EXHIBIT 4.1
================================================================================
CAPSTAR HOTEL COMPANY
$200,000,000
SERIES A AND SERIES B
83/4% SENIOR SUBORDINATED NOTES DUE 2007
INDENTURE
DATED AS OF AUGUST 19, 1997
IBJ SCHRODER BANK & TRUST COMPANY
TRUSTEE
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE................................................................ 1
SECTION 1.1 DEFINITIONS.............................................. 1
SECTION 1.2 OTHER DEFINITIONS........................................ 14
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........ 14
SECTION 1.4 RULES OF CONSTRUCTION.................................... 15
ARTICLE 2
THE NOTES................................................................... 15
SECTION 2.1 FORM AND DATING.......................................... 15
SECTION 2.2 EXECUTION AND AUTHENTICATION............................. 16
SECTION 2.3 REGISTRAR AND PAYING AGENT............................... 16
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST...................... 17
SECTION 2.5 HOLDERS LISTS............................................ 17
SECTION 2.6 TRANSFER AND EXCHANGE.................................... 17
SECTION 2.7 REPLACEMENT NOTES........................................ 18
SECTION 2.8 OUTSTANDING NOTES........................................ 18
SECTION 2.9 TREASURY NOTES........................................... 19
SECTION 2.10 TEMPORARY NOTES.......................................... 19
SECTION 2.11 CANCELLATION............................................. 19
SECTION 2.12 DEFAULTED INTEREST....................................... 19
SECTION 2.13 RECORD DATE.............................................. 20
SECTION 2.14 CUSIP NUMBER............................................. 20
SECTION 2.15 RESTRICTIVE LEGENDS...................................... 20
SECTION 2.16 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY................ 21
SECTION 2.17 SPECIAL TRANSFER PROVISIONS.............................. 22
ARTICLE 3
REDEMPTIONS AND OFFERS TO PURCHASE.......................................... 24
SECTION 3.1 NOTICES TO TRUSTEE....................................... 24
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED........... 24
SECTION 3.3 NOTICE OF REDEMPTION..................................... 25
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION........................... 25
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.............................. 26
SECTION 3.6 NOTES REDEEMED IN PART................................... 26
SECTION 3.7 OPTIONAL REDEMPTION...................................... 26
SECTION 3.8 MANDATORY REDEMPTION..................................... 27
-i-
PAGE
----
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS
PROCEEDS...... 27
ARTICLE 4
COVENANTS................................................................... 29
SECTION 4.1 PAYMENT OF NOTES......................................... 29
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.......................... 29
SECTION 4.3 SEC REPORTS.............................................. 30
SECTION 4.4 COMPLIANCE CERTIFICATE................................... 30
SECTION 4.5 TAXES.................................................... 31
SECTION 4.6 STAY, EXTENSION AND USURY LAWS........................... 31
SECTION 4.7 LIMITATION ON RESTRICTED PAYMENTS........................ 31
SECTION 4.8 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES........................ 34
SECTION 4.9 LIMITATION ON ADDITIONAL INDEBTEDNESS AND ISSUANCE OF
CERTAIN CAPITAL STOCK.................................... 34
SECTION 4.10 LIMITATION ON SALE OF ASSETS............................. 36
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES............... 37
SECTION 4.12 LIMITATION ON LIENS...................................... 38
SECTION 4.13 CORPORATE EXISTENCE...................................... 38
SECTION 4.14 CHANGE OF CONTROL........................................ 38
SECTION 4.15 SUBSIDIARY GUARANTEES.................................... 39
SECTION 4.16 LINE OF BUSINESS......................................... 40
SECTION 4.17 PAYMENTS FOR CONSENT..................................... 40
SECTION 4.18 NO SENIOR SUBORDINATED DEBT.............................. 40
ARTICLE 5
SUCCESSORS.................................................................. 40
SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC.......................... 40
SECTION 5.2 SUCCESSOR SUBSTITUTED.................................... 41
ARTICLE 6
DEFAULTS AND REMEDIES....................................................... 41
SECTION 6.1 EVENTS OF DEFAULT........................................ 41
SECTION 6.2 ACCELERATION............................................. 43
SECTION 6.3 OTHER REMEDIES........................................... 44
SECTION 6.4 WAIVER OF PAST DEFAULTS.................................. 44
SECTION 6.5 CONTROL BY MAJORITY...................................... 44
SECTION 6.6 LIMITATION ON SUITS...................................... 44
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT..................... 45
SECTION 6.8 COLLECTION SUIT BY TRUSTEE............................... 45
-ii-
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM......................... 45
SECTION 6.10 PRIORITIES............................................... 46
SECTION 6.11 UNDERTAKING FOR COSTS.................................... 46
