsidiaries to the extent that, (i) under the terms
thereof or pursuant to law, no personal recourse may be had against the Company
or its Subsidiaries (other than Special Purpose Subsidiaries) for the payment of
the principal of or interest or premium on such Indebtedness, and enforcement of
obligations on such Indebtedness (except with respect to fraud, willful
misconduct, misrepresentation, misapplication of funds, reckless damage to
assets and undertakings with respect to environmental matters or construction
defects) is limited only to recourse against interests in specified assets and
property (the "Subject Assets"), accounts and proceeds arising therefrom, and
rights under purchase agreements or other agreements with respect to such
Subject Assets; (ii) such Indebtedness (x) is incurred concurrently with the
acquisition by the Company or its Subsidiaries of such Subject Assets or a
Person (or interests in a Person) holding such Subject Assets, or (y)
constitutes Refinancing Indebtedness with respect to Indebtedness so incurred;
and (iii) the Subject Assets are not Existing Assets and no Existing Assets or
proceeds from the sale, transfer or other disposition of Existing Assets were
used to acquire such Subject Assets.
"Notice of Default" shall have the meaning specified in
-----------------
Section 6.1(3).
"Obligations" shall have the meaning specified in section
-----------
12.1.
"Offer Amount" shall have the meaning specified in Section
------------
4.14.
"Offer Price" shall have the meaning specified in Section
-----------
4.14.
"Offer to Purchase" shall have the meaning specified in
-----------------
Section 4.14.
"Offering Memorandum" means the confidential Offering
-------------------
Memorandum dated May 18, 1995 distributed to prospective purchasers of
Securities in connection with the sale of Securities by the Company.
"Officer" means, with respect to the Company or a Subsidiary
-------
Guarantor, the Chief Executive Officer, the President, any Senior Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of the Company or such Subsidiary Guarantor.
"Officers' Certificate" means, with respect to the Company or
---------------------
a Subsidiary Guarantor, a certificate signed by two Officers or by an Officer
and an Assistant Secretary of the Company or such Subsidiary Guarantor (as
applicable) and otherwise complying with the requirements of Sections 14.4 and
14.5, and delivered to the Trustee or an Agent, as applicable.
"Opinion of Counsel" means a written opinion from legal
------------------
counsel who is reasonably acceptable to the Trustee (which may include counsel
to the Trustee, the Company or its Parent (including an employee of the Company
or its Parent)) or an Agent, as applicable, complying with the requirements of
Sections 14.4 and 14.5, and delivered to the Trustee or an Agent, as applicable.
10
"Outstanding" as used with reference to the Securities shall have the
-----------
meaning specified in Section 2.8 hereof.
"Parent" of any person means a corporation which at the date of
------
determination owns, directly or indirectly, a majority of the Voting Stock of
such person or of a Parent of such person.
"Paying Agent" has the meaning specified in Section 2.3.
------------
"Permitted Indebtedness" means any of the following:
----------------------
(a) The Company and its Subsidiaries may Incur Indebtedness solely in
respect of surety and appeal bonds, performance bonds and other obligations of a
like nature (to the extent that such incurrence does not result in the
incurrence of any obligation to repay any obligation relating to borrowed money
of others), all in the ordinary course of business in accordance with customary
industry practices;
(b) The Company and its Subsidiary Guarantors may Incur Indebtedness under
revolving credit loans for funded Indebtedness from time to time in the ordinary
course of business up to an aggregate amount outstanding of $60 million;
(c) The Company and its Subsidiaries may Incur Indebtedness under Interest
Swap and Hedging Obligations that do not increase the Indebtedness of the
Company other than as a result of fluctuations in interest or foreign currency
exchange rates provided that such Interest Swap and Hedging Obligations are
incurred for the purpose of providing interest rate protection with respect to
Indebtedness permitted under this Indenture or to provide currency exchange
protection in connection with revenues generated in currencies other than U.S.
dollars;
(d) The Company may Incur Indebtedness to any Subsidiary Guarantor, and any
Subsidiary Guarantor may incur Indebtedness to any other Subsidiary Guarantor or
to the Company and any Subsidiary may incur Indebtedness to the Company or a
Subsidiary Guarantor (subject to the requirements of Section 4.3); provided,
that, in the case of Indebtedness of the Company, such obligations shall be
unsecured and subordinated in all respects to the Company's obligations pursuant
to the Securities;
(e) The Company and its Subsidiary Guarantors may guarantee Indebtedness of
the Company, the Subsidiary Guarantors or the Subsidiaries, as applicable, to
the extent such guaranteed Indebtedness was permitted to be incurred under this
Indenture; and
(f) The Company and its Subsidiaries may incur Indebtedness solely in
respect of bankers' acceptances and letters of credit all in the ordinary course
of business in accordance with customary industry practices in an aggregate
amount outstanding at any time not to exceed $100 million less the aggregate
principal amount of revolving Indebtedness incurred pursuant to clause (b)
above.
"Permitted Investment" means any of the following:
--------------------
(a) an Investment in Cash Equivalents;
(b) Investments in a Person substantially all of whose assets are of a type
generally used in a Related Business (an "Acquired Person") if, as a result of
such Investments, (i) the Acquired Person immediately thereupon is or becomes a
Subsidiary of the Company, or (ii) the Acquired Person immediately thereupon
either (1) is merged or consolidated with or into the Company or any of its
Subsidiaries and the surviving Person is the Company or a Subsidiary of the
Company or (2) transfers or conveys all or substantially all of its assets to,
or is liquidated into, the Company or any of its Subsidiaries;
(c) an Investment in a Person, provided that (i) such Person is principally
engaged in a Related Business, (ii) the Company or one or more of its
Subsidiaries participates in the management of such Person, as a general
partner, member of such Person's governing board or otherwise and (iii) the
aggregate amount
11
of (x) Investments made in reliance on this clause (c) subsequent to the Issue
Date plus (y) investments made by Acquisitions and its Subsidiaries from and
after the Acquisitions Issue Date to the date of the Merger in reliance on
clause (c) of the definition of Permitted Investments under the Acquisitions
Indenture, shall not exceed in the aggregate $50.0 million;
(d) Permitted Sharing Arrangement Payments;
(e) securities received in connection with an Asset Sale so long as such
Asset Sale complied with this Indenture including Section 4.14 (but only to the
extent the Fair Market Value of such securities and all other noncash and
noncash equivalent consideration received complies with clause (iii) of Section
4.14); and
(f) Permitted Mortgage Investments.
"Permitted Lien" means any of the following:
--------------
(a) Liens existing on the Issue Date;
(b) Liens imposed by governmental authorities for taxes, assessments or
other charges not yet subject to penalty or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP;
(c) statutory liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business provided that (i) the underlying obligations are not
overdue for a period of more than 30 days, or (ii) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of the Company in accordance
with GAAP;
(d) Liens securing the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects which, singly or in the aggregate, do not
in any case materially detract from the value of the property subject thereto
(as such property is used by the Company or any of its Subsidiaries) or
interfere with the ordinary conduct of the business of the Company or any of its
Subsidiaries;
(f) Liens arising by operation of law in connection with judgments, only to
the extent, for an amount and for a period not resulting in an Event of Default
with respect thereto;
(g) pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security legislation;
(h) Liens securing on an equal and ratable basis the Securities and any
other Indebtedness, including, without limitation, the New Notes and the
Acquisitions Notes.
(i) Liens securing Indebtedness of a Person existing at the time such
Person becomes a Subsidiary or is merged with or into the Company or a
Subsidiary or Liens securing Indebtedness incurred in connection with an
Acquisition, provided that (i) such Liens were in existence prior to the date of
such acquisition, merger or consolidation, were not incurred in anticipation
thereof, and do not extend to any other assets and (ii) no Existing Assets or
proceeds from the sale, transfer or other disposition of Existing Assets were
used to acquire such Person;
12
(j) Liens arising from Non-recourse Purchase Money Indebtedness permitted
to be incurred under this Indenture provided such Liens relate only to the
property which is subject to such Non-recourse Purchase Money Indebtedness;
(k) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more adverse to the
Holders of the Securities than the terms of the Liens securing such refinanced
Indebtedness (provided, however, that cross-collateralization, creation of
"collateral pools" or similar arrangements in and of themselves shall not be
considered more adverse to the Holders of the Securities for the purposes of the
foregoing);
(l) Liens securing revolving debt incurred under clause (b) of the
definition of Permitted Indebtedness which revolving debt shall not exceed an
aggregate principal amount outstanding at any time of $60 million;
(m) Liens securing any other Indebtedness permitted to be incurred under
Section 4.11 not to exceed an aggregate principal amount outstanding at any time
of $100 million; and
(n) Liens securing bankers' acceptances and letters of credit incurred
under clause (f) of the definition of Permitted Indebtedness which do not exceed
an aggregate principal amount outstanding at any time of $115 million less the
aggregate principal amount of revolving debt secured pursuant to clause (l)
above.
"Permitted Lien Indebtedness" shall have the meaning specified in Section
---------------------------
12.1.
"Permitted Lien Indebtedness Obligations" shall have the meaning specified
---------------------------------------
in Section 12.1.
"Permitted Mortgage Investment" means an Investment in Indebtedness secured
-----------------------------
by lodging property assets provided that (i) the Company is able to consolidate
the operations of the lodging property in its consolidated GAAP financial
statements, or (ii) such Investment is made with a view toward acquiring
ownership of the lodging properties securing such Indebtedness; provided,
however, that the aggregate Investments (the value of each such Investment to be
determined at the time of such Investment) made in reliance on this clause (ii)
with respect to lodging properties as to which the Company has not consolidated
the operations in its consolidated GAAP financial statements, as set forth in
clause (i), shall not at any time exceed 10% of the Company's aggregate assets.
"Permitted Sharing Arrangements" means any contracts, agreements or other
------------------------------
arrangements between the Company or one or more Subsidiaries of the Company and
a Parent of the Company or one or more Subsidiaries of such Parent, pursuant to
which such Persons share centralized services, establish joint payroll
arrangements, procure goods or services jointly or otherwise make payments with
respect to goods or services on a joint basis, or allocate corporate expenses
(other than taxes based on income); provided that (i) such Permitted Sharing
Arrangements are, in the determination of management of the Company, in the best
interests of the Company and its Subsidiaries and (ii) the liabilities of the
Company and its Subsidiaries under such Permitted Sharing Arrangements are
determined in good faith and on a reasonable basis.
"Permitted Sharing Arrangements Payments" means payments under Permitted
---------------------------------------
Sharing Arrangements.
"Permitted Tax Payments" means (for any taxable year of the Company in
----------------------
which it joins in filing a consolidated Federal income tax return with a Parent)
a payment (including any estimated tax payment based on any estimated tax
liability for such year) by the Company to the Parent in an amount not in excess
of the lesser of (i) the separate return Federal income tax liability (if any)
of the affiliated group (within the meaning of Section 1504 of the Code) of
which the Company would be the ultimate Parent (the "Company Group") if it were
not, and never had been, a member of another affiliated group for that or any
other taxable year and (ii) the actual Federal income tax liability (if any) of
the affiliated group of which the Company is actually a member (the "Parent
Group") for such year that is allocable to the Company Group. In the event that
a Parent of the Company and any member of the Company Group join in filing any
combined or consolidated (or similar) state or local income or franchise tax
13
returns, then the term Permitted Tax Payment shall also include payments with
respect to such state or local income or franchise taxes determined in a manner
as similar as possible to that provided in the preceding sentence for Federal
income tax.
"Person" or "person" means any corporation, individual, limited liability
------ ------
company, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state or political
subdivision thereof, trust, municipality or other entity.
"Pledged Collateral" means (i) the Pledged Shares, (ii) any interest of the
------------------
Pledgors in the entries on the books of any financial intermediary pertaining to
the Pledged Shares, (iii) all dividends, cash or other proceeds, distributions
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Shares,
(iv) all instruments, certificates, documents and writings representing or
evidencing any or all of the foregoing and (v) all proceeds of any and all of
the foregoing.
"Pledged Shares" means the Subsidiary Guarantor Shares, other than any such
--------------
shares or other securities that have been released from the Lien created by
Article XII pursuant to the provisions of Article XII or Article XIII of this
Indenture.
"Pledgors" means the Company and any Subsidiary Guarantors holding an
--------
interest in the Pledged Shares.
"Pro Rata Portion" shall have the meaning specified in Section 13.1.
----------------
"Proceeds" shall have the meaning specified in Section 12.9.
--------
"Procurement Contracts" means contracts for the procurement of goods and
---------------------
services entered into in the ordinary course of business and consistent with
industry practices.
"Property" means any right or interest in or to property or assets of any
--------
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Agreement" means that certain Purchase Agreement dated May 18,
------------------
1995 by and among the Company, the Subsidiary Guarantors and the Initial
Purchasers, as such agreement may be amended, modified or supplemented from time
to time in accordance with the terms thereof.
"Purchase Date" shall have the meaning specified in Section 4.14.
-------------
"Qualified Capital Stock" means any Capital Stock of the Company that is
-----------------------
not Disqualified Capital Stock.
"Qualified Exchange" means (i) any legal defeasance, redemption,
------------------
retirement, repurchase or other acquisition of then outstanding Capital Stock or
Indebtedness of the Company issued on or after the Issue Date with the Net Cash
Proceeds received by the Company from the substantially concurrent sale of
Qualified Capital Stock or (ii) any exchange of Qualified Capital Stock for any
then outstanding Capital Stock or Indebtedness issued on or after the Issue
Date.
"Rating Agencies" means (i) S&P and (ii) ▇▇▇▇▇'▇ or (iii) if S&P or ▇▇▇▇▇'▇
---------------
or both shall not make a rating of the Securities publicly available, a
nationally recognized securities rating agency or agencies, as the case may be,
selected by the Company, which shall be substituted for S&P or ▇▇▇▇▇'▇ or both,
as the case may be.
"Rating Category" means (i) with respect to S&P, any of the following
---------------
categories: BB, B, CCC, CC, C and D (or equivalent successor categories); (ii)
with respect to ▇▇▇▇▇'▇, any of the following categories: Ba, B, Caa, Ca, C and
D (or equivalent successor categories); and (iii) the equivalent of any such
category of S&P or ▇▇▇▇▇'▇ used in another Rating Agency. In determining whether
the rating of the Securities has decreased by one
14
or more gradations, gradations within Rating Categories (+ and - for S&P, 1, 2
and 3 for ▇▇▇▇▇'▇; or the equivalent gradations for another Rating Agency) shall
be taken into account (e.g., with respect to S&P, a decline in a rating from BB+
to BB, as well as from BB- to B+, will constitute a decrease of one gradation).
"Rating Date" means the date which is 90 days prior to the earlier of (i) a
-----------
Change of Control and (ii) the first public notice of the occurrence of a Change
of Control or of the intention by the Company to effect a Change of Control.
"Rating Decline" means the occurrence, on or within 90 days after the
--------------
earliest to occur of (i) a Change of Control and (ii) the date of the first
public notice of the occurrence of a Change of Control or of the intention by
the Company to effect a Change of Control (which period shall be extended so
long as the rating of the Securities is under publicly announced consideration
for possible downgrade by any of the Rating Agencies), of: (a) in the event the
Securities are rated by either ▇▇▇▇▇'▇ or S&P on the Rating Date as Investment
Grade, a decrease in the rating of the Securities by either of such Rating
Agencies to a rating that is below Investment Grade, or (b) in the event the
Securities are rated below Investment Grade by both Rating Agencies on the
Rating Date, a decrease in the rating of the Securities by either Rating Agency
by one or more gradations (including gradations within Rating Categories as well
as between Rating Categories).
"Record Date" means a Record Date specified in the Securities whether or
-----------
not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be redeemed,
---------------
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the form of Security.
"Redemption Price," when used with respect to any Security to be redeemed,
----------------
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Security, which shall include, without duplication, in each case,
accrued and unpaid interest to the Redemption Date (subject to the provisions of
Section 3.5).
"Reference Period" with regard to any Person means the four full fiscal
----------------
quarters ended immediately preceding any date upon which any determination is to
be made pursuant to the terms of the Securities or this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital Stock
------------------------
(a) issued in exchange for, or the proceeds from the issuance and sale of which
are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed the sum of
(x) the reasonable and customary fees and expenses incurred in connection with
the Refinancing plus (y) the lesser of (i) the principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, of the Indebtedness or
Disqualified Capital Stock so refinanced and (ii) if such Indebtedness being
refinanced was issued with an original issue discount, the accreted value
thereof (as determined in accordance with GAAP) at the time of such Refinancing;
provided, that (A) such Refinancing Indebtedness of any Subsidiary of the
Company shall be used only to refinance outstanding Indebtedness or Disqualified
Capital Stock of such Subsidiary, and (B) Refinancing Indebtedness shall (x) not
have an Average Life shorter than the Indebtedness or Disqualified Capital Stock
to be so refinanced at the time of such Refinancing and (y) in all respects, be
no less subordinated or junior, if applicable, to the rights of Holders of the
Securities than was the Indebtedness or Disqualified Capital Stock to be
refinanced.
"Registrar" shall have the meaning specified in Section 2.3.
---------
"Registration Rights Agreement" means the Registration Rights Agreement,
-----------------------------
dated the date hereof by and among the Initial Purchasers, the Company and the
Subsidiary Guarantors, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
15
"Related Business" means the businesses conducted (or proposed to be
----------------
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are materially related businesses. Without limiting the generality of
the foregoing, Related Business shall include the ownership or operation of
lodging properties and senior living facilities.
"Released Subsidiary Guarantor Shares" shall have the meaning specified in
------------------------------------
Section 12.1.
"Residence Inns" means the 19 Residence Inns owned by the Company or its
--------------
Subsidiaries at the Issue Date.
"Requisite Obligees" shall have the meaning specified in Section 12.8.
------------------
"Restricted Investment" means, in one or a series of related transactions,
---------------------
any Investment, other than a Permitted Investment.
"Restricted Payment" means, with respect to any person, (a) the declaration
------------------
or payment of any dividend or other distribution in respect of Capital Stock of
such person or the Parent or any Subsidiary of such Person, (b) any payment on
account of the purchase, redemption or other acquisition or retirement for value
of Capital Stock of such Person or the Parent or any Subsidiary of such Person,
(c) other than with the proceeds from the substantially concurrent sale of, or
in exchange for, Refinancing Indebtedness, any purchase, redemption, or other
acquisition or retirement for value of, any payment in respect of any amendment
of the terms of or any defeasance of, any Subordinated Indebtedness, directly or
indirectly, by such person or the Parent or a Subsidiary of such person prior to
the scheduled maturity, any scheduled repayment of principal, or scheduled
sinking fund payment, as the case may be, of such Indebtedness, (d) any
Restricted Investment by such Person, (e) the payment to any affiliate in
respect of taxes owed by any consolidated group of which both such person or a
Subsidiary of such person and such affiliate are members, and (f) any loan or
advance to, or guarantee of any indebtedness of, any affiliate of such person or
any Subsidiary of such person; provided, however, that the term "Restricted
Payment" does not include (i) any dividend, distribution or other payment on or
with respect to Capital Stock of the Company to the extent payable solely in
shares of Qualified Capital Stock of the Company; (ii) any dividend,
distribution or other payment to the Company, or to any of the Subsidiary
Guarantors, by the Company or any of its Subsidiaries; (iii) Permitted Tax
Payments; (iv) the declaration or payment of dividends or other distributions by
any Subsidiary of the Company provided such distributions are made to the
Company (or a Subsidiary of the Company, as applicable) on a pro rata basis (and
in like form) to all distributions so made; or (v) the Initial Distributions.
"Restricted Security" means a Security, unless or until it has been (i)
-------------------
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering it or (ii) sold pursuant to Rule 144
(as such rule may be amended from time to time or any similar provision then in
force) under the Securities Act; provided, that in no case shall an Exchange
Security issued in accordance with this Indenture and the terms and provisions
of the Registration Rights Agreement be a Restricted Security.
"S&P" means Standard & Poor's Ratings Services and its successors.
---
"SEC" means the Securities and Exchange Commission.
---
"Secured Obligations" shall have the meaning specified in Section 12.1.
-------------------
"Securities" means, collectively, the Initial Securities and, when and if
----------
issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the SEC promulgated thereunder.
16
"Securities Custodian" means the Registrar, as custodian with respect to
--------------------
the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means any Person in whose name a Security is
-------------- ------
registered on the Registrar's books.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" of the Company within the meaning of Rule 1.02(v) of Regulation S-X
promulgated by the SEC as in effect as of the date of this Indenture.
"Special Purpose Subsidiary" means any Subsidiary of the Company (x) the
--------------------------
assets of which do not include Existing Assets and were not acquired with
Existing Assets or proceeds from the sale, transfer or other disposition of
Existing Assets, and (y) which has no Indebtedness other than Non-recourse
Purchase Money Indebtedness and/or Permitted Indebtedness of the type described
in clauses (a), (c), (d) and (e) of the definition of Permitted Indebtedness.
