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SECURITIES PURCHASE AGREEMENT
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Among
AMERICAN SKIING COMPANY
and
OAK HILL CAPITAL PARTNERS, L.P.
and
THE OTHER ENTITIES NAMED IN ANNEX A HERETO
Dated as of July 15, 2001
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................2
SECTION 1.01 Certain Defined Terms...............................2
SECTION 1.02 Other Definitions...................................7
SECTION 1.03 Terms Generally.....................................7
ARTICLE II SUBSCRIPTION AND SALE...............................................8
SECTION 2.01 Purchase and Sale of the Junior Subordinated Notes..8
SECTION 2.02 Purchase and Sale of the Common Shares..............8
SECTION 2.03 Closing.............................................8
SECTION 2.04 Closing Deliveries by the Company...................9
SECTION 2.05 Closing Deliveries by the Purchasers...............10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................10
SECTION 3.01 Authority..........................................11
SECTION 3.02 Capital Stock of the Company; Ownership of the
Shares........................................12
SECTION 3.03 No Conflict........................................14
SECTION 3.04 No Default.........................................14
SECTION 3.05 NYSE...............................................14
SECTION 3.06 Governmental Consents and Approvals................14
SECTION 3.07 Compliance With Laws...............................14
SECTION 3.08 Full Disclosure....................................15
SECTION 3.09 Brokers............................................15
SECTION 3.10 Securities Law Compliance..........................15
SECTION 3.11 Taxes).............................................15
SECTION 3.12 Representations and Warranties on Closing Date.....16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...................16
SECTION 4.01 Organization and Authority of Each Purchaser.......16
SECTION 4.02 No Conflict........................................17
SECTION 4.03 Governmental Consents and Approvals................17
SECTION 4.04 Investment Purpose.................................18
SECTION 4.05 Status of Junior Subordinated Notes and Shares;
Limitations on Transfer and Other
Restrictions..................................18
SECTION 4.06 Sophistication and Financial Condition of Each
Purchaser.....................................18
SECTION 4.07 Brokers............................................18
SECTION 4.08 Full Disclosure....................................19
SECTION 4.09 Representations and Warranties on Closing Date.....19
ARTICLE V ADDITIONAL AGREEMENTS...............................................19
SECTION 5.01 Use of Proceeds....................................19
SECTION 5.02 Further Action; Consents; Filings..................19
SECTION 5.03 Tax Reporting......................................19
SECTION 5.04 Heavenly Gondola Guarantee.........................20
SECTION 5.05 Exchange of the Tranche C Loan.....................21
SECTION 5.06 Series B Preferred Stock ..........................21
SECTION 5.07 Termination of Warrant Purchase Agreement..........26
SECTION 5.08 Committees; Directors of Material Subsidiaries.....26
SECTION 5.09 Public Announcements Public Announcements..........26
SECTION 5.10 NYSE Listing.......................................27
SECTION 5.11 Enforcement of the Company's Rights................27
ARTICLE VI CONDITIONS TO THE CLOSING..........................................27
SECTION 6.01 Conditions to the Obligations of Each Party........27
SECTION 6.02 Conditions to Obligations of the Company...........28
SECTION 6.03 Conditions to Obligations of the Purchasers........29
SECTION 6.04 Additional Condition to the Obligations of the
Purchasers....................................30
ARTICLE VII TERMINATION.......................................................30
SECTION 7.01 Termination........................................30
ARTICLE VIII GENERAL PROVISIONS...............................................31
SECTION 8.01 Expenses...........................................31
SECTION 8.02 Survival...........................................31
SECTION 8.03 Notices............................................31
SECTION 8.04 Headings...........................................32
SECTION 8.05 Severability.......................................32
SECTION 8.06 Entire Agreement...................................33
SECTION 8.07 Assignment.........................................33
SECTION 8.08 No Third Party Beneficiaries.......................33
SECTION 8.09 Amendments and Waivers.............................33
SECTION 8.10 Governing Law. ....................................33
SECTION 8.11 Counterparts.......................................33
SECTION 8.12 Specific Performance...............................34
ANNEX/EXHIBITS
Annex A Purchasers
Annex B JSN Purchasers
Annex C Common Share Purchasers
Annex D Series C-1 and Series C-2 Allocations
Exhibit A Form of Junior Subordinated Note Indenture
Exhibit B Form of Registration Rights Agreement
Exhibit C-1 Form of Series C-1 Certificate of Designation
Exhibit C-2 Form of Series C-2 Certificate of Designation
Exhibit D Form of Series D Certificate of Designation
Exhibit E Form of Amended and Restated By-laws
SECURITIES PURCHASE AGREEMENT dated as of July 15, 2001 among
AMERICAN SKIING COMPANY, a Delaware corporation (the "Company"), OAK HILL
CAPITAL PARTNERS, L.P., a Delaware limited partnership ("Oak Hill"), and the
other entities identified in Annex A attached hereto (together with Oak Hill,
the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company wishes to issue and sell to the
Purchasers identified on Annex B and C, and such Purchasers wish to purchase
from the Company, an aggregate of $12,500,000 principal amount of the Company's
11.3025% junior subordinated convertible notes (as more particularly defined
herein, the "Junior Subordinated Notes"), and an aggregate of 1,000,000 shares
(the "Common Shares") of Common Stock (as defined herein) upon the terms and
subject to the conditions set forth herein;
WHEREAS, in order to further assist the Company in its
financial restructuring efforts, Oak Hill has agreed to (i) provide a
$14,000,000 guarantee of the Heavenly Gondola Capital Lease (as defined herein),
(ii) fund $2,500,000 of additional Tranche C Loans (as defined in the Resort
Properties Credit Agreement) under the Resort Properties Credit Agreement (as
defined herein), and (iii) the termination of its right to receive the Tranche C
Warrants (as defined herein);
WHEREAS, in order to induce the Purchasers set forth on Annex
B & C to provide additional financing to the Company in the form of the purchase
of the Junior Subordinated Notes and the Common Shares, and in consideration of
Oak Hill's agreement to (i) provide a guarantee of the obligations of Heavenly
Valley LP (as defined herein) under the Heavenly Gondola Capital Lease, (ii)
fund $2,500,000 of additional Tranche C Loans under the Resort Properties Credit
Agreement and (iii) the termination of its right to receive the Tranche C
Warrants, and in consideration of the other covenants and agreements of the
Purchasers in this Agreement, subject to the terms and conditions set forth
below, the Company has agreed to issue to the Purchasers 40,000 shares of Series
C-1 Preferred Stock (as defined herein) and a number of shares of Series C-2
Preferred Stock (as defined herein) determined as provided herein, and to effect
certain changes to its existing capital structure, all as more particularly set
forth herein;
WHEREAS, on July 13, 2001 the Tranche A Lenders (as defined in
the Resort Properties Credit Agreement) are advancing to ASCRP an additional
$1,250,000 pursuant to the Resort Properties Credit Agreement and Oak Hill, in
partial satisfaction of its obligations pursuant to this Agreement to fund
$2,500,000 of additional Tranche C Loans, is advancing to ASCRP Tranche C Loans
in the sum of $1,250,000 pursuant to its existing Tranche C Loan commitment.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the Purchasers and the
Company hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Affiliate" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
"Agreement" or "this Agreement" means this Securities Purchase Agreement
dated as of July 15, 2001 among the Company and the Purchasers (including the
Annex and the Schedules and Exhibits hereto and the Disclosure Letter) and all
amendments hereto made in accordance with the provisions of Section 7.09.
"Amended and Restated Credit Agreement" means the Amended, Restated and
Consolidated Credit Agreement dated as of October 12, 1999, as it may be amended
from time to time, among the Company and certain Company Subsidiaries, as
borrowers, the lenders and Fleet National Bank (f/k/a BankBoston, N.A.), as
agent for the lenders.
"ASCRP" means American Skiing Company Resort Properties, Inc., a Maine
corporation.
"Certificate of Incorporation" means the certificate of incorporation of
the Company, as amended to the date of this Agreement and as may be amended from
time to time.
"Board" means the board of directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in The City of New
York.
"By-laws" means the by-laws of the Company as amended to the date of this
Agreement and as may be further amended from time to time.
"Class A Common Stock" means the Class A common stock of the Company, par
value $.01 per share.
"Code" means the Internal Revenue Code of 1986, as amended through the date
hereof.
"Common Stock" means the common stock of the Company (excluding the Class A
Common Stock), par value $.01 per share.
"Company Subsidiary" or "Company Subsidiaries" means any Subsidiary or all
of the Subsidiaries of the Company, respectively.
"control" (including the terms "controlled by" and "under common control
with"), with respect to the relationship between or among two or more Persons,
means the possession, directly or indirectly or as trustee or executor, of the
power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or executor, by
contract or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"Conversion Stock" means new shares of Common Stock issued or issuable upon
conversion of the Series C-1 Preferred Stock.
"Designated C-2 Share Number" means a number (rounded up to the nearest
whole number) calculated as follows: the aggregate Liquidation Price (as defined
in Exhibit B to the Certificate of Incorporation) of the Series B Preferred
Stock on the Closing Date less $40,000,000 divided by 1000.
"Director" means a member of the Board.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Governmental Authority" means any United States federal, state, local,
supranational or any foreign government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"Heavenly Gondola Capital Lease" means the lease to be entered into between
a financial institution reasonably acceptable to the Company and the Purchasers
and Heavenly Valley LP covering certain gondola towers and cars and related
equipment and assets servicing the Heavenly resort and yielding proceeds to the
Company of $14,000,000.
"Heavenly Valley LP" means Heavenly Valley Limited Partnership, a Nevada
limited partnership and a wholly owned subsidiary of the Company.
"Junior Subordinated Note Indenture" means the Indenture relating to the
Subordinated Notes to be entered into as of the Closing Date among the Company,
as issuer, and Oak Hill, as trustee, substantially in the form of Exhibit A
attached hereto.
"Junior Subordinated Notes" means the Company's 11.3025% Junior
Subordinated Convertible Notes due 2007 issued pursuant to the Junior
Subordinated Note Indenture.
"Law" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law.
"Lien" means any security interests, pledges, mortgages, liens, deeds of
trust, charges, claims, judgments, unsatisfied preemptive rights, purchase
options, rights of first refusal or first offer, proxies, voting agreements,
transfer restrictions, and other encumbrances of every kind and nature
whatsoever, whether arising by agreement, operation of law or otherwise, other
than any created by the Purchasers or pursuant to this Agreement or arising
under applicable state or federal securities laws.
"Material Adverse Effect" means any circumstance, change in, or effect on
the Company, any Company Subsidiary or their businesses or any resort location
that, individually or in the aggregate with any other circumstances, changes in,
or effects on, the Company, any Company Subsidiary or their businesses or any
resort location is, or is reasonably expected to be, materially adverse to the
business of the Company and the Company Subsidiaries, taken as a whole, or the
financial condition, results of operations, prospects, assets or properties of
the Company and the Company Subsidiaries, taken as a whole, except for any
changes or effects principally resulting from or principally arising in
connection with (i) any occurrence or condition affecting the leisure industry
generally or (ii) any changes in general economic conditions, it being
understood that the fact that the business or financial condition, results of
operations, prospects, assets or properties of each resort location are
consolidated with the other resort locations and business of the Company and the
Company Subsidiaries for purposes of defining whether there has been a "Material
Adverse Effect" shall in no way imply that a material adverse change in the
business, financial condition, results of operations, prospects, assets or
properties of any single resort location could not result in a Material Adverse
Effect.
"▇▇. ▇▇▇▇▇" means ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"NYSE" means the New York Stock Exchange.
"Person" means any individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the Exchange
Act.
"Purchase Price Bank Account" means a bank account in the United States to
be designated by the Company in a written notice to Oak Hill, on behalf of each
Purchaser, at least two Business Days before the Closing.
"Registration Rights Agreement" means the Registration Rights Agreement to
be entered into as of the Closing Date by the Company and the Purchasers
substantially in the form of Exhibit B attached hereto.
"Resort Properties Credit Agreement" means the Second Amended and Restated
Credit Agreement dated as of July 31, 2000, as amended and as it may be further
amended from time to time, among ASCRP, the lenders party thereto and Fleet
National Bank, as agent for the lenders.
"SEC" means the United States Securities and Exchange Commission. ---
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Subordinated Note Indenture" means the Indenture dated as of June
28, 1996, as amended and supplemented by the Supplemental Indenture dated as of
September 4, 1998, the Second Supplemental Indenture dated as of September 4,
1998, the Third Supplemental Indenture dated as of August 6, 1999 and the Fourth
Supplemental Indenture dated as of October 6, 1999, and as it may be further
amended from time to time, relating to the Senior Subordinated Notes, among the
Company, as issuer, several of the Company Subsidiaries, as guarantors, and The
United States Trust Company of New York, as trustee.
"Senior Subordinated Notes" means the Company's Series A and Series B
Senior Subordinated Notes due 2006 issued pursuant to the Senior Subordinated
Note Indenture.
"Senior Preferred Stock" means the Company's 10.5% Repriced Convertible
Exchangeable Preferred Stock, par value $.01 per share.
"Series B Preferred Stock" means the Company's 8.5% Series B Convertible
Participating Preferred Stock, par value $.01 per share.
"Series C-1 Certificate of Designation" means the documents to be filed
with the Secretary of State of the State of Delaware, substantially in the form
of Exhibit C-1 attached hereto, setting forth the rights and preferences of the
Series C-1 Preferred Stock.
"Series C-2 Certificate of Designation" means the documents to be filed
with the Secretary of State of the State of Delaware, substantially in the form
of Exhibit C-2 attached hereto, setting forth the rights and preferences of the
Series C-2 Preferred Stock.
"Series C Preferred Shares" means, collectively, the shares of Series C-1
Preferred Stock and Series C-2 Preferred Stock to be issued to the Purchasers
pursuant to this Agreement.
"Series C-1 Preferred Stock" means the Company's 12% Series C-1 Convertible
Participating Preferred Stock, par value $.01 per
share.
"Series C-2 Preferred Stock" means the Company's 15% Series C-2 Preferred
Stock, par value $.01 per share.
"Series D Certificate of Designation" means the documents to be filed with
the Secretary of State of the State of Delaware, substantially in the form of
Exhibit D attached hereto, setting forth the rights and preferences of the
Series D Preferred Stock.
"Series D Preferred Stock" means the Company's Series D Participating
Preferred Stock, par value $.01 per share.
"Shares" means the Common Shares and the Series C Preferred Shares.
"Stockholders' Agreement" means the Stockholders' Agreement dated as of
August 6, 1999, as amended by Amendment No. 1 thereto dated July 31, 2000, and
as it may be further amended from time to time, among the Company, ▇▇. ▇▇▇▇▇,
Oak ▇▇▇▇ and the other parties identified therein.
"Subsidiaries" of any Person means any corporation, partnership, joint
venture, limited liability company, trust, estate or other Person of which (or
in which), directly or indirectly, more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such partnership, joint venture or limited liability
company or other Person or (c) the beneficial interest in such trust or estate
is at the time owned by such first Person, or by such first Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Tax" or "Taxes" means any federal, state, county, local, foreign and other
taxes (including, without limitation, income, profits, premium, estimated,
excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance,
capital levy, production, transfer, withholding, employment, unemployment
compensation, payroll and property taxes, import duties and other governmental
charges and assessments), whether or not measured in whole or in part by net
income, and including deficiencies, interest, additions to tax or interest, and
penalties with respect thereto, and including expenses associated with
contesting any proposed adjustments related to any of the foregoing.
"Textron Credit Agreement" means the Loan and Security Agreement dated as
of September 1, 1998, as amended by the First Amendment dated as of April 5,
1999 and the Accession, Loan Sale and Second Amendment Agreement dated June 24,
1999 and as it may be further amended from time to time, among Grand Summit
Resort Properties, Inc., as borrower, the lenders party thereto and Textron
Financial Corporation, as administrative agent.
"Tranche C Warrants" means the warrants to purchase 6,000,000 shares of
Common Stock to be issued to Oak Hill pursuant to the Warrant Purchase
Agreement.
"Warrant Purchase Agreement" means the Securities Purchase Agreement dated
July 31, 2000 among the Company, ASCRP and Oak Hill, as it has been and may be
amended from time to time.
SECTION 1.02 Other Definitions. The meanings of the following terms can be
found in the Sections of this Agreement indicated below:
Term Section
---- -------
Aggregate CS Purchase Price Section 2.02(b)
Aggregate JSN Purchase Price Section 2.01(b)
Aggregate Purchase Price Section 2.02(b)
Closing Section 2.03
Closing Date Section 2.03
Common Shares Preamble
Company Preamble
CS Purchase Price Section 2.02(b)
Disclosure Letter Article III
Heavenly Gondola Guarantee Section 5.04
JSN Purchase Price Section 2.01(b)
Material Subsidiaries Section 5.08
Non-Purchaser Directors Section 5.11
Oak Hill Preamble
Purchase Price Section 2.02(b)
Purchasers Preamble
Reporting Agreement Section 5.03
Series B Voting Rights Section 5.06(b)
Tax Returns Section 3.11(a)
Terminating Company Breach Section 7.01(d)
Terminating Purchaser Breach Section 7.01(e)
Transfer Section 5.06(i)
SECTION 1.03 Terms Generally. References in this Agreement to articles,
sections, paragraphs, clauses, schedules, annexes and exhibits are to articles,
sections, paragraphs, clauses, schedules, annexes and exhibits in or to this
Agreement unless otherwise indicated. Whenever the context may require, any
pronoun includes the corresponding masculine, feminine and neuter forms. Any
term defined by reference to any agreement, instrument or document has the
meaning assigned to it whether or not such agreement, instrument or document is
in effect. The words "include", "includes" and "including" are deemed to be
followed by the phrase "without limitation". Unless the context otherwise
requires, any agreement, instrument or other document defined or referred to
herein refers to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified from time to time. Unless the
context otherwise requires, references herein to any Person include its
successors and assigns. The words "shall" and "will" have the same meaning and
effect.
ARTICLE II
SUBSCRIPTION AND SALE
SECTION 2.01 Purchase and Sale of the Junior Subordinated Notes. (a) Upon
the terms and subject to the conditions set forth in this Agreement, the Company
shall sell to each of the Purchasers identified in Annex B, and each such
Purchaser shall purchase from the Company, Junior Subordinated Notes in the
aggregate principal amount set forth opposite such Purchaser's name on Annex B
for the aggregate price set forth in Section 2.01(b). Oak Hill shall be
responsible and liable for the performance of all obligations of each such
Purchaser under this Agreement, including, without limitation, full payment of
the Aggregate JSN Purchase Price (as defined below).
(b) The purchase price to be paid by each Purchaser to the Company for the
Junior Subordinated Notes to be purchased by it shall be the amount set forth
opposite its name on Annex B and shall be payable at the Closing (as defined
below) by wire transfer in immediately available funds (such payable amount with
respect to each Purchaser being referred to as the "JSN Purchase Price"). The
aggregate purchase price for all of the Junior Subordinated Notes sold hereby
for which Oak Hill is responsible in accordance with Section 2.01(a) is
$12,500,000 (the "Aggregate JSN Purchase Price").
SECTION 2.02 Purchase and Sale of the Common Shares. (a) Upon the terms and
subject to the conditions set forth in this Agreement, the Company shall sell to
each of the Purchasers identified in Annex C, and each such Purchaser shall
purchase from the Company, a number of Common Shares set forth opposite such
Purchaser's name on Annex C for the price set forth in Section 2.02(b). Oak Hill
shall be responsible and liable for the performance of all obligations of each
such Purchaser under this Agreement, including, without limitation, full payment
of the Aggregate CS Purchase Price (as defined below).
(b) The purchase price to be paid by each Purchaser to the Company for the
Common Shares to be purchased by it shall be the amount set forth opposite its
name on Annex C and shall be payable at the Closing (as defined below) by wire
transfer in immediately available funds (such payable amount with respect to
each Purchaser being referred to as the "CS Purchase Price," and together with
the JSN Purchase Price, the "Purchase Price"). The aggregate purchase price for
all of the Shares sold hereby for which Oak Hill is responsible in accordance
with Section 2.02(a) is $1,000,000 (the "Aggregate CS Purchase Price," and
together with the Aggregate JSN Purchase price, the "Aggregate Purchase Price").
SECTION 2.03 Closing. The purchase and sale of the Junior Subordinated
Notes and the Common Shares and the consummation of the other transactions
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held at the offices of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1285 Avenue
of the Americas, New York, New York, at 10:00 a.m. on the first Business Day
following the expiration of the 10-day NYSE notice period described in Section
5.10, or at such other time, place and/or date as shall be agreed upon by the
Company and Oak Hill. The date upon which the Closing occurs is referred to
herein as the "Closing Date".
SECTION 2.04 Closing Deliveries by the Company. At the Closing, the Company
shall deliver or cause to be delivered to the Purchasers:
(a) Junior Subordinated Notes in the aggregate principal amount of
$12,500,000, registered in the name of the Purchasers identified in Annex B in
accordance with their respective allocations as set forth in Annex B and duly
executed and authenticated pursuant to the requirements of the Junior
Subordinated Note Indenture;
(b) a newly issued stock certificate or certificates representing in the
aggregate 1,000,000 shares of Common Stock and issued in the name the Purchasers
identified in Annex C in accordance with their respective allocations as set
forth in Annex C;
(c) newly issued stock certificates representing in the aggregate 40,000
shares of Series C-1 Preferred Stock and the Designated C-2 Share Number of
Series C-2 Preferred Stock and issued in the name of the Purchasers identified
in Annex D in accordance with their respective allocations as set forth in Annex
D;
(d) a receipt for the Purchase Price paid by each Purchaser;
(e) a true and complete copy, certified by the Secretary or an Assistant
Secretary of the Company, of the resolutions duly and validly adopted by the
Board evidencing its authorization of the execution and delivery of this
Agreement, the Registration Rights Agreement, the Junior Subordinated Note
Indenture and the Junior Subordinated Notes and the consummation of the
transactions contemplated hereby and thereby, including the filing of the Series
C-1 Certificate of Designation, the Series C-2 Certificate of Designation and
the Series D Certificate of Designation with the Secretary of State of the State
of Delaware and the issuance of the Junior Subordinated Notes, the Common Shares
and the Series C Preferred Shares;
(f) a legal opinion addressed to the Purchasers and dated the Closing Date,
from counsel to the Company, in a form reasonably acceptable to Oak Hill and its
counsel;
(g) a copy of (i) the Certificate of Incorporation, certified by the
Secretary of State of the State of Delaware, as of a date not earlier than five
Business Days prior to the Closing Date and accompanied by a certificate of the
Secretary or Assistant Secretary or other authorized officer of the Company,
dated as of the Closing Date, stating that no amendments, other than the filing
of the Series C-1 Certificate of Designation, the Series C-2 Certificate of
Designation and the Series D Certificate of Designation, have been made to such
Certificate of Incorporation since such date, and (ii) the By-laws, certified by
the Secretary or Assistant Secretary of the Company as amended in accordance
with Section 6.03(d) and in effect on the Closing Date;
(h) a good standing certificate for the Company from the Secretary of State
of the State of Delaware dated as of a date not earlier than five Business Days
prior to the Closing Date;
(i) a copy of (i) the fairness opinion of Credit Suisse First Boston dated
as of the date hereof and delivered to the independent Directors in connection
with this Agreement and the transactions contemplated hereby and (ii) the
bringdown fairness opinion of Credit Suisse First Boston dated as of the Closing
Date and delivered to the independent Directors in connection with this
Agreement and the transactions contemplated hereby, such bringdown fairness
opinion to be substantially the same in form and substance as the fairness
opinion described in clause (i) above (each of which opinions will expressly
permit the Company to deliver a copy thereof to the Purchasers in satisfaction
of the Company's obligation under this Section 2.04(i)); and
(j) the other documents and instruments to be delivered by the Company
pursuant to Section 6.03.
SECTION 2.05 Closing Deliveries by the Purchasers. At the Closing, the
Purchasers shall deliver to the Company the items specified below:
(a) the Aggregate Purchase Price for the Junior Subordinated Notes and the
Common Shares, to the Purchase Price Bank Account;
(b) a receipt acknowledging delivery by the Company of the Junior
Subordinated Notes and the stock certificates specified in Section 2.04(b) and
(c);
(c) a legal opinion addressed to the Company and dated the Closing Date,
from counsel for the Purchasers, in a form reasonably satisfactory to the
Company and its counsel;
(d) a good standing certificate for each Purchaser from the Secretary of
State of the state of its organization as of a date not earlier than five
Business Days prior to the Closing Date; and
(e) the other documents and instruments to be delivered by the Purchasers
pursuant to Section 6.02.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
As an inducement to the Purchasers to enter into this Agreement, and except
as disclosed in a letter duly executed by an authorized officer of the Company
and delivered by the Company to each Purchaser immediately prior to the
execution of this Agreement (the "Disclosure Letter"), the Company hereby
represents and warrants to the Purchasers, as follows:
SECTION 3.01 Authority. (a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, and the Company has all necessary corporate power
and authority to enter into each of this Agreement, the Registration Rights
Agreement and the Junior Subordinated Note Indenture and the Junior Subordinated
Notes, and to carry out its obligations hereunder and thereunder.
(b) The execution and delivery of each of this Agreement, the Registration
Rights Agreement and the Junior Subordinated Note Indenture and the Junior
Subordinated Notes, the performance by the Company of its obligations hereunder
and thereunder and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the issuance to
the Purchasers of the Junior Subordinated Notes (including the Series D
Preferred Stock issuable on conversion of the Junior Subordinated Notes), the
Common Shares and the Series C Preferred Shares (including the Conversion Stock
or Series D Preferred Stock issuable upon conversion of the Series C-1 Preferred
Stock), have been duly authorized by all requisite action on the part of the
Company (including approval by a majority of the Board (which majority includes
the unanimous approval of all Directors not nominated or appointed by the
Purchasers or their Affiliates) and the recommendation by a special committee of
disinterested Directors), and no other corporate proceedings on the part of the
Company or its stockholders are necessary to authorize such execution, delivery
and performance by the Company. Except for the approval of the holders of the
Series B Preferred Stock as evidenced by their execution and delivery of this
Agreement, no stockholder vote of the Company is required for the execution,
delivery and performance of this Agreement, the Registration Rights Agreement,
the Junior Subordinated Note Indenture or the Junior Subordinated Notes.
(c) This Agreement has been and, as of the Closing Date, the Registration
Rights Agreement will be, duly executed and delivered by the Company, and
(assuming due authorization, execution and delivery by the Purchasers) this
Agreement constitutes and, as of the Closing Date, the Registration Rights
Agreement will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(d) As of the Closing Date the Junior Subordinated Note Indenture will be
duly executed and delivered by the Company and (assuming due authorization,
execution and delivery by Oak Hill, as trustee), will constitute a legal, valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally and subject to
general principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(e) The Junior Subordinated Notes have been duly authorized and, at the
Closing Date, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Junior
Subordinated Note Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be subject to bankruptcy
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors' rights generally and subject to general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
SECTION 3.02 Capital Stock of the Company; Ownership of the Shares. (a) As
of the date hereof, the authorized capital stock of the Company consists of (x)
100 million shares of Common Stock, of which (i) 15,929,353 shares are issued
and outstanding, (ii) 3,623,608 shares are reserved for issuance upon conversion
of the Senior Preferred Stock, (iii) 46,124,575 shares are reserved for issuance
upon conversion of the Series B Preferred Stock, (iv) 14,760,530 shares are
reserved for issuance upon conversion of the Class A Common Stock, (v) 8,688,699
shares are reserved for issuance upon the exercise of stock options granted to
directors, officers and other employees of the Company pursuant to equity
incentive plans approved by the Board, and (vi) six million shares have been
reserved for issuance upon exercise of the Tranche C Warrants, (y) 15 million
shares of Class A Common Stock, of which 14,760,530 shares are outstanding, and
(z) 500,000 shares of preferred stock, par value $.01 per share, of which (i)
150,000 shares have been designated Series B Preferred Stock and are issued and
outstanding, and (ii) 40,000 shares have been designated Senior Preferred Stock,
of which 36,626 shares are issued and outstanding.
(b) As of the Closing Date, upon consummation of the Closing as
contemplated hereby, subject to the conversion or exercise of any convertible or
other common share equivalent securities, the authorized capital stock of the
Company will consist of (x) 100 million shares of Common Stock, of which (i)
16,929,353 shares will be issued and outstanding, (ii) 3,623,608 shares will be
reserved for issuance upon conversion of the Senior Preferred Stock, (iii)
14,760,530 shares will be reserved for issuance upon conversion of the Class A
Common Stock, (iv) 8,688,699 shares will be reserved for issuance upon the
exercise of stock options granted to directors, officers and other employees of
the Company pursuant to equity incentive plans approved by the Board and (v)
45,883,352 shares shall have been reserved for issuance upon conversion of the
Series C-1 Preferred Stock, (y) 15 million shares of Class A Common Stock, of
which 14,760,530 shares will be outstanding, and (z) 500,000 shares of preferred
stock, par value $.01 per share, of which (i) 150,000 shall have been designated
Series B Preferred Stock and will be issued and outstanding (subject to Section
5.06 of this Agreement), (ii) 40,000 shares shall have been designated Senior
Preferred Stock, of which 36,626 shares will be issued and outstanding, (iii)
40,000 shall have been designated Series C-1 Convertible Preferred Stock, 40,000
of which will be issued and outstanding, (iv) 150,000 shall have been designated
Series C-2 Preferred Stock, of which the Designated C-2 Share Number will be
issued and outstanding, and (v) 5,000 shall have been designated Series D
Participating Preferred Stock, none of which will be issued and outstanding,
5,000 shares of which shall have been reserved for issuance upon conversion of
the Junior Subordinated Notes and upon conversion of the Series C-1 Preferred
Stock.
(c) All of the outstanding shares of the Company's capital stock are (and
upon consummation of the Closing as contemplated hereby will have been) validly
issued, fully paid and nonassessable. As of the date hereof, none of the issued
and outstanding shares of capital stock of the Company have been issued and, as
of the Closing Date, upon consummation of the Closing as contemplated hereby,
none of the shares of capital stock of the Company will have been issued, in
violation of any preemptive rights. Except as described above, there are no (and
upon consummation of the Closing as contemplated hereby there will not be any)
options, warrants, subscriptions, calls, convertible securities or other rights,
agreements, arrangements or commitments relating to the capital stock of the
Company or obligating the Company to issue or sell any shares of capital stock
of, or any other equity interest in, the Company. Except as provided in the
Senior Subordinated Note Indenture, there are no (and upon consummation of the
Closing as contemplated hereby there will not be any) outstanding contractual
obligations of the Company to repurchase, redeem or otherwise acquire any shares
of capital stock of the Company or make any investment (in the form of a loan,
capital contribution or otherwise) in any other Person other than a Company
Subsidiary.
(d) Upon consummation of the Closing as contemplated hereby, including
receipt by the Company of the Aggregate Purchase Price, (i) the Common Shares
and the Series C Preferred Shares will be validly issued, fully paid and
nonassessable, and (ii) the Purchasers shall acquire good and valid title to the
Common Shares and the Series C Preferred Shares, free and clear of any Liens.
Upon issuance and delivery of the Series C-1 Preferred Stock and the Junior
Subordinated Notes in accordance with this Agreement and the Junior Subordinated
Note Indenture, the Series C-1 Preferred Stock will be convertible into the
Conversion Stock and Series D Preferred Stock in accordance with the terms of
the Series C-1 Certificate of Designation, and the Junior Subordinated Notes
will be convertible into shares of Series D Preferred Stock in accordance with
the terms of the Junior Subordinated Notes and the Junior Subordinated Note
Indenture. The Series D Preferred Stock and the Conversion Stock have been duly
authorized by all necessary corporate action and, when issued and delivered by
the Company upon conversion of the Junior Subordinated Notes and the Series C-1
Preferred Stock, as applicable, will be validly issued, fully paid and
non-assessable.
SECTION 3.03 No Conflict. Assuming the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to
in Section 3.06, except as may result from facts or circumstances relating
solely to the Purchasers, the execution, delivery and performance of this
Agreement does not and, as of the Closing Date, the execution, delivery and
performance of the Registration Rights Agreement, the Junior Subordinated Note
Indenture and the Junior Subordinated Notes by the Company will not (a) violate,
conflict with or result in the breach of any provision of the certificate of
incorporation or by-laws (or similar organizational documents) of the Company or
any Company Subsidiary, (b) conflict with or violate any existing Law or
Governmental Order applicable to the Company, any Company Subsidiary or any of
its respective assets, properties or businesses, or (c) conflict with, result in
any breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any Lien
on any of the assets or properties of the Company or any Company Subsidiary
pursuant to (i) the Stockholders' Agreement, the Amended and Restated Credit
Agreement, the Resort Properties Credit Agreement, the Textron Credit Agreement,
the Senior Subordinated Note Indenture or the Senior Subordinated Notes, or (ii)
any other material note, bond, mortgage or indenture, contract, agreement,
lease, sublease, license, permit, franchise or other instrument, obligation or
arrangement to which the Company or any Company Subsidiary is a party or by
which any of its assets or properties is bound or affected. except with respect
to clause (c)(ii) only, as would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 3.04 No Default. Neither the Company nor any Company Subsidiary is
in violation of its charter or by-laws or other constituting or organizational
documents, or in default in the performance or observance of any obligation,
agreement, covenant or condition under the Amended and Restated Credit
Agreement, the Senior Subordinated Note Indenture, the Senior Subordinated
Notes, the Resort Properties Credit Agreement or the Textron Credit Agreement.
SECTION 3.05 NYSE. The Company has obtained all consents and waivers from
the NYSE necessary in connection with this Agreement and the transactions
contemplated hereby, including a waiver of any requirement that the issuance of
the Common Shares or the Conversion Stock or any of the other transactions
hereunder be approved by the Company's stockholders. The Company has delivered
to the Purchasers true and correct copies of all such waivers and consents. The
Company is not in default or violation of any material rule, regulation,
condition or requirement of the NYSE.
SECTION 3.06 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement, the Registration Rights Agreement, the Junior
Subordinated Note Indenture and the Junior Subordinated Notes by the Company do
not and will not require any consent, approval, authorization or other order of,
action by, filing with or notification to any Governmental Authority, except (i)
for the applicable requirements, if any, of the Exchange Act, (ii) any consents
or waivers from the NYSE, which are addressed in Section 3.05, and (iii) for
such other consents, approvals, authorizations, orders, actions, filings or
notifications which if not obtained or made would not be reasonably expected to
result in a Material Adverse Effect or to materially delay the consummation of
the transactions contemplated by this Agreement.
SECTION 3.07 Compliance With Laws. Neither the Company nor any Company
Subsidiary is in default or violation of any Governmental Order, except for (i)
such defaults or violations of any rule, regulations, conditions or requirements
of the NYSE, which are addressed in Section 3.05 and (ii) such other defaults or
violations that would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 3.08 Full Disclosure. None of the information supplied by the
Company in this Agreement or any other document, certificate, notice or consent
related to any of the foregoing delivered to the Purchasers in connection with
this Agreement at or prior to the Closing contains (or will contain) an untrue
statement of a material fact or omits (or will omit) to state a material fact
required to be stated therein or necessary to make the statements made, in light
of the circumstances in which made, not materially false or misleading.
SECTION 3.09 Brokers. Except for the fees of Credit Suisse First Boston
which will be paid by the Company, no broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.
SECTION 3.10 Securities Law Compliance. Assuming the representations and
warranties of the Purchasers set forth in Article IV hereof are true and correct
in all respects, the subscription and sale of the Junior Subordinated Notes to
the Purchasers (including the Series D Preferred Stock issuable on conversion
thereof) and the issuance of the Common Shares and the Series C Preferred Shares
to the Purchasers (including the Conversion Stock and, if applicable, Series D
Preferred Stock, issuable on conversion of the Series C-1 Preferred Stock)
pursuant to this Agreement will be exempt from the registration requirements of
the Securities Act. Neither the Company nor any Person acting on its behalf has,
in connection with the sale of the Shares, engaged in (i) any form of general
solicitation or general advertising (as those terms are used within the meaning
of Rule 502(c) under the Securities Act), (ii) any action involving a public
offering within the meaning of Section 4(2) of the Securities Act, or (iii) any
action that would require the registration under the Securities Act of the
offering and sale of the Shares pursuant to this Agreement or that would violate
applicable state securities or "blue sky" laws. The Company has not made and
will not prior to the Closing Date make, directly or indirectly, any offer or
sale of the Shares or of securities of the same or similar class as the Shares
if, as a result, the offer and sale contemplated hereby would fail to be
entitled to exemption from the registration requirements of the Securities Act.
As used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.
SECTION 3.11 Taxes. (a) To the knowledge of the Company, the Company has
filed or caused to be filed, or has properly filed extensions for, all material
tax returns, reports, forms and other such documents ("Tax Returns") that are
required to be filed and has paid or caused to be paid all Taxes as shown on
said returns and on all material assessments received by it to the extent that
such Taxes have become due, except any Tax the validity or amount of which is
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves, in accordance with GAAP, have been set aside. To the
knowledge of the Company, such Tax Returns are true and correct in all material
respects. The Company has paid or caused to be paid, or has established reserves
in accordance with GAAP for all material Tax liabilities applicable to the
Company for all fiscal years that have not been examined and reported on by the
taxing authorities (or closed by applicable statutes). To the knowledge of the
Company, no material additional Tax assessment against the Company or any
Company Subsidiary has been heretofore proposed by any Governmental Authority
for which provision deemed adequate by the Company in its reasonable judgment
has not been made on its balance sheet. Except as disclosed in Section 3.11(a)
of the Disclosure Letter, no waivers of the statute of limitation or extension
of time within which to assess any Tax have been granted by the Company or any
Company Subsidiary. United States federal income tax returns of the Company have
been closed through the tax year ended July 27, 1997.
(b) Except as disclosed in Section 3.11(b) of the Disclosure Letter, with
respect to all Tax Returns of the Company and the Company Subsidiaries, (i) no
audit is in progress and no extension of time is in force with respect to any
date on which any Tax Return was or is to be filed and no waiver or agreement is
in force for the extension of time for the assessment or payment of any Tax and
(ii) to the knowledge of the Company there is no unassessed deficiency proposed
or threatened against the Company or any of the Company Subsidiaries.
(c) The Company knows of no change in the rates or basis of assessment of
any Tax (other than federal income tax) of the Company and the Company
Subsidiaries that would reasonably be expected to result in a Material Adverse
Effect.
(d) Neither the Company nor any of the Company Subsidiaries has agreed to
or to the knowledge of the Company is required to make any adjustments under
section 481 of the Code by reason of a change or accounting method or otherwise.
(e) None of the respective assets of the Company or any of the consolidated
tax Company Subsidiaries is required to be treated as being owned by any Person,
other than the Company or any of the Company Subsidiaries, pursuant to the "safe
harbor" leasing provisions of Section 168(f)(8) of the Code.
(f) The Company underwent an "ownership change" as defined in Section 382
of the Code on August 9, 1999. The Closing will not result in an ownership
change (as so defined in Section 382 of the Code).
SECTION 3.12 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 3 shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though such representation had been made on and as of the Closing Date,
except that any representation and warranty made as of a specific date prior to
the Closing Date shall be true in all material respects on and as of such
specific date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
As an inducement to the Company to enter into this Agreement, each of the
Purchasers hereby represents and warrants severally, and not jointly, to the
Company as follows:
SECTION 4.01 Organization and Authority of Each Purchaser. (a) Each
Purchaser is a limited partnership duly organized, validly existing and in good
standing under the laws of its state of organization. Each Purchaser has all
necessary power and authority to enter into this Agreement and the Registration
Rights Agreement, to carry out its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.
(b) The execution and delivery of each of this Agreement and the
Registration Rights Agreement by such Purchaser, the performance by such
Purchaser of its obligations hereunder and thereunder and the consummation by
such Purchaser of the transactions contemplated hereby and thereby have been
duly authorized by all requisite action on the part of such Purchaser.
(c) This Agreement has been, and, as of the Closing Date, the Registration
Rights Agreement will be, duly executed and delivered by each Purchaser, and
(assuming due authorization, execution and delivery by the Company) this
Agreement constitutes and, as of the Closing Date, the Registration Rights
Agreement will constitute, a legal, valid and binding obligation of such
Purchaser enforceable against such Purchaser in accordance with its terms.
SECTION 4.02 No Conflict. Assuming the making and obtaining of all filings,
notifications, consents, approvals, authorizations and other actions referred to
in Section 4.03, except as may result from any facts or circumstances relating
solely to the Company, the execution, delivery and performance of this Agreement
and the Registration Rights Agreement by each Purchaser does not and will not
(a) violate, conflict with or result in the breach of any provision of its
certificate of limited partnership or by-laws or similar organizational document
of such Purchaser, (b) conflict with or violate any Law or Governmental Order
applicable to such Purchaser or (c) conflict with, or result in any breach of,
constitute a default (or event which with the giving of notice or lapse or time,
or both, would become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any Lien on any of
the assets or properties of such Purchaser pursuant to, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement to which such Purchaser is a party or by
which any of such assets or properties are bound or affected which, with respect
to clauses (b) and (c) above, would have a material adverse effect on the
ability of such Purchaser to consummate the transactions contemplated by this
Agreement and the Registration Rights Agreement.
SECTION 4.03 Governmental Consents and Approvals. The execution, delivery
and performance of this Agreement and the Registration Rights Agreement by each
Purchaser does not and will not require any consent, approval, authorization or
other order of, action by, filing with, or notification to, any Governmental
Authority, except (i) for the applicable requirements, if any, of the Exchange
Act, and (ii) for such other consents, approvals, authorizations, orders,
actions, filings or notifications, which if not obtained or made would not be
reasonably likely to be material to such Purchaser or materially delay the
consummation of the transactions contemplated by this Agreement.
SECTION 4.04 Investment Purpose. Each Purchaser is acquiring the Junior
Subordinated Notes and the Shares for its own account solely for the purpose of
holding such securities for purposes of investment and not with a view to, or
for offer or sale in connection with, any distribution thereof, public or
otherwise in violation of the federal securities laws or any applicable state
securities laws.
SECTION 4.05 Status of Junior Subordinated Notes and Shares; Limitations on
Transfer and Other Restrictions. Each Purchaser understands that the Junior
Subordinated Notes and the Shares have not been and will not be registered under
the Securities Act or under any state securities laws (other than in accordance
with the Registration Rights Agreement) and are being offered and sold in
reliance upon federal and state exemptions for transactions not involving any
public offering and that the Shares have not been approved or disapproved by the
SEC or by any other federal or state agency. Each Purchaser further understands
that such exemption depends in part upon, and the Junior Subordinated Notes and
the Shares are being sold in reliance on, the representations and warranties set
forth in this Article IV. Each Purchaser further understands that none of the
Junior Subordinated Notes or the Shares may be sold, transferred or assigned
unless registered by the Company pursuant to the Securities Act and any
applicable state securities laws, or unless an exemption therefrom is available,
and, accordingly, it may not be possible for each Purchaser to liquidate its
investment in the Junior Subordinated Notes or the Shares, and each Purchaser
agrees not to sell, assign or otherwise transfer or dispose of any of the Junior
Subordinated Notes or the Shares unless such Junior Subordinated Notes or Shares
have been so registered or an exemption from registration is available.
SECTION 4.06 Sophistication and Financial Condition of Each Purchaser. Each
Purchaser is an "Accredited Investor" as defined in Regulation D under the
Securities Act and each Purchaser considers itself to be an experienced and
sophisticated investor and to have such knowledge and experience in financial
and business matters as are necessary to evaluate the merits and risks of an
investment in the Junior Subordinated Notes and the Shares. Each Purchaser has
not been organized for the sole purpose of acquiring the Junior Subordinated
Notes or the Shares. Each Purchaser has been provided access to such information
and documents as it has requested and has been afforded an opportunity to ask
questions of and receive answers from representatives of the Company concerning
the terms and conditions of this Agreement and the purchase of the Junior
Subordinated Notes and Shares contemplated hereby.
SECTION 4.07 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Purchasers.
SECTION 4.08 Full Disclosure. None of the information supplied by the
Purchasers in this Agreement or any other document, certificate, notice or
consent related to any of the foregoing delivered to the Company in connection
with this Agreement at or prior to the Closing contains (or will contain) an
untrue statement of a material fact or omits (or will omit) to state a material
fact required to be stated therein or necessary to make the statements made, in
light of the circumstances in which made, not materially false or misleading.
SECTION 4.09 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 4 shall be true in all
material respects on and as of the Closing Date with the same force and effect
as though such representation had been made on and as of the Closing Date,
except that any representation and warranty made as of a specific date prior to
the Closing Date shall be true in all material respects on and as of such
specific date.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01 Use of Proceeds. The Company shall use, and shall cause ASCRP
to use, the proceeds of the Aggregate Purchase Price substantially as follows:
(a) approximately $12,500,000 to acquire real property and improvements
from ASCRP and/or one of its Subsidiaries as agreed to by the Purchasers; and
(b) the remainder of the proceeds for (i) fees and expenses of the Company
relating to the transactions contemplated by this Agreement and (ii) general
working capital purposes. SECTION 5.02......Further Action; Consents; Filings.
(a) Upon the terms and subject to the conditions hereof, each of the parties
hereto shall use commercially reasonable best efforts to (i) take, or cause to
be taken, all appropriate action and do, or cause to be done, all things
necessary, proper or advisable under applicable Law to consummate the
transactions contemplated by this Agreement and, when executed, the Registration
Rights Agreement and the Junior Subordinated Note Indenture, (ii) obtain from
Governmental Authorities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by the Purchasers or
the Company or any of their partners or Subsidiaries, as the case may be, in
connection with the authorization, execution and delivery of this Agreement, the
Registration Rights Agreement, the Junior Subordinated Note Indenture and the
Junior Subordinated Notes and the consummation of the transactions contemplated
hereby and thereby and (iii) make all necessary filings, and thereafter make any
other required submissions, with respect to this Agreement, the Registration
Rights Agreement and the Junior Subordinated Note Indenture, the Junior
Subordinated Notes and the transactions contemplated hereby and thereby that are
required under the Exchange Act and any other applicable Law.
SECTION 5.03 Tax Reporting. The parties hereto agree and acknowledge that
unless otherwise required in the opinion of outside counsel to the relevant
party, as a result of a change in applicable law (including, without limitation,
a clarification of law pursuant to legislative, administrative or judicial
guidance), to comply with its obligations under the Code, (i) no party hereto
will take the position that any amount will be includible in income with respect
to the securities issued pursuant to this Agreement (including the Conversion
Stock or Series D Preferred Stock issuable upon conversion of the Series C-1
Preferred Stock and the shares of Series D Preferred Stock issuable upon
conversion of the Junior Subordinates Notes) under Section 305 of the Code and
that the parties shall file all Tax Returns accordingly (the "Reporting
Agreement") and (ii) no party shall affirmatively take any position inconsistent
with the Reporting Agreement upon examination of any Tax Return, in any refund
claim, in any litigation or otherwise.
SECTION 5.04 Heavenly Gondola Guarantee. On or after the Closing Date, upon
the request of the Company, Oak Hill (or an Affiliate of Oak Hill reasonably
acceptable to the lessor under the Heavenly Gondola Capital Lease) shall provide
a guarantee of the obligations of Heavenly Valley LP under the Heavenly Gondola
Capital Lease, such guarantee to be on commercially reasonable terms and have a
maximum aggregate liability of $14,000,000 (the "Heavenly Gondola Guarantee").
Oak Hill shall use its best efforts to assist the Company to obtain the Heavenly
Gondola Capital Lease on commercially reasonable terms. The Company shall
cooperate with Oak Hill to obtain the Heavenly Gondola Capital Lease and shall
use all commercially reasonable efforts to negotiate a provision in the Heavenly
Gondola Capital Lease for the release of the Heavenly Gondola Guarantee upon the
sale or other disposition of assets by the Company or any of the Company
Subsidiaries in one transaction or multiple transactions resulting in aggregate
gross proceeds to the Company or the Company Subsidiaries of $90,000,000 or
more.
Subject to the provisions of the Heavenly Gondola Guarantee and to the
provisions of the debt instruments of the Company and the Company Subsidiaries,
in the event that Oak Hill shall make any payment under the Heavenly Gondola
Guarantee, the Company agrees that on demand it shall, or shall cause Heavenly
Valley Limited Partnership to, promptly reimburse, without setoff or
counterclaim, Oak Hill in full for any such payments. To the extent permitted
under the debt instruments of the Company and the Company Subsidiaries, Oak Hill
may elect (with the consent of the Company) to exchange such reimbursement
obligation in respect of payments under the Heavenly Gondola Guarantee for a
bridge loan instrument of the Company with a maturity of less than one year from
such exchange and an interest rate equal to the deemed interest rate under the
Heavenly Gondola Capital Lease, and containing such other terms consistent with
the foregoing reimbursement obligation as Oak Hill may reasonably request or
approve. The foregoing rights afforded to Oak Hill shall be in addition to, and
not in lieu of, any rights that Oak Hill may have to be reimbursed for payments
made under the Heavenly Gondola Guarantee under common law, in equity, by
separate agreement or otherwise.
SECTION 5.05 Exchange of the Tranche C Loan. If and when permitted pursuant
to the terms of the Senior Debt (as defined in the Junior Subordinated Note
Indenture), at the request of Oak Hill, the Company shall take, and shall cause
its Subsidiaries to take, all actions reasonably necessary to exchange the
Tranche C Loans for an unsubordinated and unsecured (or subordinated and
unsecured if agreed to by Oak Hill) debt instrument of the Company with a market
interest rate as agreed to by the Company and Oak Hill (or if not so agreed then
as determined by a nationally recognized investment bank selected by the Company
and Oak Hill or if no investment bank is selected within 10 days following Oak
Hill's request, selected in the manner described in the second to last sentence
of Section 9(c)(iv) of the Series C-1 Certificate of Designation with the
expenses of such investment bank to be paid by the Company), and with the same
maturity and payment terms, and containing such other terms consistent with, the
Tranche C Loans as Oak Hill may reasonably request or approve.