ARTICLE 7
TRUSTEE..................................................................... 46
SECTION 7.1 DUTIES OF TRUSTEE........................................ 46
SECTION 7.2 RIGHTS OF TRUSTEE........................................ 47
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE............................. 48
SECTION 7.4 TRUSTEE'S DISCLAIMER..................................... 48
SECTION 7.5 NOTICE OF DEFAULTS....................................... 48
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS............................ 49
SECTION 7.7 COMPENSATION AND INDEMNITY............................... 49
SECTION 7.8 REPLACEMENT OF TRUSTEE................................... 50
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC......................... 51
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION............................ 51
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY............................................. 51
ARTICLE 8
DISCHARGE OF INDENTURE...................................................... 51
SECTION 8.1 DEFEASANCE AND DISCHARGE OF THIS INDENTURE AND THE
NOTES.................................................... 51
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE........................... 52
SECTION 8.3 COVENANT DEFEASANCE...................................... 53
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE............... 53
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.................... 55
SECTION 8.6 REPAYMENT TO THE COMPANY................................. 55
SECTION 8.7 REINSTATEMENT............................................ 56
ARTICLE 9
AMENDMENTS.................................................................. 56
SECTION 9.1 WITHOUT CONSENT OF HOLDERS............................... 56
SECTION 9.2 WITH CONSENT OF HOLDERS.................................. 57
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT...................... 58
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS........................ 58
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES......................... 58
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.......................... 58
-iii-
PAGE
----
ARTICLE 10
SUBORDINATION................................................................ 59
SECTION 10.1 AGREEMENT TO SUBORDINATE................................. 59
SECTION 10.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY..................... 59
SECTION 10.3 NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES............. 60
SECTION 10.4 [THIS SECTION INTENTIONALLY OMITTED]..................... 60
SECTION 10.5 ACCELERATION OF NOTES.................................... 61
SECTION 10.6 WHEN DISTRIBUTION MUST BE PAID OVER...................... 61
SECTION 10.7 NOTICE BY THE COMPANY.................................... 61
SECTION 10.8 SUBROGATION.............................................. 61
SECTION 10.9 RELATIVE RIGHTS.......................................... 61
SECTION 10.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY............. 62
SECTION 10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE................. 62
SECTION 10.12 RIGHTS OF TRUSTEE AND PAYING AGENT....................... 62
SECTION 10.13 AUTHORIZATION TO EFFECT SUBORDINATION.................... 63
SECTION 10.14 AMENDMENTS............................................... 63
ARTICLE 11
SUBSIDIARY GUARANTEES....................................................... 63
SECTION 11.1 SUBSIDIARY GUARANTEES.................................... 63
SECTION 11.2 WHEN A GUARANTOR MAY MERGE, ETC.......................... 64
SECTION 11.3 LIMITATION OF GUARANTOR'S LIABILITY...................... 65
SECTION 11.4 RELEASE OF A GUARANTOR................................... 65
ARTICLE 12
MISCELLANEOUS............................................................... 66
SECTION 12.1 TRUST INDENTURE ACT CONTROLS............................. 66
SECTION 12.2 NOTICES.................................................. 66
SECTION 12.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.............. 67
SECTION 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT....... 67
SECTION 12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............ 67
SECTION 12.6 RULES BY TRUSTEE AND AGENTS.............................. 68
SECTION 12.7 LEGAL HOLIDAYS........................................... 68
SECTION 12.8 RECOURSE AGAINST OTHERS.................................. 68
SECTION 12.9 DUPLICATE ORIGINALS...................................... 68
SECTION 12.10 GOVERNING LAW............................................ 68
SECTION 12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............ 69
SECTION 12.12 SUCCESSORS............................................... 69
SECTION 12.13 SEVERABILITY............................................. 69
SECTION 12.14 COUNTERPART ORIGINALS.................................... 69
SECTION 12.15 TABLE OF CONTENTS, HEADINGS, ETC......................... 69
-iv-
PAGE
----
EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Supplemental Indenture
Exhibit C Form of Certificate to be Delivered in Connection with Transfers
to Non- QIB accredited Investors
Exhibit D From of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S
-v-
INDENTURE dated as of August 19, 1997 between CapStar Hotel Company, a
Delaware corporation (the "COMPANY"), and IBJ Schroder Bank & Trust Company, as
trustee (the "TRUSTEE").