"Special Record Date" for payment of any Defaulted Interest means a date
-------------------
fixed by the Paying Agent pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means May 15,
---------------
2005.
"Subject Assets" means specified assets and property of the Company or its
--------------
Subsidiaries securing Non-recourse Purchase Money Indebtedness.
"Subordinated Indebtedness" means (i) Indebtedness of the Company or a
-------------------------
Subsidiary Guarantor that is subordinated in right of payment to the Securities
or a Guaranty, as applicable, or (ii) Indebtedness of the Company or a
Subsidiary Guarantor (other than secured Indebtedness or Indebtedness ranking
pari passu with the Securities or a Guaranty, as applicable) that has a stated
maturity on or after the Stated Maturity.
"Subsidiary" with respect to any Person, means (i) a corporation a majority
----------
of whose Capital Stock with voting power, under ordinary circumstances, to elect
directors is at the time, directly or indirectly, owned by such Person, by such
Person and one or more Subsidiaries of such Person or by one or more
Subsidiaries of such Person, or which is controlled by such Person in a manner
sufficient to permit its financial statements to be consolidated with the
financial statements of such Person in conformance with generally accepted
accounting principles ("GAAP") and which financial statements are so
consolidated, (ii) any other Person (other than a corporation or a partnership)
in which such Person, one or more Subsidiaries of such Person, or such Person
and one or more Subsidiaries of such Person, directly or indirectly, at the date
of determination thereof has at least majority ownership interest, or which is
controlled by such Person in a manner sufficient to permit its financial
statements to be consolidated with the financial statements of such Person in
conformance with GAAP and which financial statements are so consolidated, or
(iii) a partnership (x) in which such Person or one or more Subsidiaries of such
Person is, at the time, a general partner and owns alone or together with the
Company a majority of the partnership interests or (y) in which such Person or
one or more Subsidiaries of such Person is, at the time, a general partner, and
which is controlled by such Person in a manner sufficient to permit its
financial statements to be consolidated with the financial statements of such
Person in conformance with GAAP and which financial statements are so
consolidated. Notwithstanding the foregoing, an Unrestricted Subsidiary shall
not be deemed to be a Subsidiary of the Company or of any Subsidiary of the
Company for purposes of this Indenture.
"Subsidiary Guarantors" means (i) the Initial Subsidiary Guarantors
---------------------
identified in the following sentence and (ii) any Future Subsidiary Guarantors
that become Subsidiary Guarantors pursuant to the terms of this Indenture, but
excluding any Persons whose guarantees have been released pursuant to the terms
of this Indenture. The Initial Subsidiary Guarantors consist of HMH Courtyard
Properties, Inc., HMC Retirement Properties, Inc., Marriott Financial Services,
Inc., Marriott SBM Two Corporation, HMH Pentagon Corporation and Host Airport,
Inc., each a direct wholly owned subsidiary of the Company or any successor
entity, whether by merger, consolidation, change of name or otherwise.
17
"Subsidiary Guarantor Shares" means all of the Capital Stock of each
---------------------------
Subsidiary Guarantor (other than Marriott Financial Services, Inc.) owned by the
Company or another Subsidiary Guarantor, any additional shares of Capital Stock
of any Subsidiary Guarantor (other than Marriott Financial Services, Inc.) in
any manner acquired from time to time by any Pledgor and any shares or other
securities of the Subsidiary Guarantors (other than Marriott Financial Services,
Inc.) issued to any Pledgor in exchange or substitution therefor, provided that
shares or other securities of any Person shall not constitute Subsidiary
Guarantor Shares after such Person ceases to be a Subsidiary Guarantor under
this Indenture.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S. Code
---
77aaa-77bbbb), as in effect on the date of the execution of this Indenture;
provided, however, that, in the event the Trust Indenture Act of 1939 is amended
after such date, "TIA" means, to the extent required by such amendment, the
Trust Indenture Act of 1939 as so amended.
"Transfer Instruments" shall have the meaning specified in Section 12.2.
--------------------
"Transfer Restricted Securities" means Securities that bear or are required
------------------------------
to bear the legend set forth in Section 2.6 hereof.
"Transfers" means (i) the transfer to the Parent of the Company of proceeds
---------
in the approximate amount of $118 million from the March 1995 sale of 21
Courtyard properties to a real estate investment trust; (ii) the transfer to the
Parent of the Company of two notes receivable from MFI Partners, and having
aggregate net book value at December 30, 1994 of $14 million dollars, which
notes were received in connection with the 1994 sale of 26 Fairfield Inns L.P.
in the aggregate principal amount of $26.5 million; (iii) the transfer to the
Parent of the Company of the capital stock of HMH HPT Courtyard Properties,
Inc., a Subsidiary of the Company holding only (x) a lessee's interest in the 21
Courtyard properties referenced in clause (i) above, (y) the right to receive
deferred purchase price from the sale of such 21 properties at the end of the
lease term, and (z) certain other assets related to such sale/leaseback; (iv)
the transfer to the Parent of the Company of (x) the rights and obligations with
respect to the leaseback of 17 additional Courtyard properties sold in 1995, (y)
the right to receive deferred purchase price from the sale of such 17 properties
at the end of the lease term and (z) certain other assets related to such
sale/leaseback; and (v) the transfer to the Parent of the Company of all of the
Company's underdeveloped land parcels, with an aggregate book value of
approximately $64 million, together with deferred taxes related thereto, all as
further described in the Offering Memorandum.
"Trustee" means the party named as such in this Indenture until a successor
-------
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means any officer within the corporate trust division (or
-------------
any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the Persons who
at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"UCC" means the New York Uniform Commercial Code as in effect from time to
---
time.
"Unrestricted Subsidiary" means any Subsidiary of the Company that does not
-----------------------
own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); provided, that (i) such Subsidiary is principally
engaged in a Related Business, (ii) neither immediately prior thereto nor after
giving pro forma effect to such designation would there exist a Default or Event
of Default and (iii) immediately after giving pro forma effect thereto, the
Company could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio in Section 4.11(a). The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Subsidiary, provided, that (i) no
Default or Event of Default is existing or will occur as a consequence thereof
and (ii) immediately after giving effect to such designation, on a pro forma
basis, the Company could incur at least $1.00 of Indebtedness pursuant to the
Debt Incurrence Ratio in Section 4.11(a). Each
18
such designation shall be evidenced by filing with the Trustee a certified copy
of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"U.S. Government Obligations" means direct noncallable obligations
---------------------------
of, or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means, with respect to any specified person, capital
------------
stock with voting power, under ordinary circumstances, to elect directors of
such Person.
"Wholly Owned" or "wholly owned" with respect to a Subsidiary of
------------ ------------
any person means (i) with respect to a Subsidiary that is a partnership or a
limited liability company or similar entity, a Subsidiary whose equity interests
are 99% or greater beneficially owned by such person and (ii) with respect to a
Subsidiary that is other than a partnership or a limited liability company or
similar entity, a Subsidiary whose capital stock or other equity interest is
100% beneficially owned by such person.
SECTION 1.2. Incorporation By Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
----------
"indenture securities" means the Securities.
--------------------
"indenture securityholder" means a Holder or a Securityholder.
------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company, each
-------
Subsidiary Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
19
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision; and
(7) references to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
ARTICLE II.
THE SECURITIES
SECTION 2.1. Form and Dating.
---------------
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. Execution and Authentication.
----------------------------
Two Officers shall sign, or one officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile signature.
The Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security was an Officer at
the time of such execution but no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless and
the Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate or cause to be authenticated Initial
Securities for original issue in the aggregate principal amount of up to
$600,000,000 and shall authenticate Exchange Securities for original issue in
the aggregate principal amount of up to $600,000,000, in each case upon a
written order of the Company in the form of an Officers' Certificate; provided
that such Exchange Securities shall be issuable only upon the valid surrender
for cancellation of Initial Securities of a like aggregate principal amount in
accordance with the Registration Rights Agreement. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on which
the Securities are to be authenticated. The aggregate principal amount of
Securities outstanding at any time may not exceed $600,000,000, except as
provided in Section 2.7. Upon the written order of the Company in the form of an
Officers' Certificate, the Trustee shall authenticate Securities in substitution
of Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries. The Trustee hereby appoints Bankers
Trust Company as its initial authenticating agent, and by its acknowledgment and
acceptance on the signature page hereto, Bankers Trust Company hereby agrees to
so act.
20
Securities shall be issuable only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
SECTION 2.3. Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or exchange ("Registrar") and an office or agency of
the Company where Securities may be presented for payment ("Paying Agent") and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except that,
for the purposes of Articles III, VIII, XI, and Section 4.14 and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
Paying Agent. The Company hereby initially appoints the Bankers Trust Company as
Registrar and Paying Agent, and by its acknowledgment and acceptance on the
signature page hereto, Bankers Trust Company hereby agrees so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent (including the Paying Agent) not a party to this
Indenture, which agreement shall implement the provisions of this Indenture that
relate to such Agent, and shall furnish a copy of each such agreement to the
Trustee. The Company shall promptly notify the Trustee in writing of the name
and address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Securities.
The Company initially appoints the Registrar to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section
6.1(4) or (6), the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Company, the Registrar and the Paying Agent, the
Trustee may, assume the duties and obligations of the Registrar and the Paying
Agent hereunder. For as long as the Trustee acts as the Registrar and the Paying
Agent, the Trustee shall have the rights and immunities of the Trustee as set
forth in Article VII and shall receive appropriate compensation therefor.
SECTION 2.4. Paying Agent to Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the Trustee
to agree in writing that such Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, or interest on, the Securities (whether such
assets have been distributed to it by the Company or any other obligor on the
Securities), and shall notify the Trustee in writing of any Default in making
any such payment. If either of the Company or a Subsidiary of the Company acts
as Paying Agent, it shall segregate such assets and hold them as a separate
trust fund for the benefit of the Holders or the Trustee. The Company at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default or any Event of Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent (if other than the Company) shall
have no further liability for such assets.
SECTION 2.5. Securityholder Lists.
--------------------
The Registrar shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S)312(a). If the
21
Trustee or any Paying Agent is not the Registrar, the Company shall furnish to
the Trustee on or before the third Business Day preceding each Interest Payment
Date and at such other times as the Trustee or any such Paying Agent may request
in writing a list in such form and as of such date as the Trustee or any such
Paying Agent reasonably may require of the names and addresses of Holders and
the Company shall otherwise comply with TIA (S)312 (a).
SECTION 2.6. Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
that the Definitive Securities surrendered for registration of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Definitive Securities that are Transfer
Restricted Securities, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification from such Holder
to that effect (in substantially the form set forth on the reverse
of the Security); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A
under the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security);
or
(C) if such Transfer Restricted Security is being
transferred (i) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act
or (ii) pursuant to an effective registration statement under the
Securities Act, or (iii) to an "institutional accredited investor"
within the meaning of Rule 501(A)(1), (2), (3) or (7) under the
Securities Act that is acquiring the security for its own account,
or for the account of such an institutional accredited investor, in
each case in a minimum principal amount of the Securities of
$100,000, not with a view to or for offer or sale in connection
with any distribution in violation of the Securities Act, or (iv)
in reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect (in
substantially the form set forth on the reverse of the Security)
and in the case of (i), (iii) and (iv) above, if the Company or the
Registrar so request, an Opinion of Counsel reasonably acceptable
to the Company and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
22
satisfaction of the requirements set forth below. Upon receipt by the Registrar
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Registrar, together with:
(i) if such Definitive Security is a Transfer Restricted
Security, a certification (in substantially the form set forth on
the reverse of the Security) that such Definitive Security is being
transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A
under the Securities Act; and
(ii) whether or not such Definitive Security is a Transfer
Restricted Security, written instructions of the Holder directing
the Registrar to make, or to direct the Securities Custodian to
make, an endorsement on the Global Security to reflect an increase
in the aggregate principal amount of the Securities represented by
the Global Security,
then the Registrar shall cancel such Definitive Security and cause, or direct
the Securities Custodian to cause, in accordance with the standing instructions
and procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall, upon receipt of an authentication
order in the form of an Officers' Certificate, authenticate a new Global
Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a
Definitive Security. Upon receipt by the Registrar of written
instructions or such other form of instructions as is customary for
the Depositary from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Security and upon
receipt by the Registrar of a written order or such other form of
instructions as is customary for the Depositary or the Person
designated by the Depositary as having such a beneficial interest
in a Transfer Restricted Security only, the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial owner,
a certification from such person to that effect (in substantially
the form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities
Act a certification to that effect from the transferor (in
substantially the form set forth on the reverse of the Security);
or
(C) if such beneficial interest is being transferred (i)
pursuant to an exemption from registration in accordance with Rule
144 or Regulation S under the Securities Act or (ii) pursuant to an
effective registration statement under the Securities Act, or (iii)
to an "institutional accredited investor" within the meaning of
Rule 501(A)(1), (2), (3) or (7) under the Securities Act that is
acquiring the security for its
23
own account, or for the account of such an institutional accredited
investor, in each case in a minimum principal amount of the
Securities of $100,000, not with any distribution in violation of
the Securities Act, or (iv) in reliance on another exemption from
the registration requirements of the Securities Act, a
certification to that effect from the transferee or transferor (in
substantially the form set forth on the reverse of the Security)
and in the case of (i), (iii) and (iv) above, if the Company or the
Registrar so requests, an Opinion of Counsel from the transferee or
transferor reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is in compliance with
the Securities Act;
then the Registrar or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication order in the form of
an Officers' Certificate, the Trustee or the Trustee's authenticating agent will
authenticate and deliver to the transferee a Definitive Security in the
appropriate principal amount.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall
be registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Registrar.
The Registrar shall deliver such Definitive Securities to the
persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Securities in Absence of
Depositary. If at any time:
(i) the Depositary for the Securities notifies the Company
that the Depositary is unwilling or unable to continue as
Depositary for the Global Securities and a successor Depositary for
the Global Securities is not appointed by the Company within 90
days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee
and the Registrar in writing that they elect to cause the issuance
of Definitive Securities under this Indenture, then the Company
will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of
Definitive Securities, will, or its authenticating agent will,
authenticate and deliver Definitive Securities, in an aggregate
principal amount equal to the principal amount of the Global
Securities, in exchange for such Global Securities.
(g) Legends.
(i) Except as permitted by the following paragraph (ii), each
Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange
therefor or substitution thereof) shall bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
24
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE
ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3)
or (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $100,000 FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE REGISTRAR'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE
REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by
a Global Security) pursuant to Rule 144 under the Securities Act or
an effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legend set forth in (i)
above and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(B) any such Transfer Restricted Security represented by a
Global Security shall not be subject to the provisions set forth in
(i) above (such sales
25
or transfers being subject only to the provisions of Section 2.6(c)
hereof); provided, however, that with respect to any request for an
exchange of a Transfer Restricted Security that is represented by a
Global Security for a Definitive Security that does not bear the
legend set forth in (i) above, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to Rule 144
(such certification to be substantially in the form set forth on
the reverse of the Security).
(h) Cancellation and/or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been exchanged
for Definitive Securities, redeemed, repurchased or cancelled, such Global
Security shall be returned to or retained and cancelled by the Registrar in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for Definitive
Securities, redeemed, repurchased or cancelled, the principal amount of
Securities represented by such Global Security shall be reduced and an
endorsement shall be made on such Global Security, by the Registrar or the
Securities Custodian, at the direction of the Registrar, to reflect such
reduction.
(i) Obligations with respect to Transfers and Exchanges of
Definitive Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee or any authenticating agent
of the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments,
or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments, or similar
governmental charge payable upon exchanges or transfers pursuant to
Section 2.2 (fourth paragraph), 2.10, 3.7, 4.14(8), 9.5, or 11.1
(final paragraph)).
(iii) The Registrar shall not be required to register the
transfer of or exchange (a) any Definitive Security selected for
redemption in whole or in part pursuant to Article III, except the
unredeemed portion of any Definitive Security being redeemed in
part, or (b) any Security for a period beginning 15 Business Days
before the mailing of a notice of an offer to repurchase pursuant
to Article XI or Section 4.14 hereof or redeem Securities pursuant
to Article III hereof and ending at the close of business on the
day of such mailing.
SECTION 2.7. Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Registrar or if the
Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Registrar, to the Registrar to the effect that the Security
has been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee or any authenticating agent of the Trustee shall authenticate a
replacement Security if the Registrar's requirements are met. If required by the
Trustee, the Registrar or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Registrar, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Securities duly issued hereunder.
26
SECTION 2.8. Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by the Registrar, those delivered to the
Registrar for cancellation, those reductions in the interest in a Global
Security effected by the Registrar hereunder and those described in this Section
2.8 as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security, except as provided in
Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Registrar receives proof satisfactory to it that the replaced
Security is held by a bona fide purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds Cash or U.S.
Government Obligations sufficient to pay all of the principal and interest and
premium, if any, due on the Securities payable on that date and payment of the
Securities called for redemption is not otherwise prohibited, then on and after
that date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.9. Treasury Securities.
-------------------
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee knows are
so owned shall be disregarded.
SECTION 2.10. Temporary Securities.
--------------------
Until Definitive Securities are ready for delivery, the Company may
prepare, the Subsidiary Guarantors shall endorse and the Trustee shall
authenticate temporary Securities upon receipt of an authentication order in the
form of an Officers' Certificate. Temporary Securities shall be substantially in
the form of Definitive Securities but may have variations that the Company
reasonably and in good faith consider appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare, the Subsidiary Guarantors
shall endorse and the Trustee shall authenticate Definitive Securities in
exchange for temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
permanent Securities authenticated and delivered hereunder.
SECTION 2.11. Cancellation.
------------
The Company at any time may deliver Securities to the Registrar for
cancellation. The Trustee and the Paying Agent shall forward to the Registrar
any Securities surrendered to them for registration of transfer, exchange or
payment. The Registrar, or at the direction of the Registrar, the Trustee or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, at the written direction of the Company, shall dispose
of all Securities surrendered for registration of transfer, exchange, payment or
cancellation. Subject to Section 2.7, the Company may not issue new Securities
to replace Securities that have been paid or delivered to the Registrar for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 2.11, except as expressly
permitted in the form of Securities and as permitted by this Indenture.
SECTION 2.12. Defaulted Interest.
------------------
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (herein called
27
"Defaulted Interest") shall forthwith cease to be payable to the registered
holder on the relevant Record Date, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee and the Paying Agent
in writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Paying Agent an amount of Cash equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Paying Agent for such deposit prior to the date
of the proposed payment, such Cash when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as provided in this
clause (1). Thereupon the Paying Agent shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Paying Agent of the notice of the proposed
payment. The Paying Agent shall promptly notify the Company and the Trustee of
such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security register not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose names
the Securities (or their respective predecessor Securities) are registered on
such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
and the Paying Agent of the proposed payment pursuant to this clause, such
manner shall be deemed practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
ARTICLE III.
REDEMPTION
SECTION 3.1. Optional Redemption.
-------------------
Redemption of Securities, as permitted by any provision of this
Indenture, shall be made in accordance with such provision and this Article III.
The Company will not have the right to redeem any Securities prior to May 15,
2000. On or after May 15, 2000, the Company will have the right to redeem all or
any part of the Securities at the Redemption Prices specified in the form of
Security attached as Exhibit A set forth therein under the caption "Redemption,"
in each case (subject to the right of Holders of record on a Record Date that is
on or prior to such Redemption Date to receive interest due on the corresponding
Interest Payment Date, and subject to the provisions set forth in Section 3.5),
including accrued and unpaid interest to the Redemption Date.
SECTION 3.2. Notices to Trustee and Paying Agent.
-----------------------------------
If the Company elects to redeem Securities pursuant to Paragraph 5
of the Securities, it shall notify the Trustee and the Paying Agent in writing
of the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Paying Agent to give notice of redemption to the Holders.
28
If the Company elects to reduce the principal amount of Securities
to be redeemed pursuant to Paragraph 5 of the Securities by crediting against
any such redemption Securities it has not previously delivered to the Trustee
and the Paying Agent for cancellation, it shall so notify the Trustee and the
Paying Agent of the amount of the reduction and deliver such Securities with
such notice.
The Company shall give each notice to the Trustee and the Paying
Agent provided for in this Section 3.2 at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee and the
Paying Agent). Any such notice may be cancelled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.3. Selection of Securities to Be Redeemed.