SECTION 5.06 Series B Preferred Stock. (a) Except for the Series B Voting
Rights (as defined in paragraph (b) of this Section 5.06), effective as of and
from the Closing Date, the Purchasers and their respective successors in
interest, hereby irrevocably waive and relinquish all rights, powers and
preferences (including the right to receive dividends or any amount upon the
liquidation, dissolution or winding up of the Company or upon any optional or
mandatory redemption) the Purchasers and their respective successors in interest
have as a holder of Series B Preferred Stock by the terms of the Series B
Preferred Stock contained in Exhibit B to the Certificate of Incorporation, and
the registration rights in respect of the Series B Preferred Stock contained in
the Stockholders' Agreement, but excluding any rights, or remedies the
Purchasers and their respective successors in interest and transferees and
assigns may have pursuant to the Preferred Stock Subscription Agreement among
the Company, Oak Hill and the other parties thereto, dated as of August 9, 1999.
The provisions of this Section 5.06(a) shall constitute the consent required by
Section 6(b)(iii) of Exhibit B to the Certificate of Incorporation. Effective as
and from Closing Date each Purchaser and its respective successors in interest
does hereby release and forever discharge (i) the Company, (ii) all past and
present officers, directors, employees, counsel, agents, representatives and
controlling persons, if any, of the Company, (iii) all past and present
affiliates and subsidiaries of the Company, and (iv) all of the Company's past
or present subsidiaries' and affiliates' officers, directors, employees, counsel
agents, representatives, controlling persons, if any, of and from any and all
manner of (and hereby waive any) claims, actions or proceedings of any nature
which have been, could have been, or could be brought in any local, state or
federal court, administrative agency or other tribunal, including but not
limited to, those arising under common law, federal law, or state statutory law,
in law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, demands damages, losses, costs, or expenses, of any nature
whatsoever, known or unknown, fixed or contingent, including all claims for
incidental, consequential, punitive or exemplary damages or equitable relief
arising out of any of the foregoing, which any party hereto now has or may
hereafter have against any of the foregoing released parties, arising out of or
related to the failure to pay dividends or any amount upon the liquidation,
dissolution or winding up of the Company or upon any optional or mandatory
redemption such Purchaser and its respective successors in interest have as a
holder of Series B Preferred Stock by the terms of the Series B Preferred Stock
contained in Exhibit B to the Certificate of Incorporation.
(b) The waiver and relinquishment of rights, powers and preferences as
provided in paragraph (a) above does not include any of the following rights
(collectively, the "Series B Voting Rights"), all of which will continue in full
force and effect in respect of all outstanding shares of Series B Preferred
Stock, unaffected by the provisions of this Section 5.06 except as specifically
modified by this paragraph (b):
(i) the requirement under Section 6(i) of Exhibit B to the Certificate of
Incorporation that the minimum number of directors on the Board of Directors
shall be eleven so long as any shares of Series B Preferred Stock are
outstanding;
(ii) the rights of the holders of Series B Preferred Stock under Section
6(i) of Exhibit B to the Certificate of Incorporation to vote as a class for the
election of "Preferred Directors";
(iii)the requirement under Section 6(b)(iii) of Exhibit B to the
Certificate of Incorporation (which shall include any proposal to amend the
Certificate of Incorporation to eliminate all or a portion of the terms of the
Series B Preferred Stock pursuant to paragraph (h) below) that so long as shares
of Series B Preferred Stock are outstanding, the Company shall not, directly or
indirectly, or through merger or consolidation with any other person, without
the affirmative vote or consent of the holders of a majority of the outstanding
shares of Series B Preferred Stock, with the holders voting separately as a
class, (a) amend, alter or repeal (by merger, consolidation or otherwise) any
provision of the Certificate of Incorporation or the By-laws of the Company, as
amended, so as to affect adversely the Series B Voting Rights, or (b) issue any
additional shares of Series B Preferred Stock; and
(iv) the rights of the holders of Series B Preferred Stock and the
obligations of the Company under Section 6(b) (iv), (v), (vi), (vii) and (viii)
of Exhibit B to the Certificate of Incorporation.
(c) Effective as of and from the Closing Date, the Company agrees that it
shall not at any time seek to effect any optional or mandatory redemption of the
Series B Preferred Stock pursuant to Section 5(a) or 5(b) of Exhibit B to the
Certificate of Incorporation, and shall not take any action that would or could
reasonably be expected to impair the Series B Voting Rights.
(d) Effective as of and from the Closing Date, each Purchaser and each of
its respective successors in interest as holder of shares of Series B Preferred
Stock hereby grants to, and appoints, the Company and each of ▇▇▇▇▇▇▇ ▇. Fair
and ▇▇▇▇ ▇▇▇▇▇▇ in their respective capacities as officers of the Company, and
any individual who shall hereafter succeed any such officer of the Company, and
any other designee of the Company, each of them individually, its irrevocable
proxy and attorney-in-fact (with full power of substitution and resubstitution)
to vote all its shares of Series B Preferred Stock on any matter on which the
Series B Preferred Stock are entitled to vote other than the Series B Voting
Rights. Each Purchaser intends this proxy to be irrevocable and coupled with an
interest and will take such further action and execute such other instruments as
may be necessary to effectuate the intent of this proxy. Each Purchaser hereby
revokes any and all previous proxies with respect to such Purchaser's shares of
Series B Preferred Stock that relate to any matter other than the Series B
Voting Rights.
(e) It is the intent of the parties that granting this proxy to the Company
will cause the Series B Preferred Stock not to be outstanding for quorum or
voting purposes, except with respect to the Series B Voting Rights. Accordingly,
on any matter other than the Series B Voting Rights on which a vote of the
shares of Series B Preferred Stock is solicited, the Company hereby agrees to
take the following actions:
(i) Except to the extent explicitly permitted under paragraph (ii) below,
the Company shall ignore the shares of Series B Preferred Stock for purposes of
determining the number of voting securities outstanding for quorum and voting
purposes at any meeting of stockholders of the Company or special meeting of
holders of Series B Preferred Stock, however called, or in connection with any
action of the stockholders of the Company or the holders of Series B Preferred
Stock taken by written consent in lieu of a meeting.
(ii) If the Company determines, based on the advice of counsel, that the
Series B Preferred Stock is outstanding for quorum and/or voting purposes and
that, therefore, the participation of the Series B Preferred Stock is necessary
as a matter of law to establish a quorum for or validly take action at a meeting
of the stockholders of the Company or a class meeting of the Series B Preferred
Stock (or in connection with any action taken by written consent in lieu of such
a meeting), the Company:
(A) shall (x) cause the shares of Series B Preferred Stock to be
counted as present for purposes of establishing a quorum at any class
meeting of holders of Series B Preferred Stock and (y) vote or consent (or
cause to be voted or consented) all shares of Series B Preferred Stock as
decided by the board of directors of the Company, with the prior consent of
the Purchasers, which consent shall not be unreasonably withheld; and
(B) shall (x) cause the shares of Series B Preferred Stock to be
counted as present for purposes of establishing a quorum at any meeting of
the stockholders of the Company only to the extent that the presence of
holders of Common Stock and other voting securities would have been
sufficient to establish the requisite quorum had the shares of Series B
Preferred Stock not been outstanding; and (y) vote or consent (or cause to
be voted or consented) the shares of Series B Preferred Stock as nearly as
possible to the vote of the holders of Common Stock and other holders of
voting securities on the relevant matter, so that the decision reached on
each relevant matter is the same as the decision the stockholders of the
Company would have taken, had the shares of Series B Preferred Stock not
been outstanding.
(f) If the Company determines, based on the advice of counsel, that the
proxy set forth in this Section 5.06 is not valid or may not be given effect
under Delaware law, at a meeting of the stockholders of the Company or at a
special meeting of the holders of Series B Preferred Stock, each of the
Purchasers and each of its respective successors in interest as holder of shares
of Series B Preferred Stock shall cause its shares of Series B Preferred Stock
to be counted as present for quorum purposes and voted as set forth in
paragraphs (e)(ii)(A) or (e)(ii)(B), as applicable.
(g) Nothing contained in this Section 5.06 shall be deemed to vest in the
Company any direct or indirect ownership or incidence of ownership of or with
respect to any shares of Series B Preferred Stock. The Company shall have no
authority to exercise any power or authority to direct the Purchasers in the
voting of any of the shares of Series B Preferred Stock, except as otherwise
provided herein, or in the performance of the Purchasers' duties or
responsibilities as stockholders of the Company.
(h) At any time after the Closing Date, the Company may submit for the
approval of its stockholders a resolution authorizing an amendment to the
Certificate of Incorporation for the purpose of either (i) eliminating all
rights of the Series B Preferred Stock other than the Series B Voting Rights, or
(ii) reclassifying the Series B Preferred Stock and the Series C-1 Preferred
Stock into a series of preferred stock having all of the rights, powers and
preferences of the Series C-1 Preferred Stock and the Series B Voting Rights;
provided that in either case the form and substance of such proposal shall have
been approved in advance by Oak Hill. Subject to Oak Hill's approval, Oak Hill
and the other Purchasers shall vote all of their securities of the Company
entitled to vote thereon for the adoption of the Company's proposal at any
meeting of the holders of the Common Stock and at any class meeting of the
holders of the Series B Preferred Stock held for such purpose.
(i) On and after the Closing Date and for so long as any shares of Series B
Preferred Stock remain outstanding, if any person is acquiring from the
Purchasers all or a portion of the Purchasers' or their Affiliates' shares of
Series C-1 Preferred Stock or Series C-2 Preferred Stock, the Purchasers and
their Affiliates may, without the Company's consent, sell, transfer, assign,
pledge, hypothecate or otherwise dispose of ("Transfer") a pro rata portion
(based on the ratio that aggregate Liquidation Price of the Series C-1 Preferred
Stock and Series C-2 Preferred Stock to be transferred bears to the aggregate
Liquidation Price of the Series C-1 Preferred Stock and Series C-2 Preferred
Stock) of the shares of Series B Preferred Stock held by the Purchasers and
their Affiliates provided that the transferee shall agree in writing for the
benefit of the Company to comply with and be bound by the provisions of this
Section 5.06. In all other cases, the Transfer of shares of Series B Preferred
Stock on or after the Closing Date shall be subject to the prior written consent
of the Company. In connection with any permitted transfer of shares of Series B
Preferred Stock hereunder, the Company shall, if requested by Oak Hill, reaffirm
its obligations under this Section 5.06 for the benefit of the transferee in a
written instrument reasonably acceptable to such transferee.
(j) Effective as of and from the Closing Date, if the Company redeems,
repurchases or otherwise acquires any of the Series C-1 Preferred Stock and the
Series C-2 Preferred Stock pursuant to the Series C-1 Certificate of Designation
or the Series C-2 Certificate of Designation from the Purchasers, each of the
Purchasers agrees to transfer to the Company for no additional cost, a number of
shares of Series B Preferred Stock held by it equal to (i) the total number of
shares Series B Preferred Stock held by it multiplied by (ii) the percentage of
Series C-1 Preferred Stock and Series C-2 Preferred Stock held by such Purchaser
redeemed, repurchased or acquired by the Company (based on the ratio that the
aggregate Liquidation Price of the Series C-1 Preferred Stock and Series C-2
Preferred Stock to be redeemed, repurchased or acquired bears to the aggregate
Liquidation Price of all outstanding Shares of Series C-1 Preferred Stock and
Series C-2 Preferred Stock).
(k) Any Transfer of Series B Preferred Stock in violation of this Section
5.06 shall be null and void. Each certificate representing the shares of Series
B Preferred Stock shall be stamped or otherwise imprinted with a legend
substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. CERTAIN OF THE RIGHTS
CONFERRED BY THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
IRREVOCABLY WAIVED PURSUANT TO THE SECURITIES PURCHASE AGREEMENT,
DATED AS OF JULY 15, 2001 AS THE SAME MAY BE AMENDED, AMONG THE
COMPANY AND CERTAIN STOCKHOLDERS LISTED ON THE SIGNATURE PAGES THEREOF
(THE "SECURITIES PURCHASE AGREEMENT"). the CompaNy reserves the right
to reFUSe the trANSFER of such SECURITIEs until CERTAIN conditions SET
FORTH IN SECTION 5.06 OF THE SECURITIES PURCHASE AGREEMENT have been
fulfilled with respect to such transfer. A copy of such conditions
shall be PROVIDED by the ComPANY to the holder hereof upon written
request.
Each holder desiring to transfer securities issued pursuant to this
Agreement and bearing the legend specified in this Section 5.06(k) shall furnish
to the Company, if the Company so requests, a written opinion of counsel
reasonably satisfactory to the Company to the effect that the holder may
transfer such securities without registration under the Securities Act;
provided, that no such opinion of counsel shall be required for a transfer to
any Affiliates of the Purchasers.
SECTION 5.07 Termination of Warrant Purchase Agreement. Effective as of the
Closing Date, the Warrant Purchase Agreement is hereby terminated and none of
the Company, ASCRP nor Oak Hill shall have any further rights, benefits or
obligation thereunder (including without limitation in the case of Oak Hill, any
right to require the issuance of the Tranche C Warrants or obligation to
purchase shares of ASCRP). At the Closing, the Company shall cause ASCRP to
execute and deliver to Oak Hill a written instrument of termination in order to
further give effect to the provisions of this Section 5.07.
SECTION 5.08 Committees; Directors of Material Subsidiaries. For so long as
the Purchasers Beneficially Own (as defined in the Series C-1 Certificate of
Designation) at least 25% of both the number of Series C-1 Preferred Stock and
the number of Series C-2 Preferred Stock that they own on the Issue Date (as
defined in the Series C-1 Certificate of Designation) (such number subject to
adjustment for stock splits, stock dividends or similar transactions), the
Company shall use its commercially reasonable efforts to cause the Nominating
Committee of the Board of Directors to have two members and to cause one
Stockholder Director or Series C-1 Preferred Director (as each such term is
defined in the Series C-1 Certificate of Designation) (i) to serve as a member
of each committee of the Board, (ii) to serve as a member of the board of
directors of each of ASC East, Inc., ASC West, Inc., ASC Utah, Inc. and ASCRP
and nominees for any other board or comparable body necessary to manage any
Subsidiary of the Corporation, whether existing now or created after the date of
this Agreement, that is material to the corporation and its subsidiaries, taken
as a whole (together, the "Material Subsidiaries") and (iii) to serve as a
member of each committee of the board of directors of the Material Subsidiaries;
provided, however, that if any applicable law or regulation of the NYSE (or
other exchange on which the Common Stock is listed) shall prohibit the Board
from appointing any Stockholder Directors or Series C-1 Preferred Directors to
serve on any committee, this Agreement shall not require any Stockholder
Directors or Series C-1 Preferred Directors to serve on such committee;
provided, further, however, that in such event, the Company shall consult with
the Purchasers and shall use commercially reasonable efforts to ensure that the
Purchasers are able to achieve a level of participation in the operation of the
Board and the boards of each Material Subsidiary that is substantially similar
to such committee representation and to otherwise preserve the rights provided
in this Section 5.08.
SECTION 5.09 Public Announcements Public Announcements. The initial press
release relating to this Agreement shall be a joint press release the text of
which has been agreed to by each of Oak Hill and the Company. Thereafter, unless
otherwise required by applicable Law or the requirements of the NYSE, each of
Oak Hill, on behalf of the Purchasers as the sole authority to make any public
disclosure with respect to this Agreement, and the Company shall use
commercially reasonable efforts to consult with the other before issuing any
press release with respect to this Agreement or any of the transactions
contemplated hereby; provided, however, that the Company may make any public
disclosures it believes in good faith are required by applicable law or any
listing or trading agreement concerning its publicly traded securities.
SECTION 5.10 NYSE Listing. As soon as practicable after the Closing Date
and from time to time thereafter (but in any event prior to each dividend
accrual date), the Company shall use commercially reasonable efforts to assure
that all shares of Common Stock issuable upon conversion of the Series C-1
Preferred Stock is listed on the NYSE, subject to official notice of issuance.
The Company shall mail to stockholders as soon as practicable (but in no event
later than two (2) Business Days after the date hereof) the notice required by
Section 312.05 of the NYSE Listing Manual in connection with the waiver obtained
from the NYSE on the date hereof.
SECTION 5.11 Enforcement of the Company's Rights. Any demand, claim,
lawsuit, action or proceeding for enforcement of this Agreement against the
Purchasers or their Affiliates may be initiated either (i) upon the approval of
a majority of the Directors of the Company who are not nominated or appointed by
the Purchasers or their Affiliates (the "Non-Purchaser Directors"), or (ii) a
special committee of the Independent Directors (as such term is defined in the
Stockholders' Agreement); provided, that no such action may be taken by the
Non-Purchaser Directors under (i) above unless one or more Non-Purchaser
Directors shall have requested that a meeting of the full Board be held to
consider enforcement against the Purchasers or their Affiliates and stating the
nature of the enforcement action sought to be taken, and the full Board has not,
within 15 days following the date on which such request is first made either (A)
taken or authorized the Company to take the requested action or (B) delegated
authority with respect to such matter to a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement).
ARTICLE VI
CONDITIONS TO THE CLOSING
SECTION 6.01 Conditions to the Obligations of Each Party. The obligations
of the Company and the Purchasers to consummate the transactions contemplated by
this Agreement on the Closing Date are subject to the satisfaction or written
waiver (where permissible), with Oak Hill's written waiver constituting an
effective waiver on behalf of all Purchasers, of the following conditions:
(a) No Order. No Governmental Authority or court of competent jurisdiction
shall have enacted, threatened, issued, promulgated, enforced or entered any
Governmental Order that is then in effect, pending or threatened and has, or
would have, the effect of prohibiting consummation of the transactions
contemplated by this Agreement;
(b) No Claims. No Actions shall be pending or threatened before any
Governmental Authority to restrain or prohibit this Agreement or the
consummation of the transactions contemplated hereby;
(c) NYSE Listing. The Common Shares and the Conversion Stock (issuable upon
conversion of the Series C-1 Preferred Stock as of the Closing Date) shall have
been listed, and the Conversion Stock shall have been reserved for listing, on
the NYSE, subject to official notice of issuance;
(d) NYSE Waivers. The consents and waivers of the NYSE described in Section
3.05 and previously delivered to the Purchasers shall not have been revoked or
withdrawn and shall continue in full force and effect without modification;
(e) Credit Agreement Amendments and Lender Consents. Each of Oak Hill and
the Company shall have received, in form and substance acceptable to it in its
discretion, copies of all amendments and modifications to the Amended and
Restated Credit Agreement, the Resort Properties Credit Agreement and the
Textron Credit Agreement reflecting (i) amendments or consents to the
transactions contemplated by this Agreement, (ii) such modifications as are
necessary to decrease the amount of the Tranche C Loan commitment from
$13,000,000 to $12,000,000 and to adjust the draw down conditions so as to
enable ASCRP to submit a drawdown notice for the undrawn portion of the amended
commitment ($1,250,000) after giving effect to the funding of the Tranche C Loan
on the date hereof and (iii) such further changes as each of the Company and Oak
Hill may request or in its discretion approve;
(f) [Reserved]
(g) Preemptive Rights. ▇▇. ▇▇▇▇▇ shall have waived his rights pursuant to
Section 4.05 of the Stockholders' Agreement in a writing acceptable to Oak Hill
and the Company; and
(h) No Injunction. No Governmental Authority shall have, after the date of
this Agreement, enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits or
materially restricts or materially adversely affects the consummation of the
transactions contemplated by this agreement.
SECTION 6.02 Conditions to Obligations of the Company. The obligations of
the Company to consummate the transactions contemplated by this Agreement on the
Closing Date are subject to the satisfaction or written waiver (where
permissible) of the following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of the Purchasers contained in this Agreement shall have been true
and correct in all material respects when made and as of the Closing Date, with
the same force and effect as if made as of the Closing Date, other than such
representations and warranty as are made as of another date, which shall be true
and correct as of such date and the covenants and agreements contained in this
Agreement to be complied with by the Purchasers on or before the Closing shall
have been complied with in all material respects, and the Company shall have
received a certificate from each Purchaser to such effect signed by a duly
authorized officer thereof;
(b) Registration Rights Agreement. The Registration Rights Agreement shall
have been duly authorized, executed and delivered by each Purchaser;
(c) Additional Tranche C Loan. Subject to receipt by the Oak Hill, as the
Tranche C lender, of a valid draw down notice under the Resort Properties Credit
Agreement, Oak Hill shall have advanced an aggregate of $2,500,000 (including
the $1,250,000 advanced on July 13, 2001) to the Company in full satisfaction of
its remaining commitment (as amended) to provide the Tranche C Loans; and
(d) Purchasers Closing Deliveries. The Company shall have received the
closing deliveries of the Purchasers set forth in Section 2.05 and such other
certificates dated the Closing Date as it may reasonably request.
SECTION 6.03 Conditions to Obligations of the Purchasers. The obligations
of the Purchasers to consummate the transactions contemplated by this Agreement
on the Closing Date are subject to the satisfaction or written waiver (where
permissible), with Oak Hill's written waiver constituting an effective waiver on
behalf of all Purchasers, of the following conditions:
(a) Representations, Warranties and Covenants. The representations and
warranties of the Company contained in this Agreement shall have been true and
correct in all material respects when made and as of the Closing Date, with the
same force and effect as if made as of the Closing Date, other than such
representations and warranties as are made as of another date, which shall be
true and correct as of such date, and the covenants and agreements contained in
this Agreement to be complied with by the Company on or before the Closing shall
have been complied with in all material respects, and each Purchaser shall have
received a certificate of the Company to such effect signed by a duly authorized
officer thereof;
(b) Registration Rights Agreement. The Registration Rights Agreement shall
have been duly authorized, executed and delivered by the Company;
(c) Junior Subordinated Note Indenture. The Junior Subordinated Note
Indenture shall have been duly authorized, executed and delivered by the
Company, as issuer and Oak Hill, as trustee;
(d) By-Laws. The By-laws of the Company shall have been amended to conform
to Exhibit E attached hereto;
(e) Certificates of Designation. The Series C-1 Certificate of Designation,
the Series C-2 Certificate of Designation and the Series D Certificate of
Designation shall have been duly filed with the Secretary of State of the State
of Delaware;
(f) ASCRP Instrument of Termination. Oak Hill shall have received from
ASCRP a written instrument in form and substance acceptable to Oak Hill in its
discretion acknowledging the termination of the Warrant Purchase Agreement as
described in Section 5.07; and
(g) Company Closing Deliveries. The Purchasers shall have received the
closing deliveries of the Company indicated in Section 2.04 and such other
certificates dated the Closing Date as Oak Hill may reasonably request.
SECTION 6.04 Additional Condition to the Obligations of the Purchasers. In
addition to the conditions to the obligations of the Purchasers set forth in
Section 6.03, the Purchasers shall not be obligated to consummate the
transactions contemplated by this Agreement on the Closing Date if Oak Hill
shall have provided to the Company on or prior to the Closing Date evidence
reasonably satisfactory to the Company supporting Oak Hill's reasonable
determination that it is unlikely that the Company will be able to enter into
the Heavenly Gondola Capital Lease on the terms set forth in Section 5.04 (other
than with respect to the release of the Heavenly Gondola Guarantee); provided
that this condition may be waived by the Purchasers, with Oak Hill's written
waiver constituting an effective waiver on behalf of all Purchasers; and
provided further than nothing in this Section 6.04 shall diminish the
obligations of the parties under Section 5.04.
ARTICLE VII
TERMINATION
SECTION 7.01 Termination. This Agreement may be terminated and the other
transactions contemplated by this Agreement may be abandoned at any time prior
to the Closing Date, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated by this Agreement, as follows:
(a) by mutual written consent of each of Oak Hill and the Company;
(b) by either Oak Hill or the Company if the Closing Date shall not have
occurred on or before September 15, 2001; provided, however, that the right to
terminate this Agreement under this Section 7.01(b) shall not be available to
any party whose breach has caused the failure of the Closing to occur on or
before such date;
(c) there shall be any Governmental Order which is final and nonappealable
preventing the transactions contemplated by this Agreement;
(d) by Oak Hill upon a breach of any representation, warranty, covenant or
agreement on the part of the Company set forth in this Agreement, or if any
representation or warranty of the Company shall have become untrue, in either
case such that the conditions set forth in Section 6.03(a) would not be
satisfied ("Terminating Company Breach"); provided, however, that if such
Terminating Company Breach is curable by the Company through the exercise of its
best efforts and for as long as the Company continues to exercise such best
efforts, but not beyond the date specified in paragraph (b) above, Oak Hill may
not terminate this Agreement under this Section 7.01(d); or
(e) by the Company upon a breach of any representation, warranty, covenant
or agreement on the part of any Purchaser set forth in this Agreement, or if any
representation or warranty of any Purchaser shall have become untrue, in either
case such that the conditions set forth in Section 6.02(a) would not be
satisfied ("Terminating Purchaser Breach"); provided, however, that if such
Terminating Purchaser Breach is curable by any Purchaser through the exercise of
its respective best efforts and for as long as such Purchaser continues to
exercise such best efforts, but not beyond the date specified in paragraph (b)
above, the Company may not terminate this Agreement under this Section 7.01(e).
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01 Expenses. Except as otherwise specified in this Agreement, all
costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses; provided, however, if the purchase of Junior
Subordinated Notes and the Common Shares is consummated as contemplated by this
Agreement, the Company shall, at the Closing, and before any application of the
proceeds from the issuance and sale of the Junior Subordinated Notes, reimburse
the reasonable out-of-pocket expenses incurred by Oak Hill and the other
Purchasers in connection with the transactions contemplated by this Agreement.
SECTION 8.02 Survival. The representations and warranties of the parties
contained in this Agreement shall survive the Closing Date for a period of one
year from the Closing Date; provided, that the representations and warranties of
the Company contained in Sections 3.01, 3.02, 3.11 and (to the extent it relates
to the foregoing) 3.12 shall survive for the applicable statutory period of
limitations.
SECTION 8.03 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be given
or made by registered or certified first class mail, return receipt requested,
telecopier, courier service or personal delivery:
(a) If to the Company:
American Skiing Company
▇.▇. ▇▇▇ ▇▇▇
Sunday ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
(b) If to the Purchasers:
Oak Hill Capital Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
and
Oak Hill Capital Management, Inc.
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 8.03 designate another address or Person for
receipt of notices hereunder.
SECTION 8.04 Headings. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 8.05 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any Law or public policy,
all other terms and provisions of this Agreement shall nevertheless remain in
full force and effect unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
SECTION 8.06 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the Company and the Purchasers with respect to the subject matter hereof and
thereof.
SECTION 8.07 Assignment. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties; provided,
however, that neither the Company, on the one hand, nor Oak Hill on behalf of
each Purchaser, on the other hand, shall assign or delegate any of the rights or
obligations created under this Agreement without the prior written consent of
the other party, except to Affiliates of Oak Hill or to Oak Hill Securities
Fund, L.P. or its Affiliates; provided, further, however, that no such
assignment shall release Oak Hill or any of the other Purchasers from any of
their obligations hereunder.
SECTION 8.08 No Third Party Beneficiaries. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their permitted
assigns, and nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
SECTION 8.09 Amendments and Waivers. (a) No failure or delay on the part of
any of the parties hereto in exercising any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be
available to any of the parties hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any provision of
this Agreement and any waiver of any provision of this Agreement shall be
effective only if it is made or given in writing and signed by the Company, and
Oak Hill, on behalf of each Purchaser.
SECTION 8.10 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to any conflicts of law principles thereof that might indicate the applicability
of the laws of any other jurisdiction.
SECTION 8.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
SECTION 8.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
AMERICAN SKIING COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. Fair
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. Fair
Title: President and
Chief Executive Officer
OAK HILL CAPITAL PARTNERS, L.P.
By: OHCP GenPar, L.P.,
its general partner
By: OHCP MGP, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL CAPITAL MANAGEMENT
PARTNERS, L.P.
By: OHCP GenPar, L.P.,
its general partner
By: OHCP MGP, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities
GenPar, L.P.,
its general partner
By: Oak Hill Securities MGP, Inc.,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
OHCP SKI, L.P.
By: Oak Hill Capital Partners, L.P.
its general partner
By: OHCP GenPar, L.P.,
its general partner
By: OHCP MGP, LLC,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II,
L.P., its general partner
By: Oak Hill Securities MGP II,
Inc., its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ANNEX A
PURCHASERS
Oak Hill Capital Partners, L.P.
Oak Hill Capital Management Partners, L.P.
Oak Hill Securities Fund, L.P.
Oak Hill Securities Fund II, L.P.
OHCP SKI, L.P.
ANNEX B
JSN PURCHASERS
Principal Amount of
Jurisdiction and Junior Subordinate
Name Type of Organization Notes Purchased Purchase Price
Oak Hill Capital Partners, L.P. Delaware L.P. 12,187,500 $12,187,500
Oak Hill Capital Management Delaware L.P. 312,500 $312,500
Partners, L.P.
ANNEX C
COMMON SHARE PURCHASERS
Jurisdiction Number of
Name and Type of Organization Shares Purchased Purchase Price
Oak Hill Capital Partners, L.P. Delaware L.P. 975,000 $975,000.00
Oak Hill Capital Management Partners, Delaware L.P. 25,000 $25,000.00
L.P.
ANNEX D
SERIES C-1 AND SERIES C-2 ALLOCATIONS
Number of Percentage of
Jurisdiction Series C-1 Designated C-2
Name and Type of Organization Preferred Shares Share Number 1
---- ------------ ---------------- -------------
Oak Hill Capital Partners, L.P. Delaware L.P. 34,586 86.4647%
Oak Hill Capital Management Partners, Delaware L.P. 887 2.2170%
L.P.
Oak Hill Securities Fund, L.P. Delaware L.P. 1,997 4.99335%
Oak Hill Securities Fund II, L.P. Delaware L.P. 1,997 4.99335%
OHCP SKI, L.P. Delaware L.P. 533 1.3316%
--------
1 Any fractional shares to be allocated among the Purchaser's as directed by
Oak Hill.
EXHIBIT A
AMERICAN SKIING COMPANY
$12,500,000 (plus accreted interest)
11.3025% CONVERTIBLE SUBORDINATED NOTES DUE 2007
INDENTURE
Dated as of July ___, ▇▇▇▇
▇▇▇ ▇▇▇▇ CAPITAL PARTNERS, L.P.
Trustee
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.........................................................1
Section 1.01Definitions...............................................1
Section 1.02Other Definitions.........................................9
Section 1.03Incorporation by Reference of Trust Indenture Act........10
Section 1.04Rules of Construction....................................11
ARTICLE II. THE NOTES.........................................................11
Section 2.01Form and Dating..........................................11
Section 2.02Title and Terms..........................................13
Section 2.03Execution and Authentication.............................14
Section 2.04Registrar and Paying Agent...............................15
Section 2.05Paying Agent to Hold Money in Trust......................15
Section 2.06Holder Lists.............................................15
Section 2.07Transfer and Exchange....................................16
Section 2.08Replacement Notes........................................20
Section 2.09Outstanding Notes........................................20
Section 2.10Treasury Notes...........................................21
Section 2.11Temporary Notes; Global Notes............................21
Section 2.12Cancellation.............................................22
ARTICLE III. REDEMPTION.......................................................22
Section 3.01Notices to Trustee.......................................22
Section 3.02Selection of Notes to be Redeemed........................22
Section 3.03Notice of Redemption.....................................23
Section 3.04Effect of Notice of Redemption...........................24
Section 3.05Deposit of Redemption Price..............................24
Section 3.06Notes Redeemed in Part...................................24
Section 3.07Optional Redemption......................................24
Section 3.08Mandatory Redemption.....................................24
ARTICLE IV. COVENANTS.........................................................24
Section 4.01Payment of Notes.........................................24
Section 4.02Reports..................................................25
Section 4.03Compliance Certificate...................................25
Section 4.04Stay, Extension and Usury Laws...........................26
Section 4.05Corporate Existence......................................26
Section 4.06Taxes. 26
Section 4.07Change of Control........................................26
Section 4.08Compliance with Laws.....................................28
ARTICLE V. CONVERSION.........................................................29
Section 5.01Conversion Privilege.....................................29
i
Section 5.02Conversion Procedure.....................................29
Section 5.03No Impairment of Conversion Privilege....................30
Section 5.04Taxes on Conversion......................................30
Section 5.05Company to Provide Stock.................................30
Section 5.06Adjustment of Conversion Price...........................31
Section 5.07No Adjustment............................................35
Section 5.08Other Adjustments........................................35
Section 5.09Adjustments for Tax Purposes.............................36
Section 5.10Notice of Adjustment.....................................36
Section 5.11Notice of Certain Transactions...........................36
Section 5.12Effect of Reclassifications, Consolidations, Mergers or
Sales on Conversion Privilege.........................36
Section 5.13Trustee's Disclaimer.....................................37
ARTICLE VI. SUBORDINATION.....................................................38
Section 6.01Agreement to Subordinate.................................38
Section 6.02Liquidation; Dissolution, Bankruptcy.....................38
Section 6.03Default on Senior Debt; No Stock Collateral..............39
Section 6.04Acceleration of Notes....................................40
Section 6.05When Distribution Must Be Paid Over......................40
Section 6.06Notice.................................................. 40
Section 6.07Subrogation..............................................40
Section 6.08Relative Rights..........................................41
Section 6.09Subordination May Not Be Impaired by Company.............41
Section 6.10Distribution or Notice to Representative.................42
Section 6.11Rights of Trustee and Paying Agent.......................42
Section 6.12Authorization to Effect Subordination....................43
Section 6.13Payment..................................................43
Section 6.14No Claims Against Subsidiaries...........................43
Section 6.15Amendments...............................................44
ARTICLE VII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.............44
Section 7.01Company May Consolidate, Etc. Only On Certain Terms......44
Section 7.02Successor Substituted....................................45
ARTICLE VIII. DEFAULTS AND REMEDIES...........................................45
Section 8.01Events of Default........................................45
Section 8.02Acceleration.............................................47
Section 8.03Other Remedies...........................................48
Section 8.04Waiver of Past Defaults..................................48
Section 8.05Control by Majority......................................48
Section 8.06Limitation on Suits......................................48
Section 8.07Rights of Holders to Receive Payment.....................49
Section 8.08Collection Suit by Trustee...............................49
Section 8.09Trustee May File Proofs of Claim.........................49
Section 8.10Priorities...............................................50
ii
Section 8.11Undertaking for Costs....................................50
ARTICLE IX. TRUSTEE 50
Section 9.01Duties of Trustee........................................50
Section 9.02Rights of Trustee........................................51
Section 9.03Individual Rights of Trustee.............................52
Section 9.04Trustee's Disclaimer.....................................52
Section 9.05Notice of Defaults.......................................52
Section 9.06Reports by Trustee to Holders............................52
Section 9.07Compensation and Indemnity...............................52
Section 9.08Replacement of Trustee...................................53
Section 9.09Successor Trustee by Merger, etc.........................54
Section 9.10Eligibility; Disqualification............................54
Section 9.11Preferential Collection of Claims Against Company........54
ARTICLE X. DISCHARGE OF INDENTURE.............................................55
Section 10.01 Termination of Company's Obligations.............55
Section 10.02 Repayment to Company.............................55
ARTICLE XI. AMENDMENTS, SUPPLEMENTS AND WAIVERS...............................55
Section 11.01 Without Consent of Holders.......................55
Section 11.02 With Consent of Holders..........................56
Section 11.03 Compliance with Trust Indenture Act..............57
Section 11.04 Revocation and Effect of Consents................57
Section 11.05 Notation on or Exchange of Notes.................58
Section 11.06 Trustee Protected................................58
ARTICLE XII. MISCELLANEOUS....................................................58
Section 12.01 Trust Indenture Act Controls.....................58
Section 12.02 Notices..........................................58
Section 12.03 Communication by Holders with other Holders......59
Section 12.04 Certificate and Opinion as to Conditions
Precedent.....................................59
Section 12.05 Statements Required in Certificate or Opinion....59
Section 12.06 Rules by Trustee and Agents......................60
Section 12.07 Legal Holidays...................................60
Section 12.08 No Recourse Against Others.......................60
Section 12.09 Counterparts and Facsimile Signatures............60
Section 12.10 Variable Provisions..............................60
Section 12.11 Governing Law, Submission to Jurisdiction........61
Section 12.12 No Adverse Interpretation of other Agreements....62
Section 12.13 Successors.......................................62
Section 12.14 Severability.....................................62
Section 12.15 Table of Contents, Headings, etc.................62
Section 12.16 Enforceability of the Company's Rights...........62
iii
INDENTURE, dated as of July __, 2001, between American Skiing Company, a
Delaware corporation (the "COMPANY"), and Oak Hill Capital Partners, L.P., a
Delaware limited partnership, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders (as defined in Section 1.01 hereof) of
the Company's 11.3025% Convertible Subordinated Notes due 2007 (the "NOTES"):
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions.
-----------
"Accreted Value" means, for any Note, as of any date of determination, the
sum of (i) the Original Issue Price of the Note and (ii) any interest in respect
of such Note added to such Accreted Value pursuant to Section 2.02 of this
Indenture and the terms of such Note. Initially, upon the Issuance Date, the
amount under clause (ii) shall be zero.
"Affiliate" of any specified Person means any other Person directly
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Bank Credit Agreements" means (i) the Amended, Restated and Consolidated
Credit Agreement dated as of October 12, 1999 among the Company, various
Subsidiaries of the Company, the lenders party thereto and Fleet National Bank,
as agent for the lenders, (ii) any other credit, loan, reimbursement or other
similar agreements among the Company, any Subsidiary and any bank, insurance
company, finance company or other institutional lender, (iii) each instrument
pursuant to which Obligations under any of the agreements described in (i) or
(ii) above, are amended, deferred, extended, renewed, replaced, refunded or
refinanced, in whole or in part, and (iv) each instrument now or hereafter
evidencing, governing, guarantying or securing any Indebtedness under any
agreements described in (i), (ii) or (iii) above, in each case, as modified,
amended, reformed, renewed, extended, restated or supplemented from time to
time.
2
"Bank Lenders" means the lenders and creditors under the Bank Credit
Agreements.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors.
"Board Resolution" means a duly authorized resolution of the Board of
Directors.
"Business Day" means any day that is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of liability in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, including, without
limitation, partnership interests.
"Change of Control" means the occurrence of any of the following: (i) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole, to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Permitted Holders, or (ii) the consummation of
any transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), other than the Permitted Holders, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 50% of the voting power of the
Capital Stock of the Company, unless, in the case of this clause (ii), the
Permitted Holders retain the right or ability, by voting power, contract or
otherwise, to elect or designate a majority of the Board of Directors of the
Company.
"Common Stock" means the common stock, par value $.01 per share, of the
Company.
"Company" means the party named as such above until a successor replaces it
in accordance with Article VII and thereafter means the successor.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its nominees and
their respective successors.
"Designated Senior Debt" means the Company's Obligations under the Senior
Notes, the Bank Credit Agreements and any other Senior Debt of such Person
permitted to be incurred by the Company the principal amount of which is $25.0
3
million or more and that has been designated by the Board of Directors as
"Designated Senior Debt" by notice to the Trustee from both the Company and the
Senior Agent.
"Designated Subsidiary" means any Subsidiary of the Company that is not an
"Unrestricted Subsidiary" as defined in, and for the purposes of the Senior
Credit Agreement; provided, that each Subsidiary that is a Designated Subsidiary
at the time when the obligations under the Senior Credit Agreement shall have
been paid in full shall remain a Designated Subsidiary for so long as this
Indenture remains in effect.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any Indebtedness that is
convertible into, or exchangeable for Capital Stock.
"Excess Payment" means the excess of (A) the aggregate of the cash and the
fair value of other consideration paid by the Company or any of its Subsidiaries
with respect to shares acquired in a tender offer or other negotiated
transaction over (B) the aggregate Current Market Price of such acquired shares
immediately prior to the announcement of the tender offer (in the case of a
tender offer) or as of the date of acquisition (in the case of a negotiated
transaction). For purposes of this definition, the "fair value" of any
consideration other than cash shall be agreed to by the Company and the Majority
Holders or, if such Persons do not agree, the determination of fair value of
such consideration shall be determined in a manner consistent with the
determination of Current Market Price as set forth in Section 5.06(f).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means 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,
which are in effect on the Issuance Date and are applied on a consistent basis.
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (i) interest and currency rate swap agreements, interest rate
cap agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest or
currency exchange rates.
"Holder" means a Person in whose name a Note is registered in the register
referred to in Section 2.04.
4
"Indebtedness" means, with respect to any Person, without duplication, (i)
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or representing
the balance deferred and unpaid of the purchase price of any property or
representing any Hedging Obligations, except any such balance that constitutes
an accrued expense or trade payable, if and to the extent any of the foregoing
indebtedness (other than letters of credit and Hedging Obligations) would appear
as a liability upon a balance sheet of such Person prepared in accordance with
GAAP, all indebtedness of others secured by a lien on any asset of such Person
(whether or not such indebtedness is assumed by such Person) and, to the extent
not otherwise included, the Guarantee by such Person of any indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall be
the accreted value thereof, in the case of any Indebtedness issued with original
issue discount. Indebtedness shall not include liabilities for taxes of any
kind.
"Indenture" means this Indenture, as modified, amended, reformed, renewed,
extended, restated or supplemented from time to time
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(i) any insolvency or bankruptcy or similar case or proceeding, or any
reorganization, receivership, liquidation, dissolution or winding up of such
Person, whether voluntary or involuntary, or (ii) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of such Person.
"Interest Accrual Date" means, with respect to any installment of interest
on any Notes, the dates specified in Section 2.02 as the fixed dates on which
such installment of interest accrues and is added to the Accreted Value in
effect immediately prior to the applicable Interest Accrual Date.
"Issuance Date" means the date on which the Notes are first authenticated
and issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Majority Holders" means, at any time, the Holders of a majority in
aggregate Accreted Value of the then outstanding Notes.
"Maturity" means, with respect to any Note, the date on which the Accreted
Value of such Note becomes due and payable as therein provided and as provided
in this Indenture, whether at the Stated Maturity, the Purchase Date or
otherwise.
5
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"Non-Recourse Real Estate Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), or (c) constitutes the lender, (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries; provided, that if there has been
a legal defeasance or covenant defeasance under Article 8 of the Senior
Indenture or the Senior Indenture has been discharged, there shall be no
Non-Recourse Real Estate Debt.
"Notes" has the meaning set forth in the preamble hereto.
"NYSE" means the New York Stock Exchange.
"Oak Hill" means Oak Hill Capital Partners, L.P.
"Obligations" with respect to any instrument or agreement means any and all
principal, Accreted Value, interest (including Post-Petition Interest),
penalties, premiums, fees (including, without limitation, to the extent provided
for in such instrument or agreement, fees and expenses of counsel),
indemnifications, reimbursements, damages and other charges, obligations and
liabilities existing from time to time under such instrument or agreement,
whether direct or indirect, joint or several, actual, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, including any obligations or
liabilities to repay, redeem, repurchase, retire, acquire or defease any
Indebtedness under such instrument or agreement, or any obligation to establish
a sinking fund for any such purpose.
"Officers' Certificate" means a certificate of the Company signed by two
Officers, one of whom must be the Chairman of the Board, the President, the
Treasurer or a Vice President of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
6
"Original Issue Price" means, with respect to any Note, the amount
designated as original issue price on the face of such Note.
"Permitted Holders" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, in the event of his
incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective affiliates and associates.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Post-Petition Interest" means, with respect to any Indebtedness of any
Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument creating,
evidencing or governing such Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency or Liquidation Proceeding.
"Purchase Agreement" means the Securities Purchase Agreement, dated as of
July 15, 2001, among the Company and the purchasers named therein, as modified,
amended, reformed, renewed, extended, restated or supplemented, from time to
time.
"Purchasers" means Oak Hill Capital Partners, L.P. and Oak Hill Capital
Management Partners, L.P.
"Registration Rights Agreement" means the Registration Rights Agreement
relating to the Notes and the underlying Series D Preferred Stock, dated July
[__], 2001, among the Company and the Persons party thereto, as modified,
amended, reformed, renewed, extended, restated or supplemented, from time to
time.
"Representative" means, with respect to any Senior Debt, the agent or other
representative(s), if any, of holders of such Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means (i)
with respect to Oak Hill as Trustee, means any member of OHCP MGP, LLC (a
Delaware limited liability company and the general partner of OHCP GenPar, L.P.,
a Delaware limited partnership and general partner of Oak Hill), and (ii) with
respect to any other Person as Trustee, any Trust Officer of the Trustee or,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his or her knowledge of and familiarity with
the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
"Unrestricted Subsidiary" as defined in, and for the purposes of, the Senior
7
Indenture; provided, that each Subsidiary that is a Restricted Subsidiary at the
time when the Senior Indenture is discharged shall remain a Restricted
Subsidiary for so long as this Indenture remains in effect.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Agents" means, collectively, (i) (A) until all Indebtedness under
the Bank Credit Agreements is paid in full in cash, the agent (or the
institution performing similar functions) under the Bank Credit Agreement under
which the greatest aggregate principal amount of Indebtedness is outstanding and
(B) if all Indebtedness under the Bank Credit Agreements has been paid in full,
the Person (or representative of the Persons) holding the greatest amount of
Senior Debt other than Senior Notes, and (ii) until all Indebtedness under the
Senior Notes has been paid in full in cash, the trustee under the Senior
Indenture.
"Senior Bank Debt" means all Obligations outstanding under the Bank Credit
Agreements.
"Senior Credit Agreement" means the Amended, Restated and Consolidated
Credit Agreement dated as of October 12, 1999, among the Company and certain
Subsidiaries of the Company, as borrowers, the lenders and Fleet National Bank
(f/k/a BankBoston, N.A.), as agent for the lenders, as modified, amended,
restated or supplemented from time to time.
"Senior Debt" of any Person means and includes all principal of, premium
and interest on and other Obligations with respect to (i) the Bank Credit
Agreements, (ii) the Senior Notes and (iii) any other Indebtedness of such
Person (other than as otherwise provided in this definition), whether
outstanding on the date of issuance of the Notes or thereafter incurred;
provided, however, Senior Debt shall not include: (a) except in the case of
Indebtedness under the Amended, Restated and Consolidated Credit Agreement dated
as of October 12, 1999 among the Company, various Subsidiaries of the Company,
the lenders party thereto and Fleet National Bank, as agent for the lenders, and
the guarantees of various Subsidiaries of the Company issued in connection
therewith, in each case as modified, amended and in effect from time to time,
any Indebtedness which by the terms of the instrument creating or evidencing the
same is subordinated or junior in right of payment to any other Senior Debt in
any respect or (b) that portion of any Indebtedness incurred in violation of
this Indenture or the Senior Indenture. Notwithstanding the foregoing, Senior
Debt shall not include (1) Indebtedness evidenced by the Notes, (2) Indebtedness
which when incurred and without respect to any election under Section 1111(b) of
the United States Bankruptcy Code is without recourse to the Company, (3) any
liability for foreign, federal, state, local or other taxes owed or owing by the
Company, (4) Indebtedness of such Person to the extent such liability
8
constitutes Indebtedness to a Subsidiary of the Company, (5) Indebtedness for
the purchase of goods or materials in the ordinary course of business except
purchase money Indebtedness secured by a security interest in or Lien upon the
goods or materials purchased or (6) Indebtedness owed by the Company for
compensation to employees or for services.
"Senior Indenture" means the Indenture, dated as of June 28, 1996, between
the Company (as successor to ASC East, Inc.), and United States Trust Company of
New York as trustee, as modified, amended, restated or supplemented from time to
time.
"Senior Notes" means the 12% Series A and Series B Senior Subordinated
Notes due 2006, issued by the Company pursuant to the Senior Indenture.
"Series D Equivalents" means Series D Preferred Stock or rights, warrants,
options or other convertible securities representing the right to acquire Series
D Preferred Stock.
"Shelf Registration Statement" shall have the meaning set forth in the
Registration Rights Agreement.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the dates specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness, the Accreted
Value or such installment of interest, as the case may be, is due and payable.
"Stock Collateral" means any Equity Interests in any Subsidiary of the
Company.
"Stockholders' Agreement" means the Stockholders' Agreement dated as of
August 6, 1999, as amended by Amendment No. 1 thereto dated July 31, 2000, and
as it may be further amended from time to time, among the Company, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Oak ▇▇▇▇ and the other parties identified therein.
"Subordinated Obligations" means all Indebtedness and other Obligations of
the Company or any of its Subsidiaries, contingent or otherwise, now or
hereafter existing under or in respect of the Notes (pursuant to the terms
thereof or any other agreement or instrument relating thereto) or this
Indenture.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner of the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
9
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (Sections)
77aaa-77bbbb) as in effect on the date of execution of this Indenture.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means the Chairman of the Board, the President or any other
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is an
"Unrestricted Subsidiary" as defined in, and for the purposes of, the Senior
Indenture; provided, that each Subsidiary that is an Unrestricted Subsidiary at
the time when the Senior Indenture is discharged shall remain an Unrestricted
Subsidiary for so long as this Indenture remains in effect.
Section 1.02 Other Definitions.
-----------------
DEFINED
TERM IN SECTION
"AGENT MEMBERS"..................................... 2.01
"APPLICABLE STOCK".................................. 5.06
"BANKRUPTCY LAW".................................... 8.01
"CEDEL"............................................. 2.01
"CHANGE OF CONTROL PAYMENT"......................... 4.07
"COMMENCEMENT DATE"................................. 4.07
"CONVERSION AGENT".................................. 2.04
"CONVERSION DATE"................................... 5.02
"CONVERSION PRICE".................................. 5.01
"CONVERSION SHARES"................................. 5.01
"CURRENT MARKET PRICE" ............................. 5.06
"CUSTODIAN"......................................... 8.01
"DISTRIBUTION DATE"................................. 5.06
"DISTRIBUTION RECORD DATE".......................... 5.06
"EUROCLEAR"......................................... 2.01
"EVENT OF DEFAULT".................................. 8.01
"GLOBAL NOTES"...................................... 2.01
"LEGAL HOLIDAY"..................................... 12.07
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"OFFER AMOUNT"...................................... 4.07
"OFFICER"........................................... 12.10
"NON-PURCHASER DIRECTORS"........................... 12.16
"PAYING AGENT"...................................... 2.04
"PAYMENT BLOCKAGE NOTICE"........................... 6.03
"PAYMENT DEFAULT"................................... 8.01
"PURCHASE DATE"..................................... 4.07
"PURCHASE OFFER".................................... 4.07
"QIBS".............................................. 2.01
"REGISTRAR"......................................... 2.04
"REGULATION S"...................................... 2.01
"REGULATION S GLOBAL NOTE".......................... 2.01
"RESTRICTED NOTES".................................. 2.01
"REPURCHASE DATE"................................... 5.06
"RIGHTS"............................................ 5.06
"RULE 144A".......................................... 2.01
"RULE 144A GLOBAL NOTE".............................. 2.01
"SURVIVING ENTITY"................................... 7.01
"TENDER PERIOD"...................................... 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Indenture Securities" means the Notes;
"Indenture Security Holder" means a Holder of a Note;
"Indenture To Be Qualified" means this Indenture;
"Indenture Trustee" or "institutional trustee" means the Trustee; and
"Obligor" on the Notes means the Company or any other obligor on the Notes.