Each of the Company and the Trustee agrees as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 83/4%
Series A Senior Subordinated Notes due 2007 of the Company (the "SERIES A
NOTES") and the 83/4% Series B Senior Subordinated Notes due 2007 of the Company
(the "SERIES B NOTES," and, together with the Series A Notes, the "NOTES").
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person and (ii)
Indebtedness encumbering any asset acquired by such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED, 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 co-Registrar or agent for
service of notices and demands.
"ASSET SALE" means (i) the sale, lease (other than operating leases in
respect of facilities which are ancillary to the operation of the Company's or a
Restricted Subsidiary's Hospitality Related Business properties or assets),
conveyance or other disposition of any property or assets of the Company or any
Restricted Subsidiary (including by way of a sale and leaseback transaction),
(ii) the issuance or sale of Equity Interests of any of the Company's Restricted
Subsidiaries or (iii) any Event of Loss, other than, with respect to clauses
(i), (ii) and (iii) above, the following: (1) the sale or disposition of
personal property held for sale in the ordinary course of business, (2) the sale
or disposal of damaged, worn out or other obsolete property in the ordinary
course of business as long as such property is no longer necessary for the
proper conduct of the business of the Company or such Restricted Subsidiary, as
applicable, (3) the transfer of assets by the Company to a Restricted Subsidiary
of the Company or by a Restricted Subsidiary of the Company to the Company or to
another Restricted Subsidiary of the Company, (4) (A) the exchange of one or
more lodging facilities and related assets held by the Company or a Restricted
Subsidiary of the Company for one or more lodging facilities and related assets
of any person or entity, PROVIDED, that if any other assets are received by the
Company or such Restricted Subsidiary in such exchange, such other consideration
is in cash or Cash Equivalents; PROVIDED, FURTHER, that such cash or Cash
Equivalent consideration shall be deemed to be cash proceeds of an Asset Sale
for the purposes of calculating "Net Proceeds" and applying Net Proceeds, if
any, as described in Section 4.10 hereof, or (B) the issuance of OP Units or
2
Preferred OP Units as full or partial consideration for the acquisition of
lodging facilities and related assets, PROVIDED, that the Board of Directors of
the Company has determined that the terms of any exchange or acquisition are
fair and reasonable and that the fair market value of the assets received by the
Company, as set forth in an opinion of a Qualified Appraiser, are equal to or
greater than the fair market value of the assets exchanged, sold or issued by
the Company or a Restricted Subsidiary of the Company, (5) any Restricted
Payment, permitted under Section 4.7 hereof, (6) the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
compliance with the provisions of Section 4.14 and Article V hereof, (7) the
conversion of or foreclosure or any mortgage or note, PROVIDED that the Company
or a Restricted Subsidiary receives the real property underlying any such
mortgage or note or (8) any transaction or series of related transactions that
would otherwise be an Asset Sale where the fair market value of the assets,
sold, leased, conveyed or otherwise disposed of was less than $5.0 million or an
Event of Loss or related series of Events of Loss pursuant to which the
aggregate value of property or assets involved in such Event of Loss or Events
of Loss is less than $5.0 million.