--------------------------------------
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
pro rata basis, by lot or in such other method as the Trustee shall determine to
be fair and appropriate.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly notify
the Company and the Paying Agent in writing of the Securities selected for
redemption and, in the case of any Security selected for partial redemption, the
principal amount thereof to be redeemed. Securities in denominations of $1,000
may be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
SECTION 3.4. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, Paying Agent and each Holder whose Securities are to be
redeemed. At the Company's request, the Paying Agent shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued and
unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless the Company defaults in their obligation to
deposit with the Paying Agent Cash, or U.S. Government Obligations which through
the scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, Cash in an amount to fund the Redemption Price, in accordance with
Section 3.6 hereof or such redemption payment is otherwise prohibited, interest
on Securities called for redemption ceases to accrue on and after the Redemption
Date and the only remaining right of the Holders of such Securities is to
receive payment of the Redemption Price, including accrued and unpaid interest
to the Redemption Date, upon surrender to the Paying Agent of the Securities
called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Security to be redeemed and that, after the Redemption Date, and
29
upon surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be redeemed,
as well as the aggregate principal amount of such Securities to be redeemed and
the aggregate principal amount of Securities to be outstanding after such
partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section 3.4
and pursuant to the optional redemption provisions of Paragraph 5 of the
Securities.
SECTION 3.5. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.4,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, including accrued and unpaid interest to the
Redemption Date. Upon surrender to the Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price, including interest, if any,
accrued and unpaid to the Redemption Date; provided that if the Redemption Date
is after a regular Record Date and on or prior to the Interest Payment Date to
which such Record Date relates, the accrued interest shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date; and
provided, further, that if a Redemption Date is a non-Business Day, payment
shall be made on the next succeeding Business Day and no interest shall accrue
for the period from such Redemption Date to such succeeding Business Day.
SECTION 3.6. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with
the Paying Agent (other than the Company or an Affiliate of the Company) Cash or
U.S. Government Obligations sufficient to pay the Redemption Price of, including
accrued and unpaid interest on, all Securities to be redeemed on such Redemption
Date (other than Securities or portions thereof called for redemption on that
date that have been delivered by the Company to the Registrar for cancellation).
The Paying Agent shall promptly return to the Company any Cash or U.S.
Government Obligations so deposited which is not required for that purpose.
If the Company complies with the preceding paragraph and the other
provisions of this Article III and payment of the Securities called for
redemption is not otherwise prohibited, interest on the Securities to be
redeemed will cease to accrue on the applicable Redemption Date, whether or not
such Securities are presented for payment. Notwithstanding anything herein to
the contrary, if any Security surrendered for redemption in the manner provided
in the Securities shall not be so paid upon surrender for redemption because of
the failure of the Company to comply with the preceding paragraph, interest
shall continue to accrue and be paid from the Redemption Date until such payment
is made on the unpaid principal, and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the rate and in the manner
provided in Section 4.1 hereof and the Security.
SECTION 3.7. Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part, the
Company shall issue, the Subsidiary Guarantors shall endorse and the Trustee
shall authenticate and deliver to the Holder, without service charge to the
Holder, a new Security or Securities equal in principal amount to the unredeemed
portion of the Security surrendered.
30
ARTICLE IV.
COVENANTS
SECTION 4.1. Payment of Securities.
---------------------
The Company shall pay the principal of and interest and premium, if
applicable, on the Securities on the dates and in the manner provided herein and
in the Securities. An installment of principal of or interest and premium, if
applicable, on the Securities shall be considered paid on the date it is due if
the Trustee or Paying Agent (other than the Company, a Subsidiary of the Company
or an Affiliate of the Company) holds for the benefit of the Holders, on or
before 10:00 a.m. New York City time on that date, Cash deposited and designated
for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
SECTION 4.2. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company and the Subsidiary
Guarantors shall give prompt written notice to the Trustee and the Paying Agent
of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee and the Paying Agent, if different, with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 14.2.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The Company shall
give prompt written notice to the Trustee and the Paying Agent, if different, of
any such designation or rescission and of any change in the location of any such
other office or agency. The Company hereby initially designates the corporate
trust office of the Paying Agent as such office.
SECTION 4.3. Limitation on Restricted Payments.
---------------------------------
On and after the Amendment Date the Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, make any
Restricted Payment, if (a) on the date of such Restricted Payment, a Default or
an Event of Default would exist and be continuing or would occur as a
consequence of (after giving effect, on a pro forma basis, to) such Restricted
Payment or (b) immediately prior to such Restricted Payment or after giving
effect thereto, the aggregate amount of all Restricted Payments made by the
Company and its Subsidiaries, including such proposed Restricted Payment (if not
made in Cash, then the Fair Market Value on the date of such Restricted Payment
of any property used therefor as evidenced by a Board Resolution set forth in an
Officers' Certificate delivered to the Trustee) from and after the Amendment
Date, and on or prior to the date of such Restricted Payment, shall exceed the
sum of (i) the amount determined by subtracting (x) 2.2 times the aggregate
Consolidated Interest Expense of the Company for the period (taken as one
accounting period) from the first day of the fiscal quarter in which the
Amendment Date occurs to the last day of the last full fiscal quarter prior to
the date of the proposed Restricted Payment (the "Computation Period") from (y)
Consolidated EBITDA of the Company for the Computation Period, plus (ii) the
aggregate Net Cash Proceeds received by the Company from the sale (other than to
a Subsidiary of the Company and other than in connection with a Qualified
Exchange) of its Qualified Capital Stock or as a capital contribution from its
Parent, in either case, which Net Cash Proceeds are received by the Company
after the Amendment Date and on or prior to the date of such Restricted Payment.
31
Notwithstanding the foregoing, the provisions set forth in clause
(b) of the immediately preceding paragraph will not prohibit (i) the payment of
any dividend within 60 days after the date of its declaration if such dividend
could have been made on the date of its declaration in compliance with the
foregoing provisions, (ii) a Qualified Exchange, or (iii) a Permitted Sharing
Arrangements Payment; provided, however, that any amounts expended pursuant to
clause (i) of this paragraph shall be included as Restricted Payments made for
purposes of clause (b) of the immediately preceding paragraph, whereas amounts
received and expended in connection with a Qualified Exchange or a Permitted
Sharing Arrangements Payment shall neither be counted as Restricted Payments
made nor be credited as Net Cash Proceeds received for purposes of clause
(b)(ii) of the immediately preceding paragraph.
SECTION 4.4. Corporate Existence.
-------------------
Subject to Article V, the Company and the Subsidiary Guarantors
shall do or cause to be done all things necessary to preserve and keep in full
force and effect their respective corporate existence in accordance with the
respective organizational documents of each of them (as the same may be amended
from time to time) and the rights (charter and statutory) and corporate
franchises of the Company and the Subsidiary Guarantors; provided, however,
nothing in this Section will prohibit the Company or any Subsidiary Guarantor
from engaging in any transaction permitted under Section 13.4 or Section 13.5
hereof and provided further that neither the Company nor any Subsidiary
Guarantor shall be required to preserve any right or franchise if (a) the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of such entity and (b) the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.5. Payment of Taxes and Other Claims.
---------------------------------
Except with respect to immaterial items, the Company and the
Subsidiary Guarantors shall, and shall cause each of their Subsidiaries to, pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon the Company, any Subsidiary Guarantor or any of their Subsidiaries
or any of their respective properties and assets; and (ii) all lawful claims,
whether for labor, materials, supplies, services or anything else, which have
become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Subsidiary Guarantor or any of their
Subsidiaries; provided, however, that neither the Company nor any Subsidiary
Guarantor shall be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which disputed amounts adequate reserves have been established in accordance
with GAAP.
SECTION 4.6. Maintenance of Properties and Insurance.
---------------------------------------
The Company and the Subsidiary Guarantors shall cause all material
properties used or useful to the conduct of their business and the business of
each of their Subsidiaries to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; provided, however, that
nothing in this Section 4.6 shall prevent the Company or any Subsidiary
Guarantor from discontinuing any operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is,
(a) in the judgment of the Board of Directors of the Company, desirable in the
conduct of the business of such entity and (b) not disadvantageous in any
material respect to the Holders.
The Company and the Subsidiary Guarantors shall provide, or cause
to be provided, for themselves and each of their Subsidiaries, insurance
(including appropriate self insurance) against loss or damage of the kinds that,
in the reasonable, good faith opinion of the Company is adequate and appropriate
for the conduct of the business of the Company, the Subsidiary Guarantors and
such Subsidiaries.
32
SECTION 4.7. Compliance Certificate; Notice of Default.
-----------------------------------------
(a) The Company and each Subsidiary Guarantor shall deliver to
the Trustee within 120 days after the end of its fiscal year an Officers'
Certificate complying with TIA (S) 314(a)(4) stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company or such Subsidiary Guarantor, as the case may
be, has kept, observed, performed and fulfilled its obligations under this
Indenture and further stating, as to each such Officer signing such certificate,
whether or not the signer knows of any failure by the Company or any Subsidiary
Guarantor to comply with any conditions or covenants in this Indenture and, if
such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default or any Event of Default unless one of its Trust Officers receives
written notice thereof from the Company or any of the Holders.
SECTION 4.8. Reports.
-------
Whether or not the Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and to each Holder and to prospective purchasers of Securities
identified to the Company by an Initial Purchaser, within 15 days after it files
or would have been required to file such with the Commission, annual and
quarterly financial statements substantially equivalent to financial statements
that would have been included in reports filed with the Commission if the
Company were subject to the requirements of Section 13 or 15(d) of the Exchange
Act, including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the Commission, and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required. Whether or not required by the rules and regulations of
the Commission, the Company will file a copy of all such information and reports
with the Commission for public availability and will make such information
available to securities analysts and prospective investors upon request. The
Company shall at all times comply with TIA (S) 314(a). In addition, for so long
as the Transfer Restricted Securities are outstanding, the Company will continue
to provide to Holders of Transfer Restricted Securities and to prospective
purchasers of the Securities the information required by Rule 144A(d)(4) under
the Securities Act.
SECTION 4.9. Limitation on Status as Investment Company.
------------------------------------------
Neither the Company nor any Subsidiary shall become an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment Company
Act.
SECTION 4.10. Limitation on Transactions with Affiliates.
------------------------------------------
After the Issue Date, the Company shall not, and shall not permit
any of its Subsidiaries to, enter into any contract, agreement, arrangement or
transaction with any Affiliate (an "Affiliate Transaction") or any series of
related Affiliate Transactions (other than Exempted Affiliate Transactions),
except for such Affiliate Transactions made in good faith, the terms of which
are fair and reasonable to the Company or such Subsidiary, as the case may be,
and are at least as favorable as the terms which could be obtained by the
Company or such Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis with persons who are not Affiliates.
Without limiting the foregoing, (a) any Affiliate Transaction or
series of related Affiliate Transactions (other than Exempted Affiliate
Transactions) with an aggregate value in excess of $5.0 million must first be
approved pursuant to a Board Resolution by a majority of the Board of Directors
of the Company who are
33
disinterested in the subject matter of the transaction, and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions (other
than Exempted Affiliate Transactions) with an aggregate value in excess of $20.0
million the Company must first obtain (i) a favorable written opinion from an
independent financial advisor of national reputation as to the fairness from a
financial point of view of such transaction to the Company or such Subsidiary or
(ii) in the case of a real estate transaction or related real estate
transactions with an aggregate value in excess of $20.0 million but not in
excess of $50.0 million an opinion from an independent, qualified appraiser that
the consideration received in connection with such transaction was comparable to
the Fair Market Value of the subject assets; provided, however, in the case of
an individual who serves on the Board of Directors or as an officer of Host
Marriott or any of its Subsidiaries on the one hand, and of the Company or any
of its Subsidiaries on the other hand, such service, in and of itself, shall not
affect such person's status as a disinterested member of the Board of Directors
of the Company for purposes of clause (a) of this paragraph.
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and
-------------------------------------------------------
Disqualified Capital Stock.
--------------------------
Except as set forth below, neither the Company nor any of the
Company's Subsidiaries shall, directly or indirectly, issue, assume, guaranty,
incur, become directly or indirectly liable with respect to (including as a
result of an Acquisition), or otherwise become responsible for, contingently or
otherwise (individually and collectively, to "incur" or "Incur" or, as
appropriate, an "incurrence" or "Incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness). Notwithstanding
the foregoing:
(a) if on the date of such Incurrence (the "Incurrence Date"),
the Consolidated Coverage Ratio of the Company for the Reference Period
immediately preceding the Incurrence Date, after giving effect on a pro forma
basis to such incurrence of such Indebtedness or Disqualified Capital Stock and,
to the extent set forth in the definition of Consolidated Coverage Ratio, the
use of proceeds thereof, would be at least (w) 1.8 to 1 if such incurrence
occurs on or before June 1, 1996, (x) 1.9 to 1 if such incurrence occurs after
June 1, 1996, but before the Amendment Date, (y) 1.8 to 1 if such incurrence
occurs at any time on or after the Amendment Date but on or prior to the earlier
of the New Notes Issuance Date or September 30, 1997, or (z) 2.2 to 1 if such
incurrence occurs at any time thereafter (the "Debt Incurrence Ratio"), then the
Company and its Subsidiaries may Incur Indebtedness or Disqualified Capital
Stock; provided, however, any Indebtedness incurred by the Non-Guarantor
Subsidiaries in reliance on this clause (a) shall be limited to an aggregate
amount outstanding at any time of up to $100 million of Indebtedness which
Indebtedness shall be secured by liens permitted under clause (m) of the
definition of "Permitted Liens";
(b) the Company and the Subsidiary Guarantors may Incur
Indebtedness evidenced by the Securities and represented by this Indenture up to
the amounts specified herein as of the date hereof;
(c) the Company and its Subsidiaries or Subsidiary Guarantors, as
applicable, may Incur Refinancing Indebtedness with respect to any Indebtedness
or Disqualified Capital Stock, as applicable, described in this clause or
clauses (a), (b) or (e) of this Section 4.11 or which was outstanding at the
Company or its Subsidiaries on the Issue Date or that was outstanding at
Acquisitions or its Subsidiaries as of the Acquisitions Issue Date;
(d) the Company and its Subsidiaries or its Subsidiary
Guarantors, as applicable, may Incur Permitted Indebtedness;
(e) the Company and its Subsidiaries may Incur Non-recourse
Purchase Money Indebtedness; and
(f) the Company and its Subsidiary Guarantors may Incur
Indebtedness (in addition to Indebtedness permitted by any other clause of this
paragraph) in an aggregate amount outstanding at any time (including any
Indebtedness issued to refinance, replace, or refund such Indebtedness) of up to
$65.0 million.
Notwithstanding the foregoing, no Non-Guarantor Subsidiary may
Incur any Indebtedness or Disqualified Capital Stock unless on the Incurrence
Date the Consolidated Coverage Ratio for all Non-Guarantor Subsidiaries, on a
combined basis, for the Reference Period immediately preceding the Incurrence
Date, after giving
34
effect on a pro-forma basis to such incurrence of such Indebtedness or
Disqualified Capital Stock and, to the extent set forth in the definition of
Consolidated Coverage Ratio, the use of proceeds thereof, would be at least 2.0
to 1.
Indebtedness of any Person that is not a Subsidiary of the Company,
which Indebtedness is outstanding at the time such Person becomes a Subsidiary
of the Company or is merged with or into or consolidated with the Company or a
Subsidiary of the Company, shall be deemed to have been incurred at the time
such Person becomes a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company and Indebtedness
which is assumed at the time of the acquisition of any asset shall be deemed to
have been Incurred at the time of such acquisition.
SECTION 4.12. Limitations on Dividends and other Payment Restrictions
-------------------------------------------------------
Affecting Subsidiaries.
----------------------
Neither the Company nor the Subsidiary Guarantors shall, directly
or indirectly, create, assume or suffer to exist any consensual restriction on
the ability of any Subsidiary Guarantors to pay dividends or make other
distributions to or on behalf of, or to pay any obligation to or on behalf of,
or otherwise to transfer assets or property to or on behalf of, or make or pay
loans or advances to or on behalf of, the Company or any other Subsidiary
Guarantor except (a) restrictions imposed by the Securities or this Indenture,
(b) restrictions imposed by applicable law, (c) existing restrictions under
Existing Indebtedness or under any Acquired Indebtedness not incurred in
violation of this Indenture or any agreement relating to any property, asset, or
business acquired by the Company or any of the Subsidiary Guarantors, which
restrictions existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable to
any person, other than the person acquired, or to any property, asset or
business, other than the property, assets and business so acquired, (d) any such
restriction or requirement imposed by Indebtedness incurred under paragraph (e)
of Section 4.11, provided such restriction or requirement relates only to the
transfer of the property subject to such Non-recourse Purchase Money
Indebtedness, (e) restrictions with respect to a Subsidiary Guarantor imposed
pursuant to a binding agreement which has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary Guarantor, provided such restrictions apply solely to the Capital
Stock or assets of such Subsidiary Guarantor which are being sold, and (f) in
connection with and pursuant to permitted refinancings thereof, replacements of
restrictions imposed pursuant to clause (c) or (d) of this paragraph that are
not more restrictive than those being replaced and do not apply to any other
person or assets other than those that would have been covered by the
restrictions in the Indebtedness so refinanced. Notwithstanding the foregoing,
customary provisions restricting subletting or assignment of any lease entered
into in the ordinary course of business, consistent with industry practice,
shall not in and of themselves be deemed to be a restriction on the ability of
the Company or any of its Subsidiary Guarantors to transfer such property.
SECTION 4.13. Limitations on Liens.
--------------------
The Company and the Subsidiary Guarantors shall not, and shall not
permit any of their Subsidiaries to, directly or indirectly, Incur, or suffer to
exist any Lien on any assets or properties of the Company or any of its
Subsidiaries, now owned or hereafter acquired, or any income or profits
therefrom, except Permitted Liens, unless all payments due under this Indenture
and the Securities are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured
by such Lien.
SECTION 4.14. Limitation on Sale of Assets and Subsidiary Stock.
-------------------------------------------------
The Company shall not, and shall not permit any of its Subsidiaries
to, in one or a series of related transactions, convey, sell, transfer, assign
or otherwise dispose of, directly or indirectly, any of its property, business
or assets, including by merger or consolidation (in the case of a Subsidiary
Guarantor or a Subsidiary of the Company), and including any sale or other
transfer or issuance of any Capital Stock of any Subsidiary of the Company,
whether by the Company or a Subsidiary of either or through the issuance, sale
or transfer of Capital Stock by a Subsidiary of the Company (an "Asset Sale"),
unless (i) the Board of Directors of the Company determines in good faith that
the Company or such Subsidiary, as applicable, receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value of the assets or
Capital Stock issued or sold or otherwise disposed of, (ii) no Default or Event
of Default would occur as a consequence of (after giving effect, on a pro forma
35
basis, to) such Asset Sale, and (iii) at least 75% of the consideration therefor
received by the Company or such Subsidiary is in the form of Cash or Cash
Equivalents; provided that for purposes of this provision the amount of (A) any
Indebtedness (other than Securities) that is required to be repaid or assumed
(and is either repaid or assumed by the transferee of the related assets) by
virtue of such Asset Sale and which is secured by a Lien on the property or
assets sold and (B) any securities or other obligations received by the Company
or any such Subsidiary from such transferee that are immediately converted by
the Company or such Subsidiary into Cash (or as to which the Company or such
Subsidiary has received at or prior to the consummation of the Asset Sale a
commitment (which may be subject to customary conditions) from a nationally
recognized investment, merchant or commercial bank to convert into Cash within
90 days of the consummation of such Asset Sale and which are thereafter actually
converted into Cash within such 90-day period) will be deemed to be Cash.
Within 365 days after the receipt of any Net Cash Proceeds from an
Asset Sale, the Company may invest or commit such Net Cash Proceeds, pursuant to
a binding commitment subject only to reasonable, customary closing conditions,
to be invested (and providing such Net Cash Proceeds are, in fact, so invested,
within an additional 180 days) in (x) fixed assets and property (other than
notes, bonds, obligations and securities) which in the good faith reasonable
judgment of the Board of Directors of the Company will immediately constitute or
be part of a Related Business of the Company or such Subsidiary (if it continues
to be a Subsidiary) immediately following such transaction, (y) Permitted
Mortgage Investments or (z) a controlling interest in the Capital Stock of an
entity engaged in a Related Business; provided, that concurrently with an
Investment specified in clause (z), such entity becomes a Subsidiary Guarantor.
Pending the application of any such Net Cash Proceeds as described above, the
Company may invest such Net Cash Proceeds in any manner that is not prohibited
by this Indenture. Any Net Cash Proceeds from Asset Sales that are not applied
or invested as provided in the first sentence of this paragraph (including any
Net Cash Proceeds which were committed to be invested as provided in such
sentence but which are not in fact invested within the time period provided)
will be deemed to constitute "Excess Proceeds."