11
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
Section 1.04 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP consistently applied;
(c) "OR" is not exclusive;
(d) words in the singular include the plural, and in the plural include
the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time; and
(g) a reference to "$" or U.S. Dollars is to United States dollars.
ARTICLE II.
THE NOTES
Section 2.01 Form and Dating.
---------------
(a) General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated by reference and expressly made a part of this Indenture. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or usage (provided
that any such notation, legend or endorsement is in a form acceptable to the
Company). The Company shall furnish any such legend not contained in Exhibit A
to the Trustee in writing. Each Note shall be dated the date of its
authentication. The Notes shall be issued only in denominations of Accreted
Value with $100 of Original Issue Price and integral multiples thereof. The
terms and provisions of the Notes set forth in Exhibit A are part of this
Indenture and to the extent applicable, the Company and the Trustee, by their
12
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.
(b) Global Notes. Notes transferred in reliance on Regulation S under the
Securities Act ("REGULATION S"), as provided in Section 2.07(a)(ii) hereof,
shall be issued in the form of one or more permanent Global Notes in definitive,
fully registered form without interest coupons with the Global Notes Legend and
Restricted Notes Legend set forth in Exhibit A hereto (the "REGULATION S GLOBAL
NOTE"), which shall be deposited on behalf of the transferee of the Notes
represented thereby with the Trustee, at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or the nominee of
the Depositary for the accounts of designated agents holding on behalf of the
Euroclear System ("EUROCLEAR") or Cedelbank ("CEDEL"), duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Regulation S Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
Notes transferred to Qualified Institutional Buyers ("QIBS") in reliance on
Rule 144A under the Securities Act ("RULE 144A"), as provided in Section
2.07(a)(ii) hereof, shall be issued in the form of one or more permanent Global
Notes in definitive, fully registered form without interest coupons with the
Global Notes Legend and Restricted Notes Legend set forth in Exhibit A hereto
("RULE 144A GLOBAL NOTE"), which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Rule 144A
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Notwithstanding the foregoing, for so long as the Purchasers hold the
Notes, the Notes shall be held by them in certificated form.
(c) Book-Entry Provisions. This Section 2.01(c) shall apply only to the
Regulation S Global Note and the Rule 144A Global Note issued in the form of one
or more permanent Global Notes (collectively, the "GLOBAL NOTES") deposited with
or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(c), authenticate and deliver initially one or more Global Notes
that (a) shall be registered in the name of the Depositary for such Global Note
or Global Notes or the nominee of such Depositary and (b) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's instructions or
held by the Trustee as custodian for the Depositary.
13
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall have
no rights under this Indenture with respect to any Global Note held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of the
Depositary governing the exercise of the rights of an owner of a beneficial
interest in any Global Note.
Notwithstanding the foregoing, for so long as the Purchasers hold the
Notes, the Notes shall not be issued in the form of Global Notes.
(d) Certificated Notes. Notes transferred to "accredited investors" (as
defined in Rule 501 (a) (1), (2), (3), (4), (5), (6) and (7) of Regulation D
under the Securities Act), as provided in Section 2.07(a), or to any Person in a
transaction exempt from the registration requirements of the Securities Act,
other than a Person who elects to receive a Global Note as provided elsewhere in
the Indenture, shall be issued in the form of one or more certificated Notes in
definitive, fully registered form without interest coupons with the Restricted
Notes Legend set forth in Exhibit A hereto ("RESTRICTED NOTES"), which shall be
registered in the name of such Accredited Investor or its nominee, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. Such
Restricted Notes may only be transferred in reliance on Regulation S or to QIBs
in reliance on Rule 144A, pursuant to another exception from registration under
the Securities Act or pursuant to an effective registration statement.
In addition to the provisions of Section 2.11, owners of beneficial
interests in Global Notes may, if the Company, at its option, notifies the
Trustee in writing that it elects to cause the issuance of certificated Notes,
receive a certificated Note, which certificated Note shall bear the Restricted
Notes Legend set forth in Exhibit A hereto unless otherwise provided in this
Section 2.01(d) and Section 2.07(b) hereof.
After a transfer of any Notes during the period of the effectiveness of a
Shelf Registration Statement with respect to the Notes and pursuant thereto, all
requirements for Restricted Notes Legends on such Note will cease to apply, and
a certificated Note without a Restricted Notes Legend will be available to the
Holder of such Notes.
Section 2.02 Title and Terms.
---------------
The aggregate Original Issue Price of Notes which may be authenticated and
delivered under this Indenture is limited to $12,500,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, other Notes pursuant to Sections 2.03, 2.04, 2.07, 2.08, 4.07 and
11.05.
14
The Notes shall be known and designated as the "11.3025% Convertible
Subordinated Notes due 2007" of the Company. The Stated Maturity of the Accreted
Value of the Notes shall be July __, 20071 and the Notes shall each bear
interest at the rate of 11.3025% on the Accreted Value thereof from July __,
2001 until the Stated Maturity of the Accreted Value.
On each July __ on which the Notes are outstanding, commencing July __,
2002, and at the Stated Maturity of the Accreted Value, interest on the Notes
shall accrue and be paid through the addition of such interest to the Accreted
Value in effect immediately prior to the applicable Interest Accrual Date. The
Company shall notify the Trustee in writing of the aggregate amount of such
interest not less than five (5) or more than 45 days prior to any Interest
Accrual Date on which accretion will occur. On the applicable Interest Accrual
Date, the Accreted Value shall increase by the amount of such interest.
On Maturity, the Accreted Value shall be payable at the office or agency of
the Company maintained for such purpose in the City of New York, or at such
other office or agency of the Company as may be maintained for such purpose. If
a Holder so requests, Accreted Value, accrued and unpaid interest thereon, and
premium, if any, may be paid by wire transfer of immediately available funds to
an account previously specified in writing by such Holder to the Company and the
Trustee.
At the option of the Holder, the Notes may be converted into shares of
Series D Preferred Stock pursuant to Article IV hereof.
Holders shall have the right to require the Company to
repurchase their Notes, in whole or in part, in the event of a Change of
Control, pursuant to Section 3.07.
Section 2.03 Execution and Authentication.
----------------------------
One Officer shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of an
authorized officer of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer, authenticate Notes for Original Issue Price up to an amount stated in
paragraph 3 of the Note. The aggregate Notes outstanding at any time may not
have an aggregate Original Issue Price that exceeds $12,500,000 except as
provided in Section 2.08.
15
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders, the Company or an Affiliate.
Section 2.04 Registrar and Paying Agent.
--------------------------
The Company shall maintain in the Borough of Manhattan, City of New York,
State of New York, (i) offices or agencies where the Notes may be presented for
registration of transfer or for exchange ("REGISTRAR"), (ii) offices or agencies
where the Notes may be presented for payment ("PAYING AGENT") and (iii) offices
or agencies where the Notes may be presented for conversion ("CONVERSION
AGENT"); provided that if the only Holders are the Purchasers, such offices or
agencies may be the executive offices of the Company as set forth in Section
12.10. The Company shall act initially as principal Registrar, Paying Agent and
Conversion Agent. The principal Registrar shall keep a register of the Notes and
of their transfer and exchange. The Company may appoint one or more
co-registrars, one or more additional paying agents and one or more additional
Conversion Agents in such other locations as it shall determine. The term
"Registrar" includes any co-registrar, the term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Company may change any Paying Agent, Registrar or
Conversion Agent without prior notice to any Holder. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to appoint or maintain another entity as Registrar, Paying
Agent or Conversion Agent, the Trustee shall act as such. The Company or any of
its Affiliates may act as Paying Agent, Registrar or Conversion Agent.
Section 2.05 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of the
Accreted Value at Maturity, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any money disbursed by it. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or an Affiliate
of the Company) shall have no further liability for the money. If the Company or
an Affiliate of the Company acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent.
Section 2.06 Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
16
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at such times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Holders.
Section 2.07 Transfer and Exchange.
---------------------
Where Notes are presented to the Registrar or a co-registrar with a request
to register a transfer or to exchange them for one or more new Notes of any
authorized denomination or denominations, of a like aggregate Accreted Value,
the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. To permit registrations of transfers
and exchanges, the Company shall issue and the Trustee shall authenticate Notes
at the Registrar's request. No service charge shall be made for any registration
of transfer or exchange (except as otherwise expressly permitted herein), but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Sections 2.11 or 11.05 hereof).
(a) Notwithstanding any provision to the contrary herein, so long as a
Global Note remains outstanding and is held by or on behalf of the Depositary,
transfers of a Global Note, in whole or in part, or of any beneficial interest
therein, shall only be made in accordance with Section 2.01(b) and this Section
2.07(a); provided, however, that beneficial interests in a Global Note may be
transferred to Persons who take delivery thereof in the form of a beneficial
interest in the same Global Note in accordance with the transfer restrictions
set forth in the Restricted Notes Legend.
(i) Except for transfers or exchanges made in accordance with clauses
(ii) through (iv) of this Section 2.07(a), transfers of a Global Note shall
be limited to transfers of such Global Note in whole, but not in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note. If an owner of
a beneficial interest in the Rule 144A Global Note deposited with the
Depositary or the Trustee as custodian for the Depositary wishes at any
time to transfer its interest in such Rule 144A Global Note to a Person who
is required to take delivery thereof in the form of an interest in the
Regulation S Global Note, such owner may, subject to the rules and
procedures of the Depositary, exchange or cause the exchange of such
interest for an equivalent beneficial interest in the Regulation S Global
Note. Upon receipt by the principal Registrar of (1) instructions given in
accordance with the Depositary's procedures from an Agent Member directing
the principal Registrar to credit or cause to be credited a beneficial
interest in the Regulation S Global Note in an amount equal to the
beneficial interest in the Rule 144A Global Note to be exchanged, (2) a
written order given in accordance with the Depositary's procedures
containing information regarding the participant account of the Depositary
17
and the Euroclear or Cedel account to be credited with such increase and
(3) a certificate in the form of Exhibit B attached hereto given by the
Holder of such beneficial interest, then the principal Registrar shall
instruct the Depositary to reduce or cause to be reduced the Accreted Value
of the Rule 144A Global Note and to increase or cause to be increased the
Accreted Value of the Regulation S Global Note by the aggregate Accreted
Value of the beneficial interest in the Rule 144A Global Note equal to the
beneficial interest in the Regulation S Global Note to be exchanged or
transferred, to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Regulation S
Global Note equal to the reduction in the Accreted Value of the Rule 144A
Global Note and to debit or cause to be debited from the account of the
Person making such exchange or transfer the beneficial interest in the Rule
144A Global Note that is being exchanged or transferred.
(iii) Regulation S Global Note to Rule 144A Global Note. If an owner
of a beneficial interest in the Regulation S Global Note deposited with the
Depositary or with the Trustee as custodian for the Depositary wishes at
any time to transfer its interest in such Regulation S Global Note to a
Person who is required to take delivery thereof in the form of an interest
in the Rule 144A Global Note, such Holder may, subject to the rules and
procedures of Euroclear or Cedel, as the case may be, and the Depositary,
exchange or cause the exchange of such interest for an equivalent
beneficial interest in the Rule 144A Global Note. Upon receipt by the
principal Registrar of (1) instructions from Euroclear or Cedel, if
applicable, and the Depositary, directing the principal Registrar to credit
or cause to be credited a beneficial interest in the Rule 144A Global Note
equal to the beneficial interest in the Regulation S Global Note to be
exchanged or transferred, (2) a written order given in accordance with the
Depositary's procedures containing information regarding the participant
account of the Depositary and (3) a certificate in the form of Exhibit C
attached hereto given by the owner of such beneficial interest, then
Euroclear or Cedel or the principal Registrar, as the case may be, will
instruct the Depositary to reduce or cause to be reduced the Accreted Value
of the Regulation S Global Note and to increase or cause to be increased
the Accreted Value of the Rule 144A Global Note by the aggregate Accreted
Value of the beneficial interest in the Regulation S Global Note to be
exchanged or transferred, and the principal Registrar shall instruct the
Depositary, concurrently with such reduction, to credit or cause to be
credited to the account of the Person specified in such instructions a
beneficial interest in the Rule 144A Global Note equal to the reduction in
the Accreted Value of the Regulation S Global Note and to debit or cause to
be debited from the account of the Person making such exchange or transfer
the beneficial interest in the Regulation S Global Note that is being
exchanged or transferred.
(iv) Global Note to Restricted Note. If an owner of a beneficial
interest in a Global Note deposited with the Depositary or with the Trustee
as custodian for the Depositary wishes at any time to transfer its interest
in such Global Note to a Person who is required to take delivery thereof in
the form of a Restricted Note, such owner may, subject to the rules and
procedures of Euroclear or Cedel, if applicable, and the Depositary, cause
the exchange of such interest for one or more Restricted Notes of any
authorized denomination or denominations and of the same aggregate Accreted
Value. Upon receipt by the principal Registrar of (1) instructions from
Euroclear or Cedel, if applicable, and the Depositary directing the
principal Registrar to authenticate and deliver one or more Restricted
Notes of the same aggregate Accreted Value as the beneficial interest in
the Global Note to be exchanged, such instructions to contain the name or
names of the designated transferee or transferees, the authorized
denomination or denominations of the Restricted Notes to be so issued and
appropriate delivery instructions, (2) a certificate in the form of Exhibit
18
D attached hereto given by the owner of such beneficial interest to the
effect set forth therein, (3) a certificate in the form of Exhibit E
attached hereto given by the Person acquiring the Restricted Notes for
which such interest is being exchanged, to the effect set forth therein,
and (4) such other certifications, legal opinions or other information as
the Company may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then Euroclear or Cedel,
if applicable, or the principal Registrar, as the case may be, will
instruct the Depositary to reduce or cause to be reduced such Global Note
by the aggregate Accreted Value of the beneficial interest therein to be
exchanged and to debit or cause to be debited from the account of the
Person making such transfer the beneficial interest in the Global Note that
is being transferred, and concurrently with such reduction and debit the
Company shall execute, and the Trustee shall authenticate and deliver, one
or more Restricted Notes of the same aggregate Accreted Value in accordance
with the instructions referred to above.
(v) Restricted Note to Restricted Note. If a Holder of a Restricted
Note wishes at any time to transfer such Restricted Note to a Person who is
required to take delivery thereof in the form of a Restricted Note, such
Holder may, subject to the restrictions on transfer set forth herein and in
such Restricted Note, cause the exchange of such Restricted Note for one or
more Restricted Notes of any authorized denomination or denominations and
of the same aggregate Accreted Value. Upon receipt by the principal
Registrar of (1) such Restricted Note, duly endorsed as provided herein,
(2) instructions from such Holder directing the principal Registrar to
authenticate and deliver one or more Restricted Notes of the same aggregate
Accreted Value as the Restricted Note to be exchanged, such instructions to
contain the name or authorized denomination or denominations of the
Restricted Notes to be so issued and appropriate delivery instructions, (3)
a certificate from the Holder of the Restricted Note to be exchanged in the
form of Exhibit D attached hereto, (4) a certificate in the form of Exhibit
E attached hereto given by the Person acquiring the Restricted Notes for
which such interest is being exchanged, to the effect set forth therein,
and (5) such other certifications, legal opinions or other information as
the Company may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Registrar shall
cancel or cause to be canceled such Restricted Note and concurrently
therewith, the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Restricted Notes of the same aggregate Accreted
Value, in accordance with the instructions referred to above.
(vi) Restricted Note to Rule 144A Global Note. If an owner of a
Restricted Note registered in the name of such owner wishes at any time to
transfer such Restricted Note to a Person who is required to take delivery
thereof in the form of an interest in the Rule 144A Global Note, such
Holder may, subject to the rules and procedures of the Depositary, exchange
or cause the exchange of such Restricted Note for an equivalent beneficial
interest in the Rule 144A Global Note. Upon receipt by the principal
Registrar of (1) instructions from the Company, directing the principal
Registrar (A) to credit or cause to be credited a beneficial interest in
the Rule 144A Global Note equal to the Accreted Value of the Restricted
Note to be exchanged or transferred and (B) to cancel such Restricted Note
to be exchanged or transferred, (2) a written order given in accordance
with the Depositary's procedures containing information regarding the
participant account of the Depositary and (3) a certificate in the form of
Exhibit C attached hereto given by the owner of such Restricted Note, then
the principal Registrar will instruct the Trustee to cancel such Restricted
19
Note and will instruct the Depositary to increase or cause to be increased
the Accreted Value of the Rule 144A Global Note by the Accreted Value of
the Restricted Note to be exchanged or transferred, and the principal
Registrar shall instruct the Depositary, concurrently with such
cancellation of the Restricted Note, to credit or cause to be credited to
the account of the Person specified in such instructions a beneficial
interest in the Rule 144A Global Note equal to the Accreted Value of the
Restricted Note to be canceled by the Trustee.
(vii) Restricted Note to Regulation S Global Note. If an owner of a
Restricted Note registered in the name of such owner wishes at any time to
transfer such Restricted Note to a Person who is required to take delivery
thereof in the form of an interest in the Regulation S Global Note, such
owner may, subject to the rules and procedures of the Euroclear or Cedel,
as the case may be, exchange or cause the exchange of such Restricted Note
for an equivalent beneficial interest in the Regulation S Global Note. Upon
receipt by the principal Registrar of (1) instructions from the Company,
directing the principal Registrar (A) to credit or cause to be credited a
beneficial interest in the Regulation S Global Note equal to the Accreted
Value of the Restricted Note to be exchanged or transferred and (B) to
cancel such Restricted Note to be exchanged or transferred, (2) a written
order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Euroclear or Cedel
account to be credited with such increase and (3) a certificate in the form
of Exhibit B attached hereto given by the Holder of such Restricted Note,
then the principal Registrar will instruct the Trustee to cancel such
Restricted Note and will instruct the Depositary to increase or cause to be
increased the Accreted Value of the Regulation S Global Note by the
Accreted Value of the Restricted Note to be exchanged or transferred, and
the principal Registrar shall instruct the Depositary, concurrently with
such cancellation of the Restricted Note, to credit or cause to be credited
to the account of the Person specified in such instructions a beneficial
interest in the Regulation S Global Note equal to the Accreted Value of the
Restricted Note to be canceled by the Trustee.
(viii) Other Exchanges. In the event that a beneficial interest in a
Global Note is exchanged for a certificated Note in definitive registered
form pursuant to Section 2.11, prior to the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be
exchanged only in accordance with such procedures as are substantially
consistent with the provisions of clauses (ii) through (v) above (including
the certification requirements intended to ensure that such transfers
comply with Rule 144A, Rule 144, Regulation S or any other available
exemption from registration, as the case may be) and such other procedures
as may from time to time be adopted by the Company.
20
(b) Except in connection with a Shelf Registration Statement contemplated
by and in accordance with the terms of the Registration Rights Agreement, if
Notes are issued upon the transfer, exchange or replacement of Notes bearing the
Restricted Securities Legend set forth in Exhibit A hereto, or if a request is
made to remove such Restricted Notes Legend on Notes, the Notes so issued shall
bear the Restricted Notes Legend, or the Restricted Notes Legend shall not be
removed, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company, that neither the legend nor the restrictions on transfer set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Rule 144, Regulation S or any other available exemption from
registration under the Securities Act or, with respect to Restricted Notes, that
such Notes are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trustee, at
the direction of the Company, shall authenticate and deliver Notes that do not
bear the legend.
(c) Neither the Company nor the Trustee shall have any responsibility for
any actions taken or not taken by the Depositary and the Company shall have no
responsibility for any actions taken or not taken by the Trustee as agent or
custodian of the Depositary.
Section 2.08 Replacement Notes.
-----------------
If the Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken or if such Note is mutilated and is surrendered to the Trustee,
the Company shall issue and the Trustee shall authenticate a replacement Note if
the Trustee's and the Company's requirements are met. If required by the Trustee
or the Company, an indemnity bond must be sufficient in the judgment of both to
protect the Company, the Trustee, any Agent or any authenticating agent from any
loss which any of them may suffer if a Note is replaced. The Company may charge
for its reasonable expenses in replacing a Note.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Note, pay such Note.
Every replacement Note 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 Notes duly issued hereunder.
Section 2.09 Outstanding Notes.
-----------------
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
and those described in this Section as not outstanding.
21
If a Note is replaced, paid or purchased pursuant to Section 2.08 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced, paid or purchased Note is held by a bona fide purchaser. If
the Accreted Value of any Note is considered paid under Section 4.01 hereof, it
ceases to be outstanding and interest on it ceases to accrue.
Except as set forth in Section 2.10 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
Section 2.10 Treasury Notes.
--------------
In determining whether the Holders of the required Accreted Value of Notes
have concurred in any direction, waiver or consent, Notes owned by the Company
or a Subsidiary of the Company shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.11 Temporary Notes; Global Notes.
-----------------------------
(a) Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes. Holders of temporary Notes shall be entitled to
all of the benefits of this Indenture.
(b) A Global Note deposited with the Depositary or with the Trustee as
custodian for the Depositary pursuant to Section 2.01 shall be transferred to
the beneficial owners thereof in the form of certificated Notes only in
accordance with Section 2.01(d) or if such transfer complies with Section 2.07
and (i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Note or if at any time such Depositary
ceases to be a "clearing agency" registered under the Exchange Act and a
successor Depositary is not appointed by the Company within 90 days after
receipt of such notice or after it becomes aware of such cessation or (ii) an
Event of Default has occurred and is continuing.
(c) Any Global Note that is transferable to the beneficial owners thereof
in the form of certificated Notes pursuant to Section 2.01(d) or to this Section
2.11 shall be surrendered by the Depositary to the Trustee to be so transferred,
in whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate Accreted Value of Notes of authorized denominations in
the form of certificated Notes. Any portion of a Global Note transferred
pursuant to this Section 2.11 shall be executed, authenticated and delivered
22
only in denominations of Accreted Value with $100 of Original Issue Price and
any integral multiple thereof and registered in such names as the Depositary
shall direct. Any Note in the form of certificated Notes delivered in exchange
for an interest in the Global Notes shall, except as otherwise provided by
Section 2.07(b), bear the Restricted Notes Legend set forth in Exhibit A hereto.
(d) The registered Holder of a Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
(e) In the event of the occurrence of either of the events specified in
Section 2.11(b), the Company will promptly make available to the Trustee a
reasonable supply of certificated Notes in definitive, fully registered form
without interest coupons.
Section 2.12 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar, Paying Agent and Conversion Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall promptly cancel all Notes surrendered for registration of
transfer, exchange, payment, conversion, replacement or cancellation and shall
dispose of canceled Notes as the Company directs. The Company may not issue new
Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
ARTICLE III.
REDEMPTION
Section 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of the Notes and Section 3.07 hereof, it shall notify the Trustee of
the redemption date and the Accreted Value of Notes to be redeemed. The Company
shall give each notice provided for in this Section 3.01 at least 45 days before
the redemption date (unless a shorter notice period shall be reasonably
satisfactory to the Trustee).
Section 3.02 Selection of Notes to be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed at any time, selection of
Notes shall be made by the Trustee on a pro rata basis or by lot or by method
that complies with the requirements of any exchange on which the Notes are
listed and that the Trustee considers fair and appropriate, provided that no
Notes with Accreted Value with Original Issue Price of less than $100 shall be
redeemed in part. The Trustee shall make the selection not more than 60 days and
not less than 30 days before the redemption date from Notes outstanding not
previously called for redemption. Notes and portions of Notes selected shall be
in amounts of Accreted Value with $100 of Original Issue Price or integral
23
multiples thereof. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be called
for redemption.
If any Note selected for partial redemption is converted in part after such
selection, the converted portion of such Note shall be deemed (so far as may be)
to be the portion to be selected for redemption. The Notes (or portions thereof)
so selected shall be deemed duly selected for redemption for all purposes
hereunder, notwithstanding that any such Note is converted in whole or in part
before the mailing of the notice of redemption. Upon any redemption of less than
all the Notes, the Company and the Trustee may treat as outstanding any Notes
surrendered for conversion during the period 15 days next preceding the mailing
of a notice of redemption and need not treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
Section 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption date, the
Company shall mail, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address. The notice shall
identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of the
Accreted Value with $100 Original Issue Price thereof redeemed, and that,
after the redemption date, upon surrender of such Note, a new Note in
Accreted Value and Original Issue Price equal to the unredeemed portion
thereof shall be issued in the name of the Holder thereof upon cancellation
of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price plus accrued interest, if any;
(f) that interest on Notes called for redemption ceases to accrue on
and after the redemption date; and
(g) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed.
Such notice shall also state the current Conversion Price and the date on
which the right to convert such Notes or portions thereof into Series D
Preferred Stock of the Company will expire.
24
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense; provided that the Company shall have
delivered to the Trustee, at least 45 days prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice, as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become due and payable on the redemption date at the
price set forth in the Notes. A notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date unless theretofore
converted into Series D Preferred Stock pursuant to the provisions hereof. The
Trustee or the Paying Agent shall return to the Company any money not required
for that purpose.
Section 3.06 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in Accreted Value and Original Issue Price to the unredeemed
portion of the Note surrendered.
Section 3.07 Optional Redemption.
-------------------
The Company may redeem all or any portion of the Notes, upon the terms and
at the redemption prices set forth in the Notes. Any redemption pursuant to this
Section 3.07 shall be made pursuant to the provisions of Section 3.01 through
3.06 hereof.
Section 3.08 Mandatory Redemption.
--------------------
The Company shall not be required to make mandatory redemption payments or
sinking fund payments with respect to the Notes.
ARTICLE IV.
COVENANTS
Section 4.01 Payment of Notes.
----------------
The Company shall pay the Accreted Value and any other amounts due on the
Notes, if any, at Maturity in the manner provided in the Notes. The Accreted
25
Value and other amounts due on the Notes, if any, shall be considered paid on
the date due if the Paying Agent (other than the Company or an Affiliate of the
Company) holds on that date money designated for and sufficient to pay all
Accreted Value and such other amounts payable on the Notes, if any, then due. To
the extent lawful, the Company shall pay interest (including Post-Petition
Interest in any proceeding under any Bankruptcy Law) on overdue Accreted Value
and any other amounts due on the Notes, if any, at the rate borne by the Notes,
compounded annually.
Section 4.02 Reports.
-------
Whether or not required by the rules and regulations of the SEC, so long as
any Notes are outstanding, the Company shall file with the SEC and furnish to
the Trustee and to the Holders of Notes, all quarterly and annual financial
information required to be contained in a filing with the SEC on Forms 10-Q and
10-K, including a "Management's Discussion and Analysis of Results of Operations
and Financial Condition" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants, in each case,
as required by the rules and regulations of the SEC as in effect on the Issuance
Date.
Section 4.03 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 90 days after the end of
each fiscal year of the Company, an Officers' Certificate stating that a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under, and complied with the covenants and conditions
contained in, this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his knowledge the Company has
kept, observed, performed and fulfilled each and every covenant, and complied
with the covenants and conditions contained in this Indenture and is not in
default in the performance or observance of any of the terms, provisions and
conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he may have
knowledge) and that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of the aggregate
Accreted Value on the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall be either the
Company's principal executive officer, principal financial officer or principal
accounting officer.
The Company will, so long as any of the Notes are outstanding, deliver to
the Trustee, forthwith upon becoming aware of any Default or Event of Default,
an Officers' Certificate specifying such Default or Event of Default.
26
Section 4.04 Stay, Extension and Usury Laws.
------------------------------
The Company 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, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
Section 4.05 Corporate Existence.
-------------------
Subject to Article VI hereof, to the extent permitted by law, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or other
existence of each subsidiary of the Company in accordance with the respective
organizational documents of each subsidiary and the rights (charter and
statutory), licenses and franchises of the Company; provided, however, that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any subsidiary, if the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its subsidiaries taken as a whole.
Section 4.06 Taxes.
-----
The Company shall, and shall cause each of its subsidiaries to, pay prior
to delinquency all material taxes, assessments and governmental levies, except
as contested in good faith and by appropriate proceedings.
Section 4.07 Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require the Company to repurchase all or any part of such
Holder's Notes (with Accreted Value with $100 of Original Issue Price or
integral multiples thereof), pursuant to an offer to all Holders of the Notes to
purchase Notes (the "PURCHASE OFFER") at the purchase prices set forth in the
Notes plus accrued and unpaid interest to the date of purchase (the "CHANGE OF
CONTROL PAYMENT").
(b) The Purchase Offer shall remain open for a period specified by the
Company which shall be no less than 30 calendar days and no more than 40
calendar days following its commencement (the "COMMENCEMENT DATE") (as
determined in accordance with this Section 4.07 hereof), except to the extent
that a longer period is required by applicable law (the "TENDER PERIOD"). Upon
the expiration of the Tender Period (the "PURCHASE DATE"), the Company shall
irrevocably deposit with the Paying Agent an amount in immediately available
funds sufficient to pay the aggregate Change of Control Payment for all the
27
Notes required to be purchased pursuant to this Section 4.07 (the "OFFER
AMOUNT"), to be held for payment in accordance with the terms of this Section
4.07.
(c) The Company shall provide the Trustee with notice of the Purchase Offer
at least 10 days before the Commencement Date.
(d) Within 40 days following any Change of Control, the Company or the
Trustee (at the expense of the Company) shall send, by first class mail, a
notice to each of the Holders, which shall govern the terms of the Purchase
Offer and shall state:
(i) that the Purchase Offer is being made pursuant to which all Notes
validly tendered will be accepted for payment and the length of time the
Purchase Offer will remain open;
(ii) the purchase price (as determined in accordance with Section
4.07(a) hereof) and the Purchase Date, and that all Notes tendered will be
accepted for payment;
(iii) that any Note or portion thereof not tendered or accepted for
payment will continue to accrue and accrete interest;
(iv) that, unless the Company defaults in the payment of the purchase
price, any Note or portion thereof accepted for payment pursuant to the
Purchase Offer will cease to accrue or accrete interest after the Purchase
Date;
(v) that Holders electing to have a Note or portion thereof purchased
pursuant to any Purchase Offer will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding
the Purchase Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Purchase Date, or such longer period as may be
required by law, a letter or a telegram, telex or facsimile transmission
(receipt of which is confirmed and promptly followed by a letter) setting
forth the name of the Holder, the Accreted Value of the Note or portion
thereof the Holder delivered for purchase and a statement that such Holder
is withdrawing his election to have the Note or portion thereof purchased;
and
(vii) that Holders whose Notes were purchased only in part will be
issued new Notes equal in Accreted Value to the unpurchased portion of the
Notes surrendered.
(e) On the Purchase Date, the Company shall, to the extent lawful and
subject to Article VI hereof, (i) accept for payment the Notes or portions
thereof properly tendered pursuant to the Purchase Offer, (ii) deliver or cause
the depositary or Paying Agent to deliver to the Trustee Notes so accepted and
(iii) deliver to the Trustee an Officers' Certificate stating such Notes or
portions thereof have been accepted for payment by the Company in accordance
28
with the terms of this Section 4.07. The Paying Agent shall promptly (but in any
case not later than ten (10) calendar days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Trustee shall promptly authenticate and mail or deliver to such Holders a new
Note equal in Accreted Value to any unpurchased portion of the Note surrendered.
Any Notes not so accepted shall be promptly mailed or delivered by or on behalf
of the Company to the Holder thereof.
(f) The Purchase Offer shall be made by the Company in compliance with all
applicable provisions of the Exchange Act, and all applicable tender offer rules
promulgated thereunder, and shall include all instructions and materials
necessary to enable such Holders to tender their Notes.
(g) If and to the extent that a purchase of Notes required by this Section
4.07 is prohibited under the Senior Indenture, then notwithstanding any other
provision of this Section 4.07, such purchase shall not occur and be deferred
until the first date on which such purchase shall be permitted to be made under
the terms of the Senior Indenture. Any Note that is not purchased on a scheduled
Purchase Date as otherwise contemplated by this Section 4.07 shall continue to
be outstanding and shall accrue interest until such Note is purchased.
(h) The Company shall not be required to make a Purchase Offer if a third
party makes the Purchase Offer in the manner and at the times prescribed by, and
otherwise in compliance with the requirements set forth in, this Section 4.07
and purchases all Notes validly tendered and not withdrawn under such Purchase
Offer.
Section 4.08 Compliance with Laws.
--------------------
The Company shall, and shall cause each of its Subsidiaries to, comply in
all respects with all laws, rules, regulations and governmental orders (whether
Federal, state or local) applicable to it and the operation of its businesses
whether now in effect or hereafter enacted if noncompliance with any such law,
rule, regulation or governmental order, either individually or in the aggregate,
would have a material adverse effect on (i) the business, assets, liabilities,
properties, operations, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole, or (ii) the ability of the
Company to perform its obligations in accordance with the terms hereof or of the
Notes.
29
ARTICLE V.
CONVERSION
Section 5.01 Conversion Privilege.
--------------------
A Holder of a Note may convert it into fully paid and nonassessable shares
of Series D Preferred Stock at any time following the Issuance Date and prior to
Maturity at the Conversion Price then in effect. The number of shares of Series
D Preferred Stock issuable upon conversion of a Note (the "CONVERSION SHARES")
is determined by dividing (i) the Accreted Value of such Note on the Conversion
Date, plus any accrued and unpaid interest thereon as of such date, by (ii) the
Conversion Price in effect on the Conversion Date (the "CONVERSION PRICE").
The initial Conversion Price is stated in paragraph 9 of the Note and is
subject to adjustment as provided in this Article V.
A Holder may convert a portion of the Accreted Value of a Note in effect on
the Conversion Date, so long as such portion has a $100 Original Issue Price or
any integral multiple thereof. Provisions of this Indenture that apply to
conversion of the entire Accreted Value of a Note also apply to conversion of
such portion of it.
Section 5.02 Conversion Procedure.
--------------------
To convert a Note, a Holder must satisfy the requirements in paragraph 9 of
the Notes. The date on which the Holder satisfies all of those requirements is
the conversion date (the "CONVERSION DATE"). As soon as practicable after the
Conversion Date, the Company shall deliver to the Holder through the Conversion
Agent a certificate for the number of whole shares of Series D Preferred Stock
(including fractional shares) issuable upon the conversion. The Person in whose
name the certificate is registered shall become the stockholder of record on the
Conversion Date and, as of such date, such Person's rights as a Holder shall
cease; provided, however, that no surrender of a Note on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the Person entitled to receive the shares of Series D Preferred Stock upon such
conversion as the stockholder of record of such shares of Series D Preferred
Stock on such date, but such surrender shall be effective to constitute the
Person entitled to receive such shares of Series D Preferred Stock as the
stockholder of record thereof for all purposes at the close of business on the
next succeeding day on which such stock transfer books are open; provided
further, however, that such conversion shall be at the Conversion Price in
effect on the date that such Note shall have been surrendered for conversion, as
if the stock transfer books of the Company had not been closed.
If a Holder converts more than one Note at the same time, the number of
whole shares of Series D Preferred Stock issuable upon the conversion shall be
based on the total Accreted Value of Notes converted.
30
Upon surrender of a Note that is converted in part, the Trustee shall
authenticate for the Holder a new Note equal in Accreted Value to the
unconverted portion of the Note surrendered.
Section 5.03 No Impairment of Conversion Privilege.
-------------------------------------
The Company shall not, nor permit any of its Subsidiaries to, take any
action or enter into or amend any transaction, contract, agreement or
understanding that impairs the rights of Holders to convert their Notes in
accordance with the provisions of the Notes and this Article V.
Section 5.04 Taxes on Conversion.
-------------------
The issuance of certificates for shares of Series D Preferred Stock upon
the conversion of any Note shall be made without charge to the converting Holder
for such certificates or for any tax in respect of the issuance of such
certificates, and such certificates shall be issued in the respective names of,
or in such names as may be directed by, the Holder or Holders of the converted
Note; provided, however, that in the event that certificates for shares of
Series D Preferred Stock are to be issued in a name other than the name of the
holder of the Note converted, such Note, when surrendered for conversion, shall
be accompanied by an instrument of transfer, in form reasonably satisfactory to
the Company, duly executed by the registered holder thereof or his duly
authorized attorney; and provided further, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the holder of the converted Note, and the Company shall not be
required to issue or deliver such certificates unless or until the Person or
Persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid or is not applicable.
Section 5.05 Company to Provide Stock.
------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued preferred stock, solely
for the purpose of issuance upon conversion of Notes as herein provided, a
sufficient number of shares of Series D Preferred Stock to permit the conversion
of all outstanding Notes for shares of Series D Preferred Stock. All shares of
Series D Preferred Stock which may be issued upon conversion of the Notes shall
be duly authorized, validly issued, fully paid and nonassessable when so issued.
Shares of Series D Preferred Stock issuable upon conversion of a Restricted Note
shall bear such restrictive legends as the Company shall provide in accordance
with applicable law. If shares of Series D Preferred Stock are to be issued upon
conversion of a Restricted Note and they are to be registered in a name other
than that of the holder of such Restricted Note, then the Person in whose name
such shares of Series D Preferred Stock are to be registered must deliver to the
Trustee a certificate reasonably satisfactory to the Company and signed by such
Person as to compliance with the restrictions on transfer contained in such
restrictive legends.
31
Section 5.06 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustment from time to time as
follows:
(a) In case the Company shall (1) pay a dividend in shares of Series D
Preferred Stock to all holders of Series D Preferred Stock, (2) make a
distribution in shares of Series D Preferred Stock to holders of Series D
Preferred Stock, (3) subdivide its outstanding shares of Series D Preferred
Stock into a greater number of shares of Series D Preferred Stock or (4)
combine its outstanding shares of Series D Preferred Stock into a smaller
number of shares of Series D Preferred Stock, the Conversion Price in
effect immediately prior to such action shall be adjusted so that the
holder of any Note thereafter surrendered for conversion shall be entitled
to receive the number of shares of Series D Preferred Stock which he would
have owned immediately following such action had such Notes been converted
immediately prior thereto. Any adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date in the case of
a dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(b) In case the Company shall issue Series D Equivalents to all or
substantially all holders of Series D Preferred Stock or to any other
Person (other than the Holders) entitling such Person or Persons to
subscribe for, purchase or otherwise acquire shares of Series D Preferred
Stock (or securities in any manner representing the right to acquire Series
D Preferred Stock) at a price per share that is less than the then Current
Market Price per share of Series D Preferred Stock (as determined in
accordance with subsection (f) below) at the record date for the
determination of shareholders entitled to receive such Series D Equivalents
on the date of issuance thereof or, with respect to issuances to Persons
other than shareholders, on the issue date, as applicable, the Conversion
Price in effect immediately prior thereto shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion Price
in effect immediately prior to such record date or issue date, as
applicable, by a fraction of which the numerator shall be the number of
shares of Series D Preferred Stock outstanding on such record date or issue
date, as applicable, plus the number of shares which the aggregate offering
price of the total number of shares of Series D Preferred Stock so offered
(or the aggregate conversion price of the convertible securities so
offered) would purchase at such Current Market Price (as defined in
subsection (f) below), and of which the denominator shall be the number of
shares of Series D Preferred Stock outstanding on such record date or issue
date, as applicable, plus the number of additional shares of Series D
Preferred Stock offered (or into which the convertible securities so
offered are convertible). Such adjustment shall be made successively
whenever any Series D Equivalents are issued, and shall become effective
immediately after such record date or such issue date, as applicable. If at
the end of the period during which such Series D Equivalents are
exercisable not all such Series D Equivalents shall have been exercised,
the adjusted Conversion Price shall be readjusted to what it would have
been based upon the number of additional shares of Series D Preferred Stock
actually issued (or the number of shares of Series D Preferred Stock
issuable upon conversion of convertible securities actually issued).
32
(c) In case the Company shall distribute to all or substantially all
holders of Series D Preferred Stock any shares of capital stock of the
Company other than Series D Preferred Stock, evidences of indebtedness or
other non-cash assets (including securities of any Person other than the
Company), or shall distribute to all or substantially all holders of Series
D Preferred Stock rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in subsection (b) above), then
in each such case the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction of
which the numerator shall be the Current Market Price per share (as defined
in subsection (f) below) of the Series D Preferred Stock on the record date
mentioned below less the fair market value on such record date (as agreed
to by the Company and the Majority Holders (or, if not so agreed, as
determined in a manner similar to that used to determine Current Market
Price as provided in the last sentence of subsection (f) below)) of the
portion of the capital stock or assets or evidences of indebtedness so
distributed or of such rights or warrants applicable to one share of Series
D Preferred Stock (determined on the basis of the number of shares of
Series D Preferred Stock outstanding on the record date), and of which the
denominator shall be the Current Market Price per share (determined as
provided in subsection (f) below) of the Series D Preferred Stock on such
record date. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution.
Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than those referred to in subsection
(b) above) ("RIGHTS") pro rata to holders of Series D Preferred Stock, the
Company may, at its option, in lieu of making any adjustment pursuant to
this Section 5.06, make proper provision so that each Holder who converts
her/ his/ its Note (or any portion thereof with Accreted Value with an
Original Issue Price of $100 or integral multiples thereof) after the
record date for such distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such conversion, in
addition to the shares of Conversion Stock issuable upon such conversion, a
number of Rights to be determined as follows: (i) if such conversion occurs
on or prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the "DISTRIBUTION DATE"), the
same number of Rights to which a holder of a number of shares of Series D
Preferred Stock equal to the number of Conversion Shares is entitled at the
time of such conversion in accordance with the terms and provisions of and
applicable to the Rights and (ii) if such conversion occurs after the
Distribution Date, the same number of Rights to which a holder of the
number of shares of Series D Preferred Stock into which the Accreted Value
of the Note so converted was convertible immediately prior to the
Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at any time
distribute to all holders of Common Stock and, if any shares thereof are
outstanding, Series D Preferred Stock cash (including any distributions of
cash out of current or retained earnings of the Company) in an aggregate
amount that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of Common Stock and, if any shares thereof are
outstanding, Series D Preferred Stock made in cash plus (y) all Excess
Payments in respect of Common Stock and, if any shares thereof are
33
outstanding, Series D Preferred Stock, in each case made within the 12
months preceding the date fixed for determining the stockholders entitled
to such distribution (the "DISTRIBUTION RECORD DATE") and in respect of
which no Conversion Price adjustment pursuant to paragraphs (c) or (e) of
this Section 5.06 or this subsection (d) has been made, exceeds five
percent (5%) of the product of the Current Market Price per share
(determined as provided in subsection (f) below) of the Common Stock on the
Distribution Record Date times the sum of (i) the number of shares of
Common Stock and (ii) if any shares of Series D Preferred Stock are
outstanding, the number of Common Stock equivalents represented by such
shares of Series D Preferred Stock, in each case outstanding on the
Distribution Record Date (excluding shares held in the treasury of the
Company), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying such Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this paragraph (d) by a fraction of which the numerator
shall be the Current Market Price per share (determined as provided in
subsection (f) below) of the Common Stock on the Distribution Record Date
less the amount of such cash and other consideration (including any Excess
Payments) so distributed applicable to one share (based on the pro rata
portion of the aggregate amount of such cash and other consideration
(including any Excess Payments) paid in respect of the Common Stock,
divided by the shares of Common Stock outstanding on the Distribution
Record Date) of Common Stock and the denominator shall be such Current
Market Price per share (determined as provided in subsection (f) below) of
the Common Stock on the Distribution Record Date, such reduction to become
effective immediately prior to the opening of business on the day following
the Distribution Record Date.
(e) In case a tender offer or other negotiated transaction made by the
Company or any Subsidiary for all or any portion of the Common Stock and,
if any shares thereof are outstanding, the Series D Preferred Stock shall
be consummated, if an Excess Payment is made in respect of such tender
offer or other negotiated transaction and the amount of such Excess
Payment, together with the sum of (x) the aggregate amount of all Excess
Payments in respect of Common Stock and, if any shares thereof are
outstanding, Series D Preferred Stock plus (y) the aggregate amount of all
distributions to all holders of the Common Stock and, if any shares thereof
are outstanding, Series D Preferred Stock made in cash (specifically
including distributions of cash out of retained earnings), in each case
made within the 12 months preceding the date of payment of such current
negotiated transaction consideration or expiration of such current tender
offer, as the case may be (the "REPURCHASE DATE"), and as to which no
adjustment pursuant to paragraph (c) or paragraph (d) of this Section 5.06
or this paragraph (e) has been made, exceeds five percent (5%) of the
product of the Current Market Price per share (determined as provided in
subsection (f) below) of the Common Stock on the Repurchase Date times the
sum of (i) the number of shares of Common Stock and (ii) if any shares of
Series D Preferred Stock are outstanding, the number of Common Stock
equivalents represented by such shares of Series D Preferred Stock, in each
case outstanding (including any tendered shares but excluding any shares
held in the treasury of the Company) on the Repurchase Date, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to the
34
effectiveness of the Conversion Price reduction contemplated by this
paragraph (e) by a fraction of which the numerator shall be the Current
Market Price per share (determined as provided in subsection (f) below) of
the Common Stock on the Repurchase Date less the amount of such Excess
Payments and such cash distributions, if any, applicable to one share
(based on the pro rata portion of the aggregate amount of such Excess
Payments and such cash distributions paid in respect of the Common Stock,
divided by the shares of Common Stock outstanding on the Repurchase Date)
of Common Stock and the denominator shall be such Current Market Price per
share (determined as provided in subsection (f) below) of the Common Stock
on the Repurchase Date, such reduction to become effective immediately
prior to the opening of business on the day following the Repurchase Date.
(f) For the purpose of any computation under subsections (b), (c), (d)
and (e) of this Section 5.06, the current market price (the "CURRENT MARKET
PRICE") per share of Common Stock or Series D Preferred Stock (the
"APPLICABLE STOCK") on any date shall be deemed to be equal to the average
of the daily closing prices of the Applicable Stock on the NYSE or, if not
then listed or traded on the NYSE, such other national securities exchange
or the NASDAQ National Market if the Applicable Stock is then listed or
traded thereon, for the 10 trading days immediately prior to the record
date or date of issuance with respect to distributions, issuances or other
events requiring such computation under subsection (b), (c), (d) or (e)
above; provided that in the case of an underwritten public offering of
Series D Equivalents which are currently traded, the Current Market Price
shall be the closing price of the Series D Preferred Stock on the issuance
date, less an allowance for a customary discount to the current market
trading price which is reasonably required to effect such offering. The
closing price for each day shall be the closing price on the NYSE or the
last reported sales price or, if the shares of Applicable Stock are not
listed or admitted to trading on the NYSE, on the principal national
securities exchange on which the shares of the Applicable Stock are listed
or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, the closing sales price of the Applicable
Stock as quoted on the NASDAQ National Market. Notwithstanding the
provisions of this subsection (f), if (i) the Applicable Stock is listed or
traded on the NYSE or other national securities exchange or quoted on the
NASDAQ National Market, but either (A) the prices described in this
subsection (f) are not available or (B) the Majority Holders determine that
such prices do not adequately reflect the fair value of the Applicable
Stock due to limited float or trading volume, or (ii) the Applicable Stock
is not listed on the NYSE or other national securities exchange or quoted
on the NASDAQ National Market, the Current Market Price shall be the fair
value of the Applicable Stock as agreed by the Company and the Majority
Holders or if the Company and Majority Holders are unable to agree, the
fair value of the Applicable Stock as determined by a nationally recognized
investment bank selected jointly by the Company and the Majority Holders
(or if they are unable to agree on such investment bank, as determined by a
nationally recognized investment bank selected by lot by the Board of
Directors from a total of four such investment banks (two of which shall be
selected by the Company and two of which shall be selected by the Majority
Holders)).
35
(g) In any case in which this Section 5.06 shall require that an
adjustment be made following a record date the Company may elect to defer
(but only until five Business Days following the mailing by the Company to
the holders of the notice of adjustment described in Section 5.10 below)
issuing to the Holder of a Note converted after such record date the
Conversion Shares and other capital stock of the Company issuable upon such
conversion over and above the Conversion Shares and other capital stock of
the Company issuable upon such conversion only on the basis of the
Conversion Price prior to adjustment; and, in lieu of the shares the
issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such shares.
(h) The shares of Series D Preferred Stock shall be subject to the
antidilution adjustments set forth in their certificate of designation from
the date hereof, regardless of whether there are any shares of Series D
Preferred Stock outstanding.
(i) The fees and expenses of any investment bank retained to make any
determination under this Indenture shall be paid by the Company.
Section 5.07 No Adjustment.
-------------
No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 5.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article V shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in Section 5.06
above if all Holders are entitled to participate in the transaction on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Series D
Preferred Stock participate in the transaction. The Company shall give 30 days
prior notice to any transfer agent and to the Holders of any such determination.
No adjustment need be made for a change in the par value or a change to no
par value of the Series D Preferred Stock.
To the extent that the Notes become convertible into the right to receive
cash, no adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
Section 5.08 Other Adjustments.
-----------------
If any distribution in respect of which an adjustment to the Conversion
Price is required to be made as of the record date therefor is not thereafter
made or paid by the Company for any reason, the Conversion Price shall be
36
readjusted to the Conversion Price which would then be in effect if such record
date had not been fixed or such effective date had not occurred.
Section 5.09 Adjustments for Tax Purposes.
----------------------------
The Company may make such reductions in the Conversion Price, in addition
to those required by Section 5.06 hereof, as it determines to be advisable in
order that any stock dividend, subdivision of shares, distribution or rights to
purchase stock or securities or distribution of securities convertible into or
exchangeable for stock made by the Company to its stockholders will not be
taxable to the recipients thereof.
Section 5.10 Notice of Adjustment.
--------------------
Whenever the Conversion Price is adjusted, the Company shall promptly mail
to Holders at the addresses appearing on the Registrar's books a notice of the
adjustment and file with the Trustee an Officers' Certificate briefly stating
the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment.
Section 5.11 Notice of Certain Transactions.