"ASSUMED INDEBTEDNESS" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other Person
merged with or into or became a Subsidiary of such specified Person and (ii)
Indebtedness encumbering any asset acquired by such specified Person, in each
case excluding Indebtedness incurred in connection with, or in contemplation of
such other Person merging with or into or becoming a Subsidiary of such
specified Person.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or a day
on which banking institutions in New York, New York or the city in which the
Corporate Trust Office is located are authorized or obliged by law or executive
order to close.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participation,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, with respect to partnerships, partnership interests (whether
general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, such partnership.
"CASH EQUIVALENTS" means (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of not more than six months from the
date of acquisition, (ii) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers
acceptances with maturities not exceeding six months from the date of
acquisition and overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500 million, (iii)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (i) and (ii) entered into with any
financial institution meeting the qualifications specified in clause (ii) above,
(iv) commercial paper or commercial paper master notes having a rating of at
least P-2 or the equivalent thereof by Moody's Investors Service, Inc. or at
least A-2 or the equivalent thereof by Standard & Poor's Corporation and in each
case maturing within six months
3
after the date of acquisition, (v) money market mutual funds that provide daily
purchase and redemption features, and (vi) corporate debt with maturities of not
greater than six months and with a rating of at least A or the equivalent
thereof by Standard & Poor's Corporation and a rating of at least A2 or the
equivalent thereof by Moody's Investors Service, Inc.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease or transfer, in one or a series of related transactions, of all
or substantially all of the Company's assets to any person or group (as such
term is used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a
plan relating to the liquidation or dissolution of the Company, (iii) the
acquisition by any person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) of a direct or indirect interest in more than 50% of the
ownership of the Company or the voting power of the voting stock of the Company
by way of purchase, merger or consolidation or otherwise (other than a creation
of a holding company that does not involve a change in the beneficial ownership
of the Company as a result of such transaction), (iv) the merger or
consolidation of the Company with or into another corporation or the merger of
another corporation into the Company with the effect that immediately after such
transaction the stockholders of the Company immediately prior to such
transaction hold less than 50% of the total voting power of all securities
generally entitled to vote in the election of directors, managers, or trustees
of the Person surviving such merger or consolidation or (v) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"COMPANY" means CapStar Hotel Company, a Delaware corporation, until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter, means such successor.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus: (a) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale, to the extent such losses were deducted in computing
Consolidated Net Income, plus (b) provisions for taxes based on income or
profits of such Person for such period, to the extent such provision for taxes
was included in computing Consolidated Net Income, plus (c) Consolidated
Interest Expense of such Person for such period to the extent such expense was
deducted in computing Consolidated Net Income, plus (d) Consolidated
Depreciation and Amortization Expense of such Person for such period, to the
extent deducted in computing Consolidated Net Income less (e) noncash items
increasing such Consolidated Net Income for such period in each case, on a
consolidated basis for such Person and its Restricted Subsidiaries and
determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, the depreciation and
amortization of and the interest expense of, a Restricted Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in the same proportion) that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person and only if a corresponding amount would
be permitted at the date of determination to be dividended to such Person by
such Restricted Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders. Any calculation of the Consolidated Cash Flow
of an individual hotel property shall be calculated in a manner consistent with
the foregoing.
"CONSOLIDATED CURRENT LIABILITIES" as of the date of determination
means the aggregate amount of liabilities of the Company and its consolidated
Subsidiaries which may properly be classified as current liabilities (including
taxes payable as accrued), on a consolidated basis, after
4
eliminating (i) all intercompany items between the Company and any Subsidiary
and (ii) all current maturities of long-term Indebtedness, all as determined in
accordance with GAAP consistently applied.