Notwithstanding the foregoing provisions of the prior paragraph:
(i) the Company and its Subsidiaries may, in the ordinary
course of business, convey, sell, lease, transfer, assign or
otherwise dispose of inventory acquired and held for resale in the
ordinary course of business;
(ii) the Company and its Subsidiaries may convey, sell,
lease, transfer, assign or otherwise dispose of assets pursuant to
and in accordance with the provisions of Article V;
(iii) the Company and its Subsidiaries may sell or dispose
of damaged, worn out or other obsolete property in the ordinary
course of business so long as such property is no longer necessary
for the proper conduct of the business of the Company or such
Subsidiary, as applicable;
(iv) the Company and its Subsidiaries may consummate any
sale or series of related sales (including, without limitation,
sale and leaseback transactions) of assets or properties of the
Company and its Subsidiaries having a Fair Market Value of less
than $2.0 million; and
(v) the Company and its Subsidiaries may exchange assets
held by the Company or a Subsidiary for one or more hotels and/or
one or more Related Businesses of any person or entity owning one
or more hotels and/or one or more Related Businesses; provided,
that the Board of Directors of the Company has determined that the
terms of any exchange are fair and reasonable and the Fair Market
Value of the assets received by the Company are approximately equal
to the Fair Market Value of the assets exchanged by the Company.
36
For purposes of this Section 4.14, "Excess Proceeds Date" means
each date on which the aggregate amount of Excess Proceeds exceeds $15.0
million. Within 30 days after each Excess Proceeds Date, the Company will make a
cash offer (an "Offer to Purchase") to all Holders of Securities and holders of
any other Indebtedness of the Company ranking on a parity with the Securities
from time to time outstanding with similar provisions requiring the Company to
make an offer to purchase or to redeem such Indebtedness with the proceeds from
such Asset Sale, pro rata in proportion to the respective principal amounts
pursuant to an irrevocable, unconditional offer (an "Asset Sale Offer") to
purchase the maximum principal amount of Securities and such other senior
Indebtedness then outstanding that may be purchased out of the Excess Proceeds
(the "Offer Amount"), at an offer price in cash (the "Offer Price") in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
thereon to the date of purchase (the "Purchase Date") in accordance with the
procedures set forth in this Section 4.14.
Notice of an Offer to Purchase will be sent 20 Business Days prior
to the close of business on the earlier of (a) the third Business Day prior to
the Purchase Date and (b) the third Business Day following the expiration of the
Offer to Purchase (such earlier date being the "Final Put Date"), by first-class
mail, by the Company (or by the Registrar at the request and expense of the
Company) to each Holder at its registered address, with a copy to the Trustee
and the Paying Agent. The notice to the Holders will contain all information,
instructions and materials required by applicable law or otherwise material to
such Holders' decision to tender Securities pursuant to the Offer to Purchase.
The notice, which (to the extent consistent with this Indenture) shall govern
the terms of the offer to Purchase, shall state:
(1) that the Offer to Purchase is being made pursuant to such
notice and this Section 4.14;
(2) the Offer Amount, the Offer Price (including the amount of
accrued and unpaid interest), the Final Put Date, and the Purchase Date, which
Purchase Date shall be on or prior to 60 Business Days following the Excess
Proceeds Date;
(3) that any Security or portion thereof not tendered or accepted
for payment will continue to accrue interest;
(4) that, unless the Company defaults in depositing Cash with the
Paying Agent in accordance with the penultimate paragraph of this Section 4.14
or such payment is otherwise prevented, any Security, or portion thereof,
accepted for payment pursuant to the Offer to Purchase shall cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Security, or portion thereof,
purchased pursuant to an Offer to Purchase will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent (which may not for
purposes of this Section 4.14, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company) at the address
specified in the notice prior to the close of business on the Final Put Date;
(6) that Holders will be entitled to withdraw their elections, in
whole or in part, if the Paying Agent (which may not for purposes of this
Section 4.14, notwithstanding any other provision of this Indenture, be the
Company or any Affiliate of the Company) receives, up to the close of business
on the Final Put Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Securities the
Holder is withdrawing and a statement that such Holder is withdrawing his
election to have such principal amount of Securities purchased;
(7) that if Securities and other senior Indebtedness in a
principal amount in excess of the principal amount of Securities and other
senior Indebtedness to be acquired pursuant to the Offer to Purchase are
tendered and not withdrawn, the Trustee shall select the Securities to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Securities in denominations of $1,000 or
integral multiples of $1,000 shall be acquired);
37
(8) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered; and
(9) a brief description of the circumstances and relevant facts
regarding such Asset Sales.
Any such Offer to Purchase shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture that conflict with such laws
shall be deemed to be superseded by the provisions of such laws.
On or before a Purchase Date, the Company shall, to the extent
lawful, (i) accept for payment Securities or portions thereof properly tendered
pursuant to the Offer to Purchase on or before the Final Put Date (on a pro rata
basis if required pursuant to paragraph (7) hereof), (ii) deposit with the
Paying Agent Cash sufficient to pay the Offer Price for all Securities or
portions thereof so tendered and accepted and (iii) deliver to the Paying Agent
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof being purchased by the Company. The Paying Agent
shall on each Purchase Date mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Offer Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered; provided that if the Purchase Date is after a regular Record Date
and on or prior to the Interest Payment Date to which such Record Date relates,
the accrued interest shall be payable to the Holder of the purchased Securities
registered on the relevant Record Date. Any Security not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof.
If the amount required to acquire all Securities and other senior
Indebtedness tendered pursuant to the Offer to Purchase (the "Acceptance
Amount") made pursuant to the third paragraph of this Section 4.14 is less than
the Offer Amount, the excess of the Offer Amount over the Acceptance Amount may
be used by the Company for general corporate purposes without restriction,
unless otherwise restricted by the other provisions of this Indenture. Upon
commencement of any Offer to Purchase made in accordance with the terms of this
Indenture, the amount of Excess Proceeds existing at the time of the
commencement will be reduced to zero irrespective of the amount of Securities
tendered pursuant to the Offer to Purchase.
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
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 which would prohibit or
forgive the Company or any Subsidiary Guarantor from paying all or any portion
of the principal of, premium of, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each of the Company and the Subsidiary Guarantors
hereby expressly waives 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 or any Paying Agent, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 4.16. Limitation on Investments in Non-Guarantor Subsidiaries.
-------------------------------------------------------
From and after the Amendment Date, the Company shall not, and shall
not permit any Subsidiary Guarantor to, directly or indirectly, make any
Investment in a Non-Guarantor Subsidiary if, after giving effect thereto, the
Net Non-Guarantor Investment would exceed an amount equal to (a) the aggregate
of all capital contributions made to the Company on or after the Amendment Date
plus (b) the Applicable Percentage of the sum of (i) the combined total assets
of the Company and the Subsidiary Guarantors, excluding the assets of the Non-
Guarantor Subsidiaries (determined by the Company in accordance with GAAP), plus
(ii) the Net Non-Guarantor Investment.
38
ARTICLE V.
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.
-------------------------------------------
(a) The Company shall not, directly or indirectly, consolidate
with or merge with or into another Person or sell, lease, convey or transfer all
or substantially all of its assets (computed on a consolidated basis), whether
in a single transaction or a series of related transactions, to another Person
or group of affiliated Persons, unless (i) either (a) the Company is the
continuing entity or (b) the resulting, surviving or transferee entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Company in connection with the Securities and this
Indenture; (ii) no Default or Event of Default would occur as a consequence of
(after giving effect, on a pro forma basis, to) such transaction; (iii)
immediately after giving effect to such transaction on a pro forma basis, the
Consolidated Net Worth of the consolidated resulting, surviving or transferee
entity is equal to at least 90% of the Consolidated Net Worth of the Company
immediately prior to such transaction; (iv) immediately after giving effect to
such transaction on a pro forma basis, the consolidated resulting, surviving or
transferee entity would immediately thereafter be permitted to Incur at least
$1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio set forth
in Section 4.11(a) hereof; and (v) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and, if a supplemental indenture is required,
such supplemental indenture complies with this Indenture and that all conditions
precedent herein relating to such transaction have been satisfied.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
SECTION 5.2. Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named herein as the Company, and when a successor corporation duly assumes all
of the obligations of the Company pursuant hereto and pursuant to the
Securities, the Company shall be released from such obligations under the
Securities and this Indenture except with respect to any obligations that arise
from, or are related to, such transaction.
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.
-----------------
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) failure to pay any installment of interest upon the
Securities as and when the same becomes due and payable and the continuance of
such default for a period of 30 days;
(2) failure to pay all or any part of the principal of or
premium, if any, on the Securities when and as the same becomes due and payable
at maturity, upon redemption, by acceleration or otherwise,
39
including, without limitation, default in the payment of the Change of Control
Payment in accordance with Article XI or the Offer Price in accordance with
Section 4.14;
(3) failure by the Company or any Subsidiary to observe or
perform any covenant or agreement contained in the Securities or this Indenture
(other than a default in the performance of any covenant or agreement which is
specifically dealt with elsewhere in this Section 6.1), and continuance of such
failure for a period of 30 days after there has been given, by registered or
certified mail, to the Company by the Trustee, or to the Company and the Trustee
by Holders of at least 25% in aggregate principal amount of the outstanding
Securities, a written notice specifying such default or breach, requiring it to
be remedied and stating that such notice is a "Notice of Default" hereunder;
(4) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its Significant
Subsidiaries under any bankruptcy or similar law, and such decree or order shall
have continued undischarged and unstayed for a period of 60 consecutive days; or
a decree, judgment or order of a court of competent jurisdiction appointing a
receiver, liquidator, trustee, or assignee in bankruptcy or insolvency for the
Company, any of its Significant Subsidiaries, or any substantial part of the
property of any such Person, or for the winding up or liquidation of the affairs
of any such Person, shall have been entered, and such decree, judgment, or order
shall have remained in force undischarged and unstayed for a period of 60 days;
(5) a default in (i) Non-recourse Purchase Money Indebtedness of
the Company or any of its Subsidiaries with an aggregate principal amount in
excess of 10% of the aggregate assets of the Company and its Subsidiaries, or
(ii) other Indebtedness of the Company or any of its Subsidiaries with an
aggregate principal amount in excess of $20.0 million, in either case (a)
resulting from the failure to pay principal or interest or premium, if any, when
due or (b) as a result of which the maturity of such Indebtedness has been
accelerated prior to its stated maturity;
(6) the Company or any of its Significant Subsidiaries shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy or similar law or
similar statute, or shall consent to the filing of any such petition, or shall
consent to the appointment of a Custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any substantial part of its assets
or property, or shall make a general assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due, or shall, within the meaning of any Bankruptcy Law, become insolvent, fail
generally to pay its debts as they become due, or take any corporate action in
furtherance of or to facilitate, conditionally or otherwise, any of the
foregoing; or
(7) final unsatisfied judgments not covered by insurance for the
payment of money, or the issuance of any warrant of attachment against any
portion of the property or assets of the Company or any of its Subsidiaries,
aggregating in excess of $10.0 million at any one time shall be rendered against
the Company or any of its Subsidiaries and not be stayed, bonded or discharged
for a period (during which execution shall not be effectively stayed) of 60 days
(or, in the case of any such final judgment which provides for payment over
time, which shall so remain unstayed, unbonded or undischarged beyond any
applicable payment date provided therein).
Notwithstanding the 30-day period and notice requirement contained
in Section 6.1(3) above, (i) with respect to a default under Article XI, the 30-
day period referred to in Section 6.1(3) shall be deemed to have begun as of the
date notice of a Change of Control Offer is required to be sent to the Holders
in the event that the Company has not complied with the provisions of Section
11.1, and the Trustee or Holders of at least 25% in principal amount of the
outstanding Securities thereafter give the Notice of Default referred to in
Section 6.1(3) to the Company and, if applicable, the Trustee; provided,
however, that if the breach or default is a result of a default in the payment
when due of the Change of Control Payment on the Change of Control Payment Date,
such default shall be deemed, for purposes of this Section 6.1, to arise no
later than on the Change of Control Payment Date; and (ii) with respect to a
default under Section 4.14 requiring the giving of such notice, the 30-day
period referred to in
40
Section 6.1(3) shall be deemed to have begun as of the date the notice of an
Offer to Purchase is required to be sent in the event that the Company has not
complied with the provisions of Section 4.14, and the Trustee or Holders of at
least 25% in principal amount of the outstanding Securities thereafter give the
Notice of Default referred to in Section 6.1(3) to the Company and, if
applicable, the Trustee; provided, however, that if the breach or default is a
result of a default in the payment when due of the Offer Price on the Purchase
Date, such default shall be deemed, for purposes of this Section 6.1, to arise
no later than on the Purchase Date.
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment.
-------------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Section 6.1(4) or (6) relating to the Company or any of its Significant
Subsidiaries) occurs and is continuing, then, in every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of then outstanding Securities, by a notice in writing to the Company
(and to the Trustee if given by Holders) (an "Acceleration Notice"), may declare
all of the principal of the Securities (or the Change of Control Payment if the
Event of Default includes failure to pay the Change of Control Payment),
determined as set forth below, including in each case accrued interest thereon,
to be due and payable immediately. If an Event of Default specified in Section
6.1(4) or (6) relating to the Company or any Significant Subsidiary occurs, all
principal and accrued interest thereon will be immediately due and payable on
all outstanding Securities without any declaration or other act on the part of
the Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee Cash
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of (and premium, if any,
applicable to) any Securities which would become due other
than by reason of such declaration of acceleration, and
interest thereon at the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7, and
(2) all Events of Default, other than the nonpayment of the
principal of, premium, if any, and interest on Securities which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.12, including, if applicable, any Event of Default
relating to the covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no
waiver shall be effective against any Holder for any Event of Default or event
which with notice or lapse of time or both would be an Event of Default with
respect to (i) any covenant or provision which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected thereby,
unless all such affected Holders agree, in writing, to waive such Event of
Default or other event and (ii) any provision requiring supermajority approval
to amend, unless such default has been waived by such a supermajority. No such
waiver shall cure or waive any subsequent default or impair any right consequent
thereon.
41
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company covenants that if an Event of Default in payment
of principal, premium, or interest specified in clause (1) or (2) of Section 6.1
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities, the whole amount then due
and payable on such Securities for principal, premium (if any) and interest,
and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any) and on any overdue
interest, at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 7.7.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust in favor
of the Holders, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal and premium, if any, or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise to take any and all actions under the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and its agent and counsel and all other amounts due the Trustee under Section
7.7) and of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and 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, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment, or composition affecting
the Securities 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.
42
SECTION 6.5. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust in favor of the Holders, and any
recovery of judgment shall, after provision for the payment of compensation to,
and expenses, disbursements and advances of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6.6. Priorities.
----------
Any money collected by the Trustee pursuant to this Article VI
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium (if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant
to Section 7.7;
SECOND: To the Holders in payment of the amounts then due and
unpaid for principal of, premium (if any) and interest on, the
Securities in respect of which or for the benefit of which
such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable
on such Securities for principal, premium (if any) and
interest, respectively; and
THIRD: To the Company or such other Person as may be lawfully
entitled thereto, the remainder, if any.
The Trustee may, but shall not be obligated to, fix a record
date and payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. Limitation on Suits.
-------------------
No Holder of any Security shall have any right to order or
direct the Trustee to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(A) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in
aggregate principal amount of then outstanding Securities
shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(C) such Holder or Holders have offered to
the Trustee reasonable security or indemnity against the
costs, expenses and liabilities to be incurred or reasonably
probable to be incurred in compliance with such request;
(D) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity has
failed to institute any such proceeding; and
43
(E) no direction inconsistent with such
written request has been given to the Trustee during such
60-day period by the Holders of a majority in aggregate
principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. Unconditional Right of Holders to Receive Principal,
---------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision of this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of, and premium (if any) and
interest on, such Security on the Maturity Dates of such payments as expressed
in such Security (in the case of redemption, the Redemption Price on the
applicable Redemption Date, in the case of the Change of Control Payment, on the
applicable Change of Control Payment Date, and in the case of the Offer Price,
on the Purchase Date) and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.9. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.7, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10. Delay or Omission Not Waiver.
----------------------------
No delay or omission by the Trustee or by any Holder of any
Security to exercise any right or remedy arising upon any Event of Default shall
impair the exercise of any such right or remedy or constitute a waiver of any
such Event of Default. Every right and remedy given by this Article VI 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 6.11. Control by Holders.
------------------
The Holder or Holders of a majority in aggregate principal
amount of then outstanding Securities shall have the right to direct 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, provided,
that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or involve the Trustee in personal liability,
(2) the Trustee shall not determine that the action so
directed would be unjustly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
44
SECTION 6.12. Waiver of Past Default.
----------------------
Subject to Section 6.8, the Holder or Holders of not less than
a majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any past default hereunder and its consequences,
except a default
(A) in the payment of the principal of,
premium, if any, or interest on, any Security as specified in
clauses (1) and (2) of Section 6.1 and not yet cured, or
(B) in respect of a covenant or provision
hereof which, under Article IX, cannot be modified or amended
without the consent of the Holder of each outstanding Security
affected.
(C) in respect of any provision hereof
which, under Article IX, cannot be modified, amended or waived
without the consent of the Holders of 66-2/3% of the aggregate
principal amount of the Securities at the time outstanding;
provided, that any such waiver may be effected with the
consent of the Holders of 66-2/3% of the aggregate principal
amount of the Securities then outstanding.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair the exercise of any right arising
therefrom.
SECTION 6.13. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken, suffered or omitted to be taken
by it as Trustee, any court may in its discretion require the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys, fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 6.13 shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in aggregate principal amount of the outstanding Securities, or to any
suit instituted by any Holder for enforcement of the payment of principal of, or
premium (if any) or interest on, any Security on or after the respective
Maturity Date expressed in such Security (including, in the case of redemption,
on or after the Redemption Date).
SECTION 6.14. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Subsidiary Guarantors, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed,
subject to the terms hereof.
45
SECTION 7.1. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are adverse to
the Trustee, and
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph
(b) of this Section 7.1,
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.11.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or at the request, order or direction of the Holders
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) , (c), (d) and (f) of this
Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
SECTION 7.2. Rights of Trustee.
-----------------
Subject to Section 7.1:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 14.4 and 14.5. The
46
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such certificate or advice of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture, nor for any action
permitted to be taken or omitted hereunder by any Agent.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Subsidiary Guarantor shall be sufficient if signed by an Officer of the Company
or such Subsidiary Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Subsidiary Guarantor's covenants in Article
IV hereof or as to the performance by any Agent of its duties hereunder. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except any Default or Event of Default of which the Trustee
shall have received written notification or with respect to which a Trustee
Officer shall have actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate.
SECTION 7.3. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company, any
Subsidiary Guarantor, any of their Subsidiaries, or their respective Affiliates
with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities and it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication (if executed by the Trustee), or the use or
application of any funds received by a Paying Agent other than the Trustee.
47
SECTION 7.5. Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each Securityholder
notice of the uncured Default or Event of Default within 90 days after such
Default or Event of Default occurs. Except in the case of a Default or an Event
of Default in payment of principal (or premium, if any) of, or interest on, any
Security (including the payment of the Change of Control Payment on the Change
of Control Payment Date, the payment of the Redemption Price on the Redemption
Date and the payment of the Offer Price on the Purchase Date), the Trustee may
withhold the notice if and so long as a Trust Officer in good faith determines
that withholding the notice is in the interest of the Securityholders.
SECTION 7.6. Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA (S) 313(a). The Trustee also shall comply with TIA (S) 313(b). The
Trustee also shall transmit by mail all reports as required by TIA (S) 313(c).
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or automated quotation
system.
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Securities are listed in accordance with
TIA (S) 313(d).
SECTION 7.7. Compensation and Indemnity.
--------------------------
The Company and the Subsidiary Guarantors jointly and
severally agree to pay to the Trustee from time to time reasonable compensation
for its services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and the Subsidiary
Guarantors shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in accordance with
this Indenture. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel.
The Company and the Subsidiary Guarantors jointly and
severally agree to indemnify the Trustee (in its capacity as Trustee) and each
of its officers and each of them, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by it without negligence or bad
faith on the part of the Trustee, arising out of or in connection with the
administration of this trust and its rights or duties hereunder including the
reasonable costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company and the
Subsidiary Guarantors shall defend the claim and the Trustee shall provide
reasonable cooperation at the Company's and the Subsidiary Guarantors' expense
in the defense. The Trustee may have separate counsel and the Company and the
Subsidiary Guarantors shall pay the reasonable fees and expenses of such
counsel. The Company and the Subsidiary Guarantors need not pay for any
settlement made without their written consent. The Company and the Subsidiary
Guarantors need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.
To secure the Company's and the Subsidiary Guarantors' payment
obligations in this Section 7.7, the Trustee shall have a Lien prior to the
Securities on all assets held or collected by the Trustee, in its capacity as
Trustee, except assets held in trust to pay principal and premium, if any, of or
interest on particular Securities.
48
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(4) or (6) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's and the Subsidiary Guarantors' obligations under
this Section 7.7 and any lien arising hereunder shall survive the resignation or
removal of the Trustee, the discharge of the Company's and the Subsidiary
Guarantors' obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company in writing.
The Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor trustee with the Company's
consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a receiver, Custodian, or other public officer takes
charge of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 have been paid, the retiring Trustee shall transfer all property held by it
as trustee to the successor Trustee, subject to the Lien provided in Section
7.7, the resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holder or Holders of at least 10% in aggregate principal amount
of the outstanding Securities may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company and the Subsidiary Guarantors' obligations under
Section 7.7 shall continue for the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
49
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
-----------------------------
The Trustee shall at all times satisfy the requirements of TIA
(S) 310(a)(1), (2) and (5). The Trustee shall have a combined capital and
surplus of at least $25.0 million as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA (S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any
creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or
been removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
--------------------------------------------------------
The Company may, at its option at any time within one year of
the Stated Maturity of the Securities, elect to have Section 8.2 or may, at any
time, elect to have Section 8.3 applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.2. Legal Defeasance and Discharge.
------------------------------
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.2, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their respective obligations with respect
to all outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Securities, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.5
and the other Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all its other obligations under such Securities and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive solely
from the trust fund described in Section 8.4, and as more fully set forth in
such section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) the Company's
obligations with respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10
and 4.2, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's and the Subsidiary Guarantors' obligations in
connection therewith and (d) this Article VIII. Upon Legal Defeasance as
provided herein, the Guaranty of each Subsidiary Guarantor and the pledge of the
Pledged Collateral shall be fully released and discharged and the Trustee shall
promptly execute and deliver to the Company any documents reasonably requested
by the Company to evidence or effect the foregoing. Subject to compliance with
this Article VIII, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 with respect
to the Securities.
SECTION 8.3. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.3, the Company and the Subsidiary Guarantors shall
be released from their respective obligations under the covenants contained in
Sections 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.16,
Article V, Article XI, Article XII and Article XIII with respect to the
outstanding Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes
50
hereunder. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company need not comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document (and Section
6.1(3) shall not apply to any such covenant), but, except as specified above,
the remainder of this Indenture and such Securities shall be unaffected thereby.
In addition, upon the Company's exercise under Section 8.1 of the option
applicable to this Section 8.3, Sections 6.1(3) through 6.1(7) shall not
constitute Events of Default. Upon Covenant Defeasance, as provided herein, the
Guaranty of each Subsidiary Guarantor and the pledge of the Pledged Collateral
shall be fully released and discharged and the Trustee shall promptly execute
and deliver to the Company any documents reasonably requested by the Company to
evidence or effect the foregoing.
SECTION 8.4. Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of
either Section 8.2 or Section 8.3 to the outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfactory to the Trustee
satisfying the requirements of Section 7.10 who shall agree to comply with the
provisions of this Article VIII applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities, (a)
Cash in an amount, or (b) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment, Cash in an amount, or (c) a combination thereof, in such amounts, as in
each case will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied by the
Paying Agent (or other qualifying trustee) to pay and discharge the principal
of, premium, if any, and interest on the outstanding Securities on the stated
maturity or on the applicable redemption date, as the case may be, of such
principal or installment of principal, premium, if any, or interest; provided
that the Paying Agent shall have been irrevocably instructed to apply such Cash
and the proceeds of such U.S. Government Obligations to said payments with
respect to the Securities. The Paying Agent shall promptly advise the Trustee in
writing of any Cash or Securities deposited pursuant to this Section 8.4.
(b) In the case of an election under Section 8.2, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date hereof, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of the outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a result
of such Legal Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(c) In the case of an election under Section 8.3, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
to the effect that the Holders of the outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to Federal income tax in the same
amount, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(d) No Default or Event of Default with respect to the
Securities shall have occurred and be continuing on the date of such deposit or,
in so far as Section 6.1(4) or Section 6.1(6) is concerned, at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition is a condition subsequent which shall not be
deemed satisfied until the expiration of such period, but in the case of
Covenant Defeasance, the covenants which are defeased under Section 8.3 will
cease to be in effect unless an Event of Default under Section 6.1(4) or Section
6.1(6) occurs during such period);
51
(e) Such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company,
the Subsidiary Guarantors, or any of their Subsidiaries is a party or by which
any of them is bound;
(f) In the case of an election under either Section 8.2 or
8.3, the Company shall have delivered to the Trustee an Officers' Certificate
stating that the deposit made by the Company pursuant to its election under
Section 8.2 or 8.3 was not made by the Company with the intent of preferring the
Holders over other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(g) The Company shall have delivered to the Trustee an
Officers' Certificate stating that the conditions precedent provided for have
been complied with.
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be Held
---------------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to Section 8.6, all Cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Paying Agent (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.4 in respect of the outstanding Securities
shall be held in trust and applied by the Paying Agent, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any other Paying Agent as the Trustee may determine, to the
Holders of such Securities of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.
SECTION 8.6. Repayment to the Company.
------------------------
Anything in this Article VIII to the contrary notwithstanding,
the Trustee or the Paying Agent shall deliver or pay to the Company from time to
time upon the request of the Company any Cash or U.S. Government Obligations
held by it as provided in Section 8.4 hereof which in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
Any Cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee, or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.7. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any Cash or
U.S. Government obligations in accordance with Section 8.2 or 8.3, as the case
may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and the Subsidiary Guarantors' obligations under this Indenture
and the Securities shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.2 or 8.3 until such time as the Trustee or Paying
Agent is permitted to apply such money in accordance with Section 8.2 and 8.3,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any Security following the
52
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the Cash and U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holder, the Company or any
Subsidiary Guarantor, when authorized by Board Resolutions, and the Trustee, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make
any other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
provided such action pursuant to this clause shall not adversely affect the
interests of any Holder in any respect;
(2) to add to the covenants of the Company or the Subsidiary
Guarantors for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or the Subsidiary Guarantors;
(3) to provide for additional collateral for or additional
guarantors of the Securities;
(4) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the obligations of the
Company, herein and in the Securities in accordance with Article V;
(5) to comply with the TIA;
(6) to provide for the issuance and authorization of the
Exchange Securities;
(7) to evidence the succession of another corporation to any
Subsidiary Guarantor and assumption by any such successor of the Guaranty of
such Subsidiary Guarantor (as set forth in Section 13.4) in accordance with
Article XIII;
(8) to evidence the release of any Pledged Collateral or the
release of any Subsidiary Guarantor in accordance with Article XII or Article
XIII, respectively;
(9) in any other case where a supplemental indenture is
required or permitted to be entered into pursuant to the provisions of Article
XII or Article XIII, respectively, without the consent of any Holder;
(10) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(11) to enter into any agreements consistent with Article XII
hereof, to further implement the provisions of Article XII in connection with
the incurrence of any Permitted Lien Indebtedness.
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with
----------------------------------------------------
Consent of Holders.
------------------
Subject to Section 6.8, with the consent of the Holders of not
less than a majority in aggregate principal amount of then outstanding
Securities, by written act of said Holders delivered to the Company and the
Trustee, the Company or any Subsidiary Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement this Indenture or the
Securities or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities. Subject
to Section 6.8, the Holder or Holders of not less than a majority in aggregate
principal amount
53
of then outstanding Securities may waive compliance by the Company or any
Subsidiary Guarantor with any provision of this Indenture or the Securities.
Notwithstanding any of the above, however, no such amendment, supplemental
indenture or waiver shall without the consent of the Holders of not less than
66-2/3% of the aggregate principal amounts of Securities at the time outstanding
alter the terms or provisions of Article XII or Section 13.3; and no such
amendment, supplemental indenture or waiver shall, without the consent of the
Holder of each outstanding Security affected thereby:
(1) reduce the percentage of principal amount of Securities
whose Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture or the Securities;
(2) reduce the rate or extend the time for payment of interest
on any Security;
(3) reduce the principal or premium amount of any Security, or
reduce the Change of Control Payment, the Offer Price or the Redemption Price;
(4) change the Stated Maturity;
(5) alter the redemption provisions of Article III or the
Offer Price or Change of Control Payment, in any case, in a manner adverse to
any Holder;
(6) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Securities or the rights of
Holders to recover the principal or premium of, interest on, or redemption
payment with respect to, any Security, including without limitation any changes
in Section 6.8, 6.12 or this third sentence of this Section 9.2;
(7) make the principal of, or the interest and premium on, any
Security payable with anything or in any manner other than as provided for in
this Indenture (including changing the place of payment where, or the coin or
currency in which, any Security or any premium or the interest thereon is
payable) and the Securities as in effect on the date hereof; or
(8) make the Securities subordinated in right of payment to
any extent or under any circumstances to any other Indebtedness.
It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture or
waiver.
After an amendment, supplement or waiver under this Section
9.2 or Section 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under
this Article IX, the Company may, but shall not be obligated to, offer to any
Holder who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
54
SECTION 9.4. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by written notice to
the Company or the Person designated by the Company as the Person to whom
consents should be sent if such revocation is received by the Company or such
Person before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver, which record date shall be the date so fixed by
the Company notwithstanding the provisions of the TIA. If a record date is
fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date, and only those
Persons (or their duly designated proxies), shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (9) of Section 9.2, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest on a Security, on or after the respective
dates set for such amounts to become due and payable expressed in such Security,
or to bring suit for the enforcement of any such payment on or after such
respective dates.
SECTION 9.5. Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Registrar or require the Holder to put an appropriate notation on the
Security. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Any failure to make the appropriate notation or to issue a new Security
shall not affect the validity of such amendment, supplement or waiver.
SECTION 9.6. Trustee to Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; provided, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
55
ARTICLE X.
RESERVED
ARTICLE XI.
RIGHT TO REQUIRE REPURCHASE
SECTION 11.1. Repurchase of Securities at Option of the Holder Upon a Change of
-----------------------------------------------------------------
Control.
-------
(a) In the event that a Change of Control Triggering Event
occurs, each Holder shall have the right, at such Holder's option, subject to
the terms and conditions of this Indenture, to require the Company to repurchase
all or any part of such Holder's Securities (provided, that the principal amount
of such Securities at maturity must be $1,000 or an integral multiple thereof)
on a date selected by the Company that is no later than 45 Business Days after
the occurrence of such Change of Control Triggering Event (the "Change of
Control Payment Date"), at a cash price (the "Change of Control Payment") equal
to 101% of the aggregate principal amount thereof, plus (subject to the right of
Holders of record on a Record Date that is on or prior to such repurchase date
to receive interest due on the corresponding Interest Payment Date and subject
to clause (b)(4) below) accrued and unpaid interest, if any, to and including
the Change of Control Payment Date.
(b) In the event of a Change of Control Triggering Event, the
Company shall be required to commence an offer to purchase Securities (a "Change
of Control Offer") as follows:
(1) the Change of Control Offer shall commence within 10
Business Days following the occurrence of the Change of Control Triggering
Event;
(2) the Change of Control Offer shall remain open for 20
Business Days, except to the extent that a longer period is required by
applicable law, but in any case not more than 35 Business Days following
commencement (the "Change of Control Offer Period");
(3) upon the expiration of a Change of Control Offer,
the Company shall purchase all of the properly tendered Securities at the Change
of Control Payment, plus accrued interest;
(4) if the Change of Control Payment Date is on or after
a Record Date and on or before the related interest payment date, any accrued
interest will be paid to the Person in whose name a Security is registered at
the close of business on such Record Date, and no additional interest will be
payable to Securityholders who tender Securities pursuant to the Change of
Control Offer;
(5) the Company shall provide the Trustee and the Paying
Agent with notice of the Change of Control Offer at least three Business Days
before the commencement of any Change of Control Offer; and
(6) on or before the commencement of any Change of
Control Offer, the Company or the Registrar (upon the request and at the expense
of the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(i) that the Change of Control Offer is being made
pursuant to such notice and this Section 11.1 and that all
Securities, or portions thereof, tendered will be accepted for
payment;
(ii) the Change of Control Payment (including the amount
of accrued and unpaid interest, subject to clause (b)(4) above), the
Change of Control Payment Date and the Change of Control Put Date
(as defined below);
56
(iii) that any Security, or portion thereof, not tendered
or accepted for payment will continue to accrue interest;
(iv) that, unless the Company defaults in depositing Cash
with the Paying Agent in accordance with the last paragraph of this
Article XI or such payment is prevented, any Security, or portion
thereof, accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control
Payment Date;
(v) that Holders electing to have a Security, or portion
thereof, purchased pursuant to a Change of Control Offer will be
required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security
completed, to the Paying Agent (which may not for purposes of this
Section 11.1, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company) at the
address specified in the notice prior to the close of business on
the earlier of (a) the third Business Day prior to the Change of
Control Payment Date and (b) the third Business Day following the
expiration of the Change of Control Offer (such earlier date being
the "Change of Control Put Date");
(vi) that Holders will be entitled to withdraw their
election, in whole or in part, if the Paying Agent (which may not
for purposes of this Section 11.1, notwithstanding anything in this
Indenture to the contrary, be the Company or any Affiliate of the
Company) receives, up to the close of business on the Change of
Control Put Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Securities the Holder is withdrawing and a statement that such
Holder is withdrawing his election to have such principal amount of
Securities purchased; and
(vii) a brief description of the events resulting in
such Change of Control Triggering Event.
Any such Change of Control Offer shall comply with all applicable
provisions of Federal and state laws, including those regulating tender offers,
if applicable, and any provisions of this Indenture which conflict with such
laws shall be deemed to be superseded by the provisions of such laws.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer on or before the Change of Control Put Date, (ii)
deposit with the Paying Agent Cash sufficient to pay the Change of Control
Payment (including accrued and unpaid interest, subject to clause (b)(4) above)
for all Securities or portions thereof so tendered and (iii) deliver to the
Registrar Securities so accepted together with an Officers' Certificate listing
the aggregate principal amount of the Securities or portions thereof being
purchased by the Company. The Paying Agent shall on the Change of Control
Payment Date or promptly thereafter mail to Holders of Securities so accepted
payment in an amount equal to the Change of Control Payment (together with
accrued and unpaid interest) for such Securities (subject to clause (b)(4)
above), and the Trustee or its authenticating agent shall promptly authenticate
and the Registrar shall mail or deliver (or cause to be transferred by book
entry) to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered; provided, however, that each
such new Security will be in a principal amount of $1,000 or an integral
multiple thereof. Any Securities not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the consummation thereof.
57
ARTICLE XII.
SECURITY
SECTION 12.1. Pledge of the Pledged Shares.
----------------------------
(a) In order to secure the prompt and complete payment of the
principal of, premium, if any, and interest (including, without limitation, all
interest, whether or not allowed under Section 502 of the Bankruptcy Law, 11
U.S.C. (S) 502, or otherwise, at the applicable rate specified in the
Securities, accrued or accruing after the commencement of any proceeding under
the Bankruptcy Law by or against any of the Pledgors) on the Securities when and
as the same shall be due and payable, whether at the Maturity Date or Interest
Payment Date thereof, by acceleration, call for redemption, upon a Change of
Control Offer, Offer to Purchase or otherwise (including amounts which would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Law, 11 U.S.C. (S) 362(a)), and the payment and performance of
all other obligations and indemnities of the Company and the Subsidiary
Guarantors to the Holders or the Trustee under this Indenture and the Securities
(the "Obligations"), the Pledgors hereby pledge and grant a security interest in
their respective rights, title and interest in and to the Pledged Collateral to
the Collateral Agent for the benefit of the Holders.
In the event that any Pledgor incurs (x) Indebtedness contemplated
in paragraph (b) or (f) of the definition of Permitted Indebtedness contained in
Section 1.1 or (y) any other Indebtedness ranking pari passu with the
Securities, including, without limitation, the New Notes and the Acquisitions
Notes ("Permitted Lien Indebtedness"), then such Pledgor shall be permitted to
secure the prompt and complete payment of the principal of, premium, if any, and
interest (including, without limitation, all interest, whether or not allowed
under Section 502 of the Bankruptcy Law, 11 U.S.C. (S) 502, or otherwise, at
the applicable rates specified, accrued or accruing after the commencement of
any proceeding under the Bankruptcy Law by or against any of the Pledgors) on
such Permitted Lien Indebtedness that may be incurred by the Pledgor, when and
as the same shall be due and payable, whether at the maturity date or interest
payment date thereof, by acceleration, call for redemption, upon a Change of
Control Offer, Offer to Purchase or otherwise (including amounts which would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Law, 11 U.S.C. (S) 362(a)), and the payment and performance of
all other obligations and indemnities of such Pledgor with respect to the
Permitted Lien Indebtedness (the "Permitted Lien Indebtedness Obligations") (the
Obligations and any Permitted Lien Indebtedness Obligations, the "Secured
Obligations"), by a pledge and grant of a security interest in its right, title
and interest in and to the Pledged Collateral to the Collateral Agent for the
benefit of the holders of such Permitted Lien Indebtedness, which pledge and
security interest shall be on an equal and ratable basis with the pledge and
security interest granted to secure the Obligations hereunder.
(b) If, subsequent to the date hereof, any Person shall become
a Future Subsidiary Guarantor (as defined in Section 13.3), the applicable
Pledgors will promptly execute and deliver an indenture supplement to the
Trustee and the Collateral Agent (as parties to such indenture supplement, with
a copy to be provided to the appropriate agent or other representative of the
holders of any Permitted Lien Indebtedness) and take such other action
reasonably necessary to evidence the pledge and grant of a security interest in
the Pledgors' respective rights, title and interest in and to the shares of
Capital Stock of such Future Subsidiary Guarantor held by any of the Pledgors,
which shares (the "Future Subsidiary Guarantor Shares") shall constitute
Subsidiary Guarantor Shares, Pledged Shares and Pledged Collateral subject to
the provisions of this Article XII as of the date such Person becomes a Future
Subsidiary Guarantor; provided, however, that the foregoing provisions shall not
apply with respect to (and the term "Future Subsidiary Guarantor Shares" shall
not include) the shares ("Excluded Shares") of any Future Subsidiary Guarantor
(an "Excluded Share Subsidiary") if, at the time such Person becomes a Future
Subsidiary Guarantor pursuant to Section 13.3, the pledge of or grant of a
security interest in the shares of such Future Subsidiary Guarantor is
prohibited by law or the terms of any agreement (other than an agreement entered
into in connection with the transaction resulting in such Person becoming a
Future Subsidiary Guarantor) binding on such Future Subsidiary Guarantor or the
Pledgor(s) owning the shares of such Future Subsidiary Guarantor (provided that
any such Excluded Shares shall cease to be Excluded Shares when all such
prohibitions cease to apply to such Excluded Shares and provided that the assets
of all Excluded Share Subsidiaries (determined by the Company in accordance with
GAAP) shall in no event exceed 15% of the aggregate assets of the Company and
its
58
Subsidiaries (other than Leaseback Subsidiaries) on a consolidated basis
(determined by the Company in accordance with GAAP)).
(c) In the event that, subsequent to the date hereof, any
Person previously constituting a Subsidiary Guarantor ceases to be a Subsidiary
Guarantor (pursuant to the provisions of Section 13.4 or Section 13.5, or
otherwise), upon the request of the Company, the Trustee and the Collateral
Agent will promptly execute and deliver an indenture supplement to the Pledgors
(as parties to such indenture supplement, with a copy to be provided to the
appropriate agent or other representative of the holders of any Permitted Lien
Indebtedness), furnish any certificate or opinion required by TIA (S) 314(d),
in connection therewith and take such other action reasonably necessary to
evidence the release of the shares and any other securities of such Person, and
of each Subsidiary of such Person, from the pledge and grant of security
interest set forth in this Section 12.1, and such shares and other securities
("Released Subsidiary Guarantor Shares") shall cease to constitute Subsidiary
Guarantor Shares, Pledged Shares and Pledged Collateral subject to the
provisions of this Article XII as of the date such Person ceases to be a
Subsidiary Guarantor, provided that, in the event any Subsidiary Guarantor
ceases to be a Subsidiary Guarantor by reason of the sale of less than one
hundred percent of the Capital Stock of such Subsidiary Guarantor, the pledge
and grant of the security interest set forth in this Section 12.1 shall not be
released with respect to (and the Released Subsidiary Guarantor Shares shall not
include) the shares of Capital Stock of such Subsidiary Guarantor that continue
to be held by any Pledgor after such sale and that are not otherwise released in
accordance with the provisions of Article XII or Article XIII.
(d) Notwithstanding anything to the contrary in this Article
XII, unless an Event of Default or an event of default under any Permitted Lien
Indebtedness has occurred and is continuing, the Pledgors shall have the right,
power and authority to sell any of the Subsidiary Guarantor Shares (and
concurrent with such sale, any such Pledged Shares sold shall be released from
the Lien created by this Article), subject to the provisions of Section 4.14.
SECTION 12.2. Delivery of Pledged Shares and Subsequent Changes Affecting the
---------------------------------------------------------------
Pledged Shares.