------------------------------
In the event that:
(1) the Company takes any action which would require an adjustment in the
Conversion Price;
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 5.12; or
(3) there is a dissolution or liquidation of the Company; a Holder of a
Note may wish to convert such Note into shares of Series D Preferred
Stock prior to the record date for or the effective date of the
transaction. Therefore, the Company shall mail to Holders at the
addresses appearing on the Registrar's books and the Trustee a notice
stating the proposed record or effective date, as the case may be. The
Company shall mail the notice at least 10 days before such date;
however, failure to mail such notice or any defect therein shall not
affect the validity of any transaction referred to in clause (1), (2)
or (3) of this Section 5.11.
Section 5.12 Effect of Reclassifications, Consolidations, Mergers or Sales
on Conversion Privilege.
--------------------------------------------------------------
If any of the following shall occur, namely: (a) any reclassification or
change of Conversion Shares issuable upon conversion of the Notes (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination, or any other change
for which an adjustment is provided in Section 5.06 above); (b) any
consolidation or merger to which the Company is a party other than a merger in
which the Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Series D
Preferred Stock; or (c) any sale or conveyance of all or substantially all of
the assets of the Company as an entirety, then the Company, or such successor or
37
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale or conveyance,
execute and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee providing that the holder of each Note then
outstanding shall have the right to convert such Note into the kind and amount
of shares of stock and other securities and property (including cash) receivable
upon such reclassification, change, consolidation, merger, sale or conveyance by
a holder of the number of shares of Conversion Shares deliverable upon
conversion of such Notes immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments of the Conversion Price which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Price
provided for in this Article V. If, in the case of any such consolidation,
merger, sale or conveyance, the stock or other securities and property
(including cash) receivable thereupon by a holder of Series D Preferred Stock
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the holders of the Notes as
the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 5.12 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental indenture pursuant to
this Section 5.12, the Company shall promptly file with the Trustee an Officers'
Certificate briefly stating the reasons therefor, the kind or amount of shares
of stock or securities or property (including cash) receivable by holders of the
Notes upon the conversion of their Notes after any such reclassification,
change, consolidation, merger, sale or conveyance and any adjustment to be made
with respect thereto.
Section 5.13 Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this Article
IV should be made, how it should be made or what such adjustment should be, but
may accept as conclusive evidence of the correctness of any such adjustment, and
shall be protected in relying upon the Officers' Certificate with respect
thereto which the Company is obligated to file with the Trustee pursuant to
Section 5.10 hereof. The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Notes, and the
Trustee shall not be responsible for the Company's failure to comply with any
provisions of this Article V.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 5.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
38
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.12 hereof.
ARTICLE VI.
SUBORDINATION
Section 6.01 Agreement to Subordinate.
------------------------
The Company, for itself and its successors, and each Holder of Notes by
accepting a Note agrees, that the Subordinated Obligations are subordinated in
right of payment, to the extent and in the manner provided in this Article, to
the prior payment in full in cash of all Obligations with respect to Senior Debt
of the Company (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt. It is the intention of the Company and each
Holder of Notes that the provisions of this Article VI comply with the
requirements set forth in clause (x) of Section 4.09 of the Senior Indenture and
that the Subordinated Obligations accordingly be subordinated in right of
payment to the Senior Notes to the same extent as the Senior Notes are
subordinated in right of payment to "Senior Debt" (as defined in the Senior
Indenture) of the Company pursuant to Article 10 of the Senior Indenture.
Section 6.02 Liquidation; Dissolution, Bankruptcy.
------------------------------------
Upon any distribution of cash, securities or other property to creditors of
the Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, in an assignment for the benefit of creditors or any
marshalling of the Company's assets and liabilities;
(a) holders of Senior Debt of the Company shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior
Debt before Holders of the Notes shall be entitled to receive any payment
with respect to the Notes (except that Holders may receive securities that
are subordinated to at least the same extent as the Notes to (i) Senior
Debt of the Company and (ii) any securities issued in exchange for Senior
Debt of the Company); and
(b) until all Obligations with respect to Senior Debt of the Company
(as provided in subsection (a) above) are paid in full in cash, any
distribution to which Holders of Notes would be entitled but for this
Article shall be made to holders of such Senior Debt (except that Holders
may receive securities that are subordinated to at least the same extent as
the Notes to (i) Senior Debt of the Company and (ii) any securities issued
in exchange for Senior Debt of the Company), as their interests may appear.
39
Section 6.03 Default on Senior Debt; No Stock Collateral.
-------------------------------------------
The Company may not make any payment or distribution to the Trustee or any
Holder in respect of Obligations with respect to the Notes and may not acquire
from the Trustee or any Holder any Notes for cash or property (other than
securities that are subordinated to at least the same extent as the Notes to (i)
Senior Debt of the Company and (ii) any securities issued in exchange for Senior
Debt of the Company) until all principal and other Obligations with respect to
such Senior Debt have been paid in full in cash if:
(1) a default in the payment of the principal of or premium or interest on
Senior Debt of the Company occurs and in continuing; or
(2) a default, other than a payment default, under the agreement,
indenture, or other document governing Designated Senior Debt occurs
and is continuing that permits holders of the Designated Senior Debt
as to which such default relates to accelerate its maturity and the
Trustee receives a notice of such default (a "PAYMENT BLOCKAGE
NOTICE") from a Senior Agent. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless until at least 360 days
shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to
the Trustee shall be, or made, the basis for a subsequent Payment
Blockage Notice.
The Company may and shall resume payments on and distributions in respect
of the Notes and it may acquire them upon:
(A) in the case of a default referred to in Section 6.03(1) hereof, the
date upon which such default is cured or waived, or
(B) in the case of a default referred to in Section 6.03(2) hereof, the
earlier of the date upon which the default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of such Senior Debt has been
accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
The Company agrees that it will not, directly or indirectly, transfer or
pledge or grant any security interests in any Stock Collateral for any of the
Subordinated Obligations, and the Trustee and the Holders agree that neither the
Trustee nor any Holder will demand or accept any such Stock Collateral, and
should any transfer or pledge of or security interest in any Stock Collateral at
any time be made to or received by the Trustee or any such Holder, such Stock
Collateral shall be held for the benefit of the holders of Senior Debt of the
Company and, upon request, delivered and transferred to the Senior Agent for the
benefit of the holders of such Senior Debt.
40
Section 6.04 Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of Default, the
Company shall promptly notify holders of Senior Debt of the Company of the
acceleration.
Section 6.05 When Distribution Must Be Paid Over.
-----------------------------------
In the event that the Trustee or any Holder of Notes receives any payment
of any Obligations with respect to the Notes at a time when a Responsible
Officer of the Trustee or such Holder, as applicable, has actual knowledge that
such payment is prohibited by Section 6.03 hereof, such payment shall be held by
the Trustee or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to the holders of Senior
Debt of the Company as their interests may appear under the indenture or other
agreement (if any) pursuant to which such Senior Debt may have been issued, as
their respective interests may appear as set forth in a writing provided to the
Trustee and consented to by all Representatives of the holders of Senior Debt of
the Company, for application to the payment of all Obligations with respect to
such Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving affect to any
concurrent payment or distribution to or for the holders of such Senior Debt.
With respect to the holders of Senior Debt of the Company, the trustee
undertakes to perform such obligations on the part of the Trustee as are
specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of the Company, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders of Notes of the Company or any other Person money or assets to
which any holders of such Senior Debt shall be entitled by virtue of this
Article VI, except if such payment is made at a time when a Responsible Officer
has actual knowledge that the terms of this Article VI prohibit such payment.
Section 6.06 Notice.
------
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Debt of the Company as provided in this Article VI.
Section 6.07 Subrogation.
-----------
After all Senior Debt of the Company is paid in full in cash and until the
Notes are paid in full, Holders of Notes shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of such Senior Debt to receive distributions applicable to such Senior
41
Debt to the extent that distributions otherwise payable to the Holders have been
applied to the payment of such Senior Debt. A distribution made under this
Article VI to holders of Senior Debt of the Company that otherwise would have
been made to Holders of Notes is not, as between the Company and Holders of
Notes, a payment by the Company on the Notes.
Section 6.08 Relative Rights.
---------------
This Article VI defines the relative rights of Holders of Notes and holders
of Senior Debt of the Company. Nothing in this Indenture shall:
(i) impair, as between the Company and Holders of Notes, the obligation of
the Company, which is absolute and unconditional, to pay Accreted
Value of and premium and interest on the Notes in accordance with
their terms;
(ii) affect the relative rights of Holders of Notes and creditors of the
Company other than their rights in relation to holders of such Senior
Debt; or
(iii)prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of owners of such Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article VI to pay Accreted Value of or
premium or interest on a Note on the due date, the failure is still a Default or
Event of Default.
Section 6.09 Subordination May Not Be Impaired by Company.
--------------------------------------------
(a) No right of any holder of Senior Debt of the Company to enforce
the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or any Holder or the
failure of the Company or any Holder to comply with this Indenture.
(b) Without in any way limiting Section 6.09(a), the holders of any
Senior Debt of the Company may, at any time and from time to time, without
the consent of or notice to any Holders, without incurring any liabilities
to any Holder and without impairing or releasing the subordination and
other benefits provided in this Indenture or the Holders' obligations to
the holders of such Senior Debt, even if any Holder's right of
reimbursement or subrogation or other right or remedy is affected, impaired
or extinguished thereby, but subject to the proviso contained in the first
sentence, and to the second sentence, of the definition of "Senior Debt,"
do any one or more of the following: (i) amend, renew, exchange, extend,
modify, increase or supplement in any manner such Senior Debt or any
instrument evidencing or guaranteeing or securing such Senior Debt or any
agreement under which such Senior Debt is outstanding (including, but not
limited to, changing the manner, place or terms of payment or changing or
extending the time of payment of, or renewing, exchanging, amending,
increasing, releasing, terminating or altering, (A) the terms of such
Senior Debt, (B) any security for, or any guarantee of, such Senior Debt,
(C) any liability of any obligor on such Senior Debt (including any
guarantor) or any liability incurred in respect of such Senior Debt); (ii)
42
sell, exchange, release, surrender, realize upon, enforce or otherwise deal
with in any manner and in any order any property pledged, mortgaged or
otherwise securing such Senior Debt or any liability of any obligor
thereon, to such holder, or any liability incurred in respect thereof;
(iii) settle or compromise any such Senior Debt or any other liability of
any obligor of such Senior Debt to such holder or any security therefor or
any liability incurred in respect thereof and apply any sums by whomsoever
paid and however realized to any liability (including, without limitation,
payment of any Senior Debt) in any manner or order; and (iv) release,
terminate or otherwise cancel, or fail to take or to record or otherwise
perfect, for any reason or for no reason, any lien or security interest
securing such Senior Debt by whomsoever granted, exercise or delay in or
refrain from exercising any right or remedy against any obligor or any
guarantor or any other Person, elect any remedy and otherwise deal freely
with any obligor and any security for such Senior Debt or any liability of
any obligor to the holders of such Senior Debt or any liability incurred in
respect to such Senior Debt.
Section 6.10 Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Company, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of the Company referred to in
this Article VI, the Trustee and the Holders of Notes shall be entitled, to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article VI.
Section 6.11 Rights of Trustee and Paying Agent.
----------------------------------
Neither the Trustee nor any Paying Agent shall at any time be charged with
the knowledge of the existence of any facts that would prohibit the making of
any payment to or by the Trustee or Paying Agent under this Article VI, unless
and until the Trustee or Paying Agent shall have received written notice thereof
from the Company, the Senior Agent, one or more holders of Senior Debt of the
Company or a Representative of any holders of Senior Debt of the Company; and,
prior to the receipt of any such written notice, the Trustee or Paying Agent
shall be entitled to assume conclusively that no such facts exist. The Trustee
shall be entitled to rely on the delivery to it of written notice by a Person
representing itself to be a holder of Senior Debt (or a Representative thereof)
to establish that such notice has been given. In the event that the Trustee or
Paying Agent determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article VI, the Trustee or Paying
43
Agent may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee or Paying Agent as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article VI, and if such evidence is not furnished, the Trustee
or Paying Agent may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. Only the
Company, a Representative or a holder of Senior Debt of the Company that has no
Representative may give the notice. Nothing in this Article VI shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 9.07 hereof.
The Trustee in its individual or any other capacity may hold Senior Debt
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights.
Section 6.12 Authorization to Effect Subordination.
-------------------------------------
Each Holder of Notes by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article VI, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
8.09 hereof at least 30 days before the expiration of the time to file such
claim, a Senior Agent is hereby authorized to file an appropriate claim for and
on behalf of the Holders of the Notes.
Section 6.13 Payment.
-------
For all purposes of this Article VI, a "payment or distribution on account
of Subordinated Obligations" shall include, without limitation, any direct or
indirect payment or distribution on account of the purchase, prepayment,
redemption, retirement, defeasance or acquisition of any Note, any recovery by
the exercise of any right of set-off, any direct or indirect payment of
principal, premium or interest with respect to or in connection with any
mandatory or optional redemption or purchase provisions, any direct or indirect
payment or distribution payable or distributable by reason of any other
Indebtedness or Obligation being subordinated or any Subordinated Obligations,
and any direct or indirect payment or recovery on any claim relating to or
arising out of this Indenture, any Note or the issuance of the Notes.
Section 6.14 No Claims Against Subsidiaries.
------------------------------
The Company and the Holders acknowledge and agree as follows: (a) the Notes
are an obligation of the Company only, and the Holders have and will have no
claim, right or demand against any Subsidiary of the Company or any assets or
properties of any Subsidiary of the Company on or in respect of the Notes; (b)
the Company is, and is capitalized as, a separate legal entity such that any
44
claim, right or demand by the Holders with respect to the assets and properties
of any Subsidiary of the Company would be solely as a creditor of a direct or
indirect shareholder of such Subsidiary, and that such arrangement has been
relied upon by and is for the benefit of holders of Senior Debt of the Company
or any such guarantor; (c) the Company's direct and indirect Subsidiaries have
no obligation to pay dividends to or to make investments in the Company, for the
purpose of funding payment obligations of the Company to the Holders or
otherwise; and (d) the Bank Credit Agreements and the Senior Indenture permit
Subsidiaries of the Company to pay dividends to or to make investments in the
Company only in limited amounts and under specified circumstances.
Section 6.15 Amendments.
----------
The provisions of this Article VI shall not be amended or modified without
the written consent of the holders of all Senior Debt of the Company.
ARTICLE VII.
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 7.01 Company May Consolidate, Etc. Only On Certain Terms.
---------------------------------------------------
The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the properties and assets of the
Company and its Subsidiaries on a consolidated basis to any other Person or
group of affiliated Persons, unless at the time and after giving effect thereto:
(a) either (i) the Company shall be the continuing corporation or (ii)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition all or substantially
all of the properties and assets of the Company and its Subsidiaries on a
consolidated basis (the "SURVIVING ENTITY") shall be a corporation,
partnership, limited liability company, business trust or other entity duly
organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and such Person
expressly assumes, by a supplemental indenture, executed and delivered to
the Trustee, in a form satisfactory to the Trustee, all the obligations of
the Company under the Notes and this Indenture, and this Indenture shall
remain in full force and effect;
(b) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and
45
(c) at the time of the transaction, the Company or the Surviving
Entity shall have delivered, or caused to be delivered, to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each to the effect that such
consolidation, merger, transfer, sale, assignment, conveyance, transfer,
lease or other transaction and the supplemental indenture in respect
thereof comply with this Indenture and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Paragraph (b) of this Section 7.01 shall not apply to any merger of the
Company with or into any wholly owned Subsidiary of the Company. This Section
7.01 shall not apply to the transfer or lease of all or substantially all of the
assets of the Company to any of its wholly owned Subsidiaries.
Section 7.02 Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company in accordance with Section 7.01, the successor Person
formed by such consolidation or into which the Company is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes, with
the same effect as if such successor had been named as the Company herein or in
the Notes. When a successor (other than a successor that is an Affiliate of the
Company) assumes all the Obligations of its predecessor under this Indenture or
the Notes, as the case may be, the predecessor shall be released from those
Obligations; provided that in the case of a transfer of substantially all of the
Company's assets (but not all of the assets), the predecessor shall not be
released from the payment of the aggregate Accreted Value and any other payments
due on the Notes.
ARTICLE VIII.
DEFAULTS AND REMEDIES
Section 8.01 Events of Default.
-----------------
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of the aggregate Accreted
Value of or premium on the Notes when the same becomes due and payable at
maturity, in connection with a Purchase Offer, upon declaration or
otherwise (whether or not such payment is prohibited by the provisions of
Article VI hereof);
(b) the Company defaults for 30 days in the payment when due of any
other amounts payable on any Note (whether or not such payment is
prohibited by the provisions of Article VI hereof);
46
(c) the Company fails to observe or perform for a period of 30 days
after notice any covenant or agreement contained in Sections 5.07 and 7.01
hereof (other than, in the case of Section 5.07, a failure to purchase
Notes in connection with a Purchase Offer) hereof;
(d) the Company fails to observe or perform any other covenant or
agreement contained in this Indenture or the Notes, required by it to be
performed and the Default continues for a period of 60 days after notice
from the Trustee to the Company or from the Holders of 25% in aggregate
Accreted Value of the then outstanding Notes to the Company and the Trustee
stating that such notice is a "Notice of Default";
(e) a continuing default occurs under any mortgage, indenture or
instrument under which may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Subsidiaries), other than any such Indebtedness that constitutes
Non-Recourse Real Estate Debt or Indebtedness of an Unrestricted
Subsidiary, whether such Indebtedness or guarantee now exists or is created
after the date hereof, which default:
(i) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the
grace period provided in such (a "PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to its
express maturity;
and, in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which there
has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5 million or more;
(f) the Company or any of its Subsidiaries, fails to pay final
judgments aggregating in excess of $5 million and either (i) any creditor
commences enforcement proceedings upon any such judgment or (ii) such
judgments are not paid, discharged or stayed within 60 days after their
entry;
(g) the Company or any of its Designated Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it in an
involuntary case;
(iii)consents to the appointment of a Custodian of it or for all or
substantially all of its property;
47
(iv) makes a general assignment for the benefit of its creditors; or
(v) admits in writing its inability generally to pay its debts as
they become due; and
(h) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any of its Designated
Subsidiaries in an involuntary case;
(ii) appoints a Custodian of the Company or any of its Designated
Subsidiaries or for all or substantially all of the property of
the Company or any of its Designated Subsidiaries;
(iii)orders the liquidation of the Company or any of its Designated
Subsidiaries and the order or decree remains unstayed and in
effect for 60 consecutive days.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors or the protection of creditors.
The term "CUSTODIAN" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
At any time after Oak Hill ceases to be Trustee, an Event of Default shall
not be deemed to have occurred under clause (e) or (f) of this Section 8.01
until the Trustee shall have received written notice of such Default from the
Company or any of the Holders or unless a Responsible Officer shall have
knowledge of such Event of Default.
Section 8.02 Acceleration.
------------
If an Event of Default (other than an Event of Default specified in clauses
(g) and (h) of Section 8.01 hereof) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate Accreted
Value of the then outstanding Notes by notice to the Company and the Trustee,
may declare all the Notes to be due and payable. Upon such declaration, the
aggregate Accreted Value plus accrued and unpaid interest thereon, and any other
amounts payable on the Notes shall be due and payable immediately. If an Event
of Default specified in clause (g) or (h) of Section 8.01 hereof occurs, such
amounts shall become and be immediately due and payable without any declaration
or other act on the part of the Trustee or any Holder.
If the Notes have been declared due and payable as a result of the
acceleration of Indebtedness prior to its express maturity pursuant to Section
8.01(e)(ii), such declaration shall be automatically rescinded if the
48
acceleration of such indebtedness has been rescinded or annulled within 30 days
after such acceleration in accordance with the mortgage, indenture or instrument
under which it was issued and the conditions set forth in clauses (i) and (ii)
in the next paragraph are satisfied.
Except as otherwise provided in the immediately preceding paragraph, the
Majority Holders by notice to the Trustee may rescind an acceleration and its
consequences (i) if the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) if all existing Events of
Default have been cured or waived except nonpayment of Accreted Value or
interest on the Notes that has become due solely because of the acceleration of
the Notes.
Section 8.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the aggregate Accreted Value plus accrued and unpaid
interest thereon and any other amounts payable on the Notes, if any, or to
enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
Section 8.04 Waiver of Past Defaults.
-----------------------
The Majority Holders by notice to the Trustee may on behalf of all of the
Holders of the Notes waive an existing Default or Event of Default and its
consequences except a continuing Default or Event of Default in the payment of
the aggregate Accreted Value, accrued and unpaid interest thereon, and any other
amount payable on any Note, if any. When a Default or Event of Default is
waived, it is cured and ceases; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 8.05 Control by Majority.
-------------------
The Majority Holders may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders, or would involve the Trustee in personal liability.
Section 8.06 Limitation on Suits.
-------------------
A Holder may pursue a remedy with respect to this Indenture or the Notes
only if:
49
(a) the Holder gives to the Trustee notice of a continuing Event of
Default;
(b) the Holders of at least 25% in aggregate Accreted Value of the
then outstanding Notes make a request to the Trustee to pursue
the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Majority Holders do not give the
Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Section 8.07 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of the Accreted Value, accrued and unpaid
interest thereon, and other amounts payable on the Note, if any, on or after the
respective due dates expressed in the Note, or to bring suit for the enforcement
of any such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder made pursuant to this Section 8.07.
Section 8.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 8.01(a) or (b) hereof occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of the
aggregate Accreted Value, accrued and unpaid interest thereon, remaining unpaid
on the Notes and interest on overdue Accreted Value and such further amounts as
shall be sufficient to cover the costs and, to the extent lawful, expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 8.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Holders allowed in any judicial proceedings relative to the Company, its
creditors or its property. Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
50
Section 8.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 9.07 hereof;
Second: to the holders of Senior Debt to the extent required by Article VI;
Third: to Holders for amounts due and unpaid on the Notes for the Accreted
Value, accrued and unpaid interest thereon, and other amounts payable under the
Notes 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 the Notes for the aggregate Accreted Value, accrued
and unpaid interest thereon, and other amounts, if any, respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders made pursuant to this Section 8.10.
Section 8.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 8.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
8.07 hereof, or a suit by Holders of more than 10% in aggregate Accreted Value
of the then outstanding Notes.
ARTICLE IX.
TRUSTEE
Section 9.01 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 man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i) the Trustee
need perform only those duties that are specifically set forth in this Indenture
and no others and (ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
51
Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture and to confirm the
correctness of all mathematical computations.
(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: (i) this subsection does not limit the effect of subsection (b) of this
Section 9.01; (ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts and (iii) the Trustee
shall not be liable with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant to Section 8.05
hereof.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 9.02 Rights of Trustee.
-----------------
(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 require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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.
(e) The Trustee shall not be charged with knowledge of any Event of Default
under subsection (c), (d), (e) or (f) (and subsection (a) or (b) if the Trustee
does not act as Paying Agent) of Section 8.01 unless either (i) a Responsible
Officer shall have actual knowledge thereof, or (ii) the Trustee shall have
52
received notice thereof in accordance with Section 12.02 hereof from the Company
or any Holder.
Section 9.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company or an Affiliate with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, subject to the exceptions set forth therein, the
Trustee is subject to Sections 9.10 and 9.11 hereof.
Section 9.04 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, it shall not be accountable for the Company's use of the
proceeds from the Notes, and it shall not be responsible for any statement of
the Company in the Indenture or any statement in any Note other than its
authentication or for compliance by the Company with the Registration Rights
Agreement.
Section 9.05 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders a notice of the Default
or Event of Default within 90 days after it occurs. Except in the case of a
Default or Event of Default in payment on any Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Holders.
Section 9.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after the reporting date stated in Section 12.10, the
Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA Section 313(a) if and to the extent required by such
Section 313(a). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c). A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange on which the Notes are listed. The
Company shall notify the Trustee when the Notes are listed on any stock
exchange. This Section 9.06 shall not apply so long as Oak Hill is the Trustee.
Section 9.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such disbursements and expenses
53
may include the reasonable disbursements, compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it except as set forth in the next paragraph. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees, disbursements and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be unreasonably
withheld.
The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 9.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except money or property held in trust to pay Accreted
Value and interest on particular Notes.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services after an
Event of Default specified in Section 8.01(g) or (h) hereof occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
All amounts owing to the Trustee under this Section 9.07 shall be payable
by the Company in United States dollars. This Section 9.07 shall not apply so
long as Oak Hill is the Trustee.
Section 9.08 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 9.08.
The Trustee may resign by so notifying the Company. The Majority Holders
may remove the Trustee by so notifying the Trustee and the Company. If Oak Hill
is not the Trustee, the Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section
310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
54
(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 Majority
Holders may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
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
Holders of at least 10% of the aggregate Accreted Value of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof, unless the
Trustee's duty to resign is stayed as provided in TIA Section 310(b), any Holder
who has been a bona fide Holder of a Note for at least six months may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee; provided, that the foregoing shall not apply
if the Trustee is Oak Hill.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 9.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 9.08 hereof,
the Company's obligations under Section 9.07 hereof shall continue for the
benefit of the retiring trustee with respect to expenses and liabilities
incurred by it prior to such replacement.
Section 9.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
Section 9.10 Eligibility; Disqualification.
-----------------------------
After the date on which Oak Hill shall no longer be the Trustee, (i) this
Indenture shall always have a Trustee who satisfies the requirements of TIA
Section 310(a)(1) and (5), (ii) the Trustee shall always have a combined capital
and surplus as stated in Section 12.10 hereof and (iii) the Trustee shall be
subject to TIA Section 310(b).
Section 9.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
After the date on which Oak Hill shall no longer be the Trustee, (i) the
Trustee shall be subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b), (ii) a Trustee (other than Oak Hill)
55
who has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE X.
DISCHARGE OF INDENTURE
Section 10.01 Termination of Company's Obligations.
------------------------------------
This Indenture shall cease to be of further effect (except that the
Company's obligations under Sections 9.07 and 10.02 hereof shall survive) when
all outstanding Notes theretofore authenticated and issued have been delivered
to the Trustee for cancellation and the Company has paid all sums payable
hereunder.
Section 10.02 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of Accreted Value or interest that remains
unclaimed for two years after the date upon which such payment shall have become
due; provided, however, that the Company shall have first caused notice of such
payment to the Company to be mailed to each Holder entitled thereto no less than
30 days prior to such payment. After payment to the Company, the Trustee and the
Paying Agent shall have no further liability with respect to such money and
Holders entitled to the money must look to the Company for payment as general
creditors unless any applicable abandoned property law designates another
Person.
ARTICLE XI.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.01 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 6.12 and 7.01 hereof;
(c) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
56
(d) to make any change that provides additional rights or benefits to
the Holders of the Notes;
(e) to make any change that does not adversely affect the interests
hereunder of any Holder; or
(f) to qualify the Indenture under the TIA or to comply with the
requirements of the SEC in order to maintain the qualification of
the Indenture under the TIA.
Section 11.02 With Consent of Holders.
-----------------------
Subject to Section 8.07 hereof, the Company and the Trustee may amend or
supplement this Indenture or the Notes with the written consent of the Majority
Holders. Subject to Sections 8.04 and 8.07 hereof, the Majority Holders may also
waive compliance in a particular instance by the Company with any provision of
this Indenture or the Notes. However, without the consent of each Holder
affected, an amendment, supplement or waiver under this Section 11.02 may not:
(a) reduce the percentage in aggregate Accreted Value of the then
outstanding Notes the consent of whose Holders is required for any
amendment, supplement to this Indenture or waiver of any provision of this
Indenture;
(b) change the Stated Maturity of the Accreted Value of any Note or
alter the Accreted Value thereof or any amounts payable thereon under this
Indenture, if any;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a default in the payment of the Accreted Value or any other
amounts payable on any Note, if any, or impair the right to institute suit
for the enforcement of any such payment on or after the Maturity thereof,
except a rescission of acceleration of the Notes by the Majority Holders
and a waiver of the payment default that resulted from such acceleration;
(e) make any Note payable in money other than that stated in the Note;
(f) make any change in Sections 8.04 or 8.07 hereof;
(g) impair the right to convert the Notes into Series D Preferred
Stock;
(h) modify Article V or VI in a manner adverse to the Holders of
Notes;
57
(i) except as provided by Article VII, consent to the assignment or
transfer by the Company of any of its rights and obligations under the
Indenture; and
(j) make any change in the foregoing amendment and waiver provisions
of this Article XI.
To secure a consent of the Holders under this Section 11.02, it shall not
be necessary for the Holders 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 11.02 becomes
effective, the Company shall mail to Holders a notice briefly describing the
amendment or waiver.
Section 11.03 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Notes shall be set forth in a
supplemental indenture that complies with the TIA as then in effect.
Section 11.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder or subsequent Holder may revoke the consent as to
his Note or portion of a Note if the Trustee receives the notice of revocation
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite Accreted Value of Notes have
consented 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. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
Accreted Value of Notes required hereunder for such amendment or waiver to be
effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (a) through (j) of
Section 11.02 hereof. In such case, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder that evidences the
same debt as the consenting Holder's Note.
58
Section 11.05 Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an amendment or waiver
on any Note thereafter authenticated. The Company in exchange for all Notes may
issue and the Trustee shall authenticate new Notes that reflect the amendment or
waiver.
Failure to make such notation on a Note or to issue a new Note as aforesaid
shall not affect the validity and effect of such amendment or waiver.
Section 11.06 Trustee Protected.
-----------------
The Trustee shall sign all supplemental indentures, except that the Trustee
may, but need not, sign any supplemental indenture that adversely affects its
rights.
ARTICLE XII.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
----------------------------
This Indenture is subject to the provisions of the TIA that are required to
be incorporated into this Indenture (or, prior to the registration of the Notes
pursuant to the Registration Rights Agreement, would be required to be
incorporated into this Indenture if it were qualified under the TIA), and shall,
to the extent applicable, be governed by such provisions. If any provision of
this Indenture limits, qualifies, or conflicts with another provision which is
required (or would be so required) to be incorporated in this Indenture by the
TIA, the incorporated provision shall control.
Section 12.02 Notices.
-------
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in Person or mailed by first class mail
to the other's address stated in Section 12.10 hereof. The Company or the
Trustee by notice to the other may designate additional or different addresses
for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first class mail
to his address shown on the register kept by the Registrar. Failure to mail a
notice or communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
59
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service, or by reason
of any other cause, it shall be impossible to mail any notice as required by the
Indenture, then such method of notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.
Section 12.03 Communication by Holders with other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c). This Section 12.03 shall not apply so long as Oak Hill is the Trustee.
Section 12.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate 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 complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Section 4.03)
shall include:
(a) a statement that the Person signing such certificate or rendering
such opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, such Person has
made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
60
Section 12.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by, or a meeting of,
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 12.07 Legal Holidays.
--------------
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If any other operative date for purposes of
this Indenture shall occur on a Legal Holiday then for all purposes the next
succeeding day that is not a Legal Holiday shall be such operative date.
Section 12.08 No Recourse Against Others.
--------------------------
A director, officer, employee, incorporator or shareholder of the Company,
as such, shall not have any liability for any Obligations of the Company under
the Notes or this Indenture or for any claim based on, in respect of or by
reason of such Obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
Section 12.09 Counterparts and Facsimile Signatures.
-------------------------------------
This Indenture may be executed by manual or facsimile signature in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Section 12.10 Variable Provisions.
-------------------
"OFFICER" means the Chairman of the Board, the President, any Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The first certificate pursuant to Section 4.03 hereof shall be for the
fiscal year ended on December 31, 2001.
The reporting date for Section 9.06 hereof is March 15 of each year after
Oak Hill ceases to be the Trustee. The first reporting date is March 15, 2002.
Except for Oak Hill, the Trustee shall always have a combined capital and
surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition.
61
The Company's address is:
American Skiing Company
P. O. Box 450
Sunday ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
The Trustee's address is:
Oak Hill Capital Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
with a copy to:
Oak Hill Capital Management, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Each party may change its address by written notice to the other party.
Section 12.11 Governing Law, Submission to Jurisdiction.
-----------------------------------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND
THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
62
Section 12.12 No Adverse Interpretation of other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or an Affiliate. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.13 Successors.
----------
All agreements of the Company in this Indenture and the Notes shall bind
its successor. All agreements of the Trustee in this Indenture shall bind its
successor.
Section 12.14 Severability.
------------
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
Section 12.15 Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 12.16 Enforceability of the Company's Rights.
--------------------------------------
Any demand, claim, lawsuit, action or proceeding for enforcement of this
Agreement against the Purchasers or their Affiliates may be initiated either (i)
upon the approval of a majority of the Directors of the Company who are not
nominated or appointed by the Purchasers or their Affiliates (the "Non-Purchaser
Directors"), or (ii) a special committee of the Independent Directors (as such
term is defined in the Stockholders' Agreement); provided that no such action
may be taken by the Non-Purchaser Directors under (i) above unless one or more
Non-Purchaser Directors shall have requested that a meeting of the full Board of
Directors be held to consider enforcement against the Purchasers or their
Affiliates and stating the nature of the enforcement action sought to be taken,
and the full Board of Directors has not, within 15 days following the date on
which such request is first made either (A) taken or authorized the Company to
take the requested action or (B) delegated authority with respect to such matter
to a special committee of the Independent Directors (as such term is defined in
the Stockholders' Agreement).
63
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
AMERICAN SKIING COMPANY, as Company
By:
----------------------------------
Name:
Title:
OAK HILL CAPITAL PARTNERS, L.P.,
as Trustee
By: OHCP GenPar, L.P., its general
partner
By: OHCP MGP, LLC, its general
partner
By:
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY AND ANY SHARES OF SERIES D PREFERRED STOCK ISSUED
UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
AND ANY SHARES OF SERIES D PREFERRED STOCK ISSUED UPON CONVERSION HEREOF MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, IF AVAILABLE, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
(d) TO AN ACCREDITED INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES
ACT)THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THE NOTES (IN SUBSTANTIALLY FORM OF EXHIBIT E OF THE INDENTURE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN ACCRETED VALUE WITH AN ORIGINAL ISSUE PRICE (AS
DEFINED IN THE TERMS OF NOTES) LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR ANY SUBSIDIARY THEREOF OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE PURCHASER WILL, AND EACH SUBSEQUENT
PURCHASER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OR ANY SERIES D PREFERRED STOCK ISSUABLE UPON
CONVERSION HEREOF OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
No. ________
$____________Original Issue Price
or such other amount as is indicated on Schedule A hereof*
CUSIP No. [ ]/CINS No. [ ]
11.3025% CONVERTIBLE SUBORDINATED NOTE DUE 2007
American Skiing Company, a Delaware corporation (the
"COMPANY"), promises to pay to or registered assigns, the Accreted Value of
this Note (as defined on the reverse hereof) on July __,
2007,2 subject to the further provisions of this Note set forth on the reverse
hereof which further provisions shall for all purposes have the same effect as
if set forth at this place.
Interest Accrual Dates: Each July __, commencing July __, 2002
IN WITNESS WHEREOF, American Skiing Company has caused this
Note to be signed manually or by facsimile by one of its duly authorized
officers.
Dated:
----------------------------
AMERICAN SKIING COMPANY
By:_____________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION This is one
of the 11.3025% Convertible
Subordinated Notes due 2007
described in the
within-mentioned Indenture.
____________________________, as Trustee
By:______________________________________
Authorized Officer
* Applicable to Global Notes Only
[FORM OF REVERSE OF NOTE]
AMERICAN SKIING COMPANY
11.3025% Convertible Subordinated Note due 2007
1. Interest. American Skiing Company, a Delaware corporation (the "COMPANY,"
which term includes any successor Person under the Indenture hereinafter
referred to), is the issuer of 11.3025% Convertible Subordinated Notes due 2007
(the "NOTES"). The Company promises to pay the Accreted Value of this Note on
July __, 2007.3 The Notes will accrue interest, compounded annually, as provided
in Section 2 of the Indenture on the Accreted Value of the Note, at a rate of
11.3025% per annum. Interest on the Notes will accrue from July __, 2001 and
will be computed on the basis of a 360-day year of twelve 30-day months. The
"ACCRETED VALUE" of this Note is defined as the sum of (i) the Original Issue
Price of this Note, and (ii) any interest or premium in respect to this Note
added to each Accreted Value pursuant to Section 2.02 of the Indenture and the
terms of this Note.
2. Method of Payment. Interest on the Notes shall be payable through the
addition of such interest to the Accreted Value in effect immediately prior to
the applicable Interest Accrual Date. The Company shall notify the Trustee in
writing of the aggregate amount of such interest not less than five (5) nor more
than 45 days prior to the Interest Accrual Date on which accretion will occur.
On the applicable Interest Accrual Date, the Accreted Value shall increase by
the amount of such interest. On maturity, Holders must surrender Notes to a
Paying Agent to collect the Accreted Value on such Notes. The Company will pay
the Accreted Value, accrued and unpaid interest thereon, and premium, if any, in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. If a Holder so requests, Accreted Value,
accrued and unpaid interest thereon, and premium, if any, may be paid by wire
transfer of immediately available funds to an account previously specified in
writing by such Holder to the Company and the Trustee.
3. Paying Agent, Conversion Agent and Registrar. The Trustee will act as Paying
Agent, Conversion Agent and Registrar in the City of New York, New York. The
Company may change any Paying Agent, Conversion Agent or Registrar without prior
notice. The Company or any of its Affiliates may act in any such capacity.
4. Indenture. The Company issued the Notes under the Indenture. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by the Trust Indenture Act of 1939 (15 U.S. Code (Sections) 77aaa-77bbbb) as in
effect on the date of the Indenture. The Notes are subject to, and qualified by,
all such terms, certain of which are summarized hereon, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
unsecured general obligations of the Company limited (except as otherwise
provided in the Indenture) to $12,500,000 in aggregate Original Issue Price and
subordinated in right of payment to all existing and future Senior Debt of the
Company.
5. Optional Redemption. The Notes are not redeemable at the Company's option
prior to July 31, 2004. Thereafter, the Notes will be subject to redemption at
the option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
Accreted Value thereof) set forth below plus accrued and unpaid interest thereon
to the applicable redemption date, if redeemed during the twelve-month period
beginning on July 31 of the years indicated below:
Year Percentage
2004........................................... 119.00%
2005........................................... 115.33%
2006........................................... 111.66%
2007........................................... 100.00%
---------------
Any such optional redemption shall be initiated only upon (i)
the approval of a majority of the Board of Directors, provided that such
approval includes the approval of a majority of the directors of the Company who
are not designated or appointed by the Purchasers or their Affiliates (so long
as the Purchasers or their Affiliates are Holders) or by any other Person (or
group of Persons) which is a Holder and has the ability to designate or appoint
a majority of the Board of Directors or (ii) the approval of a special committee
of the Independent Directors (as such terms is defined in the Stockholders'
Agreement).
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of the Notes to be
redeemed at his address of record. The Company may redeem Notes in whole or in
part in denominations of Accreted Value with $100 of Original Issue Price or
integral multiples thereof. In the event of a redemption of less than all of the
Notes, the Notes will be chosen for redemption by the Trustee in accordance with
the Indenture. On and after the redemption date, interest ceases to accrue on
the Notes or portions of them called for redemption.
6. Mandatory Redemption. The Company will not be required to make mandatory
redemption or repurchase payments with respect to the Notes. There are no
sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holder. If there is a Change of Control, the Company
shall be required to offer to purchase all outstanding Notes on the Purchase
Date at the purchase price equal to the prices (expressed as percentages of the
Accreted Value thereof on a Purchase Date occurring within the 12-month period
beginning on July 31 of the years indicated below, other than 2001, which shall
be the period commencing on July __, 2001 and ending on July 30, 2002) set forth
below, plus accrued and unpaid interest thereon to the Purchase Date:
Year Percentage
2001........................................... 123.00%
2002........................................... 119.10%
2003........................................... 115.20%
2004........................................... 103.30%
2005........................................... 102.20%
2006........................................... 101.10%
2007........................................... 100.00%
Notwithstanding the foregoing, the purchase price payable with
respect to the Notes upon a Change of Control shall not exceed 100% of the
Accreted Value of the Notes, plus any accrued and unpaid interest thereon to the
Purchase Date unless (i) a majority of the Board of Directors, provided that
such majority includes a majority of the directors of the Company who are not
designated or appointed by the Purchasers or their Affiliates or by any other
Person (or group of Persons) which has the ability to designate or appoint a
majority of the Board of Directors or (ii) a majority of a special committee of
the Independent Directors (as such terms is defined in the Stockholders'
Agreement), shall have approved the transaction(s) constituting the Change of
Control; provided, that if such approval has been withheld solely or primarily
to reduce the purchase price payable upon a Change of Control the Holders shall
be entitled to receive the applicable purchase price set forth in the table in
the preceding paragraph, plus any accrued and unpaid interest on the Notes to
the Purchase Date.
Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
8. Subordination. The payment of the Accreted Value, accrued and unpaid interest
thereon or any other amounts due on the Notes is subordinated in right of
payment to all existing and future Senior Debt of the Company, as described in
the Indenture. Each Holder, by accepting a Note, agrees to such subordination
and authorizes and directs the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee as its attorney-in-fact for such purpose.
9. Conversion. The holder of any Note has the right, exercisable at any time
following the Issuance Date and prior to the close of business (New York time)
on the date of the Note's maturity, to convert the Accreted Value thereof (or
any portion thereof (with $100 Original Issue Price or any integral multiples
thereof) into shares of Series D Preferred Stock at the initial Conversion Price
of $12,500 per share, subject to adjustment under certain circumstances as set
forth in the Indenture.
To convert a Note, a holder must (1) complete and sign a
conversion notice substantially in the form set forth below, (2) surrender the
Note to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. The number of shares issuable upon
conversion of a Note is determined by dividing the Accreted Value of the Note
converted, accrued and unpaid interest thereon, and any other amounts payable on
the Notes on the date of conversion, by the Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest.
A Note in respect of which a holder has delivered an "Option
of Holder to Elect Purchase" form appearing below exercising the option of such
holder to require the Company to purchase such Note may be converted only if the
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture. The above description of conversion of the Notes is
qualified by reference to, and is subject in its entirety by, the more complete
description thereof contained in the Indenture.
10. Denominations, Transfer, Exchange. The Notes are in registered form, without
coupons, in denominations of Accreted Value with $100 of Original Issue Price
and any integral multiples thereof. The transfer of Notes may be registered, and
Notes may be exchanged, as provided in 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.
11. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.
12. Unclaimed Money. If money for the payment of Accreted Value or interest
remains unclaimed for two years, the Trustee and the Paying Agent shall pay the
money back to the Company at its written request. After that, Holders of Notes
entitled to the money must look to the Company for payment unless an abandoned
property law designates another Person and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
13. Defaults and Remedies. The Notes shall have the Events of Default set forth
in Section 8.01 of the Indenture. Subject to certain limitations in the
Indenture, if an Event of Default occurs and is continuing, the Trustee by
notice to the Company or the Holders of at least 25% in aggregate Accreted Value
of the then outstanding Notes by notice to the Company and the Trustee may
declare all the Notes to be due and payable immediately, except that in the case
of an Event of Default arising from certain events of bankruptcy or insolvency,
all unpaid Accreted Value, accrued and unpaid interest thereon and other amounts
payable on the Notes, if any, shall become due and payable immediately without
further action or notice. The Majority Holders by written notice to the Trustee
may rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of Accreted Value, and other amounts due
on the Notes, if any, that has become due solely because of the acceleration.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, the Majority may direct the Trustee
in its exercise of any trust or power. The Company must furnish annually
compliance certificates to the Trustee. The above description of Events of
Default and remedies is qualified by reference, and subject in its entirety, to
the more complete description thereof contained in the Indenture.
14. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Majority Holders (including consents obtained in connection with a tender offer
or exchange offer for Notes), and any existing default may be waived with the
consent of the Majority Holders. Without the consent of any Holder, the
Indenture or the Notes may be amended among other things, to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for assumption of the Company's
obligations to Holders, to make any change that does not adversely affect the
rights of any Holder or to qualify the Indenture under the TIA or to comply with
the requirements of the SEC in order to maintain the qualification of the
Indenture under the TIA.
15. Trustee Dealings with the Company. The Trustee, in its individual or any
other capacity may become the owner or pledgee of the Notes and may otherwise
deal with the Company or an Affiliate with the same rights it would have, as if
it were not Trustee, subject to certain limitations provided for in the
Indenture and in the TIA. Any Agent may do the same with like rights.
16. No Recourse Against Others. A director, officer, employee, incorporator or
shareholder of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
Holder of the Notes by accepting a Note waives and releases all such liability.
The waiver and release are part of the consideration for the issue of the Notes.
17. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
18. Authentication. The Notes shall not be valid until authenticated by the
manual signature of an authorized officer of the Trustee or an authenticating
agent.
19. Abbreviations. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and UGMA (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder of the Notes upon
written request and without charge a copy of the Indenture. Request may be made
to:
American Skiing Company
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Attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
(Insert assignee's social security or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:
_____________________________________________
(Sign exactly as your name appears on the other
side of this Note)
Date:
-----------------------------
Signature Guarantee: *
_____________________________________________
In connection with any transfer of any of the Notes evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date, if any,
on which such Notes were owned by the Company or any Affiliate of the Company,
the undersigned confirms that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company or any subsidiary thereof,
(2)[ ] to a qualified institutional buyer in compliance with Rule 144A,
(3)[ ]outside the United States in compliance with Rule 904 under the
Securities Act,
(4) [ ] pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available),
(5) [ ] to an Accredited Investor (as defined in Regulation D under the
Securities Act) in a transaction exempt from registration under the
Securities Act,
(6) [ ] pursuant to any other exemption from registration under the
Securities Act or
(7) [ ] pursuant to an effective registration statement under the
Securities Act.
* Signature must be guaranteed by a commercial bank, trust company or
member firm of the New York Stock Exchange. However, such guarantee is
not required so long as a Purchaser holds the Note.
Signature
Signature Guarantee*
Signature must be guaranteed
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Date: _____________________
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange. However, such guarantee is not required so
long as a Purchaser holds the Note.
NOTICE: To be executed by an executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof
repurchased by the Company pursuant to Section 4.07 of the Indenture, check the
box: [ ]
If the purchase is in part, indicate the portion of Accreted
Value with Original Issue Price in denominations of $100 or any integral
multiple thereof to be purchased:
Your Signature:
___________________________________________
(Sign exactly as your name appears on the
other side of this Note)
Date:
-----------------------------
Signature Guarantee:**/
___________________________________________
**/ Signature must be
guaranteed by a commercial
bank, trust company or
member firm of the New York
Stock Exchange. However,
this guarantee is not
required so long as a
Purchaser holds the Note.
ELECTION TO CONVERT
To American Skiing Company
The undersigned owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion below designated, into
Series D Preferred Stock of American Skiing Company in accordance with the terms
of the Indenture referred to in this Note, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If the
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date:
-----------------------------
in whole ___ Portions of Accreted Value of the Note to be converted
(with
$100 Original Issue Price or integral multiples thereof):
$ ____________
Signature
________________________________________
Please Print or Typewrite Name and Address, Including Zip Code, and
Social Security or Other Identifying Number
Signature Guarantee: *
________________________________________
* Signature must be
guaranteed by a commercial
bank, trust company or
member firm of the New York
Stock Exchange. However,
this guarantee is not
required so long as the
Purchaser holds the Note.
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
SCHEDULE OF ORIGINAL ISSUE PRICE
The original issue price of this Global Note shall be $ . The
following increases or decreases in the Original Issue Price (as defined in the
Indenture) of this Global Note have been made:
Amount of increase Signature of Date of exchange
Amount of decrease in in Original Issue Original Issue authorized officer following such
Original Issue Price Price of this Price of this of Trustee or Notes decrease or
of this Global Note Global Note Global Note Custodian increase
----------------------------------------------------------------------------------------------------------
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM RULE 144A GLOBAL NOTE OR RESTRICTED NOTE
TO REGULATION S GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(ii) or 2.06(a)(vii) of the Indenture)
[Name of Trustee]
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible Subordinated Notes due
2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of July __, 2001 (the
"INDENTURE"), between American Skiing Company, as Issuer, and , as Trustee.
This letter relates to $[ ] [check one] (i) [ ] aggregate Accreted Value of
Notes which are held in the form of the Rule 144A Global Note (CUSIP No. ) with
the Depositary or (ii) [ ] Accreted Value of Restricted Note (CUSIP No. )
registered, in either case, in the name of [name of transferor] (the
"TRANSFEROR") to effect the transfer of the Notes in exchange for an equivalent
beneficial interest in the Regulation S Global Notes. The Original Issue Price
of such Notes is $ .
In connection with such request, the Transferor does hereby certify that
such transfer has been effected in accordance with (i) the transfer restrictions
set forth in the Notes and (ii) that:
(1) the offer of the Notes was not made to a Person in the United States;
(2) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor
any Person acting on its behalf knows that the transaction was
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the United States Securities Act of 1933,
as amended (the "SECURITIES ACT").
In addition, if the sale is made during a distribution compliance period
and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1), as
the case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Capitalized terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S.
[Name of Transferor]
By:________________________
Name:
Title:
Dated:
-------------------
cc: American Skiing Company
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Attn: _______________
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE OR RESTRICTED NOTE
TO RULE 144A GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(iii) or 2.06(a)(vi) of the Indenture)
[Trustee]
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible Subordinated Notes due
2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of July
__, 2001 (the "INDENTURE"), between American Skiing Company, as Issuer, and , as
Trustee. Capitalized terms used but not defined herein shall have the respective
meanings given them in the Indenture.
This letter relates to $[ ] [check one] (i) [ ] aggregate
Accreted Value of Notes which are held in the form of the Regulation S Global
Note (CUSIP No. ____) with the Depositary or (ii) [ ] Accreted Value of
Restricted Note (CUSIP No. ) registered, in each case, in the name of [name of
transferor] (the "TRANSFEROR") to effect the transfer of the Notes in exchange
for an equivalent beneficial interest in the Rule 144A Global Note. The Original
Issue Price of such Notes is $_______.
In connection with such request, and in respect of such Notes
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933, as amended, to a
transferee that the Transferor reasonably believes is purchasing the Notes for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
Dated: [Name of Transferor],
----------------------------
By:________________________
Name:
Title:
cc: American Skiing Company
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Sunday River Access
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Attn: ________________
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR RESTRICTED
NOTE TO RESTRICTED NOTE
(Transfers pursuant to Section 2.06(a)(iv) or Section 2.06(a)(v) of the
Indenture)
[Name of Trustee],
-
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible Subordinated Notes due
2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of July , 2001 (the
"INDENTURE"), between American Skiing Company, as Issuer, and , as Trustee.