"CONSOLIDATED DEPRECIATION AND AMORTIZATION EXPENSE" means, with
respect to any Person for any period, the total amount of depreciation and
amortization expense (including amortization of goodwill and other intangibles
but excluding amortization of prepaid cash expenses that were paid in a prior
period) and the total amount of non-cash charges (other than non-cash charges
that represent an accrual or reserve for cash charges in future periods or which
involved a cash expenditure in a prior period) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis as determined in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, without duplication, the sum of (a) interest expense, whether paid
or accrued, to the extent such expense was deducted in computing Consolidated
Net Income (including amortization of original issue discount, non-cash interest
payments, the interest component of Capital Lease Obligations, and net payments
(if any) pursuant to Hedging Obligations, but excluding amortization of deferred
financing fees), (b) commissions, discounts and other fees and charges paid or
accrued with respect to letters of credit and bankers acceptance financing and
(c) interest for which such Person or its Restricted Subsidiaries is liable,
whether or not actually paid, pursuant to Indebtedness or under a Guarantee of
Indebtedness of any other Person, in each case, calculated for such Person and
its Restricted Subsidiaries for such period on a consolidated basis as
determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, PROVIDED, that the following shall be excluded: (i) the Net Income of
any Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be excluded, whether or not distributed to the
Company or one of its Restricted Subsidiaries, (ii) the Net Income of any Person
that is a Restricted Subsidiary and that is restricted from declaring or paying
dividends or other distributions, directly or indirectly, by operation of the
terms of its charter, any applicable agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation or otherwise shall be included
only to the extent of the amount of dividends or distributions paid to the
referent Person or a Restricted Subsidiary, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (iv) the cumulative effect of changes
in accounting principles shall be excluded.
"CONSOLIDATED NET TANGIBLE ASSETS" as of any date of determination,
means the total amount of assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and
other similar items properly deducted in determining net assets) which would
appear on a consolidated balance sheet of the Company and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, and
after giving effect to purchase accounting and after deducting therefrom
Consolidated Current Liabilities and, to the extent otherwise included, the
amounts of: (i) minority interests in consolidated Subsidiaries held by Persons
other than the Company or a Subsidiary; (ii) excess of cost over fair value of
assets of businesses acquired, as determined in good faith by the Board of
Directors; (iii) any revaluation or other write-up in book value of assets
subsequent to the Issuance Date as a result of a change in the method of
valuation in accordance with GAAP consistently applied; (iv) unamortized debt
discount and expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items; (v) treasury stock; and
5
(vi) cash set apart and held in a sinking or other analogous fund established
for the purpose of redemption or other retirement of Capital Stock to the extent
such obligation is not reflected in Consolidated Current Liabilities.
"CONSOLIDATED NET WORTH" means, with respect to any Person, as of any
date of determination, the sum of (i) the consolidated equity of the common
stockholders of such Person and its consolidated Subsidiaries as of such date
plus (ii) the respective amount reported on such Person's balance sheet as of
such date with respect to any series of Preferred Stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such Preferred Stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the Issuance Date in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all Investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments) and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issuance Date or (ii) was nominated for election or
elected to such Board of Directors with the affirmative vote of at least a
majority of the Continuing Directors who were members of such Board at the time
of such nomination or election.
"CORPORATE TRUST OFFICE" shall be at the address of the Trustee
specified in Section 12.2 or such other address as the Trustee may give notice
to the Company.
"CREDIT AGREEMENT" means the senior credit facility dated June 30,
1997, entered into between and among the Company and the lenders party thereto,
providing for borrowings and letters of credit, including any related notes,
security documentation, guarantees, collateral documents, instruments and
agreements executed in connection therewith, in each case as amended, modified,
supplemented, restructured, renewed, restated, refunded, replaced or refinanced
or extended, in each case on a senior basis, from time to time on one or more
occasions.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event if Default.