--------------
(a) All certificates, instruments, documents and writings
representing or evidencing the Pledged Shares (including, without limitation,
Future Subsidiary Guarantor Shares) shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed stock powers or
other instruments of transfer or assignment in blank (the "Transfer
Instruments"), all in form and substance reasonably satisfactory to the
Collateral Agent. The Collateral Agent shall establish a separate account for
the purpose of holding the Pledged Shares. The Collateral Agent shall have the
right, after the occurrence of an Event of Default or an event of default under
any Permitted Lien Indebtedness and ten Business Days after notice to the
applicable Pledgor(s) in accordance with Section 12.5 hereof, to transfer to or
to register in the name of the Collateral Agent or any of its nominees (which
shall not be the Company or an affiliate of the Company) any or all of the
Pledged Shares. In addition, the Collateral Agent shall have the right at any
time thereafter to exchange certificates or instruments representing or
evidencing Pledged Shares for certificates or instruments of smaller or larger
denominations.
(b) All certificates, instruments, documents and writings
representing or evidencing Pledged Shares that have been released from the Lien
created by this Article pursuant to Section 12.1 or Article XIII of this
Indenture, and all Transfer Instruments pertaining thereto, shall be delivered
by the Collateral Agent to the applicable Pledgor entitled thereto promptly upon
written request therefor delivered to the Collateral Agent.
(c) Each of the Pledgors represents and warrants that it has
made its own arrangements for keeping itself informed of changes and potential
changes affecting the Pledged Shares (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, reorganization and other
exchanges, tender offers and voting rights), and each of the Pledgors agrees
that the Collateral Agent shall not have any obligation to inform any of the
Pledgors of any such changes or potential changes or to take any action or omit
to take any action with respect thereto.
59
SECTION 12.3. Supplements, Further Assurances.
-------------------------------
(a) Each of the Pledgors agrees that at any time and from time
to time, at the expense of such Pledgor, such Pledgor will promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or that the Collateral Agent may reasonably request, in order
to create, perfect and protect and maintain the creation, perfection and
priority of any security interest granted or purported to be granted hereby or
to enable the Collateral Agent to exercise and enforce its rights hereunder with
respect to the Pledged Collateral.
(b) Each of the Pledgors further agrees that it will, upon
obtaining any Pledged Shares required to be pledged pursuant to Section 12.1,
promptly deliver the certificates, instruments, documents and writings
representing or evidencing such shares to the Collateral Agent.
SECTION 12.4. Voting Rights; Dividends; Etc.
-----------------------------
(a) As long as no Event of Default or event of default under
any Permitted Lien Indebtedness shall have occurred and be continuing and, in
the case of paragraph (i) below, until ten Business Days after the Collateral
Agent has given written notice to the applicable Pledgor(s) in accordance with
Section 12.4(b):
(i) Each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged
Shares owned by such Pledgor or any part of any of them for any
purpose not inconsistent with the terms this Indenture or any
instrument governing any Permitted Lien Indebtedness and which would
not impair the Pledged Shares.
(ii) Each Pledgor shall be entitled to receive and
retain, and utilize free and clear of the Lien created by this
Indenture, any and all dividends, distributions and other payments
in respect of the Pledged Shares owned by such Pledgor; provided,
however, that any and all dividends and other distributions received
in the form of additional Pledged Shares shall be forthwith
delivered to the Collateral Agent to hold as Pledged Collateral and
shall, if received by such Pledgor, be received in trust for the
benefit of the Collateral Agent, be segregated from the other
property of such Pledgor and be forthwith delivered to the
Collateral Agent as part of the Pledged Collateral in the same form
as so received (with any necessary endorsement).
(iii) In order to permit the Pledgors to exercise the
voting and other rights which they are entitled to exercise pursuant
to Section 12.4(a)(i) above and to receive the dividends,
distributions, and other payments which each is authorized to
receive and retain pursuant to Section 12.4(a)(ii) above, the
Collateral Agent shall, if necessary, upon written request of a
Pledgor, from time to time execute and deliver (or cause to be
executed and delivered) to such Pledgor, all such proxies, dividend
payment orders and other instruments as such Pledgor may reasonably
request.
(b) Upon the occurrence and during the continuance of an Event
of Default or event of default under any Permitted Lien Indebtedness and, in the
case of Section 12.4(b)(i), after the passage of ten Business Days following the
Collateral Agent's written notice to the applicable Pledgor of cessation of such
Pledgor's voting and other consensual rights hereunder:
(i) All rights of any of the Pledgors to exercise the
voting and other consensual rights which each such Pledgor would
otherwise be entitled to exercise pursuant to Section 12.4(a)(i)
above shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which, at the direction of the Trustee or
the appropriate agent(s) or other representative(s) of the holders
of any Permitted Lien Indebtedness as specified in Section 12.8(b),
shall thereupon have the sole right to
60
exercise such voting and other consensual rights during the
continuance of such Event of Default or event of default under any
Permitted Lien Indebtedness.
(ii) All rights of the Pledgors to the dividends,
distributions and other payments which such Pledgors would otherwise
be authorized to receive and retain pursuant to Section 12.4(a)(ii)
shall cease, and all such rights shall thereupon become vested in
the Collateral Agent, who shall thereupon have the sole right to
receive and hold as Pledged Collateral such dividends,
distributions, principal, premium and interest payments during the
continuance of such Event of Default or event of default under any
Permitted Lien Indebtedness.
(c) In order to permit the Collateral Agent to receive all
dividends and other distributions to which it may be entitled under Section
12.4(b)(ii) above, and to exercise the voting and other consensual rights which
it may be entitled to exercise pursuant to Section 12.4(b)(i) above, each of the
Pledgors shall, if necessary, upon written notice from the Collateral Agent,
from time to time execute and deliver to the Collateral Agent all such proxies,
dividend payment orders and other instruments as the Collateral Agent may
reasonably request.
(d) All dividends, distributions and other payments which are
received by a Pledgor contrary to the provisions of Section 12.4(b)(ii) above
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Pledgor and shall be forthwith paid over to
the Collateral Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
SECTION 12.5. Collateral Agent Appointed Attorney-In-Fact.
-------------------------------------------
Each of the Pledgors hereby appoints the Collateral Agent as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor or otherwise, from time to time in the
Collateral Agent's discretion, to take any action and to execute any instrument
which the Collateral Agent may reasonably deem necessary or advisable to
accomplish the purposes of this Article XII following the occurrence and during
the continuation of an Event of Default or an event of default under any
Permitted Lien Indebtedness (but not prior thereto, or after the cessation
thereof), including, without limitation, in any respect neither contrary to the
provisions of this Indenture nor any instrument governing any Permitted Lien
Indebtedness, the right to notify and direct the issuer of or any party
obligated with respect to any Pledged Collateral to make payments with respect
to such Pledged Collateral directly to the Collateral Agent or may, in any
respect not contrary to the provisions of this Indenture or any instrument
governing any Permitted Lien Indebtedness, permit such rights to be exercised by
any Pledgor; and, without limiting the generality of the foregoing, in its
discretion following the occurrence and during the continuation of an Event of
Default or an event of default under any Permitted Lien Indebtedness (but not
prior thereto, or after the cessation thereof):
(a) The Collateral Agent may at any time vote or give
consents, or authorize the Pledged Shares to be voted or such consents to be
given in accordance with, and subject to the notice provisions set forth in,
Section 12.4(b) hereof.
(b) The Collateral Agent may join in and become a party to any
plan of reorganization and readjustment, whether voluntary or involuntary, may
deposit any of the Pledged Collateral under such plan or make any exchange or
surrender or permit any substitution for or cancellation of the Pledged
Collateral as required by such plan and may take all such action as may be
required by such plan; provided, however, that all securities issued or created
under such plan and exchanged for the Pledged Collateral and all securities,
moneys or property received pursuant to such plan shall thereafter be subject to
the terms of this Article XII and become part of the Pledged Collateral.
(c) The Collateral Agent may receive, endorse and collect all
checks, whether or not made payable to the order of the applicable Pledgor,
representing any dividend, distribution or other payments at any time paid or
made on or with respect to the Pledged Collateral all of which shall be applied
to the Secured Obligations as provided herein, and may give full discharge for
the same in accordance with Section 12.4(b) hereof.
61
SECTION 12.6. Collateral Agent May Perform.
----------------------------
If any of the Pledgors fails to perform any agreement contained in
this Article XII within a reasonable period of time after receipt of a written
request to do so from the Collateral Agent, the Collateral Agent may, but shall
have no obligation to itself perform, or cause performance of, such agreement,
and the reasonable expenses of the Collateral Agent, including the reasonable
fees and expenses of its counsel, incurred in connection therewith shall be
payable under Section 12.13(h) hereof.
SECTION 12.7. Reasonable Care.
---------------
The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if the Pledged Collateral is accorded treatment substantially equivalent to that
which the Collateral Agent, in its individual capacity, accords its own property
consisting of negotiable securities, it being understood that, in the absence of
instructions from the Trustee or the appropriate agent(s) or other
representative(s) of the holders of any Permitted Lien Indebtedness as specified
in Section 12.8(b), except as provided for herein and in any Agreement With
Collateral Agent entered into in connection with the incurrence of any Permitted
Lien Indebtedness pursuant to Section 12.14, the Collateral Agent shall not have
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, tenders or other matters relative to any Pledged
Collateral, whether or not the Collateral Agent has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any Person with
respect to any Pledged Collateral.
SECTION 12.8. Remedies Upon Default; Decisions Relating to Exercise of Remedies;
------------------------------------------------------------------
Limitations on Exercise of Remedies.
-----------------------------------
(a) Remedies Upon Default. Subject to Section 12.8(b), if an
Event of Default or an event of default under any Permitted Lien Indebtedness
shall have occurred and be continuing and as a consequence thereof Secured
Obligations equal to at least a majority of the aggregate principal amount of
the Secured Obligations then outstanding shall have become immediately due and
payable:
(i) The Collateral Agent may exercise in respect of the
Pledged Collateral, in addition to other rights provided for herein
or otherwise available to it, all the rights of a secured party on
default under the UCC; and in furtherance thereof, the Collateral
Agent may, at the direction of the Trustee or the appropriate
agent(s) or other representative(s) of the holders of any Permitted
Lien Indebtedness as specified in Section 12.8(b), without providing
notice to the Pledgors except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and at such price or prices and upon such other
terms as the Collateral Agent may deem commercially reasonable. Each
purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of any of the Pledgors, and
each of the Pledgors hereby waives (to the extent permitted by law)
all rights of redemption, stay and/or appraisal which it now has or
may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. Each of the Pledgors agrees that
to the extent notice of sale shall be required by law, at least 30
days' notice to such Pledgor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
Each of the Pledgors hereby waives any claims against the Collateral
Agent arising hereunder by reason of the fact that the price at
which any Pledged Collateral may
62
have been sold at such a private sale was less than the price which
might have been obtained at a public sale.
(ii) Each of the Pledgors recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable
state securities laws, the Collateral Agent may be compelled, with
respect to any sale of all or any part of the Pledged Collateral, to
limit purchasers to those who will agree, among other things, to
acquire the Pledged Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Each of
the Pledgors acknowledges that any such private sale may be at
prices and on terms less favorable to the Collateral Agent than
those which may be obtained through a public sale without such
restrictions (including, without limitation, a public offering made
pursuant to a registration statement under the Securities Act), and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially reasonable
manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Pledged Collateral for the period of time necessary to permit the
issuer thereof to register it for a form of public sale requiring
registration under the Securities Act or under applicable state
securities laws, even if the applicable Pledgor would agree to do
so.
(iii) If the Collateral Agent, at the direction of the
Trustee or the appropriate agent(s) or other representative(s) of
the holders of any Permitted Lien Indebtedness as specified in
Section 12.8(b), exercises its right to sell any or all of the
Pledged Collateral, upon written request, the applicable Pledgor(s)
shall and shall cause each issuer of any Pledged Shares to be sold
hereunder from time to time to furnish to the Collateral Agent all
such information as the Collateral Agent may request in order to
determine the number of shares and other instruments included in the
Pledged Collateral which may be sold by the Collateral Agent as
exempt transactions under the Securities Act and the rules of the
SEC thereunder, as the same are from time to time in effect.
(b) Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Indenture or any instrument
governing any Permitted Lien Indebtedness to the contrary, the Collateral Agent
shall exercise or shall refrain from exercising any remedy provided for in this
Article XII, or otherwise pertaining to the Pledged Collateral, in accordance
with the instructions of the Trustee or the appropriate agent(s) or other
representative(s) of the holders of any Permitted Lien Indebtedness as follows:
the Collateral Agent shall at all times follow the instructions delivered by the
Trustee or the appropriate agent(s) or other representative(s) of the holders of
any Permitted Lien Indebtedness on behalf of the holders of a majority in
aggregate principal amount of the Secured Obligations then outstanding
("Requisite Obligees"). The Collateral Agent may at any time request directions
from the Trustee and the appropriate agent(s) or other representative(s) of the
holders of any Permitted Lien Indebtedness in accordance with the foregoing
(through delivery of such request to the Trustee and such agent(s) or other
representative(s)) with respect to any course of action or other matter relating
to the Pledged Collateral or the provisions of this Article XII. Directions
given by the Trustee and/or such agent(s) or other representative(s) to the
Collateral Agent in accordance with the foregoing shall be in writing and shall
be binding on all Holders of the Securities and holders of any Permitted Lien
Indebtedness for all purposes, and the Collateral Agent shall have no liability
for acting in accordance with such directions; provided, however, that (i) the
Collateral Agent shall not be required to follow any such direction that is in
conflict with any rule of law or with the terms of this Indenture or, except
with respect to determining who may direct the Collateral Agent to act or
refrain from taking action, any instrument governing any Permitted Lien
Indebtedness, and (ii) the Collateral Agent may take any other action it deems
proper which is not inconsistent with such direction.
63
SECTION 12.9. Application of Proceeds.
-----------------------
After and during the continuance of an Event of Default or an event
of default under any Permitted Lien Indebtedness, any cash held by the
Collateral Agent as Pledged Collateral and all cash proceeds received by the
Collateral Agent (all such cash being "Proceeds") in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral pursuant to the exercise by the Collateral Agent of its remedies
under this Article XII or otherwise, shall be applied promptly from time to time
by the Collateral Agent:
First, to the payment of the costs and expenses of such sale,
collection or other realization, including reasonable compensation
to the Collateral Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by the
Collateral Agent in connection therewith;
Second, to the Trustee for the benefit of the Holders, for payment
until paid in full of the obligations in accordance with Section
6.6, and to the appropriate agent(s) or other representative(s) of
the holders of all Permitted Lien Indebtedness for payment until
paid in full of the Permitted Lien Indebtedness Obligations (all
such payments to be made ratably with respect to all outstanding
Secured Obligations); and
Third, after payment in full in cash of all Secured Obligations, to
the applicable Pledgor, or its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct, of any surplus then
remaining from such Proceeds.
At the time of any application of Proceeds by the Collateral Agent
pursuant to this Section 12.9, the Collateral Agent shall provide each of the
Pledgors, the Trustee (if the Collateral Agent is not then the Trustee) and the
appropriate agent(s) or other representative(s) of the holders of any Permitted
Lien Indebtedness with a certificate setting forth the total amount paid to the
Trustee and such agent(s) or other representative(s) and a calculation of the
amounts, if any, deducted from Proceeds otherwise payable to the Trustee and
such agent(s) or other representative(s) or the Pledgors as contemplated by this
Indenture.
For purposes of this Section 12.9, payments shall be deemed to have
been made "ratably" with respect to all outstanding Secured Obligations if such
payments are made to or for the benefit of each holder of outstanding Secured
Obligations in the proportion that the Secured Obligations held by such holder
bears to the total amount of the Secured Obligations, as of such date (it being
understood that all payments by the Collateral Agent to or for the benefit of
the holders of the Outstanding Securities shall be made by the Collateral Agent
to the Trustee and all payments by the Collateral Agent to or for the benefit of
the holders of Permitted Lien Indebtedness shall be made by the Collateral Agent
to the appropriate agent(s) or other representative(s) of the holders of such
Permitted Lien Indebtedness, as applicable).
SECTION 12.10. Recording, Etc.
--------------
The Pledgors will cause, at their own expense, this Indenture and
all amendments or supplements hereto to be registered, recorded and filed or re-
registered, re-recorded, refiled and renewed in such manner and in such place or
places, if any, as may be required by law in order fully to preserve and protect
the security interests created under this Article XII in the Pledged Collateral
and to effectuate and preserve the security therein of the Collateral Agent for
the benefit of the Holders and the holders of any Permitted Lien Indebtedness
and all rights of the Collateral Agent.
The Company shall furnish to the Collateral Agent, the Trustee (if
the Collateral Agent is not then the Trustee) and to the appropriate agent(s) or
other representative(s) of the holders of any Permitted Lien Indebtedness
outstanding as of the applicable date specified below:
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(i) promptly after execution of this Indenture an
Opinion of Counsel either stating that in the opinion of such
counsel the Indenture has been properly recorded and filed so as to
make effective the Liens intended to be created by this Article XII,
and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to make such
Liens effective; and
(ii) within thirty (30) days of July 31 of each year,
commencing July 31, 1996, an Opinion of Counsel either stating that
in the opinion of such counsel such action has been taken with
respect to recording, filing, re-recording and refiling of this
Indenture as is necessary to maintain the Liens intended to be
created by this Article XII, and reciting the details of such
action, or stating that in the opinion of such counsel no such
action is necessary to maintain such Liens.
The release of any Pledged Collateral from the terms hereof will not
be deemed to impair the security under this Indenture or any instrument
governing any Permitted Lien Indebtedness in contravention of the provisions
hereof or thereof if and to the extent the Pledged Collateral is released
pursuant to the provisions of this Article XII or Article XIII of this
Indenture. The Collateral Agent, the Trustee and each of the Holders acknowledge
that a release of Pledged Collateral in accordance with the terms of this
Article XII or Article XIII of this Indenture will not be deemed for any purpose
to be an impairment of the security under this Indenture. To the extent
applicable, the Pledgors shall cause TIA (S) 314(d) relating to the release of
property or securities from the Lien created by this Article XII to be complied
with. Any certificate or opinion required by TIA (S) 314(d) may be made by any
Officer of the applicable Pledgor to the extent permitted by TIA (S) 314(d).
SECTION 12.11. Termination.
-----------
When all Secured Obligations have been paid in full in cash, the
provisions of this Article XII shall terminate, and the Collateral Agent shall,
upon the request and at the expense of the applicable Pledgor(s), forthwith
assign, transfer and deliver, against receipt and without recourse to the
Collateral Agent, such of the Pledged Collateral owned by each of the Pledgors
as shall not have been sold or otherwise applied pursuant to the terms hereof to
or on the order of such Pledgor. Upon the release of any Pledged Collateral
pursuant to Section 12.1 or Article XIII of this Indenture, (i) the provisions
of this Article XII shall terminate with respect to the Pledged Collateral so
released and (ii) the Collateral Agent shall, upon the request and at the
expense of the applicable Pledgor, forthwith assign, transfer and deliver,
against receipt and without recourse to the Collateral Agent, such of the
Pledged Collateral so released as shall have not been sold or otherwise applied
pursuant to the terms hereof to or on the order of such Pledgor.
SECTION 12.12. Continuing Security Interest.
----------------------------
This Article XII shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect (a) until the
payment in full in cash of all Secured Obligations or (b) with respect to any
Pledged Collateral released pursuant to Section 12.1 or Article XIII of this
Indenture, until such Pledged Collateral is so released and (ii) be binding upon
each of the Pledgors, its successors and assigns and (iii) inure to the benefit
of the Collateral Agent and each of its successors.
SECTION 12.13. The Collateral Agent.
--------------------
(a) Marine Midland Bank is hereby appointed as the "Collateral
Agent," to serve in such capacity until its successor is duly appointed pursuant
to Section 12.13(e) below. The Collateral Agent hereby accepts such appointment
and acknowledges that it is acting in such capacity for the benefit of the
holders of Secured Obligations. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth in this Article XII of this
Indenture or any Agreement With Collateral Agent entered into pursuant to
Section 12.14, and the Collateral Agent, in such capacity, shall not be a
trustee for any Person or have any other fiduciary obligation to any Person
(including, without limitation, any obligation under the Trust Indenture Act of
1939, as amended) by reason of the provisions of this Article XII. The
Collateral Agent may employ agents and attorneys-
65
in-fact and shall not be responsible, except as to cash or securities received
by it or its authorized agents, for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable care. Neither the
Collateral Agent nor any of its directors, officers, employees or agents shall
be liable or responsible for any action taken or omitted to be taken by it or
them hereunder or in connection herewith, except for its or their own negligence
or willful misconduct. For as long as the Trustee acts as the Collateral Agent,
the Collateral Agent shall have the rights and immunities, including
indemnification, of the Trustee as set forth in Article VII.