Capitalized terms used but not defined herein shall have the respective meanings
given them in the Indenture.
This letter relates to $[ ] aggregate Accreted Value of Notes which are
held [in the form of the [Rule 144A/Regulation S]. [Global] [Restricted] Note
(CUSIP No. [ ] CINS No. [ ]) [with the Depositary] in the name of [name of
transferor] (the "TRANSFEROR") to effect the transfer of the Notes. The Original
Issue Price of such Notes is $_______.
In connection with such request, and in respect of such Notes, the
Transferor does hereby certify that such Notes are being transferred (i) in
accordance with the transfer restrictions set forth in the Notes and (ii) in
accordance with applicable securities laws of any state of the United States or
any other jurisdiction.
*Insert, if appropriate.
[Name of Transferor],
By:________________________
Name:
Title:
Dated:
-------------------
cc: American Skiing Company
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: __________________
APPENDIX E
FORM OF LETTER TO BE DELIVERED BY INVESTORS OR OTHER PERSONS IN A TRANSACTION
EXEMPT FROM REGISTRATION
American Skiing Company
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Ladies and Gentlemen:
We are delivering this letter in connection with our acquisition of
11.3025% Convertible Subordinated Notes due 2007 (the "Notes") of American
Skiing Company, a Delaware corporation (the "Company").
We hereby confirm that:
[(i) we are an "accredited investor" within the meaning of Rule 501 (a)
(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501 (a) (1), (2), (3) or (7) under the
Securities Act (an "Institutional Accredited Investor");]
[(ii) (A) any purchase of the Notes by us will be for our own account or
for the account of one or more other Institutional Accredited Investors or as
fiduciary for the account of one or more trusts, each of which is an "accredited
investor" within the meaning of Rule 501 (a) (7) under the Securities Act and
for each of which we exercise sole investment discretion or (B) we are a "bank,"
within the meaning of Section 3 (a) (2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3 (a) (5) (A) of the
Securities Act that is acquiring the Notes as fiduciary for the account of one
or more institutions for which we exercise sole investment discretion;]
(iii) in the event that we purchase any of the Notes, we will acquire Notes
having a minimum Original Issue Price of not less than $250,000 for our own
account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing the
Notes;
(v) we are not acquiring the Notes with a view to distribution thereof or
with any present intention of offering or selling any of the Notes, except
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption from the registration requirements thereof, as provided
below, provided that the disposition of our property and the property of any
accounts for which we are acting as fiduciary shall remain at all times within
our control; and
(vi) we acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we deem necessary
in connection with our decision to acquire the Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that if in the future we decide to resell, pledge or
otherwise transfer such Notes, such Notes may be offered, resold, pledged or
otherwise transferred only: (a) to the Company or any of its subsidiaries, (b)
to a person whom the seller reasonably believes is a Qualified Institutional
Buyer or "QIB" (as defined in Rule 144A under the Securities Act) purchasing for
its own account or for the account of a QIB in a transaction meeting the
requirements of Rule 144A, (c) in an offshore transaction meeting the
requirements of Rule 904 of the Securities Act, (d) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (e) to an Accredited Investor
that, prior to such transfer, furnishes the trustee a signed letter containing
certain representations and agreements relating to the transfer of the Notes (in
substantially this form) and, if such transfer is in respect of an Accreted
Value with an Original Issue Price (as defined in the terms of Notes) less than
$250,000, an opinion of counsel acceptable to the Company that such transfer is
in compliance with the Securities Act, (f) in accordance with another exemption
from the registration requirements of the Securities Act (and based upon an
opinion of counsel acceptable to the Company) or (g) pursuant to an effective
registration statement and, in each case, in accordance with the applicable
securities laws of any state of the United States, or any other applicable
jurisdiction. We understand that the registrar and transfer agent for the Notes
will not be required to accept for registration of transfer any Notes acquired
by us, except upon presentation of evidence satisfactory to the Company and the
transfer agent that the foregoing restrictions on transfer have been complied
with. We further understand that any Notes acquired by us will be in the form of
definitive physical certificates and will bear a legend reflecting the substance
of this paragraph.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
Dated:
----------------------------
(Name of Purchaser)
By:________________________
Name:
Title:
Address:
--------
1 The date that is three days prior to the sixth anniversary of the
Issuance Date.
2 The date that is three days prior to the sixth anniversary of the
Issuance Date
3 The date that is three days prior to the sixth anniversary of the
Issuance Date
EXHIBIT B
Registration Rights Agreement dated as of July __, 2001, among American
Skiing Company, a Delaware corporation (the "Company"), Oak Hill Capital
Partners, L.P., a Delaware limited partnership ("Oak Hill"), and the other
entities identified in Annex A attached hereto (together with Oak Hill, the
"Purchasers").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Securities Purchase Agreement dated as of July __,
2001 (the "Securities Purchase Agreement") among the Company and the Purchasers,
on the date hereof the Company has issued to the Purchasers (i) an aggregate of
$12,500,000 principal amount of Junior Subordinated Convertible Notes (ii) an
aggregate of 1,000,000 shares of Common Stock (iii) 40,000 shares of Series C-1
Preferred Stock, and (iv) ________ shares of Series C-2 Convertible Preferred
Stock;
WHEREAS, in order to induce each of the Purchasers to enter into the
Securities Purchase Agreement and to consummate the transactions contemplated
therein, the Company has agreed to grant registration rights with respect to the
Registrable Securities as set forth in this Agreement.
This is the Registration Rights Agreement referred to in the Securities
Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual agreements set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Company and the Purchasers do hereby agree as
follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
"Affiliate" has the meaning set forth in Rule 12b-2, as in effect on the
date hereof, under the Exchange Act.
"Agreement" or "this Agreement" means this Registration Rights Agreement
dated as of July 15, 2001 by and between the Company and the Purchasers
(including the Annex hereto) and all amendments hereto made in accordance with
the provisions of Section 4.7.
"Associate" has the meaning set forth in Rule 12b-2, as in effect on the
date hereof, under the Exchange Act.
"Beneficially Own" has the meaning set forth below:
A Person shall be deemed to "Beneficially Own" any securities:
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(i) of which such Person or any of such Person's Affiliates or Associates
is considered to be a "beneficial owner" under Rule 13d-3 of the
Exchange Act, as in effect on the date of this Agreement;
(ii) which are Beneficially Owned, directly or indirectly, by any other
Person (or any Affiliate or Associate of such other Person) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting or disposing of such
securities; or
(iii)which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon
the satisfaction of conditions) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in The City of New
York.
"Class A Common Stock" means the Class A common stock, par value $.01 per
share, of the Company.
"Common Shares" means the shares of Common Stock being issued to the
Purchasers on the date hereof pursuant to the Securities Purchase Agreement.
"Common Stock" means the common stock (excluding the Class A Common Stock),
par value $.01 per share, per share, of the Company.
"Conversion Stock" means new shares of Common Stock issued or issuable upon
conversion of shares of Series C-1 Preferred Stock
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Holder" means the Purchasers and any person to whom rights under this
Agreement are assigned in accordance with the provisions of Section 3.10.
"ING Registration Rights Agreement" means the Registration Rights Agreement
dated as of November 10, 1997, between the Company and ING.
"ING" means ING (U.S.) Capital Corporation.
"Junior Subordinated Notes" means the 11.3025% Junior Subordinated
Convertible Notes of the Company issued pursuant to the Securities Purchase
Agreement and the Junior Subordinated Note Indenture.
"Junior Subordinated Note Indenture" means the Indenture relating to the
Junior Subordinated Notes dated as of the date hereof among the Company, as
issuer, and Oak Hill, as trustee.
"majority in interest" means with respect to the Holders or any subgroup of
the Holders, the Holders holding at least a majority in amount of each class of
Registrable Securities held by all the Holders or such subgroup of Holders.
"▇▇. ▇▇▇▇▇" means ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Oak Hill Stockholders" means Oak Hill Capital Partners, L.P., Oak Hill
Securities Fund, L.P. and their respective Affiliates and Associates.
"Person" means any individual, partnership, limited liability company,
firm, corporation, association, trust, unincorporated organization or other
entity.
"register," "registered" and "registration" shall refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act.
"Registrable Securities" means collectively (i) the Junior Subordinated
Notes, (ii) the Series D Preferred Stock issuable upon conversion of the Junior
Subordinated Notes and the Series C-1 Preferred Stock, (iii) the Series C
Preferred Shares, (iv) any Common Stock held by Holders (including the Common
Shares and the Conversion Stock) and (v) any Common Stock issued as (or upon the
conversion or exercise of any warrant, right, option or other convertible
security which is issued as) a dividend or other distribution with respect to,
in exchange for or in replacement of, any of the foregoing, in each case held,
from time to time, by the Holders. In addition to the foregoing, the term
"Registrable Securities" shall include any "Registrable Stock" (as such term is
defined in the Stockholders' Agreement) held from time to time by Oak Hill, Oak
Hill Securities Fund, L.P. or their respective Affiliates; provided, however,
that any demand for registration pursuant to Section 3.1 or 3.3 by one or more
Initiating Holders (as defined in Section 3.1) that include holders of such
Registrable Stock and that includes shares of Registrable Stock in the
securities to be registered shall also be deemed to be a demand for registration
by such holders under the Stockholders' Agreement for purposes of determining
the total number of demand registrations to which such holders are entitled.
"Repriced Preferred Registration Rights Agreement" means the Amended and
Restated Registration Rights Agreement between the Company and ▇▇▇▇▇▇▇▇ L.L.C.
dated as of November 3, 1997.
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"Repriced Preferred Stock" means the 10.5% Repriced Convertible
Exchangeable Preferred Stock, $.01 par value per share, of the Company.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Series C-1 Preferred Stock" means the 12% Series C-1 Convertible
Participating Preferred Stock, par value $.01 per share, of the Company.
"Series C-2 Preferred Stock" means the 15% Series C-2 Preferred Stock, par
value $.01 per share, of the Company.
"Series C Preferred Shares" means the shares of Series C-1 Preferred Stock
and Series C-2 Preferred Stock being issued to the Purchasers on the date hereof
pursuant to the Securities Purchase Agreement.
"Series D Preferred Stock" means the Series D Participating Preferred
Stock, par value $.01 per share, of the Company issued or issuable upon
conversion of the Junior Subordinated Notes.
"Shares" means the Common Shares, Conversion Stock, the Series D Preferred
Stock and the Series C Preferred Shares.
"Stockholders' Agreement" means the Stockholders' Agreement, dated as of
August 6, 1999, as amended by Amendment No. 1 thereto dated July 31, 2000, and
as it may be further amended from time to time, among the Company, ▇▇. ▇▇▇▇▇,
Oak Hill and the other parties identified therein.
"Transfer" means, in respect of any securities of the Company, to directly
or indirectly sell, transfer, assign, pledge, hypothecate or to otherwise
dispose of such securities, and the words "Transferred" and "Transferee" shall
have corresponding meanings.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
2. Transfers
2.1 Restrictive Legend. Each certificate representing the Shares shall
except as otherwise provided in this Section 2, be stamped or otherwise
imprinted with legends substantially in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE
ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. AS A
4
CONDITION TO ANY TRANSFER, THE COMPANY MAY REQUIRE AN OPINION
OF COUNSEL TO THE EFFECT THAT THE PROPOSED TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT.
A certificate shall not bear the Securities Act legend if in the opinion of
counsel satisfactory to the Company (it being agreed that ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ shall be satisfactory) the securities being sold thereby may
be publicly sold without registration under the Securities Act.
2.2 Notice of Proposed Transfer. Prior to any proposed Transfer of any
Shares, the holder thereof shall give written notice to the Company of its
intention to effect such Transfer. Each such notice shall describe the manner of
the proposed Transfer and, if known, the identity of the proposed transferee
and, if requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed Transfer
may be effected without registration under the Securities Act, whereupon the
holder of such stock shall be entitled to Transfer such stock in accordance with
the terms of its notice; provided, however, that no such opinion of counsel
shall be required for a Transfer to any Affiliates of the Purchasers. Each
certificate representing Shares transferred as above provided shall bear the
legends set forth in Section 2.1, except that such certificate shall not bear
such legends if (i) such Transfer is in accordance with the provisions of Rule
144 of the Securities Act (or any other rule permitting public sale without
registration under the Securities Act, but not Rule 144A) or (ii) the opinion of
counsel referred to above is to the further effect that the transferee and any
subsequent transferee (other than an Affiliate of the Company) would be entitled
to Transfer such securities in a public sale without registration under the
Securities Act. The restrictions provided for in this Section 2.2 shall not
apply to securities that are not required to bear the legends prescribed by
Section 2.1 in accordance with the provisions of Section 2.1.
3. Registration Rights.
3.1 Request for Registration.
(a) At any time after the date hereof, one or more Holders of any
class of Registrable Securities (the "Initiating Holders") may request in a
written notice (which notice shall state the class and the number or amount
of Registrable Securities to be so registered and the intended method of
distribution) that the Company file a registration statement under the
Securities Act (or a similar document pursuant to any other statute then in
effect corresponding to the Securities Act) covering the registration of
any or all Registrable Securities held by such Initiating Holders in the
manner specified in such notice; provided, however, that there must be
included in such registration at least 10% of any class of Registrable
Securities to be registered (or any lesser percentage if the anticipated
aggregate offering price would exceed $25,000,000). Following receipt of
any notice under this Section 3.1, the Company shall (x) within 30 days
5
notify all other Holders of such request in writing and (y) use all
commercially reasonable efforts to cause to be registered under the
Securities Act all Registrable Securities that the Initiating Holders and
such other Holders have, within ten days after the Company has given such
notice, requested be registered in accordance with the manner of
disposition specified in such notice by the Initiating Holders.
(b) If the Initiating Holders intend to have the Registrable
Securities distributed by means of an underwritten offering, the Company
shall include such information in the written notice referred to in clause
(x) of paragraph (a) above. In such event, the right of any Holder to
include its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwritten offering
and the inclusion of such Holder's Registrable Securities in the
underwritten offering (unless otherwise mutually agreed by a majority in
interest of the Initiating Holders and such Holder) to the extent provided
below. All Holders proposing to distribute Registrable Securities through
such underwritten offering shall enter into an underwriting agreement in
customary form with the underwriter or underwriters. Such underwriter or
underwriters shall be selected by a majority in interest of the Initiating
Holders and shall be approved by the Company, which approval shall not be
unreasonably withheld.
(c) Notwithstanding any provision of this Agreement to the contrary:
(i) the Company shall not be required to effect a registration
pursuant to this Section 3.1 during the period starting with the
date which is 30 days prior to the date of the initial public
filing by the Company of, and ending on a date that is 120 days
following the effective date of, a registration statement
pertaining to a public offering of securities for the account of
the Company or on behalf of the selling stockholders under any
other registration rights agreement that the Holders have been
entitled to join pursuant to Section 3.2; provided, however, that
the Company shall actively employ in good faith all commercially
reasonable efforts to cause such registration statement to become
effective as promptly as practicable;
(ii) if (A)(i) the Company is in possession of material nonpublic
information relating to the Company or any of its subsidiaries
and (ii) the Company determines in good faith that public
disclosure of such material nonpublic information would not be in
the best interests of the Company and its stockholders, (B)(i)
the Company has made a public announcement relating to an
acquisition or business combination transaction that includes the
Company and/or one or more of its subsidiaries that is material
to the Company and its subsidiaries taken as a whole, and (ii)
the Company determines in good faith that (x) offers and sales of
Registrable Securities pursuant to any registration statement
prior to the consummation of such transaction (or such earlier
date as the Company shall determine) is not in the best interests
of the Company and its stockholders or (y) it would be
impracticable at the time to obtain any financial statements
relating to such acquisition or business combination transaction
6
that would be required to be set forth in a registration
statement or (C) the Company shall furnish to such Holders a
certificate signed by the president of the Company stating that
in the good faith opinion of the Board of Directors such
registration would interfere with any material transaction or
financing, confidential negotiations, including, without
limitation, negotiations relating to an acquisition or business
combination transaction, or business activities then being
pursued by the Company or any of its subsidiaries, then, in any
such case, the Company's obligation to use all commercially
reasonable efforts to file a registration statement shall be
deferred, or the effectiveness of any registration statement may
be suspended, in each case for a period not to exceed 120 days;
provided, however, that the Company may not delay the filing or
suspend the effectiveness of any registration statement under
this Section 3.1(c)(ii) on more than one occasion in any
consecutive twelve-month period;
(iii)the Company shall not be required to effect a registration
pursuant to this Section 3.1 if the Registrable Securities
requested by all Holders to be registered pursuant to such
registration are included in, and eligible for sale under, a
Shelf Registration (as defined below); and
(iv) the Company shall not be required to effect a registration
pursuant to this Section 3.1 more than one time in any
consecutive twelve-month period.
(d) With respect to any registration pursuant to this Section 3.1, the
Company may include in such registration any of its primary securities sold
on its own behalf, any securities being offered by ING to the extent
required pursuant to the ING Registration Rights Agreement, any securities
being offered by holders of Repriced Preferred Stock to the extent required
pursuant to the Repriced Preferred Registration Rights Agreement, or any
securities being offered by a holder of Registrable Stock to the extent
required pursuant to the Stockholders' Agreement. If, in the opinion of the
managing underwriter (or, in the case of a non-underwritten offering, in
the opinion of the Company), the total amount of all securities to be
registered, including Registrable Securities, will exceed the maximum
amount of the Company's securities which can be marketed (i) at a price
reasonably related to the then current market value of such securities, and
(ii) without otherwise materially and adversely affecting the entire
offering, then subject to the registration rights of the holders of the
Repriced Preferred Stock, ING and the holders of the Registrable Stock
under the Stockholders' Agreement, the Company securities and Registrable
Securities to be included in such registration shall be included in the
order as set forth below:
(i) first, any securities of the Initiating Holders in proportion (as
nearly as practicable) to the amount of Registrable Securities
beneficially owned by such Initiating Holders at the time of
filing of the registration statement;
(ii) second, any securities offered by the Company;
7
(iii)third, other Holders requesting registration of Registrable
Securities in proportion (as nearly as practicable) to the amount
of Registrable Securities owned by such Holders at the time of
filing of the registration statement; and
(iv) fourth, any other securityholders of the Company granted
incidental registration rights in proportion (as nearly as
practicable) to the amount of registrable securities beneficially
owned by such stockholders at the time of the filing of the
registration statement.
If more than one class of Registrable Securities is to be included in
a registration pursuant to this Section 3.1, then (i) any reduction in the
number or amount of securities to be included may be effected in respect of
all of the relevant classes, or in respect of only one or more classes, as
determined by the managing underwriter (or the Company, in the case of a
non-underwritten offering) in its sole discretion and (ii) the cutback
provision of the preceding sentence shall be applied separately to each
class of securities.
(e) The Company shall not be obligated to effect and pay for more than
six registrations of the Holders (four of which may be Shelf Registrations
requested pursuant to Section 3.3); provided, however, that a registration
requested by any Holder pursuant to this Section 3.1 shall not be deemed to
have been effected for purposes of this Section 3.1(e) unless (i) it has
been declared effective by the SEC, (ii) it has remained effective for the
period set forth in Section 3.4(a), (iii) the offering of Registrable
Securities pursuant to such registration is not subject to any stop order,
injunction or other order or requirement of the SEC (other than any such
stop order, injunction, or other requirement of the SEC prompted by any act
or omission of Holders of Registrable Securities) and (iv) such Holder was
permitted to include in such registration at least one-half of each class
of the Registrable Securities requested by it to be included in such
registration.
3.2 Incidental Registration.
(a) Subject to Section 3.7 and to the registration rights of the
holders of the Repriced Preferred Stock contained in the Repriced Preferred
Registration Rights Agreement, the registration rights of ING contained in
the ING Registration Rights Agreement and to the registration rights of the
holders of Registrable Stock contained in the Stockholders' Agreement, if
at any time the Company determines that it shall file a registration
statement under the Securities Act for the registration of any of its
securities (other than a registration statement on a Form S-4 or S-8 or an
offering of securities solely to the Company's existing stockholders) on
any form that would also permit the registration of the Registrable
Securities and such filing is to be on its behalf or on behalf of selling
holders of its securities for the general registration of securities to be
sold for cash, the Company shall each such time promptly give the Holders
written notice of such determination setting forth the date on which the
Company proposes to file such registration statement, which date shall be
no earlier than 15 days from the date of such notice, and advising the
Holders of their right to have Registrable Securities included in such
8
registration. In the case of a registration statement to be filed on behalf
of selling holders of its securities, the Company shall also indicate in
such notice whether it will be registering securities on its own behalf as
part of such registration statement. Upon the written request of any Holder
received by the Company not later than 15 days after the date of the
Company's notice (which request shall state the class and amount of
Registrable Securities to be so registered and the intended method of
distribution), the Company shall, subject to Section 3.2(b) below, use all
reasonable efforts to cause to be registered under the Securities Act all
of the Registrable Securities that each such Holder has so requested to be
registered; provided, however, that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this Section 3.2
without obligation or liability to such Holder.
(b) If, in the opinion of the managing underwriter (or, in the case of
a non-underwritten offering, in the opinion of the Company), the total
amount of such securities to be so registered, including such Registrable
Securities, will exceed the maximum amount of the Company's securities
which can be marketed (i) at a price reasonably related to the then current
market value of such securities and (ii) without otherwise materially and
adversely affecting the entire offering, then subject to the rights of the
holders of Repriced Preferred Stock, ING and the holders of Registrable
Stock under the Stockholders Agreement, the Company securities and
Registrable Securities to be included in such registration shall be
included in the following order:
(i) first, any securities of the Company;
(ii) second, any Registrable Securities of Holders in proportion (as
nearly as practicable) to the amount of Registrable Securities
owned by such Holders at the time of filing of the registration
statement; and
(iii)third, any other securityholders of the Company granted
incidental registration rights in proportion (as nearly as
practicable) to the amount of registrable securities beneficially
owned by such stockholders at the time of the filing of the
registration statement.
If more than one class of Registrable Securities is to be included in
a registration pursuant to this Section 3.2, then (i) any reduction in the
number or amount of securities to be included may be effected in respect of
all of the relevant classes, or in respect of only one or more classes, as
determined by the managing underwriter (or the Company, in the case of a
non-underwritten offering) in its sole discretion and (ii) the cutback
provision of the preceding sentence shall be applied separately to each
class of securities.
3.3 Shelf Registration.
(a) An Initiating Holder may use registration rights granted pursuant
to Section 3.1 subject to the limitations of paragraphs (d) and (e) of
Section 3.1, to request that the Company file a "shelf" registration
statement pursuant to Rule 415 under the Securities Act or any successor
9
rule (the "Shelf Registration") with respect to the Registrable Securities.
The Company shall (i) use all commercially reasonable efforts to have the
Shelf Registration filed within 30 days of such request and declared
effective as soon as reasonably practicable following such request and (ii)
use all commercially reasonable efforts to keep the Shelf Registration
continuously effective from the date that such Shelf Registration is
declared effective until at least the earlier of such time as (A) all such
Registrable Securities have been sold thereunder or (B) the second
anniversary of such effective date in order to permit the prospectus
forming a part thereof to be usable by Holders during such period.
(b) The Company shall supplement or amend the Shelf Registration, (i)
as required by the registration form utilized by the Company or by the
instructions applicable to such registration form or by the Securities Act,
(ii) to include in such Shelf Registration any additional securities that
become Registrable Securities by operation of the definition thereof and
(iii) following the written request of an Initiating Holder pursuant to
Section 3.3(c), to cover offers and sales of all or a part of the
Registrable Securities by means of an underwriting. The Company shall
furnish to the Holders of the Registrable Securities to which the Shelf
Registration relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five Business Days in
advance) of its use or filing with the SEC to allow the Holders a
meaningful opportunity to comment thereon.
(c) The Holders may, at their election and upon written notice by an
Initiating Holder to the Company, effect offers and sales under the Shelf
Registration by means of one or more underwritten offerings, in which case
the provisions of Section 3.1(b) shall apply to any such underwritten
distribution of securities under the Shelf Registration and such
underwriting shall, if sales of Registrable Securities pursuant thereto
shall have closed, be regarded as the exercise of one of the registration
rights contemplated by Section 3.1.
3.4 Obligations of the Company. Whenever required under Sections 3.1 and
3.3 to use all commercially reasonable efforts to effect the registration and
sale of any Registrable Securities under the Securities Act, the Company shall:
(a) prepare and file with the SEC a registration statement with respect to such
Registrable Securities (which shall be filed in no event later than 90 days
after written notice requesting a registration statement under Sections 3.1 or
3.3 has been received) and use all commercially reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby determined as provided hereafter; provided,
however, that the Company shall not be required to keep any Registration
Statement (other than the Shelf Registration) effective more than 120 days;
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the Securities Act with respect to
10
the disposition of all Registrable Securities covered by such registration
statement;
(c) furnish to the Holders such reasonable numbers of copies of the
registration statement and the prospectus included therein (including each
preliminary prospectus and any amendments or supplements thereto) in conformity
with the requirements of the Securities Act, any exhibits filed therewith and
such other documents and information as they may reasonably request;
(d) use all commercially reasonable efforts to register or qualify the
Registrable Securities covered by such registration statement under such other
securities or "blue sky" laws of such jurisdiction within the United States and
Puerto Rico as shall be reasonably appropriate for the distribution of the
Registrable Securities covered by the registration statement; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business in or to file a general consent to service of
process in any jurisdiction wherein it would not, but for the requirements of
this paragraph (except that the Company will use all commercially reasonable
efforts to register or qualify Registrable Securities in such additional
jurisdictions as the Holder may request subject to the foregoing proviso and at
the Holder's own expense), be obligated to do so; and provided further that the
Company shall not be required to qualify such Registrable Securities in any
jurisdiction in which the securities regulatory authority requires that any
Holder submit any shares of its Registrable Securities to the terms, provisions
and restrictions of any escrow, lockup or similar agreement(s) for consent to
sell Registrable Securities in such jurisdiction unless such Holder agrees to do
so;
(e) promptly notify each Holder for whom such Registrable Securities is
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, and at the request of any such Holder promptly prepare and
furnish to such Holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made. In the
event the Company shall give such notice, the Company shall extend the period
during which such Registration Statement shall be maintained effective as
provided in Section 3.4(a) (or, in the case of the Shelf Registration, Section
3.3(a)) by the number of days during the period from and including the date of
the giving of such notice to the date when the Company shall make available to
the Holders such supplemented or amended prospectus;
(f) furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to Section 3.1 or 3.3, if the method of
11
distribution is by means of an underwriting, on the date that the Registrable
Securities are delivered to the underwriters for sale pursuant to such
registration or, if such Registrable Securities is not being sold through
underwriters, on the date that the registration statement with respect to such
Registrable Securities becomes effective, (i) a signed opinion, dated on or
about such date, of the independent legal counsel representing the Company for
the purpose of such registration, addressed to the underwriters, if any, and if
such Registrable Securities is not being sold through underwriters, then to the
Holders making such request, as to such matters as such underwriters or to the
Holders holding a majority in interest of the Registrable Securities included in
such registration, as the case may be, may reasonably request and as would be
customary in such a transaction, and (ii) letters dated on or about such date
and the date the offering is priced from the independent certified public
accountants of the Company, addressed to the underwriters, if any, and if such
Registrable Securities is not being sold through underwriters, then to the
Holders making such request and, if such accountants refuse to deliver such
letters to such Holders, then to the Company (A) stating that they are
independent certified public accountants within the meaning of the Securities
Act and that, in the opinion of such accountants, the financial statements and
other financial data of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereto, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act and (B) covering such other financial matters (including information as to
the period ending not more than five Business Days prior to the date of such
letters) with respect to the registration in respect of which such letter is
being given as such underwriters or to the Holders holding a majority in
interest of the Registrable Securities included in such registration, as the
case may be, reasonably request and as would be customary in such a transaction;
(g) enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in order
to expedite or facilitate the disposition of the Registrable Securities to be so
included in the registration statement;
(h) take all action necessary (i) to qualify the Junior Subordinated Note
Indenture under the Trust Indenture Act and (ii) to appoint a trustee to replace
Oak Hill Capital Partners, L.P. under the Junior Subordinated Note Indenture
that satisfies the requirements of the Junior Subordinated Note Indenture and
the Trust Indenture Act and is otherwise reasonably acceptable to Oak Hill
Capital Partners, L.P. if it holds any Junior Subordinated Notes;
(i) appoint a transfer agent for any class of Registrable Securities if
such class has no transfer agent;
(j) obtain CUSIP numbers for the applicable class of Registrable Securities
and arrange for delivery of printed certificates or other appropriate forms for
such Registrable Securities;
12
(k) otherwise use all commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
securityholders, as soon as reasonably practicable, but not later than 18 months
after the effective date of the registration statement, an earnings statement
covering the period of at least 12 months beginning with the first full month
after the effective date of such registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and
(l) use all commercially reasonable efforts to list the Registrable
Securities covered by such registration statement with any U.S. nationally
recognized securities exchange on which the applicable class of Registrable
Securities is then listed.
For purposes of Sections 3.4(a) and 3.4(b), the period of distribution of
Registrable Securities in a firm commitment underwritten public offering shall
be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable
Securities in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Securities covered thereby and six months after
the effective date thereof.
3.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 3 of this
Agreement that the Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as the Company shall reasonably request
and as shall be required in connection with the action to be taken by the
Company.
3.6 Expenses of Registration. All expenses incurred in connection with each
registration pursuant to Sections 3.1, 3.2 and 3.3 of this Agreement, excluding
underwriters' discounts and commissions, but including, without limitation, all
registration, filing and qualification fees, word processing, duplicating,
printers' and accounting fees (including the expenses of any special audits or
"cold comfort" letters required by or incidental to such performance and
compliance), fees of the National Association of Securities Dealers, Inc. or
listing fees, messenger and delivery expenses, all fees and expenses of
complying with state securities or "blue sky" laws, and fees and disbursements
of counsel for the Company, and the reasonable fees and disbursements of one
counsel for the selling Holders (which counsel shall be selected by the Holders
holding a majority in interest of the Registrable Securities being registered),
shall be paid by the Company; provided, however, that if a registration request
pursuant to Sections 3.1 or 3.2 is subsequently withdrawn by the Holders the
Company shall not be required to pay any expenses of such registration, and such
withdrawing Holders shall bear such expenses. The Holders shall bear and pay the
underwriting commissions and discounts applicable to securities offered for
their account and the fees and disbursements of any additional counsel in
connection with any registrations, filings and qualifications made pursuant to
this Agreement.
13
3.7 Underwriting Requirements. In connection with any underwritten
offering, the Company shall not be required under Section 3.1 to include
Registrable Securities in such underwritten offering unless the Holders of such
Registrable Securities accept the terms of the underwriting of such offering
that have been reasonably agreed upon between the Company and the underwriters
selected in connection with the underwritten offering.
3.8 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Agreement:
(a) The Company shall indemnify and hold harmless each Holder, such
Holder's directors and officers, agents of such Holder, each person who
participates in the offering of such Registrable Securities, including
underwriters (as defined in the Securities Act), and each Person, if any,
who controls such Holder or participating person within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint
or several, to which they may become subject under the Securities Act, the
Exchange Act, state securities or "blue sky" laws or otherwise, insofar as
such losses, claims, damages or liabilities (or proceedings in respect
thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such registration statement
(including any preliminary prospectus, any prospectus filed under Rule 424
under the Securities Act or other final prospectus, any amendments or
supplements to any prospectus or registration statement, any exhibits to
the registration statement or any documents or other information
incorporated by reference into such registration statement or any
prospectus thereto) or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse each such Holder, such Holder's directors and officers,
agents, such participating person or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
however, that, subject to Section 3.8(c), the indemnity agreement contained
in this Section 3.8(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld); provided further that the Company shall not be
liable to any Holder, such Holder's directors and officers, agents,
participating person or controlling person in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out
of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus or amendments or
supplements thereto, in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, such Holder's directors and officers,
agents, participating person or controlling person. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of any such Holder, such Holder's directors and officers, agents,
participating person or controlling person, and shall survive the Transfer
of such securities by such Holder.
14
(b) Each Holder requesting or joining in a registration severally and
not jointly shall indemnify and hold harmless the Company, each of its
directors and officers, each Person, if any, who controls the Company
within the meaning of the Securities Act, and each agent and any
underwriter for the Company (within the meaning of the Securities Act)
against any losses, claims, damages or liabilities, joint or several, to
which the Company or any such director, officer, controlling person, agent
or underwriter may become subject, under the Securities Act, Exchange Act,
state securities or "blue sky" laws or otherwise, insofar as such losses,
claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such registration statement (including
any preliminary prospectus, any prospectus filed under Rule 424 under the
Securities Act or other final prospectus or, any amendments or supplements
thereto) or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, or amendments or supplements
thereto, in reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection
with such registration; and each such Holder shall reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, controlling person, agent or underwriter (but not in excess of
expenses incurred in respect of one counsel for all of them unless there is
an actual conflict of interest between any indemnified parties, which
indemnified parties may be represented by separate counsel) in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that subject to Section 3.8(c) the indemnity
agreement contained in this Section 3.8(b) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld); and provided further that the
liability of each Holder hereunder shall be limited to the proportion of
any such loss, claim, damage, liability or expense which is equal to the
proportion that the net proceeds from the sale of the Registrable
Securities sold by such Holder under such registration statement bears to
the total net proceeds from the sale of all securities sold thereunder, but
not in any event to exceed the net proceeds received by such Holder from
the sale of Registrable Securities covered by such registration statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it
in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement.
The indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the
15
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall
not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or relating proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than the
separate firm (in addition to any local counsel), whose fees must be
reasonable, for the Holders of Registrable Securities and all persons, if
any, who control the Holders of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, collectively, (b) the fees and expenses of more than one separate firm
(in addition to any local counsel), whose fees must be reasonable, for the
Company, and each person, if any, who controls the Company within the
meaning of either such Section, and that all fees and expenses payable
under (a) and (b) above shall be reimbursed as they are incurred. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent (which shall not be unreasonably
withheld), but if settled with such consent or if there be a final
non-appealable judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without
the prior written consent of the indemnified parties (which shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 3.8 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement , compromise
or consent (i) includes an unconditional release of each indemnified party
from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
Notwithstanding the foregoing, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, such indemnifying party agrees that
it shall be liable for any settlement of the nature contemplated by this
Section 3.8 effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of
aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement
party being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(d) To the extent any indemnification by an indemnifying party is
prohibited or limited by applicable law, the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in
16
connection with the actions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether or not any action
in question, including any untrue or alleged untrue statement of material
fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount
paid or payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. Notwithstanding anything to the contrary in
this Section 3.8(d), the liability of each Holder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the net proceeds from the
sale of the Registrable Securities sold by such Holder under such
registration statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds
received by such Holder from the sale of Registrable Securities covered by
such registration statement.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.8(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
3.9 Lockup. Each Holder of a class of Registrable Securities shall, in
connection with any underwritten registration of that class of the Company's
securities, upon the request of the underwriters managing any underwritten
offering of the Company's securities, agree in writing not to effect any sale,
disposition or distribution of any Registrable Securities (other than the
Registrable Securities included in such registration), without the prior written
consent of such underwriters, as the case may be, for such period of time from
30 days prior to the effective date of such registration to such time as the
Company or the underwriters may specify; provided, however, that (x) all
executive officers and directors of the Company shall also have agreed not to
effect any sale, disposition or distribution of any Registrable Securities under
the circumstances and pursuant to the terms set forth in this Section 3.9 and
(y) in no event shall the Holders be required to not effect any sale,
disposition or distribution for longer than 90 days after the registration
statement becomes effective pursuant to this Section 3.9.
3.10 Transfer of Registration Rights. The registration rights of the
Purchasers under this Agreement with respect to the Registrable Securities may
be transferred to any Person who is the transferee of Registrable Securities;
provided, however, that (i) the Purchasers shall give the Company written notice
at or prior to the time of such Transfer stating the name and address of the
Transferee and identifying the Registrable Securities with respect to which the
17
rights under this Agreement are being Transferred; (ii) such Transferee shall
agree in writing, in form and substance reasonable satisfactory to the Company,
to be bound as a Holder by the provisions of this Agreement; and (iii)
immediately following such Transfer, the further disposition of such securities
by such Transferee is restricted under the Securities Act. Except as set forth
in this Section 3.10, no Transfer of Registrable Securities shall cause such
Registrable Securities to lose such status.
3.11 No Inconsistent Agreements. The Company represents and warrants that
except for rights granted to the Holders herein and the registration rights
contained in the Repriced Preferred Registration Rights Agreement, the
Stockholders Agreement and the ING Registration Rights Agreement, the Company
has not granted to any Person the right to request or require the Company to
register any securities issued by the Company. The Company shall not enter into
any agreement, or amend or modify any existing agreement, with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or grant any additional registration rights to any Person or with
respect to any securities which are not Registrable Securities which are prior
in right to or inconsistent with the rights granted in this Agreement.
3.12 Rule 144 Information. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Registrable Securities to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its commercially reasonable efforts to file with the SEC in a
timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and
(c) furnish to each Holder of Registrable Securities forthwith upon
request a written statement by the Company as to its compliance with the
reporting requirements of such Rule 144 and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing such Holder to sell any Registrable
Securities without registration.
3.13 Furnishing of Information. For so long as the Oak Hill Stockholders
Beneficially Own at least 5% of the outstanding shares of Common Stock (assuming
the conversion of all convertible securities held by such Persons):
(a) The Company will furnish or make available to the Oak Hill
Stockholders, as the case may be, its annual reports to stockholders and
any quarterly or other financial reports and information furnished by it to
stockholders pursuant to the requirements of the Exchange Act.
18
(b) If the Company is not required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, it shall furnish
to the Oak Hill Stockholders its financial statements, including any notes
thereto (and with respect to annual reports, an auditors' report by a
nationally recognized firm of independent certified public accountants), a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and such other information which the Company would otherwise be
required to include in annual and quarterly reports filed under the
Exchange Act.
(c) The Company shall, at any reasonable time and from time to time,
permit the Oak Hill Stockholders or any agent or representative thereof, to
examine and make copies of and abstracts from the records and books of
account of the Company, and to discuss the records, finances and accounts
of the Company with any of its officers, directors and with their
independent certified public accountants.
4. Enforcement of the Company's Rights. Any demand, claim, lawsuit, action
or proceeding for enforcement of this Agreement against the Purchasers or their
Affiliates may be initiated either (i) upon the approval of a majority of the
Directors of the Company who are not nominated or appointed by the Purchasers or
their Affiliates (the "Non-Purchaser Directors"), or (ii) a special committee of
the Independent Directors (as such term is defined in the Stockholders'
Agreement); provided that no such action may be taken by the Non-Purchaser
Directors under (i) above unless one or more Non-Purchaser Directors shall have
requested that a meeting of the full Board be held to consider enforcement
against the Purchasers or their Affiliates and stating the nature of the
enforcement action sought to be taken, and the full Board has not, within 15
days following the date on which such request is first made either (A) taken or
authorized the Company to take the requested action or (B) delegated authority
with respect to such matter to a special committee of the Independent Directors
(as such term is defined in the Stockholders' Agreement).
5. Miscellaneous.
5.1 Notices. All notices, demands and other communications provided for or
permitted hereunder shall be made in writing and shall be given or made by
registered or certified first class mail, return receipt requested, telecopier,
courier service or personal delivery:
(a) If to the Company:
American Skiing Company
Sunday ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy to:
19
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
(b) If to the Purchasers:
Oak Hill Capital Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
and
Oak Hill Capital Management, Inc.
Park Avenue Tower
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(c) If to any other Holder, to the address of such Holder appearing in the
records of the Company.
All such notices, demands and other communications shall be deemed to have
been duly given when delivered by hand, if personally delivered; when delivered
by courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 5.1 designate another address or Person for receipt
of notices hereunder.
5.2 Headings. The descriptive headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
20
5.3 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect unless the provisions held invalid, illegal or unenforceable
shall substantially impair the benefits of the remaining provisions hereof.
5.4 Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among the Company and
the Purchasers with respect to the subject matter hereof and thereof.
5.5 Assignment. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties; provided, however,
neither the Company, on the one hand, nor Oak Hill on behalf of each Purchaser,
on the other hand, shall assign or delegate any of the rights or obligations
created under this Agreement without the prior written consent of the other
party except, in the case of the Purchasers, as contemplated by Section 3.10.
5.6 No Third Party Beneficiaries. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their permitted assigns,
and, except for the rights set forth in Section 3.8, nothing herein, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
5.7 Amendments and Waivers. No failure or delay on the part of any of the
parties hereto in exercising any right, power or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to any of
the parties hereto at law, in equity or otherwise.
(a) Any amendment, supplement or modification of or to any provision of
this Agreement and any waiver of any provision of this Agreement shall be
effective only if it is made or given (i) in writing and signed by the Company
and Holders of a majority of each class of Registrable Securities or (ii) in a
writing by the Person or Persons against whom enforcement of such amendment or
waiver is sought.
5.8 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to any
conflicts of law principles thereof that might indicate the applicability of the
laws of any other jurisdiction.
5.9 Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
21
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
5.10 Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.
22
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
AMERICAN SKIING COMPANY
By:
-------------------------------------------
Name:
Title:
OAK HILL CAPITAL PARTNERS, L.P.
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL CAPITAL MANAGEMENT PARTNERS, L.P.
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL SECURITIES FUND, L.P.
By: Oak Hill Securities GenPar, L.P.,
its general partner
By: Oak Hill Securities MGP, Inc.,
its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
23
OHCP SKI, L.P.
By: Oak Hill Capital Partners, L.P.,
its general partner
By: OHCP GenPar, L.P.,
its general partner
By: OHCP MGP, LLC,
its general partner
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
OAK HILL SECURITIES FUND II, L.P.
By: Oak Hill Securities GenPar II, L.P.,
its general partner
By: Oak Hill Securities MGP II, Inc.,
its general partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
24
ANNEX A
Purchasers
Oak Hill Capital Partners, L.P.
Oak Hill Capital Management Partners, L.P.
Oak Hill Securities Fund, L.P.
Oak Hill Securities Fund II, L.P.
OHCP SKI, L.P.
EXHIBIT C-1
CERTIFICATE OF DESIGNATION
OF 12% SERIES C-1 CONVERTIBLE
PARTICIPATING PREFERRED STOCK
OF
AMERICAN SKIING COMPANY
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
AMERICAN SKIING COMPANY, a corporation organized under the
laws of the State of Delaware (the "Corporation"), certifies that, pursuant to
the authority contained in its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, its Board of Directors has adopted the following resolution
creating a series of Serial Preferred Stock, $.01 par value per share,
designated 12% Series C-1 Convertible Participating Preferred Stock:
RESOLVED, that the series of authorized Preferred Stock, par
value $.01 per share, designated 12% Series C-1 Convertible Participating
Preferred Stock of the Corporation be hereby created, and that the designations
and amounts thereof and the voting powers, preferences and relative, optional
and other special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof, are as follows:
A. The Corporation shall have authority to issue 40,000
shares of 12% of Series C-1 Convertible Participating Preferred Stock, $.01 par
value per share (the "Series C-1 Preferred Stock"); and
B. The voting powers, preferences and relative,
participating, optional and other special rights of the shares of the Series C-1
Preferred Stock, and the qualifications, limitations and restrictions thereof
are as follows: Section 1. Definitions.
As used herein, the following terms have the following
meanings (with terms defined in the singular having comparable meanings when
used in the plural and vice versa), unless the context otherwise requires:
"Accretion Amounts" shall mean the sum of all amounts added to
the Liquidation Price pursuant to Section 3.
"Affiliate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Associate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Beneficially Own" has the meaning set forth below:
A Person shall be deemed to "Beneficially Own" any securities:
(i) of which such Person or any of such Person's Affiliates or
Associates is considered to be a "beneficial owner" under Rule 13d-3 of the
Exchange Act, as in effect on the date of this Agreement;
(ii) which are Beneficially Owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for the
purpose of acquiring, holding, voting or disposing of such securities; or
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Business Day" shall mean any day that is not a Saturday,
Sunday or a Legal Holiday.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Corporation and
its Subsidiaries, taken as a whole, to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act) other than the Permitted Holders, or (ii)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act), other than the Permitted Holders,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the
voting power of the Corporation's capital stock, unless, in the case of this
clause (ii), the Permitted Holders retain the right or ability, by voting power,
contract or otherwise, to elect or designate a majority of the Board of
Directors of the Corporation; provided, that, for so long as any Senior
Subordinated Notes are outstanding, a Change of Control shall not be deemed to
occur for purposes of this Certificate of Designation unless the same event or
transaction shall also have caused a "Change of Control" to have occurred for
purposes of the Senior Subordinated Note Indenture, and the Corporation shall be
required to make a "Change of Control Offer" as provided therein.
2
"Change of Control Notice" shall have the meaning set forth in
Section 5(c).
"Change of Control Price" shall have the meaning set forth in
Section 5(c).
"Class A Common Stock" shall mean the Class A common stock,
par value $.01 per share, of the Corporation.
"Common Stock" shall mean the Company Common Stock and the
Class A Common Stock as the same exist as of the date hereof or as such stock
may be constituted from time to time.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Corporation.
"Conversion Date" shall have the meaning specified in Section
9(b).
"Conversion Price" shall mean the applicable price at which
Conversion Shares shall be delivered upon conversion of shares of the Series C-1
Preferred Stock as specified in Section 9(a).
"Conversion Shares" shall have the meaning specified in
Section 9(a).
"Current Market Price" shall mean the Current Market Price of
the Company Common Stock calculated in accordance with Section 9(c)(iv).
"Default Voting Event" shall have the meaning specified in
Section 6(b)(ii).
"Definitive Agreements" shall mean the Purchase Agreement, the
Registration Rights Agreement, the Junior Subordinated Note Indenture and the
Junior Subordinated Notes.
"Distribution Date" shall have the meaning specified in
Section 9(c)(iii).
"Dividend Rate" shall have the meaning specified in Section 3.
"Equity Equivalents" shall mean Common Stock or rights,
warrants, options or other convertible securities (including the Repriced
Preferred Stock and any other convertible debt or equity) representing the right
to acquire Common Stock, or any securities that have similar common equity
features, but excluding the exercise of options which were granted prior to the
initial public offering of the Corporation or options that were or are set at
the market price at the time such options were or are granted by the Corporation
or as determined by the Board of Directors or a duly authorized committee
thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
3
"Group" shall have the meaning set forth in Rule 13d-5, as in
effect on the date hereof, under the Exchange Act.
"Holders" shall mean the holders of the Series C-1 Preferred
Stock.
"Issue Date" shall mean the original date of issuance of the
Series C-1 Preferred Stock.
"Junior Preferred" shall have the meaning specified in
Section 2.
"Junior Stock" shall have the meaning specified in Section 2.
"Junior Subordinated Note Indenture" means the Indenture
dated as of the Closing Date (as defined in the Purchase Agreement) relating to
the Junior Subordinated Notes, between the Corporation as issuer and Oak Hill
Capital Partners, L.P. as initial trustee.
"Junior Subordinated Notes" means the 11.3025% Junior
Subordinated Convertible Notes due issued pursuant to the Junior Subordinated
Note Indenture.
"Legal Holiday" shall mean any day on which banking
institutions are obligated or authorized to close in The City of New York.
"Liquidation Price" shall mean for each share of Series C-1
Preferred Stock, as of any date, an amount equal to $1,000 per share, plus (x)
the aggregate Accretion Amounts through such date and (y) all accrued and unpaid
dividends to such date, whether or not declared, to the extent such accrued and
unpaid dividends are not taken into account in determining the Accretion Amounts
under clause (x).
"Liquidation Right" shall mean for each share of Series C-1
Preferred Stock the greater of (i) the Liquidation Price and (ii) the amount
that would be received in liquidation following conversion of a share of Series
C-1 Preferred Stock into Common Stock.
"Majority Holders" shall mean the Holders of a majority of the
then outstanding shares of Series C-1 Preferred Stock.
"Mandatory Redemption" shall have the meaning specified in
Section 5(a).
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System.
"Notice" shall have the meaning specified in Section 5(b).
"NYSE" shall mean the New York Stock Exchange.
"Parity Securities" shall have the meaning specified in
Section 4.
4
"Permitted Holders" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, in the
event of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective Affiliates and Associates.
"Person" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3), as in effect on the
date hereof, of the Exchange Act.
"Preferred Stock" shall mean the Serial Preferred Stock, par
value $.01 per share, of the Corporation.
"Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of July 15, 2001, between the Corporation and the
Stockholders.
"Redemption Price" shall have the meaning specified in Section
5(b).
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of the Closing Date (as defined in the Purchase
Agreement), between the Corporation and the Stockholders.
"Repriced Preferred Stock" shall mean the 10.5% Repriced
Convertible Exchangeable Preferred Stock, $.01 par value per share, of the
Corporation.
"Rights" shall have the meaning specified in Section
9(c)(iii).
"Senior Liquidation Stock" shall have the meaning specified in
Section 4.
"Senior Subordinated Note Indenture" means the Indenture dated
as of June 28, 1996, as amended and supplemented by the Supplemental Indenture
dated as of September 4, 1998, the Second Supplemental Indenture dated as of
September 4, 1998, the Third Supplemental Indenture dated as of August 6, 1999,
and the Fourth Supplemental Indenture dated as of October 6, 1999, and as it may
be further amended from time to time, relating to the Senior Subordinated Notes,
among the Corporation, as issuers, several of the Corporation's subsidiaries, as
guarantors, and The United States Trust Company of New York, as trustee.
"Senior Subordinated Notes" means the Corporation's Series A
and Series B Senior Subordinated Notes due 2006 issued pursuant to the Senior
Subordinated Note Indenture.
"Series B Preferred Stock" shall mean the 8.5% Series B
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
5
"Series C-1 Default Preferred Directors" shall have the
meaning specified in Section 6(b)(ii).
"Series C-1 Preferred Directors" shall have the meaning
specified in Section 6(b)(i).
"Series C-2 Preferred Stock" shall mean the 15% Series C-2
Preferred Stock, par value $0.01 per share, of the Corporation.