"DESIGNATED SENIOR DEBT" means (i) Indebtedness under or in respect of
the Credit Agreement and (ii) any other Indebtedness constituting Senior Debt
which, at the time of determination, has an aggregate principal amount of at
least $25.0 million and is specifically designated in the instrument evidencing
such Senior Debt as "DESIGNATED SENIOR DEBT" by the Company.
"DISQUALIFIED STOCK" means any Capital Stock (other than OP Units and
Preferred OP Units) which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the first anniversary of the date on which the
Notes mature.
6
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for Capital Stock).
"EVENT OF LOSS" means, with respect to any property or asset (tangible
or intangible, real or personal), any of the following: (A) any loss,
destruction or damage of such property or asset or (B) any actual condemnation,
seizure or taking by the power of eminent domain or otherwise of such property
or asset, or confiscation of such property or asset or the requisition of the
use of such property or asset.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the Issuance Date (after giving effect
to the use of proceeds of the Notes issued hereunder), excluding, for this
purpose, amounts outstanding under the Credit Agreement as in effect on the
Issuance Date.
"EXISTING PREFERRED OP UNITS" means Preferred OP Units issued and
outstanding on the date of this Indenture.
"FINAL MEMORANDUM" means the Company's Offering Memorandum dated
August 14, 1997 pertaining to the offer and sale of $150,000,000 in aggregate
principal amount of Notes, pursuant to applicable exemptions from registration
under the Securities Act.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, guarantees or
redeems any Indebtedness (other than revolving credit borrowings that provide
working capital in the ordinary course of business) or issues or redeems
Preferred Stock subsequent to the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"CALCULATION DATE"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or redemption
of Indebtedness, or such issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. For purposes of making the computation referred to above, acquisitions,
dispositions and discontinued operations (as determined in accordance with GAAP)
that have been made by the Company or any of its Restricted Subsidiaries,
including all mergers, consolidations and dispositions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date shall be calculated on a pro forma basis assuming that all such
acquisitions, dispositions, discontinued operations, mergers, consolidations
(and the reduction of any associated fixed charge obligations resulting
therefrom) had occurred on the first day of the four-quarter reference period.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (a) Consolidated Interest Expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, to the extent such
expense was deducted in computing Consolidated Net Income and (b) the product of
(i) all cash dividend or distribution payments on any series of Preferred Stock
of such Person or its Restricted Subsidiaries (other than Preferred Stock owned
by such Person or its Restricted Subsidiaries), times (ii) a fraction, the
numerator of which is one and the denominator of
7
which is one minus the then current combined federal, state and local statutory
tax rate of such Person, expressed as a decimal, in each case, on a consolidated
basis and in accordance with GAAP; PROVIDED, HOWEVER, that if the cash dividend
on such Preferred Stock is deductible for federal tax purposes, then the
fraction shall be equal to one.
"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 have been approved by a significant segment of the accounting
profession, which are in effect on the Issuance Date.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States of America is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) or otherwise
incurring, assuming or becoming liable for the payment of any principal, premium
or interest, 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 or other obligation (including agreements to
keep-well and to purchase assets, goods, securities or services).
"GUARANTOR" means a Restricted Subsidiary that become a guarantor of
the Notes pursuant to the terms of this Indenture, and its successor, if any.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest 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 rates or currency exchange rates.
"HOLDER" means the Person in whose name a Note is registered on the
Registrar's books.
"HOSPITALITY-RELATED BUSINESS" means the lodging business and other
businesses necessary for, incident to, in support of, connected with,
complementary to or arising out of the lodging business, including, without
limitation, (i) developing, managing, operating, improving or acquiring lodging
facilities, restaurants and other food-service facilities and convention or
meeting facilities, and marketing services related thereto, (ii) acquiring,
developing, operating, managing or improving any real estate taken in
foreclosure (or similar settlement) by the Company or any of its Restricted
Subsidiaries, or any real estate ancillary or connected to any lodging owned,
managed or operated by the Company or any of its Restricted Subsidiaries, (iii)
owning and managing mortgages in, or other Indebtedness secured by Liens on
lodging and real estate related or ancillary to lodging or (iv) other related
activities thereto.