(b) The Collateral Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by telex,
telecopy, telegram or cable) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel (including counsel to the Company or
the Pledgors), independent accountants and other experts selected by the
Collateral Agent. As to any matters not expressly provided for in this
Indenture, the Collateral Agent shall in all cases be fully protected in acting,
or in refraining from acting, in accordance with instructions given by the
Trustee and/or the appropriate agent(s) or other representative(s) of the
holders of any Permitted Lien Indebtedness as specified in Section 12.8(b), and
any action taken or failure to act pursuant thereto shall be binding on all
Pledgors and holders of Secured Obligations. Notwithstanding anything to the
contrary herein, the Collateral Agent shall in all cases be permitted to rely on
notice from the Trustee as to whether there has occurred and is continuing an
Event of Default under this Indenture and on notice from the appropriate
agent(s) or other representative(s) of the holders of any Permitted Lien
Indebtedness as to whether there has occurred and is continuing an event of
default under the instruments governing such Permitted Lien Indebtedness.
(c) Except for action expressly required of the Collateral
Agent hereunder, the Collateral Agent shall, notwithstanding anything to the
contrary herein, in all cases be fully justified in failing or refusing to act
hereunder unless and until it shall be further indemnified to its satisfaction
by the holders of the Secured Obligations against any and all loss, cost,
expense or liability which may be incurred by it by reason of taking or refusing
to take any such action. The Collateral Agent shall not be required to take any
action that is in its opinion contrary to law or to the terms of this Indenture
or, except with respect to determining who may direct the Collateral Agent to
act or refrain from taking action, any instrument governing any Permitted Lien
Indebtedness, or which would in its opinion subject it or any of its officers,
employees or directors to liability.
(d) Except as expressly provided herein, the Collateral Agent
shall have no duty to take any affirmative steps with respect to the collection
of amounts payable in respect to the Pledged Collateral.
(e)(i) Until such time as the Secured Obligations shall have been
paid in full, the Collateral Agent may at any time, by giving
written notice to the Company and the Trustee (if the Collateral
Agent is not then the Trustee) and the appropriate agent(s) or other
representative(s) of the holders of any Permitted Lien Indebtedness
resign and be discharged of the responsibilities hereby created,
such resignation to become effective upon (x) the appointment of a
successor Collateral Agent and (y) the acceptance of such
appointment by such successor Collateral Agent. As promptly as
practicable after the giving of any such notice, the Company shall
appoint a successor Collateral Agent, which successor Collateral
Agent shall be approved by the Trustee and the appropriate agent(s)
or other representative(s) of the holders of any Permitted Lien
Indebtedness (which approval shall not be unreasonably withheld). If
no successor Collateral Agent shall be appointed and shall have
accepted such appointment within 90 days after the Collateral Agent
gives the aforesaid notice of resignation, the Collateral Agent or
the Trustee or the appropriate agent(s) or other representative(s)
of the holders of any Permitted Lien Indebtedness may apply to any
court of competent jurisdiction to appoint a successor Collateral
Agent to act until such time, if any, as a successor shall have been
appointed as provided in this clause (e)(i). Any successor so
appointed by such court shall immediately and without further act be
superseded by any successor Collateral Agent appointed by the
Company, with the approval of the Trustee and the appropriate
agent(s) or other representative(s) of the holders of any Permitted
Lien Indebtedness (which approval shall not be unreasonably
withheld), as provided above in this clause
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(e)(i). The Collateral Agent may be removed at any time at the
written direction of the Requisite Obligees, with notice delivered
to the Trustee, the appropriate agent(s) or other representative(s)
of the holders of Permitted Lien Indebtedness and the Company.
(ii) If at any time the Collateral Agent shall be removed
or otherwise become incapable of acting, or if at any time a vacancy
shall occur in the office of the Collateral Agent for any other
cause (other than a resignation governed by the preceding clause
(e)(i)), a successor Collateral Agent shall be appointed by the
Company, with the approval of the Trustee and the appropriate
agent(s) or other representative(s) of the holders of any Permitted
Lien Indebtedness (such approval not to be unreasonably withheld).
If no successor Collateral Agent has been appointed by the Company
within 90 days after such vacancy is created, the Trustee and/or
such agent(s) or other representative(s) may apply to any court of
competent jurisdiction to appoint a successor Collateral Agent to
act until such time, if any, as a successor shall have been
appointed as provided in this clause (e)(ii). The powers, duties,
authority and title of the predecessor Collateral Agent shall be
terminated and cancelled without procuring the resignation of such
predecessor and without any other formality (except as may be
required by applicable law) other than appointment and designation
of a successor by the Company in the manner set forth above, in
writing duly acknowledged and delivered to the predecessor, the
appropriate agent(s) or other representative(s) of the holders of
Permitted Lien Indebtedness and the Trustee. Such appointment and
designation shall be full evidence of the right and authority to
make the same and of all the facts therein recited, and this
Indenture, the instruments governing any Permitted Lien Indebtedness
and any Agreement With Collateral Agent entered into pursuant to
Section 12.14 shall vest in such successor, without any further act,
deed or conveyance, all the estates, properties, rights, powers,
trusts, duties, authority and title of its predecessor; but such
predecessor shall, nevertheless, on the written request of the
Trustee, the appropriate agent(s) or other representative(s) of the
holders of Permitted Lien Indebtedness, the Company or the
successor, execute and deliver an instrument transferring to such
successor all the estates, properties, rights, powers, trusts,
duties, authority and title of such predecessor hereunder by it or
its agents to such successor.
(iii) The Collateral Agent who has resigned or been
removed shall be entitled to fees, costs and expenses to the extent
incurred or arising, or relating to events occurring, before its
resignation or removal.
(f) Every successor Collateral Agent appointed pursuant to
clause (e), above, shall be a bank or trust company in good standing and having
power to act as Collateral Agent hereunder, incorporated under the laws of the
United States of America or any State thereof or the District of Columbia and
having its principal office within the 48 contiguous States and shall also have
capital, surplus and undivided profits of not less than $50,000,000, if there be
such an institution with such capital, surplus and undivided profits willing,
qualified and able to accept the agency hereunder upon reasonable or customary
terms.
(g) Any corporation into which the Collateral Agent may be
merged, or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Collateral Agent, shall be a party, or
any person succeeding to all or substantially all of the corporate trust
business of the Collateral Agent, shall be Collateral Agent under this Indenture
without the execution or filing of any paper or any further act on the part of
any party hereto.
(h) The Pledgors (jointly and severally) will upon demand pay
to the Collateral Agent the amount of any and all reasonable expenses (including
the reasonable fees and expenses of its counsel) which the Collateral Agent may
incur in connection with (i) the administration of the provisions of this
Article XII, (ii) the custody or preservation of, or the sale of, collection
from or other realization upon, any of the Pledged Collateral or (iii) the
exercise or enforcement of any of the rights of the Collateral Agent hereunder.
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SECTION 12.14. Agreement With Collateral Agent.
-------------------------------
The Collateral Agent, the Trustee, the Pledgors and appropriate
agent(s) or other representative(s) of the holders of any Permitted Lien
Indebtedness shall enter into an Agreement With Collateral Agent in form and
substance reasonably acceptable to them (an "Agreement With Collateral Agent")
to provide for the orderly implementation of their respective rights and
responsibilities pursuant to this Article XII, including provision for the
exchange of such information as may be reasonably required to enable the
Collateral Agent to fulfill its responsibilities pursuant to this Article XII.
SECTION 12.15. Modifications at Such Time as any Permitted Lien Indebtedness
-------------------------------------------------------------
Ceases to be Outstanding.
------------------------
At such time as any Permitted Lien Indebtedness has been fully
satisfied in accordance with the instruments governing such Permitted Lien
Indebtedness, the provisions of this Article XII shall cease to apply with
respect to such Permitted Lien Indebtedness, and from and after such date,
notwithstanding any contrary provisions contained in this Article XII, (i) no
notices, requests or other materials or information will be required to be
provided to the agent(s) or representative(s) of the holders of such Permitted
Lien Indebtedness pursuant to the terms of this Article XII, (ii) any approvals
or directions from such agent(s) or other representative(s) otherwise required
under this Article XII will cease to be so required, (iii) the Collateral Agent
will no longer be entitled or required to take any actions by virtue of an event
of default under such Permitted Lien Indebtedness and all references to such
Permitted Lien Indebtedness (including Permitted Lien Indebtedness Obligations
in respect of such Permitted Lien Indebtedness), the instruments governing such
Permitted Lien Indebtedness, the Agreement With Collateral Agent with respect to
such Permitted Lien Indebtedness and the agent(s) or representative(s) of the
holders thereof shall be deemed to have been deleted.
ARTICLE XIII.
GUARANTY
SECTION 13.1. Guaranty.
--------
(a) In consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the Subsidiary
Guarantors hereby irrevocably and unconditionally guarantees (the "Guaranty"),
jointly and severally, to each Holder of a Security authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of this Indenture, the Securities or the
obligations of the Company under this Indenture or the Securities, that: (w) the
principal and premium (if any) of and interest on the Securities will be paid in
full when due, whether at the Maturity Date or Interest Payment Date, by
acceleration, call for redemption, upon a Change of Control Offer, Offer to
Purchase, or otherwise; (x) all other obligations of the Company to the Holders
or the Trustee under this Indenture or the Securities will be promptly paid in
full or performed, all in accordance with the terms of this Indenture and the
Securities; and (y) in case of any extension of time of payment or renewal of
any Securities or any of such other obligations, they will be paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration, call for redemption, upon a Change of
Control Offer, upon an Offer to Purchase or otherwise. Failing payment when due
of any amount so guaranteed for whatever reason, each Subsidiary Guarantor shall
be jointly and severally obligated to pay the same before failure so to pay
becomes an Event of Default. If the Company or a Subsidiary Guarantor defaults
in the payment of the principal of, premium, if any, or interest on, the
Securities when and as the same shall become due, whether upon maturity,
acceleration, call for redemption, upon a Change of Control Offer, Offer to
Purchase or otherwise, without the necessity of action by the Trustee or any
Holder, each Subsidiary Guarantor shall be required, jointly and severally, to
promptly make such payment in full.
(b) Each Subsidiary Guarantor hereby agrees that its
obligations with regard to this Guaranty shall be full and unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any delays in
obtaining or realizing upon or failures to obtain or realize upon collateral,
the recovery of any judgment against the Company, any action to enforce the same
68
or any other circumstances that might otherwise constitute a legal or equitable
discharge or defense of a guarantor (except as provided in Sections 13.4 and
13.5). Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company or
right to require the prior disposition of the assets of the Company to meet its
obligations, protest, notice and all demands whatsoever and covenants that this
Guaranty will not be discharged (except to the extent released pursuant to
Section 13.4 or 13.5) except by complete performance of the obligations
contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or any
Custodian, trustee, or similar official acting in relation to either the Company
or such Subsidiary Guarantor, any amount paid by either the Company or such
Subsidiary Guarantor to the Trustee or such Holder, this Guaranty, to the extent
theretofore discharged, shall be reinstated in full force and effect (except to
the extent released pursuant to Section 13.4 or 13.5). Each Subsidiary Guarantor
agrees that it will not be entitled to any right of subrogation in relation to
the Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby. Each Subsidiary Guarantor further
agrees that, as between such Subsidiary Guarantor, on the one hand, and the
Holders and the Trustee, on the other hand, (i) the maturity of the obligations
guaranteed hereby may be accelerated as provided in Section 6.2 for the purposes
of this Guaranty, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company of the obligations guaranteed
hereby, and (ii) in the event of any declaration of acceleration of those
obligations as provided in Section 6.2, those obligations (whether or not due
and payable) will forthwith become due and payable by each of the Subsidiary
Guarantors for the purpose of this Guaranty.
(d) Each Subsidiary Guarantor and by its acceptance of a
Security issued hereunder each Holder hereby confirms that it is the intention
of all such parties that the guarantee by such Subsidiary Guarantor set forth in
Section 13.1(a) not constitute a fraudulent transfer or conveyance for purpose
of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar Federal or state law. To effectuate the
foregoing intention, the Holders and such Subsidiary Guarantor hereby
irrevocably agree that the obligations of such Subsidiary Guarantor under its
guarantee set forth in Section 13.1(a) shall be limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Subsidiary Guarantor and after giving effect to any collections from or payments
made by or on behalf of any other Subsidiary Guarantor in respect of the
obligations of such other Subsidiary Guarantor under its guarantee or pursuant
to the following paragraph of this Section 13.1(d), result in the obligations of
such Subsidiary Guarantor under such guarantee not constituting such a
fraudulent transfer or conveyance.
Each Subsidiary Guarantor that makes any payment or distribution
under Section 13.1(a) shall be entitled to a contribution from each other
Subsidiary Guarantor equal to its Pro Rata Portion of such payment or
distribution. For purposes of the foregoing, the "Pro Rata Portion" of any
Subsidiary Guarantor means the percentage of the net assets of all Subsidiary
Guarantors held by such Subsidiary Guarantor, determined in accordance with
GAAP.
(e) It is the intention of each Subsidiary Guarantor and the
Company that the obligations of each Subsidiary Guarantor hereunder shall be
joint and several and in, but not in excess of, the maximum amount permitted by
applicable law. Accordingly, if the obligations in respect of the Guaranty would
be annulled, avoided or subordinated to the creditors of any Subsidiary
Guarantor by a court of competent jurisdiction in a proceeding actually pending
before such court as a result of a determination both that such Guaranty was
made without fair consideration and, immediately after giving effect thereto,
such Subsidiary Guarantor was insolvent or unable to pay its debts as they
mature or left with an unreasonably small capital, then the obligations of such
Subsidiary Guarantor under such Guaranty shall be reduced by such court if and
to the extent such reduction would result in the avoidance of such annulment,
avoidance or subordination; provided, however, that any reduction pursuant to
this paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, "fair consideration",
"insolvency", "unable to pay its debts as they mature", "unreasonably small
capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law.
69
SECTION 13.2. Execution and Delivery of Guaranty.
----------------------------------
Each Subsidiary Guarantor shall, by virtue of such Subsidiary
Guarantor's execution and delivery of this Indenture or such Subsidiary
Guarantor's execution and delivery of an indenture supplement pursuant to
Section 13.3 hereof, be deemed to have signed on each Security issued hereunder
the notation of guarantee set forth on the form of the Securities attached
hereto as Exhibit A to the same extent as if the signature of such Subsidiary
Guarantor appeared on such Security. The delivery of any Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of the guaranty set forth in Section 13.1 on behalf of each Subsidiary
Guarantor. The notation of a guaranty set forth on any Security shall be null
and void and of no further effect with respect to the guaranty of any Subsidiary
Guarantor which, pursuant to Section 13.4 or Section 13.5, is released from such
guaranty.
SECTION 13.3. Future Subsidiary Guarantors.
----------------------------
Upon (i) the acquisition by the Company or any Subsidiary Guarantor
of the Capital Stock of any Person, if, as a result of such acquisition, such
Person becomes a Subsidiary (other than a Leaseback Subsidiary) or (ii) the last
day of any fiscal quarter during which any Subsidiary of the Company that is not
a Subsidiary Guarantor as of such date and has not previously been released as a
Subsidiary Guarantor pursuant to Section 13.4 or Section 13.5 of this Indenture
becomes a Subsidiary (other than a Leaseback Subsidiary), such Subsidiary
(hereinafter any such Subsidiary, except any Excluded Guaranty Subsidiary or any
Special Purpose Subsidiary, being called a "Future Subsidiary Guarantor") shall
fully and unconditionally guarantee the obligations of the Company with respect
to payment and performance of the Securities and the other obligations of the
Company under this Indenture to the same extent that such obligations are
guaranteed by the other Subsidiary Guarantors pursuant to Section 13.1; and,
within 60 days of the date of such occurrence, such Future Subsidiary Guarantor
shall execute and deliver to the Trustee a supplemental indenture making such
Future Subsidiary Guarantor a party to this Indenture; provided, however, that
the foregoing provisions shall not apply to (A) any Subsidiary referenced in
clause (i) or clause (ii) above that is prohibited by law or by the terms of any
agreement from making the guarantee set forth in Section 13.1 (an "Excluded
Guaranty Subsidiary") (provided that such Subsidiary will become a Future
Subsidiary Guarantor as of the date such prohibition is removed or lapses and
provided that the assets of all Excluded Guaranty Subsidiaries (determined by
the Company in accordance with GAAP) shall in no event exceed 15% of the
aggregate assets of the Company and its Subsidiaries (other than Leaseback
Subsidiaries) on a consolidated basis (determined by the Company in accordance
with GAAP)), or (B) a Subsidiary which would have been released from its
guarantee, by virtue of events set forth in Section 13.5, had such Subsidiary
been a Subsidiary Guarantor at the time such events occurred, or (C) a
Subsidiary of any Person which has been released as a Subsidiary Guarantor
pursuant to Section 13.5 or (D) any Subsidiary referenced in clause (i) or
clause (ii) above that is a Special Purpose Subsidiary.
SECTION 13.4. Subsidiary Guarantor May Consolidate, Etc., on Certain Terms.
------------------------------------------------------------
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary Guarantor
with or into the Company or any other Subsidiary Guarantor. Upon any such
consolidation or merger, the guarantees (as set forth in Section 13.1) of the
Subsidiary Guarantor which is not the survivor of the merger or consolidation,
and of any Subsidiary of such Subsidiary Guarantor that is also a Subsidiary
Guarantor, shall be released and shall no longer have any force or effect, and
any and all assets and Capital Stock (and all rights associated with such
Capital Stock) of such Subsidiary Guarantor, and of any Subsidiary of such
Subsidiary Guarantor that is also a Subsidiary Guarantor, that constitute part
of the Pledged Collateral shall be fully and unconditionally released from the
Lien created by Article XII and shall no longer constitute Pledged Collateral.
In the event that a Subsidiary Guarantor is the survivor of a merger or
consolidation with the Company, such Subsidiary Guarantor shall assume the
obligations of the Company pursuant to Section 5.2 and the Guaranty of such
Subsidiary Guarantor shall be released and shall no longer have any force or
effect and all assets and Capital Stock (and all rights associated with such
Capital Stock) of such Subsidiary Guarantor, that constitute part of the Pledged
Collateral shall be unconditionally released from the Lien created by Article
XII and shall no longer constitute Pledged Collateral.
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(b) Nothing contained in this Indenture shall prevent any sale
or conveyance of assets of any Subsidiary Guarantor (whether or not constituting
all or substantially all of the assets of such Subsidiary Guarantor) to any
Person, provided that the Company shall comply with the provisions of Section
4.14, and provided further that, in the event that all or substantially all of
the assets of a Subsidiary Guarantor are sold or conveyed, the guarantees of
such Subsidiary Guarantor (as set forth in Section 13.1) shall be released and
shall no longer have any force or effect, and all assets and Capital Stock (and
all rights associated with such Capital Stock) of such Subsidiary Guarantor, and
of each Subsidiary of such Subsidiary Guarantor that is also a Subsidiary
Guarantor, that constitute part of the Pledged Collateral shall be
unconditionally released from the Lien created by Article XII and shall no
longer constitute Pledged Collateral.
(c) Except as provided in Section 13.4(a) or Section 13.5,
each Subsidiary Guarantor shall not, directly or indirectly, consolidate with or
merge with or into another Person, unless (i) either (a) the Subsidiary
Guarantor is the continuing entity or (b) the resulting or surviving entity is a
corporation organized under the laws of the United States, any state thereof or
the District of Columbia and expressly assumes by supplemental indenture all of
the obligations of the Subsidiary Guarantor in connection with the Securities
and this Indenture; (ii) no Default or Event of Default would occur as a
consequence of (after giving effect, on a pro forma basis, to) such transaction;
and (iii) the Subsidiary Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation or
merger and, if a supplemental indenture is required, such supplemental indenture
complies with this Indenture and that all conditions precedent herein relating
to such transaction have been satisfied.
(d) Upon any consolidation or merger of the Subsidiary
Guarantor in accordance with Section 13.4(c) hereof, the successor corporation
formed by such consolidation or into which the Subsidiary Guarantor is merged
shall succeed to, and be substituted for, and may exercise every right and power
of, the Subsidiary Guarantor under this Indenture with the same effect as if
such successor corporation had been named herein as the Subsidiary Guarantor,
and when a successor corporation duly assumes all of the obligations of the
Subsidiary Guarantor pursuant hereto and pursuant to the Securities, the
Subsidiary Guarantor shall be released from such obligations.
SECTION 13.5. Release of Subsidiary Guarantors and Collateral.