"Series D Preferred Stock" shall mean the Series D
Participating Preferred Stock, par value $.01 per share, of the Corporation.
"Stockholder Director" means a director of the Corporation
designated by the Stockholders and elected pursuant to the Stockholders'
Agreement, or a director elected by the holders of the Series B Preferred Stock
pursuant to the terms thereof.
"Stockholders" shall mean Oak Hill Capital Partners, L.P.,
Oak Hill Securities Fund, L.P. and their respective Affiliates and Associates
who may now or hereafter own Equity Equivalents.
"Stockholders' Agreement" means the Stockholders' Agreement
dated as of August 6, 1999, as amended by Amendment No. 1 thereto dated July 31,
2000, and as it may be further amended from time to time, among the Corporation,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Oak ▇▇▇▇ Capital Partners, L.P. and the other parties
identified therein.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such Person (or any combination thereof).
Section 2. Rank.
All shares of Series C-1 Preferred Stock, both as to payment
of dividends and to distribution of assets upon liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall rank (i)
senior to all of the Corporation's now or hereafter issued preferred stock
including, without limitation, the Series D Preferred Stock (the "Junior
Preferred") except for (A) the Repriced Preferred Stock, as to which it shall
rank junior, and (B) the Series B Preferred Stock and the Series C-2 Preferred
Stock, as to which it shall rank pari passu, and (ii) senior to all of the
Corporation's now or hereafter issued Common Stock or any other common stock of
any class of the Corporation (collectively with the Junior Preferred, the
"Junior Stock").
6
Section 3. Dividends and Certain Restrictions.
The Holders shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the Corporation legally
available therefor, dividends at a rate per share of 12% per annum (as may be
adjusted from time to time as provided in this Section 3) of the Liquidation
Price (the "Dividend Rate"), which shall be fully cumulative, shall accrue and
be compounded quarterly on July 31, October 31, January 31 and April 30 of each
year, commencing on July 31, 2001 (except that if such date is a Saturday,
Sunday or Legal Holiday, then dividends to be paid in cash will be payable on
the next Business Day) to Holders of record as they appear on the stock transfer
books of the Corporation on the record date for the payment of such dividend,
which shall be not more than 60 nor less than 30 days preceding the payment date
for such dividend, as is fixed by the Board of Directors. Dividends may, at the
option of the Corporation, be paid (i) in cash at the Dividend Rate or (ii) by
way of an increase in the Liquidation Price in effect as of the relevant
quarterly dividend payment date in an amount calculated based on the Dividend
Rate. Notwithstanding the foregoing, dividends shall be payable solely in
accordance with clause (ii) if cash dividends have not been paid on the Repriced
Preferred Stock on the immediately preceding dividend payment date with respect
to such Repriced Preferred Stock. The Dividend Rate on the Series C-1 Preferred
Stock shall be increased by 2% per annum upon a declaration of Default Voting
Event as set forth in Section 6(b)(ii) for so long as such Default Voting Event
remains uncured.
In addition to the dividends described in the preceding
paragraph, if the Corporation declares and pays any dividend or makes a
distribution on the Company Common Stock, the Holders shall be entitled to an
amount in cash, securities or other property receivable by the holders of
Company Common Stock equal to the amount that the Holders would be entitled to
receive if the Series C-1 Preferred Stock were fully converted into Company
Common Stock on the record date for the payment of any such dividends or
distribution. No dividends may be paid (or declared and set aside for payment)
on the Common Stock and no other distributions may be made in respect of the
Common Stock, and no Common Stock (or any rights, options or warrants to
purchase Common Stock) may be redeemed, purchased or otherwise acquired for any
consideration by the Corporation, unless the Corporation shall simultaneously
declare and pay a dividend or make a distribution to the holders of the Series
C-1 Preferred stock as provided in this paragraph, or unless, in the case of a
redemption, purchase or acquisition of Common Stock, the Corporation is
simultaneously redeeming, purchasing or acquiring all of the Series C-1
Preferred Stock and Series C-2 Preferred Stock. The record date for the payment
of any dividend or distribution under this Section 3 shall be not more than 60
nor less than 30 days preceding the date of payment thereof.
On any quarterly dividend payment date, if all dividends that
have accrued on the Series C-1 Preferred Stock are not paid, then such dividends
shall accumulate and be added to the Liquidation Price of the Series C-1
Preferred Stock effective as of such dividend payment date and shall thereafter
accrue additional dividends in respect thereof until such unpaid dividends have
been paid in full. Dividends paid on shares of Series C-1 Preferred Stock in an
7
amount less than the total amount of such dividends at the time accumulated and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Any reference to "dividend" or "distribution" contained in
this Section 3 shall not be deemed to include any dividend or distribution made
in connection with any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, that is effected in accordance
with the preferences and priorities set forth in the Corporation's certificate
of incorporation and all certificates of designation setting forth the rights of
the holders of the Corporation's Preferred Stock.
Section 4. Liquidation Right.
In the event of a liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, for each share of Series C-1
Preferred Stock the Holders shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, the Liquidation Right, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or series of the
Corporation's capital stock ranking junior as to liquidation rights to the
Series C-1 Preferred Stock; provided, however, that such rights shall accrue to
the Holders only in the event that the Corporation's payments with respect to
the liquidation preferences of the holders of capital stock of the Corporation
ranking senior as to liquidation rights to the Series C-1 Preferred Stock (the
"Senior Liquidation Stock") are fully met. If the assets of the Corporation
available for distribution after the payment of the liquidation preferences of
the holders of all Senior Liquidation Stock are not sufficient to pay an amount
equal to the Liquidation Right to the holders of outstanding shares of Series
C-1 Preferred Stock and the liquidation preferences payable to the holders of
shares of capital stock of the Corporation ranking (based on relative
liquidation preference) pari passu with the Series C-1 Preferred Stock,
including, without limitation, the Series C-2 Preferred Stock ("Parity
Securities"), then the assets of the Corporation shall be distributed ratably
among the Holders and the holders of Parity Securities. Neither a consolidation,
merger or other business combination of the Corporation with or into another
corporation or other entity nor a sale or offer of all or part of the
Corporation's assets for cash, securities or other property shall be considered
a liquidation, dissolution or winding up of the Corporation for purposes of this
Section 4 (unless in connection therewith the liquidation of the Corporation is
specifically approved).
Section 5. Redemption.
(a) Mandatory Redemption. The Corporation shall mandatorily redeem all of the
outstanding shares of Series C-1 Preferred Stock for cash on July 31, 2007 (the
"Mandatory Redemption"), at a redemption price equal to the Liquidation Price
per share.
No Mandatory Redemption pursuant to this Section 5(a) shall be
made unless and until all outstanding Repriced Preferred Stock has been
converted, repurchased, redeemed or otherwise retired, or the holders of the
Repriced Preferred Stock have consented thereto in accordance with the
requirements of the Corporation's certificate of incorporation. If a Mandatory
Redemption cannot occur by reason of this paragraph, the Corporation shall
8
redeem all of the outstanding shares of Series C-1 Preferred Stock as provided
herein on the first Business Day after all outstanding Repriced Preferred Stock
has been so converted, repurchased, redeemed or otherwise retired or after the
holders of the Repriced Preferred Stock shall have consented to such redemption.
If, upon any Mandatory Redemption, funds are not legally
available to the Corporation for redemption of all the shares of Series C-1
Preferred Stock, the Corporation shall redeem on such date, at the applicable
redemption price, pro rata among the Holders based on the Liquidation Price of
their shares, that number of shares of Series C-1 Preferred Stock which it can
lawfully redeem, and from time to time thereafter, as soon as funds are legally
available, the Corporation shall redeem at the applicable redemption price
shares of Series C-1 Preferred Stock pro rata among the Holders until the
Corporation has redeemed the shares of Series C-1 Preferred Stock in full.
In the event that the Corporation is in arrears in the
redemption of its Series C-1 Preferred Stock pursuant to a Mandatory Redemption
(including, without limitation, by reason of the fact that sufficient funds are
not legally available to pay the redemption price), or a mandatory redemption
cannot occur by reason of the fact that the Repriced Preferred Stock remains
outstanding, the Corporation may not (i) purchase, redeem or pay dividends on
any Junior Stock or (ii) make any mandatory purchase or redemption of any Series
C-1 Preferred Stock or Parity Securities except pro rata according to all such
obligations then due or in arrears.
Any shares of Series C-1 Preferred Stock that are not redeemed
on the scheduled redemption date shall continue to be outstanding and shall
accrue dividends until redeemed.
(b) Optional Redemption. From and after the Issue Date, the Corporation shall
have the right, at its option, at any time and from time to time, upon not less
than 60 days' prior written notice ("Notice"), but subject to the right of the
Holders to convert their shares of Series C-1 Preferred Stock into shares of
Common Stock pursuant to Section 9, to redeem, out of funds legally available
therefor, all or a portion of the shares of Series C-1 Preferred Stock during
the 12-month period beginning on [July 31] of the years indicated below (other
than 2001, which shall be the period commencing on the Issue Date and ending on
[July 30], 2002) at the redemption prices in cash (expressed as a percentage of
the Liquidation Price) set forth below (the "Redemption Price"):
Year Redemption Price
2001 112%
2002 109.6%
2003 107.2%
9
2004 104.8%
2005 102.4%
2006 and thereafter 100%
Any redemption made pursuant to this Section 5(b) shall be
initiated only upon (i) the approval of a majority of the Board of Directors,
provided that such approval includes the approval of a majority of the directors
of the Corporation who are not designated or appointed by the Purchasers (as
defined in the Purchase Agreement) or their Affiliates (so long as the
Purchasers or their Affiliates are Holders) or by any other Person which is a
Holder and has the ability to designate or appoint a majority of the Board of
Directors or (ii) the approval of a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement).
No Notice shall be given, and no redemption shall be made,
pursuant to this Section 5(b) unless the Corporation shall, on the date fixed
for redemption, simultaneously redeem a pro rata portion (based on the aggregate
liquidation preference of Series C-1 Preferred Stock and Series C-2 Preferred
Stock then outstanding) of the Series C-2 Preferred Stock.
In case of the redemption of less than all of the then
outstanding Series C-1 Preferred Stock and Series C-2 Preferred Stock, the
Corporation shall (subject the preceding paragraph) select the shares of Series
C-1 Preferred Stock to be redeemed in accordance with any method permitted by
the national securities exchange on which the shares to be redeemed are then
listed, or if not so listed, the Corporation shall designate by lot, or in such
other manner as the Board of Directors may determine, the shares to be redeemed,
or shall effect such redemption pro rata among the Holders and the holders of
shares of the Series C-2 Preferred Stock.
The Notice shall be given by first class mail, postage
prepaid, to each holder of record of the Series C-1 Preferred Stock to be
redeemed, at such holder's address as it shall appear upon the stock transfer
books of the Corporation. Each such notice of redemption shall specify the date
fixed for redemption, the Redemption Price, the then current Conversion Price,
the place or places of payment and conversion and that payment or conversion
will be made upon presentation of and surrender of the certificates evidencing
the shares of Series C-1 Preferred Stock to be redeemed or converted, and that
the Series C-1 Preferred Stock may be converted at any time before the close of
business on such date fixed for redemption.
Any Notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of the
Series C-1 Preferred Stock receives such Notice; and failure to give such Notice
by mail, or any defect in such notice, to a Holder of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any shares of Series C-1 Preferred Stock owned by other Holders to whom such
Notice was duly given. On or after the date fixed for redemption as stated in
such Notice, each Holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place designated in
such Notice and shall thereupon be entitled to receive payment of the Redemption
Price. If less than all the shares represented by any such surrendered
certificate are redeemed, a new certificate shall be issued without cost to the
10
Holder thereof representing the unredeemed shares. If such Notice shall have
been so mailed and if, on or prior to the redemption date specified in such
Notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the account
of the Holders of the shares so to be redeemed (as to be and continue to be
available therefor), then on and after the redemption date, notwithstanding that
any certificate for shares of the Series C-1 Preferred Stock so called for
redemption shall not have been surrendered for cancellation, all shares of the
Series C-1 Preferred Stock with respect to which such Notice shall have been
mailed and such funds shall have been set aside shall be deemed to be no longer
outstanding and all rights with respect to such shares of the Series C-1
Preferred Stock so called for redemption shall forthwith cease and terminate,
except the right of the Holders to receive out of the funds so set aside in
trust the amount payable on the redemption thereof (including an amount equal to
accrued and unpaid dividends to the date of redemption) without interest
thereon.
The Holder of any shares of Series C-1 Preferred Stock
redeemed upon any exercise of the Corporation's redemption right under this
Section 5(b) shall not be entitled to receive payment of the Redemption Price
for such shares until such Holder shall cause to be delivered to the place
specified in the Notice (i) the certificate(s) representing such shares of
Series C-1 Preferred Stock redeemed and (ii) transfer instrument(s) satisfactory
to the Corporation and sufficient to transfer such shares of Series C-1
Preferred Stock to the Corporation free of any adverse interests; provided, that
the foregoing is subject to the other provisions of the Corporation's
certificate of incorporation or the Corporation's bylaws governing lost
certificates generally.
(c) Change Of Control. Upon the occurrence of a Change of Control, each Holder
may require the Corporation to purchase such requesting Holder's Series C-1
Preferred Stock at a purchase price in cash (expressed as a percentage of the
Liquidation Price) set forth below (such prices to be applicable in respect of a
purchase relating to a Change of Control occurring during the 12-month period
beginning on [July 31] of the years indicated below, other than 2001, which
shall be the period commencing on the Issue Date and ending on [July 30], 2002)
(the "Change of Control Price"):
Change of
Year Control Price
---- -------------
2001 112.0%
2002 108.9%
2003 105.7%
2004 102.6%
2005 101.3%
2006 and thereafter 100.0%
Notwithstanding the foregoing, the Change of Control Price
shall not exceed 100% of the Liquidation Price unless (i) a majority of the
Board of Directors, provided that such majority includes a majority of the
directors of the Corporation who are not designated or appointed by the
11
Purchasers (as defined in the Purchase Agreement) or their Affiliates or by any
other Person which has the ability to designate or appoint a majority of the
Board of Directors, or (ii) a majority of a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement) shall have
approved the transaction(s) constituting the Change of Control; provided, that
if such approval has been withheld solely or primarily to reduce the Change of
Control Price, the Holders shall be entitled to receive the applicable Change of
Control Price set forth in the table in the preceding paragraph.
Within 45 days following any Change of Control, the
Corporation shall give to each Holder a written notice (a "Change of Control
Notice") stating:
(i) that a Change of Control has occurred and that such Holder
has the right to require the Corporation to purchase such
Holder's Series C-1 Preferred Stock at the Change of Control
Price as set forth above;
(ii) the circumstances and relevant facts regarding such Change of
Control;
(iii) the purchase date, which date shall be no earlier than 45
days nor later than 60 days from the date such notice is
mailed; and
(iv) the instructions a Holder must follow in order to have its
Series C-1 Preferred Stock purchased pursuant to this Section
5(c).
Change of Control Notices shall otherwise be governed by the
provisions set forth above in paragraph (b) relating to Notices.
Holders electing to have Series C-1 Preferred Stock purchased
under this Section 5(c) will be required to surrender such Series C-1 Preferred
Stock to the Corporation at the address specified in the Change of Control
Notice at least five Business Days prior to the specified purchase date. Any
Holder will be entitled to withdraw its election if the Corporation receives,
not later than three Business Days prior to the purchase date, a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder,
the amount of the Series C-1 Preferred Stock delivered for purchase by such
Holder as to which its election is to be withdrawn and a statement that such
Holder is withdrawing its election to have such Series C-1 Preferred Stock
purchased.
On the purchase date specified in the Change of Control
Notice, the Corporation shall purchase all the electing Holders' Series C-1
Preferred Stock at the Change of Control Price and otherwise on the terms and
subject to the conditions set forth herein.
No Change of Control Notice shall be issued pursuant to this
Section 5(c) unless and until all outstanding Repriced Preferred Stock has been,
or shall have been as part of the Change of Control, converted, repurchased,
12
redeemed or otherwise retired or the holders of the Repriced Preferred Stock
have consented thereto in accordance with the requirements of the Corporation's
certificate of incorporation. If a Change of Control Notice cannot be issued by
reason of this paragraph, the Corporation shall deliver the Change of Control
Notice on the first Business Day after all outstanding Repriced Preferred Stock
has been so converted, repurchased, redeemed or otherwise retired or such
consent shall have been granted.
If any Senior Subordinated Notes are outstanding or were
outstanding within 91 days prior to the scheduled date of purchase under this
Section 5(c), (i) notwithstanding any other provision of this Section 5(c), the
purchase date of any Series C-1 Preferred Stock shall not occur prior to the
purchase date for the Senior Subordinated Notes, and (ii) no purchase or
payments shall be made under this Section 5(c) so long as such payments are
prohibited by the terms of the Senior Subordinated Note Indenture. Any purchase
or payment not made by reason of this paragraph shall be deferred until the
first date on which such purchase or payment shall be permitted to be made under
the terms of the Senior Subordinated Note Indenture. If the Corporation is only
permitted to purchase a portion of the Series C-1 Preferred Stock or to pay part
of the Change of Control Price (including, without limitation, paying only the
Liquidation Price and a portion of the premium), it shall immediately pay such
portion to the Holders pro rata in accordance with the Liquidation Price of
their shares.
If, upon any Change of Control, funds are not legally
available to the Corporation for purchase of the shares of Series C-1 Preferred
Stock that the Holders have requested to be purchased, the Corporation shall
purchase on the scheduled purchase date, at the Change of Control Price, pro
rata among the Holders based on the Liquidation Price of their shares, that
number of shares of Series C-1 Preferred Stock which it can lawfully purchase,
and from time to time thereafter, as soon as funds are legally available, the
Corporation shall purchase at the Change of Control Price shares of Series C-1
Preferred Stock pro rata among the electing Holders until the Corporation has
purchased all the shares of Series C-1 Preferred Stock that the Holders have
requested be purchased.
If the Corporation defaults or is in arrears in its
obligations under this Section 5(c), (including, without limitation, by reason
of the fact that sufficient funds are not legally available to pay the Change of
Control Price), or if the Corporation does not deliver a Change of Control
Notice by reason of the fact that the Repriced Preferred Stock remains
outstanding, or if the Corporation is not permitted to purchase all of the
Series C-1 Preferred Stock or to pay all or any portion of the Change of Control
Price for any reason, the Corporation may not (i) purchase, acquire, redeem or
pay dividends on any Junior Stock or (ii) purchase, redeem or otherwise acquire
any Series C-1 Preferred Stock or Parity Securities except pro rata according to
all such obligations then due or in arrears (including the pro rata purchase of
any Series C-2 Preferred Stock required in connection with a Change of Control).
13
Notwithstanding anything in this Section 5(c) to the contrary,
the Corporation will not be required to pay the Change of Control Price upon a
Change of Control if a third party pays the Change of Control Price in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 5(c) applicable to a Change of Control Price paid by the
Corporation.
Any shares of Series C-1 Preferred Stock that are not
purchased on the scheduled purchase date shall continue to be outstanding and
shall accrue dividends at the Dividend Rate, compounding quarterly as provided
in Section 3, until purchased. If any shares of Series C-1 Preferred Stock are
purchased on the scheduled purchase date but the Change of Control Price is not
paid in full, then the unpaid portion of the Change of Control Price shall
accrue dividends at the Dividend Rate (calculated as if the affected shares of
series C-1 Preferred Stock were still outstanding), compounding quarterly as
provided in Section 3, until paid in full.
(d) Conflict. If there is any conflict between the provisions of this Section 5
and any applicable federal securities laws or regulations, the provisions of
such federal securities laws and regulations shall apply.
Section 6. Voting Rights.
(a) General.
In addition to the voting rights required under or granted by
Delaware law and as otherwise provided in Section 6(b), the Holders shall vote,
in person or by proxy, as a single class with the holders of the Common Stock
(and any other class of equity securities which may similarly vote with the
holders of the Common Stock as a single class with respect to any matter) on all
matters upon which stockholders are entitled to vote, except for the election of
directors (on which the Holders shall be entitled to vote as a separate class
pursuant to paragraph (b) below), and shall be entitled to a number of votes per
share of Series C-1 Preferred Stock equal to the number of shares of Common
Stock into which the shares of the Series C-1 Preferred Stock are convertible on
the record date of the determination of stockholders entitled to notice of and
to vote on such matter. Any shares of Series C-1 Preferred Stock held by the
Corporation or any entity controlled by the Corporation shall not have voting
rights under this paragraph (a) or under paragraph (b) and shall not be counted
in determining the presence of a quorum.
(b) Class Voting Rights.
(i) Right To Elect Directors. The Holders shall be entitled from time to time to
vote together as a class to elect the number of directors of the Corporation
("Series C-1 Preferred Directors") provided in subparagraphs (A), (B) and (C) of
this Section (6)(b)(i).
(A) If for any reason the Stockholder Directors do not constitute a majority of
the members of the Board of Directors at any time for so long as the
Stockholders Beneficially Own at least 80% of both the number of shares of
14
Series C-1 Preferred Stock and the number of shares of Series C-2 Preferred
Stock that they own on the Issue Date (as these numbers may be adjusted for
stock splits, stock dividends or similar transactions), the Holders shall be
entitled to elect the smallest number of Series C-1 Preferred Directors
necessary so that the Stockholder Directors and Series C-1 Preferred Directors
together constitute a majority of the members of the Board of Directors.
(B) In the event that the Stockholders Beneficially Own less than 80% but at
least 25% of both the number of shares of Series C-1 Preferred Stock and the
number of shares of Series C-2 Preferred Stock that they own on the Issue Date
(as these numbers may be adjusted for stock splits, stock dividends or similar
transactions), then the Holders shall be entitled to elect the number of Series
C-1 Preferred Directors necessary so that the Stockholder Directors and Series
C-1 Preferred Directors together constitute at least the following percentage of
the members of the Board of Directors:
(1) For so long as the Stockholders Beneficially Own at least 70% of both the
number of shares of Series C-1 Preferred Stock and the number of shares of
Series C-2 Preferred Stock that they own on the Issue Date (as these numbers may
be adjusted for stock splits, stock dividends or similar transactions), 40%;
(2) For so long as the Stockholders Beneficially Own at least 60% of both the
number of shares of Series C-1 Preferred Stock and the number of shares of
Series C-2 Preferred Stock that they own on the Issue Date (as these numbers may
be adjusted for stock splits, stock dividends or similar transactions), 331/3%;
(3) For so long as the Stockholders Beneficially Own at least 40% of both the
number of shares of Series C-1 Preferred Stock and the number of shares of
Series C-2 Preferred Stock that they own on the Issue Date (as these numbers may
be adjusted for stock splits, stock dividends or similar transactions), 25%; and
(4) For so long as the Stockholders Beneficially Own at least 25% of both the
number of shares of Series C-1 Preferred Stock and the number of shares of
Series C-2 Preferred Stock that they own on the Issue Date (as these numbers may
be adjusted for stock splits, stock dividends or similar transactions), 10%.
(C) If the Stockholders Beneficially Own less than 25% of both the number of
shares of Series C-1 Preferred Stock and the number of shares of Series C-2
Preferred Stock that they own on the Issue Date, then the Holders shall not be
entitled to elect any Series C-1 Preferred Directors unless the Stockholders
Beneficially Own at least 10% of both the number of shares of Series C-1
Preferred Stock and the number of shares of Series C-2 Preferred Stock that they
own on the Issue Date (as these numbers may be adjusted for stock splits, stock
dividends or similar transactions) and there are no Stockholder Directors, in
which case the Holders shall be entitled to elect one (1) Series C-1 Preferred
Director.
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(ii) Default Voting Rights. If, without either the consent of Majority Holders
or the consent of at least one Series C-1 Preferred Director or Stockholder
Director, the Corporation breaches a material covenant contained in the
Definitive Agreements or the provisions of Section 6(b)(iii) hereof (each such
event being a "Default Voting Event"), the Holders, following a declaration of
default by the Majority Holders, will have the right to elect two Series C-1
Preferred Directors ("Series C-1 Default Preferred Directors"). In addition, the
Accretion Rate on the Series C-1 Preferred Stock shall be increased by 2% per
annum for so long as any Default Voting Event remains uncured by the
Corporation. At such time as a Default Voting Event no longer exists, any Series
C-1 Default Preferred Directors elected pursuant to this Section 6(b)(ii) shall
be deemed to have automatically resigned from the Board of Directors and they
shall cease to be directors of the Corporation. The Holders (voting separately
as a class) will have the exclusive right to vote for and elect such Series C-1
Default Preferred Directors pursuant to a written consent or at a meeting of
stockholders without any further action on the part of the Corporation or the
Holders as provided below.
(iii) Actions Requiring Affirmative Vote. So long as shares of Series C-1
Preferred Stock are outstanding, the Corporation shall not, directly or
indirectly, or through merger or consolidation with any other person, without
the affirmative vote or consent of the Majority Holders, with the Holders voting
separately as a class, (a) amend, alter or repeal (by merger, consolidation or
otherwise) any provision of the Corporation's certificate of incorporation or
the Corporation's by-laws, as amended, so as to affect adversely the relative
rights, preferences, powers (including, without limitation, voting powers) and
privileges of the Series C-1 Preferred Stock, (b) except for the Series C-2
Preferred Stock, authorize or issue any new class of shares or Equity
Equivalents having a preference with respect to dividends, redemption and/or
liquidation over, or on parity with, the Series C-1 Preferred Stock, (c)
reclassify any of its capital stock into shares having a preference with respect
to dividends, redemption and/or liquidation over, or on parity with, the Series
C-1 Preferred Stock or (d) issue any additional shares of Series C-1 Preferred
Stock.
(iv) Special Meeting. Whenever the rights of the Holders to vote as a class on
any matter shall vest pursuant to this Section 6(b) or Delaware law, such rights
may be exercised by the vote of the Majority Holders present and voting, in
person or by proxy, at a special meeting of Holders or at the next annual
meeting of stockholders, or by written consent of the Majority Holders without a
meeting. Unless such action shall have been taken by written consent as
aforesaid, a special meeting of the Holders for the exercise of any such right
shall be called by the Secretary of the Corporation as promptly as possible in
compliance with applicable law and regulations, and in any event within 10 days
after receipt of a written request signed by the Holders of record of at least
25% of the then outstanding shares of the Series C-1 Preferred Stock, subject to
any applicable notice requirements imposed by law or by any national securities
exchange on which any Series C-1 Preferred Stock is listed. Such meeting shall
be held at the earliest practicable date thereafter. In connection with any
right to vote pursuant to this Section 6(b), each Holder will have one vote for
each share of Series C-1 Preferred Stock held.
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(v) Term of Office of Directors. Any Series C-1 Preferred Director or Series C-1
Default Preferred Director shall hold office for a term expiring at the next
annual meeting of stockholders and during such term may be removed at any time,
either for or without cause, by and only by, the affirmative vote of the
Majority Holders of record, with the Series C-1 Preferred Stock voting as a
single class, present and voting, in person or by proxy, at a special meeting of
such stockholders called for such purpose, or by written consent without a
meeting of the Majority Holders of record, with the Series C-1 Preferred Stock
voting as a single class. A special meeting of the Holders for the removal of a
director elected by the Holders in accordance with this paragraph (b) and the
filling of the vacancy created thereby shall be called by the Secretary of the
Corporation as promptly as possible and in any event within 10 days after
receipt of request therefor signed by the holders of not less than 25% of the
outstanding shares of the Series C-1 Preferred Stock taken as a single class,
subject to any applicable notice requirements imposed by law or any national
securities exchange on which any Series C-1 Preferred Stock is listed. Such
meeting shall be held at the earliest practicable date thereafter.
(vi) Vacancies. Any vacancy caused by the death, resignation or removal of any
Series C-1 Preferred Director or Series C-1 Default Preferred Director may be
filled by the remaining Series C-1 Preferred Directors and Series C-1 Default
Preferred Directors or, if not so filled, or if there are no Series C-1
Preferred Directors or Series C-1 Default Preferred Directors on the Board of
Directors, by and only by a vote of the Majority Holders present and voting as a
single class, in person or by proxy, at a meeting of such Holders called for
such purpose, or by written consent without a meeting of the Majority Holders.
Unless such vacancy shall have been filled by the remaining Series C-1 Preferred
Directors and Series C-1 Default Preferred Directors or by written consent as
aforesaid, such meeting shall be called by the Secretary of the Corporation at
the earliest practicable date after such death, resignation or removal, and in
any event within 10 days after the receipt of a written request signed by the
Holders of record of at least 25% of the outstanding shares of the Series C-1
Preferred Stock taken as a single class.
(vii) Stockholders' Right To Call Meeting. If any meeting of the Holders
required by this paragraph (b) to be called shall not have been called within 10
days after personal service of a written request therefor upon the Secretary of
the Corporation or within 15 days after mailing the same within the United
States of America by registered mail addressed to the Secretary of the
Corporation at its principal office, subject to any applicable notice
requirements imposed by law or any national securities exchange on which any
Series C-1 Preferred Stock is then listed, then the Holders of record of at
least 25% of the then outstanding shares of the Series C-1 Preferred Stock may
designate in writing a Holder of the Series C-1 Preferred Stock to call such
meeting at the reasonable expense of the Corporation, and such meeting may be
called by such Person so designated upon the notice required for annual meetings
of stockholders or such shorter notice (but in no event shorter than permitted
by law or any national securities exchange on which the Series C-1 Preferred
17
Stock is then listed) as may be acceptable to the Majority Holders. Any Holder
of Series C-1 Preferred Stock so designated shall have reasonable access to the
stock books of the Corporation relating solely to the Series C-1 Preferred Stock
for the purpose of causing such meeting to be called pursuant to these
provisions.
(viii) Quorum. At any meeting of the Holders called in accordance with the
provisions of this paragraph (b) for the election or removal of directors, the
presence in person or by proxy of the Majority Holders with the Holders of
Series C-1 Preferred Stock voting as a single class shall be required to
constitute a quorum; in the absence of a quorum, a majority of the Holders
present in person or by proxy shall have power to adjourn the meeting from time
to time without notice, other than announcement at the meeting, until a quorum
shall be present.
Section 7. Outstanding Shares.
For purposes of this Certificate of Designation, all shares of
Series C-1 Preferred Stock shall be deemed outstanding except (i) from the date
fixed for redemption pursuant to Section 5(b), all shares of Series C-1
Preferred Stock that have been so called for redemption under Section 5(b) if
funds necessary for payment of the Redemption Price have been irrevocably
deposited in trust, for the account of the Holders of the shares so to be
redeemed (so as to be and continue to be available therefor), with a corporation
organized and doing business under the laws of the United States or any State or
territory thereof or of the District of Columbia (or a corporation or other
person permitted to act as a trustee by the Securities and Exchange Commission),
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $100,000,000 and subject to supervision or
examination by Federal, State or District of Columbia or territorial authority;
and (ii) from the date of registration of transfer, all shares of Series C-1
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
Section 8. Status of Acquired Shares.
The Corporation shall take all such actions as are necessary
to cause any shares of Series C-1 Preferred Stock redeemed by the Corporation,
received upon conversion pursuant to Section 9, or otherwise acquired by the
Corporation, to be restored to the status of authorized and unissued shares of
Preferred Stock, without designation as to series, and such shares may
thereafter be issued, but not as shares of Series C-1 Preferred Stock unless the
other provisions of this Certificate of Designation have been complied with.
Section 9. Conversion.
(a) Except as provided in the next succeeding sentence, each share of the Series
C-1 Preferred Stock shall be convertible, at any time, at the option of the
Holder thereof, into validly issued, fully paid and non-assessable shares of the
Company Common Stock and, to the extent set forth in Section 9(c), shares of
Series D Preferred Stock (collectively, "Conversion Shares") at the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
Unless default be made in the payment of any amount due on redemption or
repurchase of shares of Series C-1 Preferred Stock as provided in this
Certificate of Designation, shares of Series C-1 Preferred Stock called for
18
redemption or otherwise redeemed or purchased by the Corporation in accordance
with the terms herein shall cease to be convertible into Conversion Shares at
the close of business on the redemption date or date of purchase. The Conversion
Price shall be initially $1.25 per share. The number of Conversion Shares
issuable upon conversion of a share of Series C-1 Preferred Stock is determined
by dividing the Liquidation Price (inclusive of any accrued and unpaid dividends
to the conversion date) of a share of Series C-1 Preferred Stock by the
Conversion Price in effect on the Conversion Date (as hereinafter defined) and
rounding the result to the nearest 1/100th of a share. The Conversion Price
shall be subject to adjustment as provided below. If a holder converts more than
one share at the same time, the number of full shares issuable upon the
conversion shall be based upon the total number of shares converted.
(b) In order to convert shares of the Series C-1 Preferred Stock into Conversion
Shares, the Holder thereof shall surrender at the office of any transfer agent
for the Series C-1 Preferred Stock (or in the absence of any transfer agent, the
Corporation) the certificate or certificates therefor, duly endorsed to the
Corporation or in blank, and give written notice to the Corporation at said
office that he or she elects to convert such shares. Shares of the Series C-1
Preferred Stock shall be deemed to have been converted immediately prior to the
close of business on the date of surrender of such shares for conversion in
accordance with the foregoing provisions (hereinafter the "Conversion Date"),
and the person or persons entitled to receive Conversion Shares issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such Conversion Shares at such time. As promptly as practicable after
the Conversion Date, the Corporation shall issue and deliver at said office the
certificate or certificates for the number of full Conversion Shares issuable
upon such conversion, together with a cash payment in lieu of any fraction of a
Conversion Share, as hereinafter provided, to the person or persons entitled to
receive the same or to the nominee or nominees of such person or persons.
(c) The Conversion Price shall be subject to adjustment as follows:
(i) In case the Corporation shall (i) pay a dividend in shares of any class of
its Common Stock to all holders of such class, (ii) make a distribution in
shares of any class of its Common Stock to all holders of such class, (iii)
subdivide any of its outstanding Common Stock into a greater number of shares,
or (iv) combine any of its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the holder of any shares of Series C-1 Preferred Stock
thereafter surrendered for conversion shall be entitled to receive that number
of Conversion Shares representing the percentage of all outstanding shares of
Common Stock which the Holder would have owned had such Series C-1 Preferred
Stock been converted immediately prior to the happening of such event and the
Conversion Price shall be adjusted accordingly. An adjustment made pursuant to
this subsection (i) shall become effective immediately after the record date in
the case of a dividend in shares or distribution and shall become effective
immediately after the effective date in the case of subdivision or combination.
19
(ii) In case the Corporation shall issue Equity Equivalents to all or
substantially all holders of any class of its Common Stock or to any other
person (other than the Holders) entitling such person or persons to subscribe
for, purchase or otherwise acquire shares of Common Stock (or securities in any
manner representing the right to acquire Common Stock or other Equity
Equivalent) at a price per share (or conversion price or other equivalent price
per share) that is less than the then Current Market Price per share of Common
Stock (as determined in accordance with subsection (iv) below) at the record
date for the determination of shareholders entitled to receive such Equity
Equivalents on the date of issuance thereof or, with respect to issuances to
persons other than Holders, on the issue date, as applicable, the Conversion
Price in effect immediately prior thereto shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date or issue date, as applicable, by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on such record date or issue date, as applicable, plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock or other Equity Equivalent so offered, (or the aggregate conversion
price or other equivalent price of the securities so offered) would purchase at
such Current Market Price (as defined in subsection (iv) below), and of which
the denominator shall be the number of shares of Common Stock outstanding on
such record date or issue date, as applicable, plus the number of additional
shares of Common Stock offered (or into which the convertible securities so
offered are convertible or, in the case of other Equity Equivalents, the number
of shares of Common Stock represented by such Equity Equivalents). Such
adjustment shall be made successively whenever any Equity Equivalents are
issued, and shall become effective immediately after such record date or such
sale date, as applicable. If at the end of the period during which such Equity
Equivalents are exercisable not all such Equity Equivalents shall have been
exercised, the adjusted Conversion Price shall be readjusted to what it would
have been based upon the number of additional shares of Common Stock actually
issued (or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
(iii) In case the Corporation shall distribute to all or substantially all
holders of any class of Common Stock any shares of capital stock of the
Corporation (other than Common Stock), evidences of indebtedness or other
non-cash assets (including securities of any company other than the
Corporation), or shall distribute to all or substantially all holders of any
class of Common Stock rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subsection (ii) above), then in each
such case the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of such distribution by a fraction of which the numerator
shall be the Current Market Price per share (as defined in subsection (iv)
below) of the Conversion Shares on the record date mentioned below less the fair
market value on such record date (as agreed to by the Corporation and the
Majority Holders or, if not so agreed, as determined in a manner similar to the
definition of Current Market Price described in the second to the last sentence
of subsection (iv) below) of the portion of the capital stock or assets or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock (determined on the basis of the number
of shares of Common Stock outstanding on the record date), and of which the
denominator shall be the Current Market Price per share (as defined in
subsection (iv) below) of the Conversion Shares on such record date. Such
20
adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
Notwithstanding the foregoing, in the event that the
Corporation shall distribute rights or warrants (other than those referred to in
subsection (ii) above) ("Rights") pro rata to holders of any class of Common
Stock, the Corporation may, at its option, in lieu of making any adjustment
pursuant to this Section 9, make proper provision so that each holder of Series
C-1 Preferred Stock who converts such stock (or any portion thereof) after the
record date for such distribution and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in addition to the
Conversion Shares issuable upon such conversion, a number of Rights to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of Rights of separate certificates evidencing
such Rights (the "Distribution Date"), the same number of Rights to which a
holder of a number of shares of Common Stock equal to the number of Conversion
Shares is entitled at the time of such conversion in accordance with the terms
and provisions of and applicable to the Rights and (ii) if such conversion
occurs after the Distribution Date, the same number of Rights to which a holder
of the number of shares of Common Stock into which the shares of Series C-1
Preferred Stock so converted were convertible immediately prior to the
Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(iv) For the purpose of any computation under subsections (ii) and (iii) of this
Section 9(c), the current market price (the "Current Market Price") per
Conversion Share on any date shall be deemed to be equal to the average of the
daily closing prices of the Common Stock on the NYSE or, if not then listed or
traded on the NYSE, such national securities exchange or the NASDAQ National
Market if the Common Stock is then listed or traded thereon on for the 10
trading days immediately prior to the record date or date of issuance with
respect to distributions, issuances or other events requiring such computation
under subsection (ii) or (iii) above; provided, that in the case of an
underwritten public offering of Equity Equivalents which are currently traded,
the Current Market Price shall be the closing price of the Common Stock on the
issuance date, less an allowance for a customary discount to the current market
trading price which is reasonably required to effect such offering. The closing
price for each day shall be the closing price on the NYSE or the last reported
sales price or, if the Conversion Shares are not listed or admitted to trading
on the NYSE, on the principal national securities exchange on which the
Conversion Shares are listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, the closing sales price
of the Conversion Shares as quoted on the NASDAQ National Market or, in case no
reported sale takes place, the average of the closing bid and asked prices as
quoted on the NASDAQ National Market. Notwithstanding the provisions of this
subsection (iv), if (A) the Common Stock is listed or traded on the NYSE or
other national securities exchange or quoted on the NASDAQ National Market but
either (1) the prices described in this Section 9(c)(iv) are not available or
(2) the Majority Holders determine that such prices do not adequately reflect
the fair value of a Conversion Share due to limited float or trading volume, or
(B) the Common Stock is not listed on the NYSE or other national securities
market or quoted on the NASDAQ National Market, the Current Market Price shall
be the fair value of a Conversion Share as agreed by the Corporation and the
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Majority Holders or if the Corporation and the Majority Holders are unable to
agree, the fair value of a Conversion Share as determined by a nationally
recognized investment bank selected jointly by the Corporation and the Majority
Holders (or if they are unable to agree on such an investment bank, as
determined by a nationally recognized investment bank selected by lot by the
Board of Directors from a total of four such investment banks (two of which
shall be selected by the Corporation, and two of which shall be selected by the
Majority Holders)). The fees and expenses of such investment bank shall be paid
by the Corporation.
(v) In any case in which this Section 9 shall require that an adjustment be made
following a record date the Corporation may elect to defer (but only until five
Business Days following the mailing by the Corporation to the holders of the
notice of adjustment described in subsection (viii) below) issuing to the Holder
of any Series C-1 Preferred Stock converted after such record date the
Conversion Shares and other capital stock of the Corporation issuable upon such
conversion over and above the Conversion Shares and other capital stock of the
Corporation issuable upon such conversion only on the basis of the Conversion
Price prior to adjustment; and, in lieu of the shares the issuance of which is
so deferred, the Corporation shall issue or cause its transfer agents to issue
due bills or other appropriate evidence prepared by the Corporation of the right
to receive such shares. If any distribution in respect of which an adjustment to
the Conversion Price is required to be made as of the record date therefor is
not thereafter made or paid by the Corporation for any reason, the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
if such record date had not been fixed or such effective date had not occurred.
(vi) No Adjustment. No adjustment in the Conversion Price shall be required
unless the adjustment would require an increase or decrease of at least 1% in
the Conversion Price as last adjusted; provided, however, that any adjustments
which by reason of this subsection (vi) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 9 shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in
paragraph (c)(i), (ii) or (iii) above if all Holders of Series C-1 Preferred
Stock are entitled to participate in the transaction on a basis and with notice
22
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction. The Corporation shall give 30 days prior notice to any transfer
agent and to the Holders of the Series C-1 Preferred Stock of any such
determination.
No adjustment need be made for (a) issuances of Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest, (b) a
change in the par value or a change to no par value of the Common Stock and (c)
the issuance of Common Stock to directors, officers and employees of the
Corporation and its subsidiaries pursuant to any stock-based incentive plan duly
approved by the Board of Directors or any duly authorized committee or delegee
thereof.
To the extent that the Series C-1 Preferred Stock becomes
convertible into the right to receive cash, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
(vii) Adjustment for Tax Purposes. The Corporation shall be entitled to make
such reductions in the Conversion Price, in addition to those required by other
provisions of this Section 9, as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivisions of shares,
distributions of rights to purchase stock or securities or distributions of
securities convertible into or exchangeable for stock hereafter made by the
Corporation to its shareholders shall not be taxable.
(viii) Notice of Adjustment. Whenever the Conversion Price is adjusted, the
Corporation shall promptly mail to holders of the Series C-1 Preferred Stock and
to the transfer agent a notice of the adjustment briefly stating the facts
requiring the adjustment and the manner of computing it. The certificate shall
be conclusive evidence of the correctness of such adjustment.
(ix) Notice of Certain Transactions. In the event that:
(A) the Corporation takes any action which would require an adjustment in the
Conversion Price;
(B) the Corporation consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation and shareholders of the
Corporation must approve the transaction; or
(C) there is a dissolution or liquidation of the Corporation, the Corporation
shall mail to holders of the Series C-1 Preferred Stock and to any transfer
agent a notice stating the proposed record or effective date, as the case may
be. The Corporation shall mail the notice at least 10 days before such date.
Failure to mail such notice or any defect therein shall not affect the validity
of any transaction referred to in clause (A), (B) or (C) of this Section
9(c)(ix).
(x) Effect of Reclassification, Consolidation, Merger or Sale on Conversion
Privilege. If any of the following shall occur, namely: (a) any reclassification
or change of Conversion Shares issuable upon conversion of the Series C-1
Preferred Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination, or any other change for which an adjustment is provided in (c)(i),
(ii) or (iii) above); (b) any consolidation or merger to which the Corporation
is a party other than a merger in which the Corporation is the continuing
corporation and which does not result in any reclassification of, or change
(other than a change in name, or in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock; or (c) any sale or
conveyance of all or substantially all of the assets of the Corporation as an
23
entirety, then the Corporation, or such successor or purchasing corporation, as
the case may be, shall, as a condition precedent to such reclassification,
change, consolidation, merger, sale or conveyance, ensure that effective
provision be made in the certificate of incorporation of the resulting or
surviving corporation or otherwise that each holder of Series C-1 Preferred
Stock then outstanding shall have the right to convert such Series C-1 Preferred
Stock into the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Conversion Stock deliverable upon conversion of such Series C-1 Preferred Stock
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance, and that the Conversion Price shall continue to be subject to
adjustment which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Price provided for in this Section 9. If in the
case of any such consolidation, merger, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Conversion Stock include shares of stock or other securities and property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such consolidation, merger, sale or conveyance, then effective provision
shall also be made in the certificate of incorporation of such other corporation
or otherwise of such additional antidilution provisions as are necessary to
protect the interests of the holders of the Series C-1 Preferred Stock by reason
of the foregoing. The provisions of this Section 9(c)(x) shall similarly apply
to successive consolidations, mergers, sales or conveyances.
(c) Notwithstanding the foregoing provisions of this Section
9, if at any time the Corporation does not have a sufficient number of
authorized shares of Common Stock to permit the conversion of Series C-1
Preferred Stock into shares of Common Stock, then to the extent of the
deficiency, the Corporation may satisfy its obligation to deliver Conversion
Shares upon conversion of Series C-1 Preferred Stock by delivering shares of
Series D Preferred Stock in lieu of Conversion Shares. In any such case, the
number of Shares of Series D Preferred Stock to be delivered shall be determined
by dividing the number of Conversion Shares the Corporation would otherwise be
obligated to deliver by the Common Share Equivalent Number (as defined in the
certificate of designation for the Series D Preferred Stock) then in effect. The
Corporation shall use all commercially reasonable efforts to ensure that the
number of authorized shares of Common Stock is at all times sufficient to enable
the full conversion of Series C-1 Preferred Stock into Conversion Shares.
Section 10. Reports.
So long as the Series C-1 Preferred Stock remains outstanding,
the Corporation shall cause its annual reports to stockholders and any quarterly
or other financial reports and information furnished by it to stockholders
pursuant to the requirements of the Exchange Act, to be mailed to the holders of
the Series C-1 Preferred Stock (contemporaneously with the mailing of such
materials to the Corporation's stockholders) at their addresses appearing on the
books of the Corporation. If the Corporation is not required to furnish annual
or quarterly reports to its stockholders pursuant to the Exchange Act, it shall
cause its financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a nationally recognized firm of
independent certified public accounts), a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and such other information
24
which the Corporation would otherwise by required to include in annual and
quarterly reports filed under the Exchange Act, to be mailed to the holders of
the Series C-1 Preferred Stock, within 120 days after the end of each of the
Corporation's fiscal years and within 60 days after the end of each of its first
three fiscal quarters.
Section 11. Severability of Provisions.
Whenever possible, each provision hereof shall be interpreted
in a manner as to be effective and valid under applicable law, but if any
provision hereof is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
25
EXHIBIT C-2
CERTIFICATE OF DESIGNATION
OF 15% SERIES C-2 PREFERRED STOCK
OF
AMERICAN SKIING COMPANY
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
AMERICAN SKIING COMPANY, a corporation organized under the
laws of the State of Delaware (the "Corporation"), certifies that, pursuant to
the authority contained in its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, its Board of Directors has adopted the following resolution
creating a series of Serial Preferred Stock, $.01 par value per share,
designated 15% Series C-2 Preferred Stock:
RESOLVED, that the series of authorized Preferred Stock, par
value $.01 per share, designated 15% Series C-2 Preferred Stock of the
Corporation be hereby created, and that the designations and amounts thereof and
the powers, preferences and relative, optional and other special rights of the
shares of such series, and the qualifications, limitations and restrictions
thereof, are as follows:
A. The Corporation shall have authority to issue 150,000
shares of 15% of Series C-2 Preferred Stock, $.01 par value per share (the
"Series C-2 Preferred Stock"); and
B. The powers, preferences and relative, optional and other
special rights of the shares of the Series C-2 Preferred Stock, and the
qualifications, limitations and restrictions thereof are as follows: Section 1.
Definitions.
As used herein, the following terms have the following
meanings (with terms defined in the singular having comparable meanings when
used in the plural and vice versa), unless the context otherwise requires:
"Accretion Amounts" shall mean the sum of all amounts added to
the Liquidation Price pursuant to Section 3.
"Affiliate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Associate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Business Day" shall mean any day that is not a Saturday,
Sunday or a Legal Holiday.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Corporation and
its Subsidiaries, taken as a whole, to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act) other than the Permitted Holders, or (ii)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act), other than the Permitted Holders,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the
voting power of the Corporation's capital stock, unless, in the case of this
clause (ii), the Permitted Holders retain the right or ability, by voting power,
contract or otherwise, to elect or designate a majority of the Board of
Directors of the Corporation; provided that, for so long as any Senior
Subordinated Notes are outstanding, a Change of Control shall not be deemed to
occur for purposes of this Certificate of Designation unless the same event or
transaction shall also have caused a "Change of Control" to have occurred for
purposes of the Senior Subordinated Note Indenture, and the Corporation shall be
required to make a "Change of Control Offer" as provided therein.
"Change of Control Notice" shall have the meaning set forth in
Section 5(c).
"Change of Control Price" shall have the meaning set forth in
Section 5(c).
"Class A Common Stock" shall mean the Class A common stock,
par value $.01 per share, of the Corporation.
"Common Stock" shall mean the Company Common Stock and the
Class A Common Stock as the same exist as of the date hereof or as such stock
may be constituted from time to time.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Corporation.
"Definitive Agreements" shall mean the Purchase Agreement, the
Registration Rights Agreement, the Junior Subordinated Note Indenture and the
Junior Subordinated Notes.
"Dividend Rate" shall have the meaning specified in Section 3.
"Equity Equivalents" shall mean Common Stock or rights,
warrants, options or other convertible securities (including the Repriced
Preferred Stock and any other convertible debt or equity) representing the right
to acquire Common Stock, or any securities that have similar common equity
2
features, but excluding the exercise of options which were granted prior to the
initial public offering of the Corporation or options that were or are set at
the market price at the time such options were or are granted by the Corporation
or as determined by the Board of Directors or a duly authorized committee
thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Group" shall have the meaning set forth in Rule 13d-5, as in
effect on the date hereof, under the Exchange Act.
"Holders" shall mean the holders of the Series C-2 Preferred
Stock.
"Issue Date" shall mean the original date of issuance of the
Series C-2 Preferred Stock.
"Junior Preferred" shall have the meaning specified in Section
2.
"Junior Stock" shall have the meaning specified in Section 2.
"Junior Subordinated Note Indenture" means the Indenture dated
as of the Closing Date (as defined in the Purchase Agreement) relating to the
Junior Subordinated Notes, between the Corporation as issuer and Oak Hill
Capital Partners, L.P. as initial trustee.