"INDEBTEDNESS" means, with respect to any Person, 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 representing Capital
Lease Obligations or 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
8
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, and also
includes, to the extent not otherwise included, the Guarantee of any
Indebtedness of such Person or any other Person.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including Guarantees), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities and all other items that are
or would be classified as investments on a balance sheet prepared in accordance
with GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, the Company no longer owns, directly or indirectly, greater than
50% of the outstanding Common Stock of such Restricted Subsidiary, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.
"ISSUANCE DATE" means the date of this Indenture.
"LIEN" means, with respect to any asset, or income or profits
therefrom, 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).
"LIQUIDATED DAMAGES" has the meaning assigned to such term in the
Registration Rights Agreements.
"MAKE-WHOLE AMOUNT" with respect to a Note means an amount equal to
the excess, if any, of (i) the present value of the remaining interest, premium
and principal payments due on such Note as if such Note were redeemed on August
15, 2002, computed using a discount rate equal to the Treasury Rate plus 62.5
basis points, over (ii) the outstanding principal amount of such Note.
"TREASURY RATE" is defined as the yield to maturity at the time of the
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical Release
H.15(519), which has become publicly available at least two business days prior
to the date of the redemption notice or, if such Statistical Release is no
longer published, any publicly available source of similar market date) most
nearly equal to the then remaining maturity of the Notes assuming redemption of
the Notes on August 15, 2002; PROVIDED, HOWEVER, that if the Make-Whole Average
Life of such Note is not equal to the constant maturity of a United States
Treasury security for which such yields are given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Make-Whole Average Life of such
Notes is less than one year, the weekly average yield on actually traded United
State Treasury securities adjusted to a constant maturity of one year shall be
used. "MAKE-WHOLE AVERAGE LIFE"
9
means the number of years (calculated to the nearest one-twelfth) between the
date of redemption and August 15, 2002.
"MAKE-WHOLE PRICE" with respect to a Note means the greater of (1) the
sum of the outstanding principal amount and the Make-Whole Amount of such Note,
and (ii) the redemption price of such Note on August 15, 2002, determined
pursuant to the first paragraph of Section 3.7 hereof (104.375% of the principal
amount).
"NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends, excluding, however, any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with any Asset Sale, and excluding any
extraordinary gain (but not loss), together with any related provision for taxes
on such extraordinary gain (but not loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale, net
of the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales commissions), and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness (a) as to which neither
the Company nor any of its Restricted Subsidiaries (i) provides credit support
(other than in the form of a Lien on an asset serving as security for
Non-Recourse Indebtedness) pursuant to any undertaking, agreement or instrument
that would constitute Indebtedness, (ii) is directly or indirectly liable (other
than in the form of a Lien on an asset serving as security for Non-Recourse
Indebtedness) or (iii) constitutes the lender and (b) 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.
"NOTES" means the Notes issued under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICERS" means the Chairman of the Board, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, Controller, Secretary, any Assistant Secretary or any Vice President
of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Operating Officer, or a Vice
President and by the Chief Financial officer, the Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of the
Company, as applicable, except with respect to certificates required to be
furnished by the
10
Company to the Trustee pursuant to Section 4.4 hereof, in which event "OFFICERS'
CERTIFICATE" means a certificate signed by the principal executive officer or
principal financial officer.
"OP UNITS" means limited partnership interests in CapStar Management
Company, L.P., CapStar Management Company II, L.P. or any successor operating
partnership that require the issuer thereof to pay dividends or distributions
which are tied to dividends paid on the Company's common stock and which by
their terms may be converted into, or exercised or redeemed for, cash or the
Company's common stock.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of this
Indenture.