-----------------------------------------------
(a) Without any further notice or action being required by any
Person, any Subsidiary Guarantor, and each Subsidiary of such Subsidiary
Guarantor that is also a Subsidiary Guarantor, shall be fully and conditionally
released and discharged from all obligations under its guarantee and this
Indenture, and any and all assets and Capital Stock (and all rights associated
with such Capital Stock) of such Subsidiary Guarantor, and of each Subsidiary of
such Subsidiary Guarantor that is also a Subsidiary Guarantor, constituting
Pledged Collateral shall be fully and unconditionally released, upon (i) the
sale or other disposition of all or substantially all of the assets or
properties of such Subsidiary Guarantor, or 50% or more of the Capital Stock of
any such Subsidiary Guarantor to Persons other than the Company and its
Subsidiaries or (ii) the consolidation or merger of any such Subsidiary
Guarantor with any Person other than the Company or a Subsidiary of the Company,
if, as a result of such consolidation or merger, Persons other than the Company
and its Subsidiaries beneficially own more than 50% of the capital stock of such
Subsidiary Guarantor, provided that, in either such case, the Net Cash Proceeds
of such sale, disposition, merger or consolidation are applied in accordance
with Section 4.14 of this Indenture or (iii) a Legal Defeasance or Covenant
Defeasance, as set forth in Article VIII or (iv) such Subsidiary Guarantor
becoming a Special Purpose Subsidiary. Notwithstanding the foregoing provisions
of this Section 13.5(a), the pledge and grant of a security interest set forth
in Section 12.1 shall not be released pursuant to clause (i) or (ii) above with
respect to any Pledged Shares that continue to be held by any Pledgor after the
consummation of any transaction described in clause (i) or (ii) above, unless
such pledge and security interest are otherwise released in accordance with the
provisions of section 13.5.
(b) The releases and discharges set forth in Section 13.5(a)
shall be effective (i) in the case of releases and discharges effected pursuant
to clause (i) or (ii) of Section 13.5(a) by virtue of a sale, disposition,
consolidation or merger, on the date of consummation thereof, (ii) in the case
of releases and discharges effected pursuant to clause (iii) of Section 13.5(a),
upon the date of Covenant Defeasance or Legal Defeasance, as applicable
71
and (iii) in the case of a Subsidiary becoming a Special Purpose Subsidiary, on
the date such Subsidiary becomes a Special Purpose Subsidiary. At the written
request of the Company, the Trustee shall promptly execute and deliver
appropriate instruments in forms reasonably acceptable to the Company evidencing
and further implementing any releases and discharges pursuant to the foregoing
provisions. If the Company desires the instruments evidencing or implementing
any releases or discharges to be executed prior to the effectiveness of such
releases and discharges as set forth above, such instruments may be made
conditional upon the occurrence of the events necessary to cause the
effectiveness of such releases and discharges, as specified in the first
sentence of this Section 13.5.
(c) Notwithstanding the foregoing provisions of this Article
XIII, (i) any Subsidiary Guarantor whose guarantee would otherwise be released
pursuant to the provisions of this Section 13.5 may elect, by written notice to
the Trustee, to maintain such guarantee in effect notwithstanding the event or
events that otherwise would cause the release of such guarantee (which election
to maintain such guarantee in effect may be conditional or for a limited period
of time), and (ii) any Subsidiary of the Company which is not a Subsidiary
Guarantor may elect, by written notice to the Trustee, to become a Subsidiary
Guarantor (which election may be conditional or for a limited period of time).
SECTION 13.6. Certain Bankruptcy Events.
Each Subsidiary Guarantor hereby covenants and agrees, to the
fullest extent that it may do so under applicable law, that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company, such Subsidiary Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guaranty and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the Bankruptcy Law or otherwise.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of the TIA, the imposed duties,
upon qualification of this Indenture under the TIA, shall control.
SECTION 14.2. Notices.
-------
Any notices or other communications to the Company or any
Subsidiary Guarantor, Paying Agent, Registrar, Securities Custodian, transfer
agent or the Trustee required or permitted hereunder shall be in writing, and
shall be sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Subsidiary Guarantor:
HMH Properties, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
72
if to the Trustee:
Marine Midland Bank
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
if to Paying Agent or the Registrar:
Bankers Trust Company
Corporate Trust and Agency Group
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Market Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party by notice to each other party may designate
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and five
Business Days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall
be mailed to him by first class mail or other equivalent means at his address as
it appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed. Any notice or
communication shall also be mailed to any Person described in TIA (S) 313(c) to
the extent required by the TIA.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 14.3. Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA (S) 312(c).
SECTION 14.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company or any
Subsidiary Guarantor to the Trustee to take any action under this Indenture,
such Person shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee), stating that, in the opinion of such counsel, all
such conditions precedent have been met; provided, however, that in the case of
any such request or application as to which the furnishing of particular
documents is specifically
73
required by any provision of this Indenture, no additional certificate or
opinion need be furnished under this Section 14.4.
SECTION 14.5. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA (S)314(a)(4)) shall comply with the provisions of TIA
(S)314(e) and shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; provided, however, that
with respect to matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 14.6. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Securityholders. Any Paying Agent or Registrar may make reasonable
rules for its functions.
SECTION 14.7. Non-Business Days.
-----------------
If a payment date is not a Business Day at such place, payment
may be made at such place on the next succeeding day that is a Business Day, and
no interest shall accrue for the intervening period.
SECTION 14.8. Governing Law.
-------------
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF
THE COMPANY AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE COMPANY AND THE SUBSIDIARY
GUARANTORS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY AND THE SUBSIDIARY GUARANTORS IN ANY OTHER JURISDICTION.
74
SECTION 14.9. No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or any Subsidiary Guarantor or any of
their respective Subsidiaries. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
SECTION 14.10. No Recourse against Others.
--------------------------
No direct or indirect stockholder, partner, employee, officer
or director, past, present or future, of the Company, the Subsidiary Guarantors
or any successor entity, shall have any personal liability in respect of the
obligations of the Company or the Subsidiary Guarantors under the Securities or
this Indenture by reason of his or its status as such stockholder, partner,
employee, officer or director. Each Securityholder by accepting a Security
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
SECTION 14.11. Successors.
----------
All agreements of the Company and the Subsidiary Guarantors in
this Indenture and the Securities shall bind its successor. All agreements of
the Trustee in this Indenture shall bind its successor.
SECTION 14.12. Duplicate Originals.
-------------------
All parties may sign any number of copies or counterparts of
this Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 14.13. Severability.
------------
In case any one or more of the provisions in this Indenture or
in the Securities shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 14.14. Table of Contents, Headings, Etc.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of
the Articles and the Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.
SECTION 14.15. Qualification of Indenture.
--------------------------
The Company shall qualify this Indenture under the TIA in
accordance with the terms and conditions of the Registration Rights Agreement
and shall pay all costs and expenses (including attorneys, fees for the Company
and the Trustee) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of the Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 14.16. Registration Rights.
-------------------
Certain Holders of the Securities are entitled to certain
registration rights with respect to such Securities pursuant to, and subject to
the terms of, the Registration Rights Agreement.
75
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
HMH PROPERTIES, INC.
By:
-------------------------------
Name:
Title:
HMC RETIREMENT PROPERTIES, INC.
By:
-------------------------------
Name:
Title:
HMH MARINA, INC.
By:
-------------------------------
Name:
Title:
HMH PENTAGON CORPORATION
By:
-------------------------------
Name:
Title:
HMH RIVERS, INC.
By:
-------------------------------
Name:
Title:
HOST AIRPORT HOTELS, INC.
By:
-------------------------------
Name:
Title:
76
MARRIOTT FINANCIAL SERVICES, INC.
By:
-------------------------------
Name:
Title:
MARRIOTT SBM TWO CORPORATION
By:
-------------------------------
Name:
Title:
HOST OF BOSTON, LTD.
BY: Host Airport, Ltd., its
General Partner
By:
-------------------------------
Name:
Title:
HOST OF HOUSTON, LTD.
BY: Host Airport, Ltd., its
General Partner
By:
-------------------------------
Name:
Title:
77
HOST OF HOUSTON 1979
BY: HMH Properties, Inc.
By:
-------------------------------
Name:
Title:
MARINE MIDLAND BANK
as Trustee
By:
-------------------------------
Name:
Title:
78
Exhibit A
FORM OF SECURITY
[HMH PROPERTIES, INC.]
9 1/2% SERIES A SENIOR SECURED NOTE
DUE 2005
No. $___________
HMH Properties, Inc., a Delaware corporation (hereinafter called the
"Company," which term includes any successors under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ____________, or
registered assigns, the principal sum of ____________ Dollars, on May 15, 2005.
Interest Payment Dates: May 15 and November 15 commencing November 15,
1995.
Record Dates: May 1 and November 1.
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed under its corporate seal.
Dated: May 25, 1995
HMH PROPERTIES, INC., a
Delaware corporation
[Seal]
By:
-----------------------------------
Name:
Title:
Attest:
----------------------------
Secretary
A-1
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities described in the within-mentioned
Indenture.
MARINE MIDLAND BANK OR MARINE MIDLAND BANK
as Trustee as Trustee
By: By: BANKERS TRUST COMPANY
-------------------------------- --------------------------------
Authorized Signatory as Authenticating Agent
By:
--------------------------------
Authorized Signatory
A-2
HMH PROPERTIES, INC.
9 1/2% Series A Senior Secured Note
due 2005
Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇) ("▇▇▇"), 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 such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or 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 an interest herein./1/
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN
THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF
AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $100,000 FOR
-------------------
/1/ This paragraph should only be added if the Security is issued in global
form.
A-3
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE REGISTRAR'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN THE
CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE
REGISTRAR. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."/2/
1. Interest.
--------
HMH Properties, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 9 1/2% per annum from May 25, 1995 until maturity.
To the extent it is lawful, the Company promises to pay interest on any interest
payment due but unpaid on such principal amount at a rate of 9 1/2% per annum
compounded semi-annually.
The Company will pay interest semi-annually on May 15 and
November 15 of each year or, if any such day is not a Business Day, on the next
succeeding Business Day (each, an "Interest Payment Date"), commencing November
15, 1995. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid on the Securities,
from the date of issuance. Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except
defaulted interest) to the Persons who are the registered Holders at the close
of business on the May 1 or November 1 immediately preceding the Interest
Payment Date. Holders must surrender Securities to a Paying Agent to collect
principal payments. Except as provided below, the Company shall pay principal
and interest in such coin or currency of the United States of America as at the
time of payment shall be legal tender for payment of public and private debts
("Cash"). The Securities will be payable as to principal, premium and interest
at the office or agency of the Company maintained for such purpose within or
without the City and State of New York or, at the option of the Company, payment
of principal, premium and interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest and premium on all Global Securities and all other
Securities the Holders of which shall have provided wire transfer instructions
to the Company or the Paying Agent.
3. Paying Agent and Registrar.
--------------------------
Initially, Bankers Trust Company will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Paying Agent, Registrar or co-Registrar.
--------------------
/2/ This paragraph should be included only for the Initial Securities.
A-4
4. Indenture.
---------
The Company issued the Securities under an Indenture, dated as
of May 25, 1995 (the "Indenture"), among the Company, the Subsidiary Guarantors
named therein and Marine Midland Bank (the "Trustee" which term includes any
successor Trustee under the Indenture). Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act, as in effect on the date of
the Indenture. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and said Act for a statement of them.
The Securities are senior secured obligations of the Company limited in
aggregate principal amount to $600,000,000. The Securities are secured by a
pledge of the Pledged Shares.
5. Redemption.
----------
The Securities may be redeemed, in whole or in part, at any
time on or after May 15, 2000, at the option of the Company, at the Redemption
Price (expressed as a percentage of principal amount) set forth below with
respect to the indicated Redemption Date, in each case (subject to the right of
Holders of record on a Record Date that is on or prior to such Redemption Date
to receive interest due on the Interest Payment Date to which such Record Date
relates), plus any accrued but unpaid interest to the Redemption Date. The
Securities may not be so redeemed prior to May 15, 2000.
If redeemed during
the 12-month period
commencing May 15 Redemption Price
----------------- ----------------
2000.......................................... 103.563%
2001.......................................... 102.375%
2002.......................................... 101.188%
2003 and thereafter........................... 100.000%
Any such redemption will comply with Article III of the
Indenture.
6. Notice of Redemption.
--------------------
Notice of redemption will be sent by first class mail, at
least 30 days and not more than 60 days prior to the Redemption Date to the
Holder of each Security to be redeemed at such Holder's last address as then
shown upon the registry books of the Registrar. Securities may be redeemed in
part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Securities called for
redemption shall have been deposited with the Paying Agent on such Redemption
Date and payment of the Securities called for redemption is not otherwise
prohibited, the Securities called for redemption will cease to bear interest and
the only right of the Holders of such Securities will be to receive payment of
the Redemption Price.
7. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption.
8. Persons Deemed Owners.
---------------------
The registered Holder of a Security may be treated as the
owner of it for all purposes.
A-5
9. Unclaimed Money.
---------------
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent(s) will pay the money
back to the Company at its written request. After that, all liability of the
Trustee and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
-----------------------------------------
Except as set forth in the Indenture, if the Company
irrevocably deposits with the Trustee, in trust, for the benefit of the Holders,
Cash, U.S. Government Obligations or a combination thereof, in such amounts as
will be sufficient in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest on
the Securities to redemption or maturity and comply with the other provisions of
the Indenture relating thereto, the Company will be discharged from certain
provisions of the Indenture and the Securities (including the restrictive
covenants described in paragraph 12 below, but excluding their obligation to pay
the principal of and interest on the Securities). Upon satisfaction of certain
additional conditions set forth in the Indenture, the Company may, within one
year of the Stated Maturity of the Securities, elect to have its obligations
discharged with respect to outstanding Securities.
11. Amendment; Supplement; Waiver.
-------------------------------
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the written consent of the Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or compliance with any
provision may be waived with the consent of the Holders of a majority in
aggregate principal amount of the Securities then outstanding. Without notice to
or consent of any Holder, the parties thereto may under certain circumstances
amend or supplement the Indenture or the Securities to, among other things, cure
any ambiguity, defect or inconsistency, or make any other change that does not
adversely affect the rights of any Holder of a Security.
12. Restrictive Covenants.
---------------------
The Indenture imposes certain limitations on the ability of
the Company and the Subsidiary Guarantors to, among other things, incur
additional Indebtedness and Disqualified Capital Stock, pay dividends or make
certain other restricted payments, enter into certain transactions with
Affiliates, incur Liens, sell assets, merge or consolidate with any other Person
or transfer (by lease, assignment or otherwise) substantially all of the
properties and assets of the Company. The limitations are subject to a number of
important qualifications and exceptions. The Company must periodically report to
the Trustee on compliance with such limitations.
13. Repurchase at Option of Holder.
------------------------------
(a) If there is a Change of Control Triggering Event, the Company
shall be required to offer to purchase on the Change of Control Payment Date all
outstanding Securities at a purchase price equal to 101% of the principal amount
thereof, plus (subject to the right of Holders of Record on a Record Date that
is on or prior to such Purchase Date to receive interest due on the Interest
Payment Date to which such Record Date relates) accrued and unpaid interest, if
any, to the Change of Control Payment Date. Holders of Securities will receive a
Change of Control Offer from the Company prior to any related Change of Control
Payment Date and may elect to have such Securities purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of
the Company, the Subsidiary Guarantors or any of their respective Subsidiaries
to sell assets. In the event the proceeds from a permitted Asset Sale exceed
certain amounts, as specified in the Indenture, the Company will be required
either to reinvest the proceeds of such Asset Sale in its business or to make an
offer to purchase a certain amount of each Holder's Securities at 100% of the
principal amount thereof, plus accrued interest, if any, to the purchase date.
A-6
14. Notation of Guaranty.
--------------------
As set forth more fully in the Indenture, the Persons
constituting Subsidiary Guarantors from time to time, in accordance with the
provisions of the Indenture, unconditionally and jointly and severally
guarantee, in accordance with Section 13.1 of the Indenture, to the Holder and
to the Trustee and its successors and assigns, that (i) the principal of and
interest on the Security will be paid, whether at the Maturity Date or Interest
Payment Dates, by acceleration, call for redemption or otherwise, and all other
obligations of the Company to the Holder or the Trustee under the Indenture or
this Security will be promptly paid in full or performed, all in accordance with
the terms of the Indenture and this Security, and (ii) in the case of any
extension of payment or renewal of this Security or any of such other
obligations, they will be paid in full when due or performed in accordance with
the terms of such extension or renewal, whether at the Maturity Date, as so
extended, by acceleration or otherwise. Such guarantees shall cease to apply,
and shall be null and void, with respect to any Subsidiary Guarantor who,
pursuant to Article Thirteen of the Indenture, is released from its guarantees,
or whose guarantees otherwise cease to be applicable pursuant to the terms of
the Indenture.
15. Successors.
----------
When a successor assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor will be
released from those obligations.
16. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing (other than an
Event of Default relating to certain events of bankruptcy, insolvency or
reorganization), then in every such case, unless the principal of all of the
securities shall have already become due and payable, either the Trustee or the
Holders of 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Securities then outstanding may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest), if it determines that withholding
notice is in their interest.
17. Trustee or Agent Dealings with Company.
--------------------------------------
The Trustee and each Agent under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates as if it were not the Trustee and such Agent.
18. No Recourse Against Others.
--------------------------
No direct or indirect stockholder, partner, employee, officer
or director, as such, past, present or future, of the Company, the Subsidiary
Guarantors or any successor entity shall have any personal liability in respect
of the obligations of the Company or the Subsidiary Guarantors under the
Securities or the Indenture by reason of his or its status as such stockholder,
partner, employee, officer or director. Each Holder of a Security by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Securities.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Security.
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20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of
a Security 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).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Securities as a convenience to the Holders of the
Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed hereon.
22. Additional Rights of Holders of Transfer Restricted Securities.
--------------------------------------------------------------
In addition to the rights provided to Holders of Securities
under the Indenture, Holders of Initial Securities shall have all the rights set
forth in the Registration Rights Agreement.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
HMH Properties, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
A-8
[FORM OF] ASSIGNMENT
--------------------
I or we assign this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
----------------------------
and irrevocably appoint _______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
Dated: _____________________ Signed: _____________________________
--------------------------------------------------------------------------------
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee*
---------------
* NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(I) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) in such other guarantee
program acceptable to be Trustee.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
----------------------------------
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article XI of the Indenture, check the appropriate
box: [___] Section 4.14 [___] Article XI
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.14 or Article XI of the Indenture, as the case may
be, state the amount you want to be purchased: $________________
Date: Signature:
--------------------- --------------------------
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee**
----------------
** NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) in such other guarantee
program acceptable to be Trustee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES***
----------------------------------------------
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer
Principal Amount Principal Amount Security following of Trustee or
Date of of this Global of this Global such decrease (or Securities
Exchange Security Security increase) Custodian
------------------------------------------------------------------------------------------------------------------
----------------
*** This schedule should only be added if the Security is issued in global form.
A-11
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
-----------------------------------------
Re: 9 1/2% SERIES A SENIOR SECURED NOTES DUE 2005 OF HMH PROPERTIES,
INC.
This Certificate relates to $_________ principal amount of Securities held
in (check applicable box) ________ book-entry or _________ definitive form by
________ (the "Transferor").
The Transferor (check applicable box):
[_] has requested the Registrar by written order to deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial interest
in such Global Security (or the portion thereof indicated above); or
[_] has requested the Registrar by written order to exchange or register
the transfer of a Security or Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that Transferor is familiar with
the Indenture relating to the above-captioned Securities and as provided in
Section 2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because (check
applicable box):
[_] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture).
[_] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of 1933, as amended
(the "Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B) or Section 2.6(d)(i)(B) of the Indenture) or pursuant to an
effective registration statement under the Securities Act (in satisfaction of
Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture.
[_] Such Security is being transferred in accordance with Rule 144 under
the Securities Act, or pursuant to an exemption from registration in accordance
with Regulation ▇▇▇▇▇▇ the Securities Act or to an "institutional accredited
investor" within the meaning of Rule 501(A)(1), (2), (3) or (7) under the
Securities Act that is acquiring the Security for its own account, or for the
account of such an institutional accredited investor, in each case in a minimum
principal amount of $100,000, not with a view to or for distribution in
violation of the Securities Act (in satisfaction of Section 2.6(a)(ii)(C) or
Section 2.6(d)(i)(C) of the Indenture).
A-12
[_] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Securities Act,
other than Rule 144A, in accordance with Rule 144 under the Securities Act, or
to an "institutional accredited investor" within the meaning of Rule 501(A)(1),
(2), (3) or (7) under the Securities Act that is acquiring the Security for its
own account, or for the account of such an institutional accredited investor, in
each case in a minimum principal amount of $100,000, not with a view to or for
distribution in violation of the Securities Act, and an opinion of Counsel to
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 2.6(a)(ii)(C) or
Section 2.6(d)(i)(C) of the Indenture).
-------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------
Date:
------------------------
A-13