"Junior Subordinated Notes" means the 11.3025% Junior
Subordinated Convertible Notes due 2007 issued pursuant to the Junior
Subordinated Note Indenture.
"Legal Holiday" shall mean any day on which banking
institutions are obligated or authorized to close in The City of New York.
"Liquidation Price" shall mean for each share of Series C-2
Preferred Stock, as of any date, an amount equal to $1,000 per share, plus (x)
the aggregate Accretion Amounts through such date and (y) all accrued and unpaid
dividends to such date, whether or not declared, to the extent such accrued and
unpaid dividends are not taken into account in determining the Accretion Amounts
under clause (x).
"Majority Holders" shall mean the Holders of a majority of the
then outstanding shares of Series C-2 Preferred Stock.
"Mandatory Redemption" shall have the meaning specified in
Section 5(a).
"Notice" shall have the meaning specified in Section 5(b).
"Parity Securities" shall have the meaning specified in
Section 4.
3
"Permitted Holders" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, in the
event of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective Affiliates and Associates.
"Person" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3), as in effect on the
date hereof, of the Exchange Act.
"Preferred Stock" shall mean the Serial Preferred Stock, par
value $.01 per share, of the Corporation.
"Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of July 15, 2001, between the Corporation, Oak Hill Capital
Partners, L.P. and the other parties identified therein.
"Redemption Price" shall have the meaning specified in Section
5(b).
"Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated as of the Closing Date (as defined in the Purchase
Agreement), between the Corporation, Oak Hill Capital Partners, L.P. and the
other parties identified therein.
"Repriced Preferred Stock" shall mean the 10.5% Repriced
Convertible Exchangeable Preferred Stock, $.01 par value per share, of the
Corporation.
"Senior Liquidation Stock" shall have the meaning specified in
Section 4.
"Senior Subordinated Note Indenture" means the Indenture dated
as of June 28, 1996, as amended and supplemented by the Supplemental Indenture
dated as of September 4, 1998, the Second Supplemental Indenture dated as of
September 4, 1998, the Third Supplemental Indenture dated as of August 6, 1999,
and the Fourth Supplemental Indenture dated as of October 6, 1999, and as it may
be further amended from time to time, relating to the Senior Subordinated Notes,
among the Corporation, as issuers, several of the Corporation's subsidiaries, as
guarantors, and The United States Trust Company of New York, as trustee.
"Senior Subordinated Notes" means the Corporation's Series A
and Series B Senior Subordinated Notes due 2006 issued pursuant to the Senior
Subordinated Note Indenture.
"Series B Preferred Stock" shall mean the 8.5% Series B
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
4
"Series C-1 Preferred Stock" shall mean the 12% Series C-1
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
"Series D Preferred Stock" shall mean the Series D
Participating Preferred Stock, par value $.01 per share, of the Corporation.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such Person (or any combination thereof).
Section 2. Rank.
All shares of Series C-2 Preferred Stock, both as to payment
of dividends and to distribution of assets upon optional or mandatory
redemption, liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall rank (i) senior to all of the Corporation's now
or hereafter issued preferred stock, including, without limitation, the Series D
Preferred Stock, (the "Junior Preferred") except for (A) the Repriced Preferred
Stock, as to which it shall rank junior, and (B) the Series B Preferred Stock
and the Series C-1 Preferred Stock, as to which it shall rank pari passu, and
(ii) senior to all of the Corporation's now or hereafter issued Common Stock or
any other common stock of any class of the Corporation (collectively with the
Junior Preferred, the "Junior Stock").
Section 3. Dividends and Certain Restrictions.
The Holders shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the Corporation legally
available therefor, dividends at a rate per share of 15% per annum (as may be
adjusted from time to time as provided in this Section 3) of the Liquidation
Price (the "Dividend Rate"), which shall be fully cumulative, shall accrue, be
compounded and payable quarterly on July 31, October 31, January 31 and April 30
of each year, commencing on July 31, 2001 (except that if such date is a
Saturday, Sunday or Legal Holiday, then dividends to be paid in cash will be
payable on the next Business Day) to Holders of record as they appear on the
stock transfer books of the Corporation on the record date for the payment of
such dividend, which shall be not more than 60 nor less than 30 days preceding
the payment date for such dividend, as is fixed by the Board of Directors.
Dividends may, at the option of the Corporation, be paid (i) in cash at the
Dividend Rate or (ii) by way of an increase in the Liquidation Price in effect
as of the relevant quarterly dividend payment date in an amount calculated based
5
on the Dividend Rate. Notwithstanding the foregoing, dividends shall be payable
solely in accordance with clause (ii) if cash dividends have not been paid on
the Repriced Preferred Stock on the immediately preceding dividend payment date
with respect to such Repriced Preferred Stock. The Dividend Rate on the Series
C-2 Preferred Stock shall be increased by 2% per annum upon a declaration of a
Default Voting Event (as defined in the Certificate of Designation authorizing
the Series C-1 Preferred Stock) for so long as such Default Voting Event remains
uncured.
On any quarterly dividend payment date, if all dividends that
have accrued on the Series C-2 Preferred Stock are not paid, then such accrued
dividends shall accumulate and be added to the Liquidation Price of the Series
C-2 Preferred Stock effective as of such dividend payment date and shall
thereafter accrue additional dividends in respect thereof until such unpaid
dividends have been paid in full. Dividends paid on shares of Series C-2
Preferred Stock in an amount less than the total amount of such dividends at the
time accumulated and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
Any reference to "dividend" or "distribution" contained in
this Section 3 shall not be deemed to include any dividend or distribution made
in connection with any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, that is effected in accordance
with the preferences and priorities set forth in the Corporation's certificate
of incorporation and all certificates of designation setting forth the rights of
the holders of the Corporation's Preferred Stock.
Section 4. Liquidation Right.
In the event of a liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, for each share of Series C-2
Preferred Stock the Holders shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, the Liquidation Price, before any payment shall be made or any assets
distributed to the holders of Common Stock or any other class or series of the
Corporation's capital stock ranking junior as to liquidation rights to the
Series C-2 Preferred Stock; provided, however, that such rights shall accrue to
the Holders only in the event that the Corporation's payments with respect to
the liquidation preferences of the holders of capital stock of the Corporation
ranking senior as to liquidation rights to the Series C-2 Preferred Stock (the
"Senior Liquidation Stock") are fully met. No further distribution of residual
property will be made to the holders of Series C-2 Preferred Stock. If the
assets of the Corporation available for distribution after the payment of the
liquidation preferences of the holders of all Senior Liquidation Stock are not
sufficient to pay an amount equal to the Liquidation Price to the holders of
outstanding shares of Series C-2 Preferred Stock and the liquidation preferences
payable to the holders of shares of capital stock of the Corporation ranking
(based on relative liquidation preference) pari passu with the Series C-2
Preferred Stock, including, without limitation, the Series C-1 Preferred Stock
6
("Parity Securities"), then the assets of the Corporation shall be distributed
ratably among the Holders and the holders of Parity Securities. Neither a
consolidation, merger or other business combination of the Corporation with or
into another corporation or other entity nor a sale or offer of all or part of
the Corporation's assets for cash, securities or other property shall be
considered a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 4 (unless in connection therewith the liquidation of
the Corporation is specifically approved).
Section 5. Redemption.
(a) Mandatory Redemption. The Corporation shall mandatorily redeem all of the
outstanding shares of Series C-2 Preferred Stock for cash on July 31, 2007 (the
"Mandatory Redemption"), at a redemption price equal to the Liquidation Price
per share.
No Mandatory Redemption pursuant to this Section 5(a) shall be
made unless and until all outstanding Repriced Preferred Stock has been
converted, repurchased, redeemed or otherwise retired or the holders of the
Repriced Preferred Stock have consented thereto in accordance with the
requirements of the Corporation's certificate of incorporation. If a Mandatory
Redemption cannot occur by reason of this paragraph, the Corporation shall
redeem all of the outstanding shares of Series C-2 Preferred Stock as provided
herein on the first Business Day after all outstanding Repriced Preferred Stock
has been so converted, repurchased, redeemed or otherwise retired or after the
holders of the Repriced Preferred Stock shall have consented to such redemption.
If, upon any Mandatory Redemption, funds are not legally
available to the Corporation for redemption of all the shares of Series C-2
Preferred Stock, the Corporation shall redeem on such date, at the applicable
redemption price, pro rata among the Holders based on the Liquidation Price of
their shares, that number of shares of Series C-2 Preferred Stock which it can
lawfully redeem, and from time to time thereafter, as soon as funds are legally
available, the Corporation shall redeem at the applicable redemption price
shares of Series C-2 Preferred Stock pro rata among the Holders until the
Corporation has redeemed the shares of Series C-2 Preferred Stock in full.
In the event that the Corporation is in arrears in the
redemption of its Series C-2 Preferred Stock pursuant to a Mandatory Redemption
(including, without limitation, by reason of the fact that sufficient funds are
not legally available to pay the redemption price), or a mandatory redemption
cannot occur by reason of the fact that the Repriced Preferred Stock remains
outstanding, the Corporation may not (i) purchase, redeem or pay dividends on
any Junior Stock or (ii) make any mandatory purchase or redemption of any Series
C-2 Preferred Stock or Parity Securities except pro rata according to all such
obligations then due or in arrears.
Any shares of Series C-2 Preferred Stock that are not redeemed
on the scheduled redemption date shall continue to be outstanding and accrue
dividends until redeemed.
(b) Optional Redemption. From and after the Issue Date, the Corporation shall
have the right, at its option, at any time and from time to time, upon not less
than 60 days' prior written notice ("Notice"), to redeem, out of funds legally
7
available therefor, all or a portion of the shares of Series C-2 Preferred Stock
during the 12-month period beginning on [July 31] of the years indicated below
(other than 2001, which shall be the period commencing on the Issue Date and
ending on [July 30], 2002) at the redemption prices in cash (expressed as a
percentage of the Liquidation Price) set forth below set forth below (the
"Redemption Price"):
Year Redemption Price
2001 118.5%
2002 115.5%
2003 112.5%
2004 109.5%
2005 106.5%
2006 and thereafter 100%
Any redemption made pursuant to this Section 5(b) shall be
initiated only upon (i) the approval of a majority of the Board of Directors,
provided that such approval includes the approval of a majority of the directors
of the Corporation who are not designated or appointed by the Purchasers (as
defined in the Purchase Agreement) or their Affiliates (so long as the
Purchasers or their Affiliates are Holders) or by any other Person which is a
Holder and has the ability to designate or appoint a majority of the Board of
Directors or (ii) the approval of a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement).
No Notice shall be given, and no redemption shall be made,
pursuant to this Section 5(b) unless the Corporation shall, on the date fixed
for redemption, simultaneously redeem a pro rata portion (based on the aggregate
liquidation preference of Series C-1 Preferred Stock and Series C-2 Preferred
Stock then outstanding) of the Series C-1 Preferred Stock.
In case of the redemption of less than all of the then
outstanding Series C-1 Preferred Stock and Series C-2 Preferred Stock, the
Corporation shall (subject to the preceding paragraph) select the shares of
Series C-2 Preferred Stock to be redeemed in accordance with any method
permitted by the national securities exchange on which the shares to be redeemed
are then listed, or if not so listed, the Corporation shall designate by lot, or
in such other manner as the Board of Directors may determine, the shares to be
redeemed, or shall effect such redemption pro rata among the Holders and the
holders of shares of Series C-1 Preferred Stock.
The Notice shall be given by first class mail, postage
prepaid, to each Holder of record of the Series C-2 Preferred Stock to be
redeemed, at such Holder's address as it shall appear upon the stock transfer
books of the Corporation. Each such notice of redemption shall specify the date
fixed for redemption, the Redemption Price, the place or places of payment and
that payment will be made upon presentation of and surrender of the certificates
evidencing the shares of Series C-2 Preferred Stock to be redeemed.
8
Any Notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder of the
Series C-2 Preferred Stock receives such Notice; and failure to give such notice
by mail, or any defect in such Notice, to a Holder of any shares designated for
redemption shall not affect the validity of the proceedings for the redemption
of any shares of Series C-2 Preferred Stock owned by other Holders to whom such
Notice was duly given. On or after the date fixed for redemption as stated in
such Notice, each Holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place designated in
such Notice and shall thereupon be entitled to receive payment of the Redemption
Price. If less than all the shares represented by any such surrendered
certificate are redeemed, a new certificate shall be issued without cost to the
Holder thereof representing the unredeemed shares. If such Notice shall have
been so mailed and if, on or prior to the redemption date specified in such
Notice, all funds necessary for such redemption shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the account
of the holders of the shares so to be redeemed (as to be and continue to be
available therefor), then on and after the redemption date, notwithstanding that
any certificate for shares of the Series C-2 Preferred Stock so called for
redemption shall not have been surrendered for cancellation, all shares of the
Series C-2 Preferred Stock with respect to which such Notice shall have been
mailed and such funds shall have been set aside shall be deemed to be no longer
outstanding and all rights with respect to such shares of the Series C-2
Preferred Stock so called for redemption shall forthwith cease and terminate,
except the right of the Holders to receive out of the funds so set aside in
trust the amount payable on the redemption thereof (including an amount equal to
accrued and unpaid dividends to the date of redemption) without interest
thereon.
The Holder of any shares of Series C-2 Preferred Stock
redeemed upon any exercise of the Corporation's redemption right under this
Section 5(b) shall not be entitled to receive payment of the Redemption Price
for such shares until such Holder shall cause to be delivered to the place
specified in the Notice (i) the certificate(s) representing such shares of
Series C-2 Preferred Stock redeemed and (ii) transfer instrument(s) satisfactory
to the Corporation and sufficient to transfer such shares of Series C-2
Preferred Stock to the Corporation free of any adverse interests; provided that
the foregoing is subject to the other provisions of the Corporation's
certificate of incorporation or the Corporation's bylaws governing lost
certificates generally.
(c) Change Of Control. Upon the occurrence of a Change of Control, each Holder
may require the Corporation to purchase such requesting Holder's Series C-2
Preferred Stock at a purchase price in cash (expressed as a percentage of the
Liquidation Price) set forth below (such prices to be applicable in respect of a
purchase relating to a Change of Control occurring during the 12-month period
beginning on [July 31] of the years indicated below, other than 2001, which
shall be the period commencing on the Issue Date and ending on [July 30], 2002)
(the "Change of Control Price"):
9
Change of
Year Control Price
---- -------------
2001 106.5%
2002 106.5%
2003 106.5%
2004 102.6%
2005 101.3%
2006 and thereafter 100%
Notwithstanding the foregoing, the Change of Control Price
shall not exceed 100% of the Liquidation Price unless (i) a majority of the
Board of Directors, provided that such majority includes a majority of the
directors of the Corporation who are not designated or appointed by the
Purchasers (as defined in the Purchase Agreement) or their Affiliates or by any
other Person which has the ability to designate or appoint a majority of the
Board of Directors or (ii) a majority of a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement) shall have
approved the transaction(s) constituting the Change of Control; provided, that
if such approval has been withheld solely or primarily to reduce the Change of
Control Price, the Holders shall be entitled to receive the applicable Change of
Control Price set forth in the table in the preceding paragraph.
Within 45 days following any Change of Control, the
Corporation shall give to each Holder a written notice (a "Change of Control
Notice") stating:
(i) that a Change of Control has occurred and that such Holder has the right to
require the Corporation to purchase such Holder's Series C-2 Preferred Stock at
the Change of Control Price as set forth above;
(ii) the circumstances and relevant facts regarding such Change of Control;
(iii) the purchase date, which date shall be no earlier than 45 days nor later
than 60 days from the date such notice is mailed; and
(iv) the instructions a Holder must follow in order to have its Series C-2
Preferred Stock purchased pursuant to this Section 5(c).
Change of Control Notices shall otherwise be governed by the
provisions set forth above in paragraph (b) relating to Notices.
Holders electing to have Series C-2 Preferred Stock purchased
under this Section 5(c) will be required to surrender such Series C-2 Preferred
Stock to the Corporation at the address specified in the Change of Control
Notice at least five Business Days prior to the specified purchase date. Any
Holder will be entitled to withdraw its election if the Corporation receives,
not later than three Business Days prior to the purchase date, a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder,
the amount of the Series C-2 Preferred Stock delivered for purchase by such
10
Holder as to which its election is to be withdrawn and a statement that such
Holder is withdrawing its election to have such Series C-2 Preferred Stock
purchased.
On the purchase date specified in the Change of Control
Notice, the Corporation shall purchase all the electing Holders' Series C-2
Preferred Stock at the Change of Control Price and otherwise on the terms and
subject to the conditions set forth herein.
No Change of Control Notice shall be issued pursuant to this
Section 5(c) unless and until all outstanding Repriced Preferred Stock has been,
or shall have been as part of the Change of Control, converted, repurchased,
redeemed or otherwise retired, or the holders of the Repriced Preferred Stock
have consented thereto in accordance with the requirements of the Corporation's
certificate of incorporation. If a mandatory redemption cannot occur by reason
of this paragraph, the Corporation shall deliver the Change of Control Notice on
the first Business Day after all outstanding Repriced Preferred Stock has been
so converted, repurchased, redeemed or otherwise retired or such consent shall
have been granted.
If any Senior Subordinated Notes are outstanding or were
outstanding within 91 days prior to the schedule date of purchase under this
Section 5(c), (i) notwithstanding any other provision of this Section 5(c), the
purchase date of any Series C-2 Preferred Stock shall not occur prior to the
purchase date for the Senior Subordinated Notes, and (ii) no purchase or
payments shall be made under this Section 5(c) so long as such purchase or
payments are prohibited by the terms of the Senior Subordinated Note Indenture.
Any purchase or payment not made by reason of this paragraph shall be deferred
until the first date on which such purchase or payment shall be permitted to be
made under the terms of the Senior Subordinated Note Indenture. If the
Corporation is only permitted to purchase a portion of the Series C-2 Preferred
Stock or to pay part of the Change of Control Price (including, without
limitation, paying only the Liquidation Price and a portion of the premium), it
shall immediately pay such portion to the Holders pro rata in accordance with
the Liquidation Price of their shares.
If, upon any Change of Control, funds are not legally
available to the Corporation for purchase of the shares of Series C-2 Preferred
Stock that the Holders have requested to be purchased, the Corporation shall
purchase on the scheduled purchase date, at the Change of Control Price, pro
rata among the Holders based on the Liquidation Price of their shares, that
number of shares of Series C-2 Preferred Stock which it can lawfully purchase,
and from time to time thereafter, as soon as funds are legally available, the
Corporation shall purchase at the Change of Control Price shares of Series C-2
Preferred Stock pro rata among the electing Holders until the Corporation has
purchased all the shares of Series C-2 Preferred Stock that the Holders have
requested be purchased.
If the Corporation defaults or is in arrears in its
obligations under this Section 5(c), (including, without limitation, by reason
of the fact that sufficient funds are not legally available to pay the Change of
Control Price), or if the Corporation does not deliver a Change of Control
Notice by reason of the fact that the Repriced Preferred Stock remains
11
outstanding, or if the Corporation is not permitted to purchase all of the
Series C-2 Preferred Stock or to pay all or any portion of the Change of Control
Price for any reason, the Corporation may not (i) purchase, acquire, redeem or
pay dividends on any Junior Stock or (ii) purchase, redeem or otherwise acquire
any Series C-2 Preferred Stock Parity Securities except pro rata according to
all such obligations then due or in arrears (including the pro rata purchase of
any Series C-1 Preferred Stock required in connection with a Change of Control.)
Notwithstanding anything in this Section 5(c) to the contrary,
the Corporation will not be required to pay the Change of Control Price upon a
Change of Control if a third party pays the Change of Control Price in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 5(c) applicable to a Change of Control Price paid by the
Corporation.
Any shares of Series C-2 Preferred Stock that are not
purchased on the scheduled purchase date shall continue to be outstanding and
shall accrue dividends at the Dividend Rate, compounding quarterly as provided
in Section 3 until purchased. If any shares of Series C-2 Preferred Stock are
purchased on the scheduled purchase date but the Change of Control Price is not
paid in full, then the unpaid portion of the Change of Control Price shall
accrue dividends at the Dividend Rate (calculated as if the affected shares of
Series C-2 Preferred Stock were still outstanding), compounding quarterly as
provided in Section 3, until paid in full.
(d) Conflict. If there is any conflict between the provisions of this Section 5
and any applicable federal securities laws or regulations, the provisions of
such federal securities laws and regulations shall apply.
Section 6. Voting Rights.
(a) General. The Series C-2 Preferred Stock shall not have the right to vote
except as provided in Section 6(b) below and for voting rights required under or
granted by Delaware law. In connection with any right of the Holders of the
Series C-2 Preferred Stock to vote separately as a class pursuant to Section
6(b) or under Delaware law, each Holder will have one vote for each share of
Series C-2 Preferred Stock held by it. Any shares of Series C-2 Preferred Stock
held by the Corporation or any entity controlled by the Corporation shall not
have voting rights hereunder and shall not be counted in determining the
presence of a quorum.
(b) Class Voting Right
(i) Actions Requiring Affirmative Vote. So long as shares of Series C-2
Preferred Stock are outstanding, the Corporation shall not, directly or
indirectly, or through merger or consolidation with any other person, without
the affirmative vote or consent of the Majority Holders, with the Holders voting
separately as a class, (a) amend, alter or repeal (by merger, consolidation or
otherwise) any provision of the Corporation's certificate of incorporation or
the Corporation's by-laws, as amended, so as to affect adversely the relative
12
rights, preferences, powers and privileges of the Series C-2 Preferred Stock,
(b) except for the Series C-1 Preferred Stock, authorize or issue any new class
of shares or Equity Equivalents having a preference with respect to dividends,
redemption and/or liquidation over, or on parity with, the Series C-2 Preferred
Stock, (c) reclassify any of its capital stock into shares having a preference
with respect to dividends, redemption and/or liquidation over, or on parity
with, the Series C-2 Preferred Stock or (iv) issue any additional shares of
Series C-2 Preferred Stock.
(ii) Special Meeting. Whenever the rights described above shall vest pursuant to
this Section 6(b) or Delaware law, they may be exercised by the vote of the
Majority Holders present and voting, in person or by proxy, at a special meeting
of Holders or at the next annual meeting of stockholders, or by written consent
of the Majority Holders without a meeting. Unless such action shall have been
taken by written consent as aforesaid, a special meeting of the Holders for the
exercise of any such right shall be called by the Secretary of the Corporation
as promptly as possible in compliance with applicable law and regulations, and
in any event within 10 days after receipt of a written request signed by the
Holders of record of at least 25% of the then outstanding shares of the Series
C-2 Preferred Stock, subject to any applicable notice requirements imposed by
law or by any national securities exchange on which any Series C-2 Preferred
Stock is listed. Such meeting shall be held at the earliest practicable date
thereafter.
(c) Stockholders' Right To Call Meeting. If any meeting of the Holders required
by this paragraph (b) to be called shall not have been called within 10 days
after personal service of a written request therefor upon the Secretary of the
Corporation or within 15 days after mailing the same within the United States of
America by registered mail addressed to the Secretary of the Corporation at its
principal office, subject to any applicable notice requirements imposed by law
or any national securities exchange on which any Series C-2 Preferred Stock is
then listed, then the Holders of record of at least 25% of the then outstanding
shares of the Series C-2 Preferred Stock may designate in writing a Holder of
the Series C-2 Preferred Stock to call such meeting at the reasonable expense of
the Corporation, and such meeting may be called by such Person so designated
upon the notice required for annual meetings of stockholders or such shorter
notice (but in no event shorter than permitted by law or any national securities
exchange on which the Series C-2 Preferred Stock is then listed) as may be
acceptable to the Majority Holders. Any Holder of Series C-2 Preferred Stock so
designated shall have reasonable access to the stock books of the Corporation
relating solely to the Series C-2 Preferred Stock for the purpose of causing
such meeting to be called pursuant to these provisions.
(d) Quorum. At any meeting of the Holders called in accordance with the
provisions of this paragraph (b), the presence in person or by proxy of the
Majority Holders with the Holders of Series C-2 Preferred Stock voting as a
single class shall be required to constitute a quorum; in the absence of a
quorum, a majority of the Holders present in person or by proxy shall have power
to adjourn the meeting from time to time without notice, other than announcement
at the meeting, until a quorum shall be present.
13
Section 7. Outstanding Shares.
For purposes of this Certificate of Designation, all shares of
Series C-2 Preferred Stock shall be deemed outstanding except (i) from the date
fixed for redemption pursuant to Section 5(b), all shares of Series C-2
Preferred Stock that have been so called for redemption under Section 5(b) if
funds necessary for payment of the Redemption Price have been irrevocably
deposited in trust, for the account of the Holders of the shares so to be
redeemed (so as to be and continue to be available therefor), with a corporation
organized and doing business under the laws of the United States or any State or
territory thereof or of the District of Columbia (or a corporation or other
person permitted to act as a trustee by the Securities and Exchange Commission),
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $100,000,000 and subject to supervision or
examination by Federal, State or District of Columbia or territorial authority;
and (ii) from the date of registration of transfer, all shares of Series C-2
Preferred Stock held of record by the Corporation or any subsidiary of the
Corporation.
Section 8. Status of Acquired Shares.
The Corporation shall take all such actions as are necessary
to cause any shares of Series C-2 Preferred Stock redeemed by the Corporation or
otherwise acquired by the Corporation, to be restored to the status of
authorized and unissued shares of Preferred Stock, without designation as to
series, and such shares may thereafter be issued, but not as shares of Series
C-2 Preferred Stock unless the other provisions of this Certificate of
Designation have been complied with.
Section 9. Reports.
So long as the Series C-2 Preferred Stock remains outstanding,
the Corporation shall cause its annual reports to stockholders and any quarterly
or other financial reports and information furnished by it to stockholders
pursuant to the requirements of the Exchange Act, to be mailed to the holders of
the Series C-2 Preferred Stock (contemporaneously with the mailing of such
materials to the Corporation's stockholders) at their addresses appearing on the
books of the Corporation. If the Corporation is not required to furnish annual
or quarterly reports to its stockholders pursuant to the Exchange Act, it shall
cause its financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a nationally recognized firm of
independent certified public accounts), a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and such other information
which the Corporation would otherwise by required to include in annual and
quarterly reports filed under the Exchange Act, to be mailed to the holders of
the Series C-2 Preferred Stock, within 120 days after the end of each of the
Corporation's fiscal years and within 60 days after the end of each of its first
three fiscal quarters.
14
Section 10. Severability of Provisions.
Whenever possible, each provision hereof shall be interpreted
in a manner as to be effective and valid under applicable law, but if any
provision hereof is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
15
EXHIBIT D
CERTIFICATE OF DESIGNATION
OF SERIES D PARTICIPATING
PREFERRED STOCK
OF
AMERICAN SKIING COMPANY
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
AMERICAN SKIING COMPANY, a corporation organized under the
laws of the State of Delaware (the "Corporation"), certifies that, pursuant to
the authority contained in its Certificate of Incorporation, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, its Board of Directors has adopted the following resolution
creating a series of Serial Preferred Stock, $.01 par value per share,
designated Series D Participating Preferred Stock:
RESOLVED, that the series of authorized Preferred Stock, par
value $.01 per share, designated Series D Participating Preferred Stock of the
Corporation be hereby created, and that the designations and amounts thereof and
the voting powers, preferences and relative, optional and other special rights
of the shares of such series, and the qualifications, limitations and
restrictions thereof, are as follows:
A. The Corporation shall have authority to issue 5,000 shares of Series
D Convertible Preferred Stock, $.01 par value per share (the "Series D Preferred
Stock"); and
B. The voting powers, preferences and relative, participating, optional
and other special rights of the shares of the Series D Preferred Stock, and the
qualifications, limitations and restrictions thereof are as follows:
Section 1. Definitions.
As used herein, the following terms have the following
meanings (with terms defined in the singular having comparable meanings when
used in the plural and vice versa), unless the context otherwise requires:
"Adjustment Date" shall mean the date on which any adjustment
to the Common Share Equivalent Number or Common Share Equivalent Price takes
effect in accordance with the provisions of Section 10.
"Affiliate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Acquisition Transaction" shall mean a Change of Control
effected by any transaction or series of transactions in which at least a
majority of the outstanding Common Stock is acquired by any Person, whether
pursuant to a tender offer, merger, acquisition or otherwise, or a sale of all
or substantially all of the assets of the Corporation as an entirety.
"Associate" has the meaning set forth in Rule 12b-2, as in
effect on the date hereof, under the Exchange Act.
"Board of Directors" shall mean the board of directors of the
Corporation.
"Business Day" shall mean any day that is not a Saturday,
Sunday or a Legal Holiday.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Corporation and
its Subsidiaries, taken as a whole, to any "person" (as such term is used in
Section 13(d)(3) of the Exchange Act) other than the Permitted Holders, or (ii)
the consummation of any transaction (including, without limitation, any merger
or consolidation) the result of which is that any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act), other than the Permitted Holders,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the
voting power of the Corporation's capital stock, unless, in the case of this
clause (ii), the Permitted Holders retain the right or ability, by voting power,
contract or otherwise, to elect or designate a majority of the Board of
Directors of the Corporation; provided that, for so long as any Senior
Subordinated Notes are outstanding, a Change of Control shall not be deemed to
occur for purposes of this Certificate of Designation unless the same event or
transaction shall also have caused a "Change of Control" to have occurred for
purposes of the Senior Subordinated Note Indenture, and the Corporation shall be
required to make a "Change of Control Offer" as provided therein.
"Change of Control Notice" shall have the meaning set forth
in Section 6(b)
"Change of Control Price" shall have the meaning set forth in
Section 6(b).
"Class A Common Stock" shall mean the Class A common stock,
par value $.01 per share, of the Corporation.
"Common Share Equivalent Number " shall have the meaning set
forth in Section 3.
2
"Common Share Equivalent Price" means initially $1.25 (the
quotient obtained by dividing the Liquidation Price by the initial Common Share
Equivalent Number), subject to adjustment pursuant to Section 10.
"Common Stock" shall mean the Company Common Stock and the
Class A Common Stock as the same exist as of the date hereof or as such stock
may be constituted from time to time.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Corporation.
"Current Market Price" shall mean the Current Market Price of
the Company Common Stock calculated in accordance with Section 10(a)(iv).
"Dividend Rate" shall have the meaning specified in Section 4.
"Employee Plans" shall mean any equity incentive plan,
agreement, bonus, award, stock purchase plan, stock option or other stock
arrangement with respect to any directors, officers or other employees of the
Corporation.
"Equity Equivalents" shall mean Common Stock or rights,
warrants, options or other convertible securities (including the Repriced
Preferred Stock and any other convertible debt or equity) representing the right
to acquire Common Stock, or any securities that have similar common equity
features, but excluding the exercise of options which were granted prior to the
initial public offering of the Corporation or options that were or are set at
the market price at the time such options were or are granted by the Corporation
or as determined by the Board of Directors or a duly authorized committee
thereof.
"Equity Put Notice" shall have the meaning specified in
Section 6(a)(ii).
"Equity Put Purchase Price" shall have the meaning specified
in Section 6(a)(ii).
"Equity Share Value" shall mean (a) with respect to an
Acquisition Transaction in which the holders of Company Common Stock receive
consideration, the price per share received by such holders of Company Common
Stock, (b) with respect to a Stock Transaction, the price per share paid if
Company Common Stock is issued or sold in a Stock Transaction (or the conversion
price or exercise price (or equivalent price per share) if convertible
securities (or any other securities that have similar common equity features)
are issued or sold in a Stock Transaction), and (c) with respect to any other
Change of Control transaction, the Current Market Price of the Company Common
Stock determined as provided in Section 10(a)(iv) as of the date of such Change
of Control transaction. If the consideration in any Acquisition Transaction,
Stock Transaction or other Change of Control transaction includes any evidence
of indebtedness, securities or other non-cash assets (including securities of
any company other than the Corporation), the Equity Share Value shall include
3
the fair value of such evidence of indebtedness, securities or other non-cash
assets as agreed to by the Corporation and the Majority Holders (or, if not so
agreed, as determined in the manner described in the second to last sentence of
Section 10(a)(iv)).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Group" shall have the meaning set forth in Rule 13d-5, as in
effect on the date hereof, under the Exchange Act.
"Holders" shall mean the holders of the Series D Preferred
Stock.
"Junior Stock" shall have the meaning specified in Section 2.
"Junior Subordinated Note Indenture" means the Indenture dated
as of the Closing Date (as defined in the Purchase Agreement) relating to the
Junior Subordinated Notes, between the Corporation or issuer and Oak Hill
Capital Partners, L.P. as trustee.
"Junior Subordinated Notes" means the 11.3025% Junior
Subordinated Convertible Notes due 2007 issued pursuant to the Junior
Subordinated Note Indenture.
"Legal Holiday" shall mean any day on which banking
institutions are obligated or authorized to close in The City of New York.
"Liquidation Price" shall mean for each share of Series D
Preferred Stock, as of any date, an amount equal to $12,500 per share.
"Majority Holders" shall mean the Holders of a majority of the
then outstanding shares of Series D Preferred Stock.
"Market Price Determination Date" shall have the meaning
specified in Section 6(a)(ii).
"NASDAQ" shall mean the National Association of Securities
Dealers Automated Quotation System.
"Notice" shall have the meaning specified in Section 6(b).
"NYSE" shall mean the New York Stock Exchange.
"Parity Securities" shall have the meaning specified in
Section 5.
"Permitted Holders" means (a) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (or, in the
event of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective Affiliates and Associates.
4
"Person" means any individual, firm, corporation, partnership,
limited partnership, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3), as in effect on the
date hereof, of the Exchange Act.
"Preferred Stock" shall mean the Serial Preferred Stock, par
value $.01 per share, of the Corporation.
"Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of July 15, 2001, between the Corporation, Oak Hill Capital
Partners, L.P., and the other parties identified therein.
"Repriced Preferred Notice" shall have the meaning specified
in Section 6(a)(i).
"Repriced Preferred Stock" shall mean the 10.5% Repriced
Convertible Exchangeable Preferred Stock, $.01 par value per share, of the
Corporation.
"Senior Liquidation Stock" shall have the meaning specified in
Section 5.
"Senior Subordinated Note Indenture" means the Indenture dated
as of June 28, 1996, as amended and supplemented by the Supplemental Indenture
dated as of September 4, 1998, the Second Supplemental Indenture dated as of
September 4, 1998, the Third Supplemental Indenture dated as of August 6, 1999,
and the Fourth Supplemental Indenture dated as of October 6, 1999, and as it may
be further amended from time to time, relating to the Senior Subordinated Notes,
among the Corporation, as issuers, several of the Corporation's subsidiaries, as
guarantors, and The United States Trust Company of New York, as trustee.
"Senior Subordinated Notes" means the Corporation's Series A
and Series B Senior Subordinated Notes due 2006 issued pursuant to the Senior
Subordinated Note Indenture.
"Series B Preferred Stock" shall mean the 8.5% Series B
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
"Series C-1 Preferred Stock" shall mean the 12% Series C-1
Convertible Participating Preferred Stock, par value $.01 per share, of the
Corporation.
"Series C-2 Preferred Stock" shall mean the 15% Series C-2
Preferred Stock, par value $.01 per share, of the Corporation.
"Stock Transaction" shall mean a Change of Control effected by
transaction or series of transactions pursuant to which the Corporation issues
or sells shares of Common Stock or rights, warrants, options or other
convertible securities representing the right to acquire Common Stock, or any
securities that have similar common equity features.
5
"Stockholders" shall mean Oak Hill Capital Partners, L.P.,
Oak Hill Securities Fund, L.P. and their respective Affiliates and Associates
who may now or hereafter own Equity Equivalents.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such Person (or any combination thereof).
Section 2. Rank.
All shares of Series D Preferred Stock, both as to payment of
dividends and to distribution of assets upon liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, shall rank (i) junior
to the Repriced Preferred Stock, the Series B Preferred Stock, the Series C-1
Preferred Stock and the Series C-2 Preferred Stock, (ii) senior to any class of
the Corporation's preferred stock hereafter issued (other than any class of
preferred stock which expressly ranks pari passu (based on relative liquidation
preference) with the Series D Preferred Stock) (the "Junior Preferred"), and
(iii) senior to all of the Corporation's now or hereafter issued Common Stock or
any other common stock of any class of the Corporation (collectively with the
Junior Preferred, the "Junior Stock").
Section 3. Common Equivalent.
For purposes of determining the rights and preferences of the
Holders of Series D Preferred Stock hereunder, each share of Series D Preferred
Stock shall initially be deemed to represent 10,000 shares of Company Common
Stock, subject to adjustment pursuant to the provisions of Section 10. The
number of shares of Common Stock which a share of Series D Preferred Stock shall
be deemed to represent from time to time, taking account of the adjustment
events described in Section 10, is referred to herein as the "Common Share
Equivalent Number."
Section 4. Dividends and Certain Restrictions.
The Holders shall not be entitled to receive any dividends or
distributions except as provided in this Section 4. If the Corporation declares
and pays dividends on the Common Stock or otherwise makes any distribution in
respect thereof, the Holders shall participate ratably in such dividends or
distributions based on the following formula: For each share of Series D
Preferred Stock, the Holder thereof shall be entitled to receive an amount equal
to the product of (x) the Common Share Equivalent Number multiplied by (y) the
amount of the dividend declared and paid or distribution made in respect of each
share of Common Stock.
6
No dividends may be paid (or declared and set aside for
payment), on the Common Stock, and no other distributions may be made in respect
of the Common Stock, and no Common Stock (or any rights, options or warrants to
purchase Common Stock), may be redeemed, purchased or otherwise acquired for any
consideration by the Corporation, unless the Corporation shall simultaneously
declare and pay a dividend or make a distribution to the holders of the Series D
Preferred Stock as provided in this paragraph or unless, in the case of a
redemption, purchase or acquisition of Common Stock, the Corporation
simultaneously offers to redeem, purchase or acquire a corresponding portion
(based on the ratio that the Common Share Equivalent Number of all outstanding
shares of Series D Preferred Stock bears to the total number of outstanding
shares of Common Stock) at a price per share of Series D Preferred Stock equal
to the Common Share Equivalent Number of such share multiplied by the price per
share to be paid for each share of Common Stock, and otherwise on a basis and
with notice that the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock are entitled to
participate in the offer. The record date for the payment of any dividend or
distribution under this Section 4 shall be not more than 60 nor less than 30
days preceding the date of payment thereof.
Any reference to "dividend" or "distribution" contained in
this Section 4 shall not be deemed to include any dividend or distribution made
in connection with any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, that is effected in accordance
with the preferences and priorities set forth in the Corporation's certificate
of incorporation and all certificates of designation setting forth the rights of
the holders of the Corporation's Preferred Stock.
Section 5. Liquidation Right.
In the event of a liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, for each share of Series D
Preferred Stock the Holders shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, before any payment shall be made or any assets distributed to the
holders of Common Stock or any other class or series of the Corporation's
capital stock ranking junior as to liquidation rights to the Series D Preferred
Stock an amount equal to the sum of (1) the Liquidation Price and (2) an
additional amount equal to the product of (x) the amount of the remaining assets
of the Corporation available for distribution after payment in full of the
Liquidation Price of the Series D Preferred Stock and the respective liquidation
preferences payable to the holders of any class or series of preferred stock of
the Corporation ranking senior as to liquidation rights to the Series D
Preferred Stock (the "Senior Liquidation Stock") and to the holders of any other
class or series of preferred stock (but excluding in each case any liquidation
preference that ranks equally with the Common Stock) multiplied by (y) a
fraction the numerator of which is the Common Share Equivalent Number and the
denominator of which is the sum of the number of shares of Common Stock then
outstanding and the aggregate Common Stock Equivalent Number for all outstanding
7
shares of Series D Preferred Stock; provided, however, that such rights shall
accrue to the Holders only in the event that the Corporation's payments with
respect to the liquidation preferences of the holders of the Senior Liquidation
Stock shall have been fully met. If the assets of the Corporation available for
distribution after payment of the liquidation preferences of holders of all the
Senior Liquidation Stock are not sufficient to pay the full amount to which the
holders of outstanding shares of Series D Preferred Stock and the liquidation
preferences payable to the holders of any class or series of preferred stock
ranking (based on relative liquidation preference) pari passu with the Series D
Preferred Stock ("Parity Securities"), then the assets of the Corporation shall
be distributed ratably among the Holders and the holders of Parity Securities.
Upon any liquidation, dissolution or winding up of the
Corporation, after the holders of the Senior Liquidation Stock, the Series D
Preferred Stock and any Parity Securities shall have been paid in full the
amounts to which they shall be entitled, the remaining assets of the Corporation
may be distributed to the holders of Junior Stock.
Neither a consolidation, merger or other business combination
of the Corporation with or into another corporation or other entity nor a sale
or offer of all or part of the Corporation's assets for cash, securities or
other property shall be considered a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 5 (unless in connection therewith
the liquidation of the Corporation is specifically approved).
Section 6. Redemption.
The Company shall purchase all or a portion (as applicable) of
a Holder's Series D Preferred Stock at the prices and on the dates, and
otherwise on the terms and subject to the conditions, provided in this Section
6.
(a) Redemption at the Option of the Holders.
(i) Each Holder may require the Corporation to purchase such requesting Holder's
Series D Preferred Stock on July 31, 2007, at a purchase price per share of
Series D Preferred Stock in cash in an amount equal to the Liquidation Price.
No purchase of Series D Preferred Stock shall be made unless
and until all outstanding Repriced Preferred Stock has been converted,
repurchased, redeemed or otherwise retired or the holders of the Repriced
Preferred Stock have consented thereto in accordance with the requirements of
the Corporation's certificate of incorporation. If a repurchase of Series D
Preferred Stock cannot occur by reason of this paragraph, the Corporation, on
the first Business Day after all Repriced Preferred Stock has been so converted,
repurchased, redeemed or otherwise retired or such consent shall have been
granted, shall give to each Holder a written notice (a "Repriced Preferred
Notice") stating:
(1) that Repriced Preferred Stock has been converted, repurchased,
redeemed or retired or that the consent of the holders of the Repriced
Preferred Stock has been obtained; and
8
(2) that the Holder has the right to require the Corporation to
purchase such Holder's Series D Preferred Stock at a purchase price per
share of Series D Preferred Stock in cash in an amount equal to the
Liquidation Price;
(3) the purchase date, which date shall be no earlier than 10 days nor
later than 15 days from the date such notice is mailed; and
(4) the instructions (which shall be consistent with this Section
6(a)(i)) a Holder must follow in order to have its Series D Preferred Stock
purchased.
Holders electing to have Series D Preferred Stock purchased
under this Section 6(a)(i) will be required to surrender such Series D Preferred
Stock to the Corporation at any time during normal business hours at its
principal place of business (or such other office or agency of the Corporation
as the Corporation may designate by notice in writing to the Holders) at least
five Business Days prior to July 31, 2007 (or, if applicable, the purchase date
stated in the applicable Repriced Preferred Notice). Any Holder will be entitled
to withdraw its election if the Corporation receives, not later than three
Business Days prior to July 31, 2007 (or, if applicable, the purchase date
stated in the applicable Repriced Preferred Notice), a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder, the
amount of the Series D Preferred Stock delivered by such Holder as to which its
election is to be withdrawn and a statement that such Holder is withdrawing its
election to have such Series D Preferred Stock purchased.
If, on July 31, 2007 (or, if applicable, the purchase date
stated in the applicable Repriced Preferred Notice), funds are not legally
available to the Corporation for purchase of the shares of Series D Preferred
Stock that the Holders have requested to be purchased by the Company, the
Corporation shall purchase on such date, at the Liquidation Price, pro rata
among the electing Holders based on the Liquidation Price of their shares, that
number of shares of Series D Preferred Stock which it can lawfully purchase, and
from time to time thereafter, as soon as funds are legally available, the
Corporation shall purchase at the Liquidation Price shares of Series D Preferred
Stock pro rata among the electing Holders until the Corporation has purchased
all the shares of Series D Preferred Stock that the Holders have requested be
purchased.
In the event that the Corporation is in arrears in the
purchase of its Series D Preferred Stock pursuant to this Section 6(a)(i)
(including, without limitation, by reason of the fact that sufficient funds are
not legally available to pay the purchase price), or a purchase cannot occur by
reason of the fact that the Repriced Preferred Stock is outstanding, the
Corporation may not (i) purchase, redeem or pay dividends on any Junior Stock or
(ii) make any mandatory purchase or redemption of any Series D Preferred Stock
or Parity Securities except pro rata according to all such obligations then due
or in arrears.
Any shares of Series D Preferred Stock that are not purchased
on the scheduled purchase date shall continue to be outstanding and bear
dividends until purchased.
9
(ii) After the 91st day following the date on which all Senior Subordinated
Notes are no longer outstanding, each Holder may require the Corporation to
purchase all or a portion of such requesting Holder's Series D Preferred Stock
at a purchase price in cash for each share of Series D Preferred stock equal to
the product obtained by multiplying the Common Share Equivalent Number effective
as of the Market Price Determination Date (as defined below) in any year
multiplied by the Current Market Price per share of Company Common Stock,
determined in the manner set forth in Section 10(a)(iv) below, as of the Market
Price Determination Date (the "Equity Put Purchase Price"). "Market Price
Determination Date" means (A) the 92nd day (or if such day is not a Business
Day, the succeeding Business Day) following the date on which all Senior
Subordinated Notes are no longer outstanding (the "Initial Market Price
Determination Date") and (B) in any subsequent year, the anniversary of the
Initial Market Price Determination Date (or, if such anniversary is not a
Business Day, the next succeeding Business Day).
If the Company Common Stock is then listed or admitted to
trading on the NYSE or another national securities exchange or prices for the
Company Common Stock are quoted on the NASDAQ National Market, the Company may,
at its option and in lieu of cash, pay the Equity Put Purchase Price by delivery
to the requesting Holders, for each share of Series D Preferred Stock, a number
of shares of Company Common Stock equal to the Common Share Equivalent Number of
such share of Series D Preferred Stock on the Market Price Determination Date.
In connection with any purchase of shares of Series D
Preferred Stock in any one year pursuant to this Section 6(a)(ii), if the
Corporation elects to pay the Equity Put Purchase Price in cash and the
aggregate purchase price for all shares of Series D Preferred Stock requested to
be purchased by the electing Holders would exceed $15,000,000, then the
Corporation shall not be obligated to purchase more than one third of the total
number of outstanding shares of Series D Preferred Stock on a fully diluted
basis (after giving effect to the conversion of any outstanding convertible
securities) on the first date on which a Holder requests a repurchase under this
Section 6(a)(ii) (or such greater number of shares with an aggregate Equity Put
Purchase Price equal to $15,000,000). If the Corporation elects to limit the
number of shares of Series D Preferred Stock to be purchased as provided in this
paragraph, then any reduction in the number of shares of Series D Preferred
Stock shall be effected pro rata as to all Holders based on the number of shares
of Series D Preferred Stock held by them.
Within 15 days following each Market Price Determination Date,
the Corporation shall give to each Holder a written notice (the "Equity Put
Notice") stating:
(1) that such Holder has the right to require the Corporation to
purchase all or a portion of such Holder's Series D Preferred Stock at the
Equity Put Purchase Price as set forth above;
(2) the purchase date, which date shall be no earlier than 15 days nor
later than 30 days from the date the Equity Put Notice is mailed;
10
(3) the Corporation's calculation of the Equity Put Purchase Price and
whether the Equity Put Purchase Price will be paid in cash or in shares of
Company Common Stock;
(4) if the Corporation elects to pay the Equity Put Purchase Price in
cash, and intends to limit the number of shares of Series D Preferred Stock
to be purchased as provided above, the aggregate number of shares of Series
D Preferred Stock the Corporation intends to purchase (which shall not be
less than one-third of the total number of shares of Series D Preferred
Stock on a fully diluted basis as provided above, or such greater number of
shares with an Equity Put Purchase Price equal to $15,000,000); and
(5) the instructions a Holder must follow in order to have its Series
D Preferred Stock purchased pursuant to this Section 6(a)(ii).
Holders electing to have Series D Preferred Stock purchased
under this Section 6(a)(ii) shall be required, at least five Business Days prior
to the purchase date specified in the Equity Put Notice, to deliver written
notice to the Corporation at its principal place of business (or such other
office or agency of the Corporation as the Corporation may designate by notice
in writing to the Holders), that he or she elects to have such shares purchased
by the Corporation pursuant to this Section 6(a)(ii) and stating the number of
shares of Series D Preferred Stock to be purchased. Any Holder will be entitled
to withdraw its election at any time prior to the purchase date specified in the
Equity Put Notice for any reason.
A Holder requesting to have its shares of Series D Preferred
Stock purchased pursuant to this Section 6(a)(ii) shall not be entitled to
receive payment of the Equity Put Purchase Price for its shares until such
Holder shall cause to be delivered to the place specified in the Equity Put
Notice (i) the certificate(s) representing such shares of Series D Preferred
Stock to be purchased and (ii) transfer instrument(s) satisfactory to the
Corporation and sufficient to transfer such shares of Series D Preferred Stock
to the Corporation free of any adverse interests; provided that the foregoing is
subject to the other provisions of the Corporation's certificate of
incorporation or the Corporation's bylaws governing lost certificates generally.
If less than all of the shares represented by any such certificate are to be
purchased, a new certificate shall be issued without cost to the Holder thereof
representing the unredeemed shares.
No Equity Put Notice shall be issued pursuant to this Section
6(a)(ii) unless and until all outstanding Repriced Preferred Stock has been
converted, repurchased, redeemed or otherwise retired or the holders of the
Repriced Preferred Stock shall have consented to the issuance of the Equity Put
Notice in accordance with the requirements of the Corporation's certificate of
incorporation.
If funds are not legally available to the Corporation for
purchase of the shares of Series D Preferred Stock that the electing Holders
have requested to be purchased, the Corporation shall purchase on the scheduled
purchase date, at the Equity Put Purchase Price, pro rata among the Holders
based on the Liquidation Price of their shares, that number of shares of Series
11
D Preferred Stock which it can lawfully purchase, and from time to time
thereafter, as soon as funds are legally available, the Corporation shall
purchase at the Equity Put Purchase Price shares of Series D Preferred Stock pro
rata among the electing Holders until the Corporation has purchased all the
shares of Series D Preferred Stock that the electing Holders have requested be
purchased.
If the Corporation defaults or is in arrears in its
obligations under this Section 6(a)(ii), (including, without limitation, by
reason of the fact that sufficient funds are not legally available to pay the
Equity Put Purchase Price), or if the Company is not permitted to deliver an
Equity Put Notice by reason of the fact that the Repriced Preferred Stock
remains outstanding, the Corporation may not (i) purchase, acquire, redeem or
pay dividends on any Junior Stock or (ii) purchase, redeem or otherwise acquire
any Series D Preferred Stock or Parity Securities except pro rata according to
all such obligations then due or in arrears.
Any shares of Series D Preferred Stock that are not purchased
on the scheduled purchase date shall continue to be outstanding and bear
dividends until purchased.
(b) Change Of Control. Upon the occurrence of a Change of Control, each Holder
may require the Corporation to purchase such requesting Holder's Series D
Preferred Stock at a purchase price in cash in an amount equal to the greater of
(i) the Liquidation Price and (ii) the Equity Share Value (the "Change of
Control Price").
Within 45 days following any Change of Control, the
Corporation shall give to each Holder a written notice (a "Change of Control
Notice") stating:
(i) that a Change of Control has occurred and that such Holder has the right to
require the Corporation to purchase such Holder's Series D Preferred Stock at
the Change of Control Price as set forth above;
(ii) the circumstances and relevant facts regarding such Change of Control;
(iii) the purchase date, which date shall be no earlier than 45 days nor later
than 60 days from the date such notice is mailed; and
(iv) the instructions a Holder must follow in order to have its Series C-1
Preferred Stock purchase pursuant to this Section 6(b).
The Change of Control Notice shall be given by first class
mail, postage prepaid, to each Holder of record of the Series D Preferred Stock,
at such Holder's address as it shall appear upon the stock transfer books of the
Corporation.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder of the
Series D Preferred Stock receives such notice; and failure to give such notice
12
by mail, or any defect in such notice, to a Holder of any shares designated for
purchase shall not affect the validity of the proceedings for the purchase of
any shares of Series D Preferred Stock owned by other Holders to whom such
notice was duly given.
Holders electing to have Series D Preferred Stock redeemed
under this Section 6(b) will be required to surrender such Series D Preferred
Stock to the Corporation at the address specified in the Change of Control
Notice at least five Business Days prior to the specified purchase date. Any
Holder will be entitled to withdraw its election if the Corporation receives,
not later than three Business Days prior to the redemption date, a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder,
the amount of the Series D Preferred Stock delivered for purchase by such Holder
as to which its election is to be withdrawn and a statement that such Holder is
withdrawing its election to have such Series D Preferred Stock purchased.
No Change of Control Notice shall be issued pursuant to this
Section 6(b) unless and until all outstanding Repriced Preferred Stock has been,
or shall have been as part of the Change of Control, converted, repurchased,
redeemed or otherwise retired or the holders of the Repriced Preferred Stock
shall have consented to the issuance of the Change of Control Notice in
accordance with the requirements of the Corporation's certificate of
incorporation. If a Change of Control Notice cannot be issued by reason of this
paragraph, the Company shall deliver the Change of Control Notice on the first
Business Day after all outstanding Repriced Preferred Stock has been so
converted, repurchased, redeemed or otherwise retired or such consent shall have
been granted.
If any Senior Subordinated Notes are outstanding or were
outstanding within 91 days prior to the scheduled date of purchase under this
Section 6(b), (i) notwithstanding any other provision of this Section 6(b), the
purchase date of any Series D Preferred Stock shall not occur prior to the
purchase date for the Senior Subordinated Notes, and (ii) no purchase or
payments shall be made under this Section 6(b) so long as such purchase or
payments are prohibited by the terms of the Senior Subordinated Note Indenture.
Any purchase or payment not made by reason of this paragraph shall be deferred
until the first date on which such payment shall be permitted to be made under
the terms of the Senior Subordinated Note Indenture. If the Corporation is only
permitted to purchase a portion of the Series D Preferred Stock or to pay part
of the Change of Control Price (including, without limitation, paying only the
Liquidation Price and a portion of the premium), it shall immediately pay such
portion to the Holders pro rata in accordance with the Liquidation Price of
their shares.
If, upon any Change of Control, funds are not legally
available to the Corporation for purchase of the shares of Series D Preferred
Stock that the Holders have requested to be purchased, the Corporation shall
purchase on the scheduled purchase date, at the Change of Control Price, pro
rata among the Holders based on the Liquidation Price of their shares, that
number of shares of Series D Preferred Stock which it can lawfully purchase, and
from time to time thereafter, as soon as funds are legally available, the
13
Corporation shall purchase at the Change of Control Price shares of Series D
Preferred Stock pro rata among the electing Holders until the Corporation has
purchased all the shares of Series D Preferred Stock that the Holders have
requested be purchased.
If the Corporation defaults or is in arrears in its
obligations under this Section 6(b), (including, without limitation, by reason
of the fact that sufficient funds are not legally available to pay the Change of
Control Price), or if the Company does not deliver a Change of Control Notice by
reason of the fact that the Repriced Preferred Stock remains outstanding, or if
the Company is not permitted to purchase all of the Series D Preferred Stock or
to pay all or any portion of the Change of Control Price for any reason, the
Corporation may not (i) purchase, acquire, redeem or pay dividends on any Junior
Stock or (ii) purchase, redeem or otherwise acquire any Series D Preferred Stock
or Parity Securities, except pro rata according to all such obligations then due
or in arrears.
The Corporation will not be required to pay the Change of
Control Price upon a Change of Control if a third party pays the Change of
Control Price in the manner, at the time and otherwise in compliance with the
requirements set forth in Section 6(b) applicable to the Change of Control Price
payable by the Corporation.
Any shares of Series D Preferred Stock that are not purchased
on the scheduled purchase date shall continue to be outstanding and bear
dividends until purchased.
(c) Conflict. If there is any conflict between the provisions of this Section 6)
and any applicable federal securities laws or regulations, the provisions of
such federal securities laws and regulations shall apply.
Section 7. Voting Rights.
(a) General.
The Series D Preferred Stock shall not have the right to vote
except as provided in Section 7(b) below and for voting rights required under or
granted by Delaware law. In connection with any right of the Holders of the
Series D Preferred Stock to vote separately as a class pursuant to Section 7(b)
or under Delaware law, each Holder will have one vote for each share of Series D
Preferred Stock held by it. Any shares of Series D Preferred Stock held by the
Corporation or any entity controlled by the Corporation shall not have voting
rights hereunder and shall not be counted in determining the presence of a
quorum.
(b) Class Voting Rights.
(i) Actions Requiring Affirmative Vote. So long as shares of Series D Preferred
Stock are outstanding, the Corporation shall not, directly or indirectly, or
through merger or consolidation with any other person, without the affirmative
vote or consent of the Majority Holders, with the Holders voting separately as a
class, (a) amend, alter or repeal (by merger, consolidation or otherwise) any
provision of the Corporation's certificate of incorporation or the Corporation's
14
by-laws, as amended, so as to affect adversely the relative rights, preferences,
powers (including, without limitation, voting powers) and privileges of the
Series D Preferred Stock, (b) authorize or issue any new class of shares or
Equity Equivalents having a preference with respect to dividends, redemption
and/or liquidation over, or on a parity with, the Series D Preferred Stock, (c)
reclassify any of its Junior Stock into shares having a preference with respect
to dividends, redemption and/or liquidation over, or on a parity with, the
Series D Preferred Stock, or (d) issue any additional shares of Series D
Preferred Stock (other than upon conversion of the Junior Subordinated Notes).
(ii) Special Meeting. Whenever the rights described above shall vest pursuant to
this Section 7(b) or Delaware law, such rights may be exercised by the vote of
the Majority Holders present and voting, in person or by proxy, at a special
meeting of Holders or at the next annual meeting of stockholders, or by written
consent of the Majority Holders without a meeting. Unless such action shall have
been taken by written consent as aforesaid, a special meeting of the Holders for
the exercise of any such right shall be called by the Secretary of the
Corporation as promptly as possible in compliance with applicable law and
regulations, and in any event within 10 days after receipt of a written request
signed by the Holders of record of at least 25% of the then outstanding shares
of the Series D Preferred Stock, subject to any applicable notice requirements
imposed by law or by any national securities exchange on which any Series D
Preferred Stock is listed. Such meeting shall be held at the earliest
practicable date thereafter.
(iii) Stockholders' Right To Call Meeting. If any meeting of the Holders
required by this paragraph (b) to be called shall not have been called within 10
days after personal service of a written request therefor upon the Secretary of
the Corporation or within 15 days after mailing the same within the United
States of America by registered mail addressed to the Secretary of the
Corporation at its principal office, subject to any applicable notice
requirements imposed by law or any national securities exchange on which any
Series D Preferred Stock is then listed, then the Holders of record of at least
25% of the then outstanding shares of the Series D Preferred Stock may designate
in writing a Holder of the Series D Preferred Stock to call such meeting at the
reasonable expense of the Corporation, and such meeting may be called by such
Person so designated upon the notice required for annual meetings of
stockholders or such shorter notice (but in no event shorter than permitted by
law or any national securities exchange on which the Series D Preferred Stock is
then listed) as may be acceptable to the Majority Holders. Any Holder of Series
D Preferred Stock so designated shall have reasonable access to the stock books
of the Corporation relating solely to the Series D Preferred Stock for the
purpose of causing such meeting to be called pursuant to these provisions.
(iv) Quorum. At any meeting of the Holders called in accordance with the
provisions of this paragraph (b), the presence in person or by proxy of the
Majority Holders with the Holders of Series D Preferred Stock voting as a single
class shall be required to constitute a quorum; in the absence of a quorum, a
15
majority of the Holders present in person or by proxy shall have power to
adjourn the meeting from time to time without notice, other than announcement at
the meeting, until a quorum shall be present.
Section 8. Outstanding Shares.
For purposes of this Certificate of Designation, all shares of
Series D Preferred Stock shall be deemed outstanding except from the date of
registration of transfer, all shares of Series D Preferred Stock held of record
by the Corporation or any subsidiary of the Corporation.
Section 9. Status of Acquired Shares.
The Corporation shall take all such actions as are necessary
to cause any shares of Series D Preferred Stock redeemed by the Corporation or
otherwise acquired by the Corporation, to be restored to the status of
authorized and unissued shares of Preferred Stock, without designation as to
series, and such shares may thereafter be issued, but not as shares of Series D
Preferred Stock unless the other provisions of this Resolution have been
complied with.
Section 10. Anti-Dilution Adjustments
(a) The Common Share Equivalent Number and the Common Share Equivalent Price
shall be adjusted from time to time as follows: Whenever the Common Share
Equivalent Number is adjusted pursuant to paragraph (a)(i) below, the Common
Share Equivalent Price shall be automatically adjusted to equal the quotient
obtained by dividing the Liquidation Price by the adjusted Common Share
Equivalent Number, and whenever the Common Share Equivalent Price is adjusted
pursuant to paragraph (b)(ii) or (iii) below, the Common Share Equivalent Number
shall also be automatically adjusted by dividing the Common Share Equivalent
Number in effect as of the Adjustment Date by the adjusted Common Share
Equivalent Price.
(i) In case the Corporation shall (i) pay a dividend in shares of any class of
its Common Stock to all holders of such class, (ii) make a distribution in
shares of any class of its Common Stock to all holders of such class, (iii)
subdivide any of its outstanding Common Stock into a greater number of shares,
or (iv) combine any of its outstanding Common Stock into a smaller number of
shares, the Common Share Equivalent Number shall be adjusted so that following
such event the Common Share Equivalent Number shall represent a percentage of
the number of outstanding shares of Common Stock equal to the percentage of the
number of shares of Common Stock outstanding immediately preceding the happening
of such event. An adjustment made pursuant to this subsection (i) shall become
effective immediately after the record date in the case of a dividend in shares
or distribution and shall become effective immediately after the effective date
in the case of subdivision or combination.
(ii) In case the Corporation shall issue Equity Equivalents to all or
substantially all holders of any class of its Common Stock or to any other
person (other than the Holders) entitling such person or persons to subscribe
16
for, purchase or otherwise acquire shares of Common Stock (or securities in any
manner representing the right to acquire Common Stock or other Equity
Equivalent) at a price per share (or conversion or other equivalent price per
share) that is less than the then Current Market Price per share of Common Stock
(as determined in accordance with subsection (v) below) at the record date for
the determination of shareholders entitled to receive such Equity Equivalents on
the date of issuance thereof or, with respect to issuances to persons other than
Holders, on the issue date, as applicable, the Common Share Equivalent Price in
effect immediately prior thereto shall be adjusted so that the same shall equal
the price determined by multiplying the Common Share Equivalent Price in effect
immediately prior to such record date or issue date, as applicable, by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on such record date or issue date, as applicable, plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock or other Equity Equivalent so offered, (or the aggregate conversion
price or other equivalent price of the securities so offered) would purchase at
such Current Market Price (as defined in subsection (iv) below), and of which
the denominator shall be the number of shares of Common Stock outstanding on
such record date or issue date, as applicable, plus the number of additional
shares of Common Stock offered (or into which the convertible securities so
offered are convertible or, in the case of other Equity Equivalents, the number
of shares of Common Stock represented by such Equity Equivalent). Such
adjustment shall be made successively whenever any Equity Equivalents are
issued, and shall become effective immediately after such record date or such
sale date, as applicable. If at the end of the period during which such Equity
Equivalents are exercisable not all such Equity Equivalents shall have been
exercised, the adjusted Common Share Equivalent Price shall be readjusted to
what it would have been based upon the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities or other Equity Equivalents actually
issued).
(iii) In case the Corporation shall distribute to all or substantially all
holders of any class of Common Stock any shares of capital stock of the
Corporation (other than Common Stock), evidences of indebtedness or other
non-cash assets (including securities of any company other than the
Corporation), or shall distribute to all or substantially all holders of any
class of Common Stock rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subsection (ii) above), then in each
such case the Common Share Equivalent Price shall be adjusted so that the same
shall equal the price determined by multiplying the Common Share Equivalent
Price in effect immediately prior to the date of such distribution by a fraction
of which the numerator shall be the Current Market Price per share (as defined
in subsection (iv) below) of the Company Common Stock on the record date
mentioned below less the fair market value on such record date (as agreed to by
the Corporation and the Majority Holders or, if not so agreed, as determined in
a manner similar to the determination of Current Market Price described in the
second to last sentence of subsection (iv) below) of the portion of the capital
stock or assets or evidences of indebtedness so distributed or of such rights or
warrants applicable to one share of Common Stock (determined on the basis of the
number of shares of Common Stock outstanding on the record date), and of which
the denominator shall be the Current Market Price per share (as defined in
17
subsection (iv) below) of the Company Common Stock on such record date. Such
adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(iv) For the purpose of any computation under subsections (ii) and (iii) of this
Section 10(a), the current market price (the "Current Market Price") per share
of Company Common Stock on any date shall be deemed to be equal to the average
of the daily closing prices of the Company Common Stock on the NYSE or, if not
then listed or traded on the NYSE, such other national securities exchange or
the NASDAQ National Market if the Company Common Stock is then listed or traded
thereon for the 10 trading days immediately prior to the record date or date of
issuance with respect to distributions, issuances or other events requiring such
computation under subsection (ii) or (iii) above; provided that in the case of
an underwritten public offering of Equity Equivalents which are currently
traded, the Current Market Price shall be the closing price of the Company
Common Stock on the issuance date, less an allowance for a customary discount to
the current market trading price which is reasonably required to effect such
offering. The closing price for each day shall be the closing price on the NYSE
or the last reported sales price or, if shares of the Company Common Stock are
not listed or admitted to trading on the NYSE, on the principal national
securities exchange on which the Company Common Stock is listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, the closing sales price of the Company Common Stock as quoted on the
NASDAQ National Market. Notwithstanding the provisions of this subsection (iv),
if (A) the Common Stock is listed or traded on the NYSE or other national
securities exchange or quoted on the NASDAQ National Market but either (1) the
prices described in this Section 10(c)(iv) are not available or (2) the Majority
Holders determine that the such prices do not adequately reflect the fair value
of a share of Company Common Stock due to limited float or trading volume, or
(B) the Common Stock is not listed on the NYSE or other national securities
market or quoted on the NASDAQ National Market, the Current Market Price shall
be the fair value of a share of Company Common Stock as agreed by the
Corporation and the Majority Holders or if the Corporation and the Majority
Holders are unable to agree, the fair value of a share of Company Common Stock
as determined by a nationally recognized investment bank selected jointly by the
Corporation and the Majority Holders (or if they are unable to agree on such an
investment bank, as determined by a nationally recognized investment bank
selected by lot by the Board of Directors from a total of four such investment
banks (two of which shall be selected by the Corporation and two of which shall
be selected by the Majority Holders)). The fees and expenses of such investment
bank shall be paid by the Corporation.
(v) No Adjustment. No adjustment in the Common Share Equivalent Number or Common
Share Equivalent Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Common Share Equivalent Number or
Common Share Equivalent Price as last adjusted; provided, however, that any
adjustments which by reason of this subsection (v) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 10 shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
18
No adjustment need be made for a transaction referred to in
paragraph (b)(i), (ii) or (iii) above if all Holders of Series D Preferred Stock
are entitled to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in light of the
basis and notice on which holders of Common Stock participate in the
transaction. The Corporation shall give 30 days' prior notice to any transfer
agent and to the Holders of the Series D Preferred Stock of any such
determination.
No adjustment need be made for (a) issuances of Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest, (b) a
change in the par value or a change to no par value of the Common Stock and (c)
the issuance of Common Stock to directors, officers and employees of the
Corporation and its subsidiaries pursuant to any stock-based incentive plan duly
approved by the Board of Directors or any duly authorized committee thereof.
(vi) Notice of Adjustment. Whenever the Common Share Equivalent Number or the
Common Share Equivalent Price is adjusted, the Corporation shall promptly mail
to holders of the Series D Preferred Stock and to the transfer agent a notice of
the adjustment briefly stating the facts requiring the adjustment and the manner
of computing it. The certificate shall be conclusive evidence of the correctness
of such adjustment.
(vii) Notice of Certain Transactions.
In the event that:
(A) the Corporation takes any action which would require an adjustment in the
Common Share Equivalent Number or the Common Share Equivalent Price;
(B) the Corporation consolidates or merges with, or transfers all or
substantially all of its assets to, another corporation and shareholders of the
Corporation must approve the transaction; or
(C) there is a dissolution or liquidation of the Corporation, the Corporation
shall mail to holders of the Series D Preferred Stock and to any transfer agent
a notice stating the proposed record or effective date, as the case may be. The
Corporation shall mail the notice at least 10 days before such date. Failure to
mail such notice or any defect therein shall not affect the validity of any
transaction referred to in clause (A), (B) or (C) of this Section 10(b)(vii).
(viii) Effect of Reclassification, Consolidation, Merger or Sale on Reference
Number and Reference Price. If any of the following shall occur, namely: (a) any
reclassification or change of Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination, or any other change for which an
adjustment is provided in (c)(i), (ii) or (iii) above); (b) any consolidation or
19
merger to which the Corporation is a party other than a merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Common Stock;
or (c) any sale or conveyance of all or substantially all of the assets of the
Corporation as an entirety, then the Corporation, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale or conveyance, ensure
that effective provision be made in the agreements relating to such transaction
and the certificate of incorporation of the resulting or surviving corporation
or otherwise such that each the Holder will receive, in exchange for it's Series
D Preferred Stock, either (1) shares of a class of securities of the Corporation
or its successor that is substantially equivalent to (and not less favorable
than) the Series D Preferred Stock, including, without limitation, with respect
to rank, antidilution protection, rights, dividends and rights or liquidation,
or (2) with respect to any Holder who so elects, into such Holder's
proportionate share (based on the Common Share Equivalent Number of such
Holder's Series D Preferred Stock and assuming that such Holder's Series D
Preferred Stock is Common Stock) the same kind and amount of shares of stock and
the securities and property (including cash) receivable by a holder of Common
Stock upon such reclassification, change, consolidation merger, sale or
conveyance. If in the case of any such consolidation, merger, sale or
conveyance, the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock include shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale
or conveyance, then effective provision shall also be made in the certificate of
incorporation of such other corporation or otherwise of such additional
antidilution provisions as are necessary to protect the interests of the holders
of the Series D Preferred Stock by reason of the foregoing. The provisions of
this Section 10(a)(viii) shall similarly apply to successive consolidations,
mergers, sales or conveyances. The provisions of this Section 10(a)(viii) shall
be in addition to any other rights the Holders of Series D Preferred Stock may
have by operation of law, contract or otherwise.
(b) Deemed Adjustment of Unissued Shares.
All adjustments to the Common Share Equivalent Number and the
Common Share Equivalent Price pursuant to this Section 10 shall apply to and be
effective in respect of all shares of Series D Preferred Stock whether or not
issued and outstanding (or deemed to be outstanding) pursuant to the terms of
this Certificate of Designation. If an adjustment event occurs, the adjustment
to the Common Share Equivalent Number and the Common Share Equivalent Price
shall take effect (1) in the case of shares of Series D Preferred Stock that are
issued and outstanding (including, for this purpose, shares that are deemed not
to be outstanding by reason of the provisions of Section 8 hereof), on the
applicable Adjustment Date, and (2) in the case of all shares of Series D
Preferred Stock that are not outstanding on the applicable Adjustment Date, on
the date such shares are subsequently issued, automatically upon such issuance.
20
Section 11. Reports.
So long as the Series D Preferred Stock remains outstanding,
the Corporation shall cause its annual reports to stockholders and any quarterly
or other financial reports and information furnished by it to stockholders
pursuant to the requirements of the Exchange Act, to be mailed to the holders of
the Series D Preferred Stock (contemporaneously with the mailing of such
materials to the Corporation's stockholders) at their addresses appearing on the
books of the Corporation. If the Corporation is not required to furnish annual
or quarterly reports to its stockholders pursuant to the Exchange Act, it shall
cause its financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a nationally recognized firm of
independent certified public accounts), a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and such other information
which the Corporation would otherwise by required to include in annual and
quarterly reports filed under the Exchange Act, to be mailed to the holders of
the Series D Preferred Stock, within 120 days after the end of each of the
Corporation's fiscal years and within 60 days after the end of each of its first
three fiscal quarters.
Section 12. Severability of Provisions.
Whenever possible, each provision hereof shall be interpreted
in a manner as to be effective and valid under applicable law, but if any
provision hereof is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a
provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
21
EXHIBIT E
AMENDED AND RESTATED BYLAWS
OF
AMERICAN SKIING COMPANY
Adopted: July , 2001
ARTICLE I
Name
Section 1. Name. The name of this corporation is stated in the Certificate
of Incorporation, as amended by the Certificate of Ownership and Merger Merging
American Skiing Company into ASC Delaware, Inc. filed with the Secretary of
State of Delaware on or about October 8, 1999.
ARTICLE II
References, Locations and Seal
Section 1. References. References in these Bylaws to the Certificate of
Incorporation shall mean this corporation's Certificate of Incorporation as
amended from time to time, as on file with the Secretary of State of Delaware.
References in these Bylaws to the Delaware General Corporation Law and to
particular sections of said Law are to said Law and said sections as amended
from time to time. The headings of Articles and Sections in these Bylaws are for
convenience only, and shall not be taken into account in construing these
Bylaws.
Section 2. Office and Location. The registered office of this corporation
in Delaware and the municipality or other place in Delaware where it is located
are set forth in the Certificate of Incorporation. The principal office and
place of business of this corporation, within or without Delaware or Maine,
shall be at such place as the Board of Directors shall from time to time fix.
Section 3. Seal. The seal of this corporation shall be circular in form
with the name of the corporation, the word "Delaware" and the year of its
incorporation so engraved on its face that it may be embossed on paper by
pressure, provided that the Board of Directors may adopt a wafer seal in any
form in respect of any particular document, in which case such wafer seal
affixed to such document shall be the corporate seal of this corporation thereon
for all purposes provided by law. The Secretary shall have custody of the
corporate seal and he or the Assistant Secretary may affix the same to documents
requiring it and attest the same. The Secretary may permit the President or
Assistant Secretary to keep a duplicate of the corporate seal.
ARTICLE III
Meetings of Shareholders
Section 1. Place. All meetings of shareholders shall be held at the
registered office of the corporation or at such other place within or without
Delaware as shall be fixed (i) by the Board of Directors, (ii) by the person or
persons calling the meeting, or (iii) in waivers of notice of the meeting signed
by all persons entitled to notice thereof.
Section 2. Date of Annual Meeting. The annual meeting of shareholders shall
be held on the third Monday of November in each year, if not a legal holiday,
and if a legal holiday, then on the next business day following, at 10:00 a.m.,
Local Time, or at such other hour as may be fixed by the President or Board of
Directors, for the election of a Board of Directors, and for the transaction of
such other business as may properly come before the meeting. The annual meeting
of shareholders may likewise be held at any date and time fixed by the President
or Board of Directors during a period of 30 days after the date hereinabove
specified. If there shall be a failure for whatever reason to hold the annual
meeting for a period of 30 days after the date hereinbefore specified, a
substitute annual meeting of shareholders may be called by any person or persons
entitled to call a special meeting of shareholders.
Section 3. Call of Special Meetings. Special meetings of shareholders for
any purpose or purposes may be called to be held at the date and time fixed in
the call by the President, the Chairman of the Board of Directors (if any), a
majority of the Board of Directors, or the holders of not less than 50% of the
shares entitled to vote at the meeting.
Section 4. Notice. Unless waived in the manner prescribed by law, written
notice stating the place, day and time of the meeting and, in case of a special
meeting or when otherwise required by the Delaware General Corporation Law, the
purpose or purposes for which the meeting is called, shall be delivered within
the time period prescribed in Section 222 of the Delaware General Corporation
Law, either personally or by mail, by or at the direction of the President,
Secretary, , or the officer or persons calling the meeting, to each shareholder
of record entitled to vote at such meeting, and to shareholders of record not
entitled to vote when required by the Delaware General Corporation Law.
ARTICLE IV
Quorum and Voting of Shares
Section 1. Quorum. The holders of a majority of the shares entitled to vote
thereat shall constitute a quorum at a meeting of shareholders.
Section 2. Votes. Except as otherwise provided by the Delaware General
Corporation Law, any corporate action shall be authorized by a majority of the
votes cast at the meeting by the holders of shares entitled to vote on the
subject matter. In elections of Directors, those candidates who receive the
2
greatest number of votes cast at the meeting by the holders of shares entitled
to vote to elect Directors, even though not receiving a majority of the votes
cast, shall be deemed elected.
ARTICLE V
Directors
Section 1. Number and Term. The number of Directors shall be fixed by
resolution of the shareholders or the Board of Directors within the limits
specified in the Certificate of Incorporation. The Directors shall be elected at
the annual meeting of the shareholders, and each Director so elected shall hold
office for one year and until the next succeeding annual meeting and until his
successor shall have been elected and qualified, or until his earlier
resignation, removal from office, death or incapacity.
Section 2. Vacancies, Resignation and Removal. Except as otherwise provided
in the Certificate of Incorporation, any vacancy in the Board of Directors,
including newly created directorships created by an increase in the number of
Directors, may be filled by a majority of the remaining Directors or by the sole
remaining Director. Any Director may resign his office by delivering a written
resignation to the President or Secretary.
Section 3. Powers. In the management and control of the business, property
and affairs of the corporation, the Board of Directors is hereby vested with the
power to authorize any and all corporate action, except when shareholder action
is specifically required by the Delaware General Corporation Law, the
Certificate of Incorporation or these Bylaws.
Section 4. Special Voting Requirements. For so long as the Stockholders (as
defined in the Certificate of Designation authorizing the 12% Series C-1
Convertible Participating Preferred Stock of this corporation (the "Series C-1
Preferred Stock") (the "Series C-1 Certificate of Designation")) Beneficially
Own (as defined in the Series C-1 Certificate of Designation) at least 25% of
both the number of shares of Series C-1 Preferred Stock and the number of shares
of this corporation's 15% Series C-2 Preferred Stock (the "Series C-2 Preferred
Stock") that they own on the Issue Date (as defined in the Series C-1
Certificate of Designation) (as such number may be adjusted for stock splits,
stock dividends and similar transactions), the corporation shall not take the
actions listed in clauses (i) through (ix) below without the affirmative vote of
at least one Stockholder Director or Series C-1 Preferred Director (as each such
term is defined in the Series C-1 Certificate of Designation), either as part of
the vote of the full Board of Directors or of the Executive Committee.
(i) Approval of an annual operating and capital budget, which shall
include operating plans, detailed capital expenditure plans and a business
plan (the "Budget"), which Budget will include, without limitation:
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(A) detailed operating assumptions relating to, without
limitation, (1) pricing, (2) expected skier visits, (3) an explanation
of changes in operating cost from the prior year, (4) head-count and
expected seasonal head-count, (5) departmental "sales, general and
administrative" expenses, including marketing plans and related
budgets, and (6) a detailed analysis of all required capital
expenditures, including return on investment analysis and a
prioritization of both growth and maintenance capital expenditures;
(B) planned material acquisitions, divestitures and other
development decisions (1) involving more than $2,000,000 in the
aggregate or (2) reasonably expected to have an impact of 5% or
more on the corporation's consolidated revenues or earnings;
(C) overall corporate strategy, including actions that
involve repositioning the corporation, commencing new lines of
business or significantly expanding lines of existing business
(other than the skiing business) or making material investments
in joint ventures or non-controlled operating companies;
(D) requirements for capital in accordance with the Budget,
including, without limitation, planned material financings
(whether in the form of debt or equity), including (1) issuance
of debt or equity securities, (2) entering into material new
credit or financing agreements, (3) materially increasing lines
of credit or making material changes in existing credit
arrangements, (4) pledging material assets, (5) the payment of
dividends on outstanding capital stock of the corporation and (6)
any redemption or repurchase of capital stock of the corporation,
other than (x) the redemption or repurchase of the Series C-1
Preferred Stock, the Series C-2 Preferred Stock or of this
corporation's 8.5% Series B Convertible Participating Preferred
Stock or Series D Participating Preferred Stock, and (y)
redemptions in accordance with the terms of any equity incentive
plan, agreement or other bonus, award or stock arrangement with
respect to any directors, officers or other employees of this
corporation (each such arrangement, an "Employee Plan"); and
(E) a "materiality" standard for variations in the Budget
requiring Board of Directors' approval.
(ii) Significant executive personnel decisions (other than
terminations), including, without limitation, hiring decisions or decisions
materially changing the compensation or responsibilities of the chief
executive officer, the president, the chief operating officer, the chief
financial officer or the general counsel of the corporation, or the chief
operating officer (or equivalent position) of American Skiing Company
Resort Properties, Inc.
(iii) Material actions that are likely to affect the corporation's
operating and strategic direction that are reasonably expected or likely to
have an impact of 5% or more on the corporation's consolidated revenues or
earnings.
4
(iv) Any amendment to the corporation's Certificate of Incorporation
or Bylaws.
(v) Any voluntary liquidation, dissolution, winding up,
recapitalization or reorganization of the corporation.
(vi) Initiation of material litigation other than with respect to any
counterclaim made by the corporation in response to any claim made by a
third party.
(vii) Any merger, consolidation or other business combination of the
corporation with or into another person or entity or any sale of all or
substantially all the assets of the corporation or any of ASC East, Inc.,
ASC West, Inc., ASC Utah, Inc. and American Skiing Company Resort
Properties, Inc. or any other subsidiary of the corporation, whether
existing now or created after the date of these Bylaws, that is material to
the corporation and its subsidiaries, taken as a whole.
(viii) Material changes to or reduction in insurance coverage.
(ix) Material financing or capital markets activity not expressly
provided in the Budget.
ARTICLE VI
Meetings of the Board of Directors
Section 1. Annual Meeting. The first meeting of each newly elected Board of
Directors, which shall be the Annual Meeting of the Board of Directors, shall be
held at such time and place as shall be fixed by the shareholders at their
meeting electing them, or if no such time and place are so fixed, said first
meeting shall be held at the place of and immediately following such meeting of
shareholders. In either event, no notice of such meeting shall be necessary.
Such meeting of the Board of Directors may also convene at such place and time
as shall be fixed by the consent in writing of all the Directors.
Section 2. Regular Meetings. Regular meetings of the Board of Directors may
be held at such time and place as shall from time to time be fixed by the Board
of Directors, and shall be held at least four (4) times in each fiscal year
commencing August, 2000. Unless action is to be taken with respect to the
Certificate of Incorporation or Bylaws, no notice of such regular meetings shall
be necessary.
Section 3. Special Meetings. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors (if any), President,
Secretary or any other person or persons authorized by the Delaware General
Corporation Law. The person or persons calling the special meeting shall fix the
time and place thereof.
5
Section 4. Notice; Generally. Notice of each special meeting of the Board
of Directors shall be given to each Director who has not signed a waiver of
notice before or after the meeting. Notices of meetings of the Board of
Directors shall be given by the Secretary or the person or persons calling the
meeting. Neither the business to be transacted at nor the purpose of the meeting
need be specified in the notice unless the Delaware General Corporation Law
shall otherwise require. The giving of notice of a special meeting of the Board
of Directors by or at the direction of the person or persons authorized to call
the same shall constitute the call thereof.
Section 5. Notice; When and How Given. Notice of meetings of the Board of
Directors may be given by any of the following methods within the time period
specified for that method:
(i) by depositing a copy of the notice in the United States mail,
first class postage prepaid, addressed to the Director at his usual or last
known business or residence address, at least 3 business days before the
meeting;
(ii) by delivering a copy of the notice to a recognized overnight
delivery or express service addressed to the Director at his usual or last
known business or residence address, including street or the like in the
address, at least 2 business days before the meeting;
(iii) by delivering a copy of the notice in hand to the Director
at least 24 hours before the meeting;
(iv) by reading or causing to be read the notice over the
telephone to the Director at least 24 hours before the meeting;
(v) by sending a telegram containing the contents of the notice
addressed to the Director at his usual or last known business or
residence address at least 2 business days before the meeting;
(vi) by transmitting the contents of the notice by telecopy, fax
or any other electronic means for the simultaneous or substantially
simultaneous transmission of data to a telephone or other number held
out by the Director as a number maintained by him for the receipt of
the means of transmission selected at least 24 hours before the
meeting; or
(vii) by sending a copy of the notice by any usual means of
communication addressed to the Director at his usual or last known
business or residence address, including street or the like in the
address, at least 3 business days before the meeting.
Notice to any Director actually received by him at least 24 hours before
the meeting shall be deemed sufficient, notwithstanding the method or means of
communication selected or the time when sent. For the purposes of this Section,
a "business day" is any day other than a Saturday, Sunday or legal holiday in
Maine.
6
ARTICLE VII
Executive and Other Committees
Section 1. Establishment; Authority. The Board of Directors, by a
resolution adopted by a majority of the Directors then in office, may designate
from among its members an executive committee and other committees, each
consisting of 2 or more Directors, and may delegate to such committee or
committees any part or all of the authority of the Board of Directors, except as
otherwise provided by Section 141(c)(2) of the Delaware General Corporation Law.
Without limitation of the foregoing, no Employee Plan may be adopted or amended
in any material respect without the approval of the compensation and stock bonus
(or equivalent) committee, which approval must include the affirmative vote of
at least one Stockholder Director or Series C-1 Preferred Director.
Section 2. Procedures. Vacancies in the membership of a committee shall be
filled by resolution adopted by a majority of the Directors then in office in
accordance with the provisions set forth in Section 1 of this Article VII.
Committees shall keep minutes of their proceedings and report the same to the
Board of Directors. Members of a committee may be removed from office, with or
without cause, by resolution adopted by a majority of the Directors then in
office. Any person or persons authorized to call a meeting of the Board of
Directors, as well as the chairman of a committee or the committee itself, may
call a meeting of a committee. Except as hereinbefore otherwise provided, so far
as applicable, the provisions of these Bylaws relating to the calling, noticing
and conduct of meetings of the Board of Directors shall govern the calling,
noticing and conduct of meetings of committees.
ARTICLE VIII
Officers
Section 1. Number. The officers of the corporation shall be elected by the
Board of Directors and shall be a President, a Chief Operating Officer and
President-Resort Operations, a Secretary and a Treasurer. The Board of Directors
may also elect one or more Vice Presidents (one of whom may be designated by the
Board of Directors as the Executive Vice President), and one or more Assistant
Secretaries and Assistant Treasurers.
Section 2. When Chosen; Qualifications; Term; Removal. The Board of
Directors at its initial meeting after the incorporation of the corporation and
at each Annual Meeting thereafter shall elect said officers, who shall hold
office until the next Annual Meeting of the Board of Directors and thereafter
until their successors are chosen and have qualified, or until their earlier
death, resignation or removal from office.
The President (and any other officer which may at any time be deemed to be
the chief executive officer, if the President is not so identified) may be
removed only by the affirmative vote of at least (a) seven (7) directors, in the
event that there are eleven (11) directors, (b) six (6) directors (including at
7
least one director who is not related to ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, the Stockholders,
their respective affiliates, or to this corporation in any other capacity than
his/her capacity as a director of this corporation (an "Independent Director"))
in the event that there are ten (10) directors, (c) two-thirds of the directors
(including at least one Independent Director), in the event that there are fewer
than ten (10) directors, or (d) a majority of the directors (including at least
one Independent Director) in the event that there are more than eleven (11)
directors.
The President shall have sole authority to remove the chief operating
officer, the chief financial officer or the general counsel of the corporation,
or the chief operating officer (or equivalent position) of American Skiing
Company Resort Properties, Inc., but only after having sought (but not
necessarily obtained) the approval of the Executive Committee and the Board of
Directors at duly called meetings thereof.
Section 3. Authority and Duties. Each officer shall have such authority and
perform such duties as are set forth in the Delaware General Corporation Law or
in these Bylaws, and as shall be determined from time to time by the Board of
Directors. Each officer shall also have such authority and perform such duties
as are usually incumbent upon his office except as the same may be limited from
time to time by the Board of Directors.
Section 4. Compensation of Officers. The compensation of all officers of
the corporation shall be fixed by the Board of Directors.
Section 5. President. The President shall be the chief executive officer of
the corporation, shall preside at all meetings of the shareholders and of the
Board of Directors at which he is present, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
Section 6. Vice President. The Vice President, if any, or if there shall be
more than one, the Vice Presidents in the order determined by the Board of
Directors, shall, in case of the absence or disability of the President, have
the authority and perform the duties of the President. If the Board of Directors
shall elect an Executive Vice President, it shall be presumed that he is the
Vice President determined by the Board of Directors first to act in case of the
absence or disability of the President.
Section 7. Secretary. The Secretary shall attend all meetings of the Board
of Directors and the shareholders and record all the proceedings of the Board of
Directors and the shareholders in a book or books kept for that purpose. The
Secretary shall perform like duties for the executive committee. The Secretary
or an Assistant Secretary may certify all votes, resolutions and actions of the
shareholders and the Board of Directors and its committees.
Section 8. Assistant Secretaries. The Assistant Secretary, or if there be
more than one, the Assistant Secretaries, in the order determined by the Board
of Directors, shall, in case of the absence or disability of the Secretary, have
the authority and perform the duties of the Secretary.
8
Section 9. Treasurer. The Treasurer shall have the custody of the corporate
funds and securities, and shall deposit all such funds in the name and to the
credit of the corporation in such depositories as may be designated by the Board
of Directors. The Treasurer shall keep or cause to be kept all books and records
of account and shall prepare or cause to be prepared all financial statements
required by the Delaware General Corporation Law, the Board of Directors or good
accounting practices. The Treasurer shall render to the Board of Directors,
whenever required, accounts of all corporate financial transactions and of the
financial condition of the corporation.
Section 10. Assistant Treasurers. Except as hereinbefore provided, the
Assistant Treasurer, or, if there shall be more than one, the Assistant
Treasurers, in the order determined by the Board of Directors, shall, in case of
the absence or disability of the Treasurer, have the authority and perform the
duties of the Treasurer.
ARTICLE IX
Voting Shares of Other Corporations
Section 1. Voting Shares of Other Corporations. The Chairman of the Board
of Directors, if any, the President, any Vice President, the Secretary, and the
Treasurer of this corporation, in that order, shall have authority to vote
shares of other corporations standing in the name of this corporation, and the
President or the Secretary is authorized to execute and deliver in the name and
on behalf of this corporation proxies appointing any one or more of the
foregoing officers as the proxy agents of this corporation.
ARTICLE X
Lost Stock Certificates
Section 1. Lost Stock Certificates. The Board of Directors may authorize,
generally or in a specific case, the appropriate officers to execute and deliver
a replacement certificate for shares of this corporation in substitution for any
certificate for shares theretofore issued alleged to have been lost, destroyed
or stolen. Unless waived by the Board of Directors, the officers executing the
replacement certificate shall require the registered holder thereof to sign and
swear to an affidavit of loss and indemnity agreement in such form as shall be
prescribed by the Secretary. In addition, the Board of Directors may prescribe
such other terms and conditions precedent to the issuance of replacement
certificates, including without limitation the requirement of further
indemnities and surety bonds or insurance policies, as it deems appropriate to
protect the corporation and its officers and agents from any claim that may be
made against it or them with respect to any such certificate alleged to have
been lost, destroyed or stolen. The powers and duties of the Board of Directors
prescribed in this ARTICLE X may be delegated in whole or in part to any
registrar or transfer agent for this corporation.
9
ARTICLE XI
Transfers and Registration of Shares
Section 1. Stock Transfer Books. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate representing shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, a new certificate shall be issued to the person entitled
thereto, and the old certificate cancelled and the transaction recorded in the
original stock transfer books of the corporation, provided that the provisions
of Article XV of these Bylaws respecting restrictions on transfers of shares
have been complied with. The original issue of shares of this corporation shall
likewise be recorded in the original stock transfer books of the corporation.
Section 2. Registered Shareholders. The corporation shall be entitled to
recognize the person or persons shown on its original stock transfer books as
the owner of shares as the exclusive and only owner thereof for all purposes,
including without limitation the right to (i) receive dividends and other
distributions; (ii) vote (except as otherwise provided in the Delaware General
Corporation Law); and (iii) examine lists, books, minutes or other materials
relating to the corporation. The corporation shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of any other
person not noted in its original stock transfer books, whether or not it shall
have express or other notice thereof.
ARTICLE XII
Indemnification
Section 1. Definitions. For all purposes of this Article, (i) the term
"Officer" (when capitalized, but not otherwise) shall mean any person who is or
was a Director, the President, the Treasurer, or the Secretary of this
corporation; (ii) the term "Employee" (when capitalized, but not otherwise)
shall mean any other person (whether or not a common law employee) who is or was
an officer, employee or agent of this corporation, or is or was serving at the
request of this corporation as a director, officer, trustee, partner, fiduciary,
employee or agent of another corporation, partnership, joint venture, trust,
pension or other employee benefit plan, or other enterprise; and (iii) the term
"Claimant" (when capitalized, but not otherwise) shall mean any Officer or
Employee seeking indemnification under this Article.
Section 2. Indemnification. This corporation shall in all cases indemnify
any Officer, and shall have power exercisable by its Board of Directors as
provided in Section 5 hereof to indemnify any Employee, who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
(other than an action by or in the right of the corporation) by reason of the
fact that the Claimant is or was an Officer or Employee, against expenses,
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including attorneys' fees, judgments, fines and amounts paid in settlement to
the extent actually and reasonably incurred by the Claimant in connection with
such action, suit or proceeding if the Claimant:
(i) Acted in good faith and in a manner that, in the Claimant's
reasonable belief, was in or not opposed to the best interests of this
corporation; or
(ii) With respect to any criminal action or proceeding, had no
reasonable cause to believe that the Claimant's conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order or
conviction adverse to the Claimant, or by settlement or plea of nolo contendere
or its equivalent, shall not of itself create a presumption that the Claimant
did not act in good faith and in a manner that, in the Claimant's reasonable
belief ,was in or not opposed to the best interests of this corporation and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that the Claimant's conduct was unlawful.
Section 3. Derivative Actions. The corporation shall indemnify any Officer,
and shall have power exercisable by its Board of Directors as provided in
Section 5 hereto to indemnify any Employee, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of this corporation to procure a judgment in its favor
by reason of the fact that the person is or was an Officer or Employee against
expenses (including attorneys' fees) actually and reasonably incurred by the
person in connection with the defense or settlement of such action or suit if
the Claimant acted in good faith and in a manner the Claimant reasonably
believed to be in or not opposed to the best interests of this corporation and
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such Claimant shall have been adjudged to be liable to this
corporation unless and only to the extent that the Delaware Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such Claimant is fairly and reasonably entitled to
indemnity for such expenses which the Delaware Court of Chancery or such other
court shall deem proper.
Section 4. When Defense Successful. Any provisions of Sections 2, 3 or 5
hereof to the contrary notwithstanding, to the extent that a Claimant has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Sections 2 or 3, or in defense of any claim, issue or
matter therein, the Claimant shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred in connection therewith.
Section 5. Determination in Specific Cases. Any indemnification under
Section 2 or 3 hereof, unless ordered by a court or required by Section 4
hereof, shall be made by this corporation only as authorized in the specific
case upon a determination that indemnification of the Claimant is proper in the
circumstances because the person has met the applicable standard of conduct set
forth in Section 2 or 3 hereof, as applicable, and in the best interests of this
corporation. Where such a case specific determination is required, that
determination shall be made, with respect to a Claimant who is a director or
officer of this corporation at the time of such determination, by the Board of
Directors by a majority vote of the Directors who were not parties to the
action, suit or proceeding, even though less than a quorum, or by a committee of
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such directors designated by a majority vote of such directors, even though less
than a quorum, or if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion, or by the
shareholders. Such a determination once made may not be revoked and, upon the
making of that determination, the Claimant may enforce the indemnification
against this corporation by a separate action notwithstanding any attempted or
actual subsequent action by the Board of Directors.
Section 6. Advances of Expenses. Expenses incurred by or in behalf of a
Claimant in defending a civil, criminal, administrative or investigative action,
suit or proceeding (i) in the case of a Claimant who is an Employee may be
authorized and paid by this corporation in advance of the final disposition of
that action, suit or proceeding upon a determination made in accordance with the
procedure established in Section 5 hereof that, based solely on the facts then
known to those making the determination and without further investigation, such
Claimant satisfies the standard of conduct prescribed by Section 2 or Section 3
hereof, as applicable, and (ii) in the case of a Claimant who is an Officer
shall in all cases be paid, as reasonably requested from time to time by the
Officer, and in the case of an Employee, may (subject to clause (i) of this
Section 6) be paid, by this corporation in advance of the final disposition of
the action, suit or proceeding upon receipt by this corporation, at the time of
the initial advance, of a written undertaking by or on behalf of it to repay all
amounts advanced if it is ultimately determined that the Claimant is not
entitled to be indemnified by this corporation as authorized in this Article
XII.
The undertaking described in clause (ii) shall be an unlimited general
obligation of the Claimant seeking the advance, but need not be secured and may
be accepted without reference to financial ability to make the repayment.
Section 7. Indemnification Not Exclusive. The indemnification and
entitlement to advances of expenses provided by this Article shall not be deemed
exclusive of any other rights to which a Claimant may be entitled under any
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in the Claimant's official capacity and as to action in another
capacity while holding an office with this corporation, and shall continue as to
a person who has ceased to be a director, officer, employee, agent, trustee,
partner or fiduciary and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of such a person.
Section 8. Enforceable By Separate Action. A right to indemnification
required by this Article or established pursuant to the provisions of this
Article may be enforced by a separate action against this corporation, if an
order for indemnification has not been entered by a court in any action, suit or
proceeding in respect to which indemnification is sought.
Section 9. Miscellaneous. For purposes of this Article, (i) references to
this "corporation" shall include, in addition to the surviving corporation or
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new corporation, any participating corporation in a consolidation or merger;
(ii) this corporation shall be deemed to have requested a person to serve an
employee benefit plan whenever the performance by him of his duties to this
corporation also imposes duties on, or otherwise involves services by, him to
the plan or participants or beneficiaries of the plan; and (iii) excise taxes
assessed on a person seeking indemnification with respect to an employee benefit
plan pursuant to applicable law shall be deemed "fines".
Section 10. Amendment. Any amendment, modification or repeal of this
Article shall not deny, diminish or otherwise limit the rights of any Claimant
to indemnification or advances hereunder with respect to any action, suit or
proceeding arising out of any conduct, act or omission occurring or allegedly
occurring at any time prior to the date of such amendment, modification or
repeal.
ARTICLE XIII
Fiscal Year
Section 1. Fiscal Year. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
ARTICLE XIV
Execution of Documents
Section 1. Execution of Documents. Unless the Board of Directors, Executive
Committee or shareholders shall otherwise generally or in any specific instance
provide:
(i) Any ▇▇▇▇, note or negotiable instrument may be signed or endorsed
in the name and on behalf of this corporation in the ordinary course of
business by the President or Treasurer, acting singly;
(ii) The President or Treasurer, acting singly, shall in the ordinary
course of business have authority to sign or endorse in the name and on
behalf of this corporation all checks and other orders for the payment of
money drawn on any bank or trust company;
(iii) The President or Treasurer, acting singly, shall have authority
to make, in the name and on behalf of this corporation, all contracts in
the ordinary course of business; and
(iv) Any other instrument, document, deed, ▇▇▇▇ of sale or other
writing of whatever nature to be executed in the ordinary course of
business may be executed in the name and on behalf of this corporation by
the President or Treasurer, acting singly, and either officer may seal,
acknowledge and deliver the same.
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Section 2. Assistants. Vice Presidents and Assistant Treasurers shall not
have the authority provided in Section 1 unless granted by the Board of
Directors generally or in any specific instance.
ARTICLE XV
Amendments to Bylaws
Section 1. Amendments. Subject to the provisions of Article V, Section 4,
the Board of Directors shall have the power to alter, amend or repeal these
Bylaws, and to adopt new Bylaws, provided that the notice, unless notice shall
be duly waived, of any regular or special meeting at which such action is to be
taken shall either set out the text of the proposed new Bylaw or amendment or
Bylaw to be repealed, or shall summarize the changes to be effected by such
adoption, amendment or repeal, and provided further that the shareholders may
amend or repeal a Bylaw provision adopted by the Board of Directors and in such
case the Board of Directors may not, for two years thereafter, amend or readopt
the Bylaw provision thus amended or repealed by the shareholders.
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