"PERMITTED INVESTMENTS" means any (a) Investments in the Company, (b)
Investments in any Restricted Subsidiary, (c) Investments in Cash Equivalents,
(d) Investments by the Company or any Restricted Subsidiary of the Company in a
Person, if as a result of such Investment (i) such Person becomes a Restricted
Subsidiary of the Company or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company, (e) Investments in Unrestricted Subsidiaries or Permitted Joint
Ventures, PROVIDED that such Investments are in entities solely or principally
engaged in Hospitality-Related Businesses and that the aggregate of such
Investments does not exceed the greater of (i) $25.0 million or (ii) 5% of
Consolidated Net Tangible Assets and (f) Investments in Unrestricted
Subsidiaries formed to acquire the Radisson Plaza, Lexington, Kentucky, the
Embassy Suites Center City, Philadelphia and the Doubletree Hotel, Austin, in an
aggregate amount not to exceed $50.0 million.
"PERMITTED JOINT VENTURE" means any corporation, partnership, limited
liability company or partnership or other similar entity formed to hold lodging
properties for which the Company holds a management contract related thereto in
which the Company owns less than a 50.1% interest.
"PERMITTED JUNIOR SECURITIES" means Equity Interest in the Company or
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Notes are subordinated to Senior Debt
pursuant to Article 10 of this Indenture.
"PERMITTED REFINANCING" means Refinancing Indebtedness or Refinancing
Disqualified Stock, as the case may be, to the extent (a) the principal amount
of Refinancing Indebtedness or the liquidation preference amount of Refinancing
Disqualified Stock, as the case may be, does not exceed the principal amount of
Indebtedness or the liquidation preference amount of Disqualified Stock, as the
case may be, so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of premiums and reasonable expenses incurred in connection
therewith); (b) such Refinancing Indebtedness or Refinancing Disqualified Stock,
as the case may be, is scheduled to mature or is redeemable at the option of the
holder, as the case may be, no earlier than the Indebtedness or Disqualified
Stock, as the case may be, being refinanced; (c) in the case of Refinancing
Indebtedness, the Refinancing Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (d) in the case of Refinancing Disqualified Stock, the Disqualified
Stock has a Weighted Average Life to Mandatory Redemption equal to or greater
than the Weighted Average Life to Mandatory Redemption of the Disqualified Stock
being extended, refinanced, renewed, replaced,
11
defeased or refunded; (e) if the Indebtedness or the Disqualified Stock, as the
case may be, being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated or junior in right of payment to the Notes, the Refinancing
Indebtedness or Refinancing Disqualified Stock, as the case may be, is
subordinated or junior in right of payment to the Notes on terms at least as
favorable to the holders of Notes as those contained in the documentation
governing the Indebtedness or the Disqualified Stock, as the case may be, being
extended, refinanced, renewed, replaced, defeased or refunded and (f) such
Refinancing Indebtedness or Refinancing Disqualified Stock is incurred or issued
either by the Company or by a Restricted Subsidiary who is the obligor on the
Indebtedness or Disqualified Stock being extended, refinanced, renewed,
replaced, defeased or refunded.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"PREFERRED OP UNITS" means limited partnership interests in CapStar
Management Company, L.P., CapStar Management Company II, L.P. or any successor
operating partnership that require the issuer thereof to pay regularly scheduled
fixed distributions thereon, which are not related to dividends on the Company's
common stock, and which by their terms may be converted into, or exercised or
redeemed for, cash or the Company's common stock.
"PREFERRED STOCK" means (i) any Equity Interest with preferential
right in the payment of dividends or distributions or upon liquidation, and (ii)
any Disqualified Stock.
"REFINANCING DISQUALIFIED STOCK" means Disqualified Stock issued in
exchange for, or the proceeds of which are used, to extend, refinance, renew,
replace, defease or refund Disqualified Stock or Indebtedness permitted to be
issued pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.9 hereof or Indebtedness referred to in clauses (iii),
(v), (vii), (ix) and (x) of the second paragraph of Section 4.9 hereof.
"REFINANCING INDEBTEDNESS" means Indebtedness issued in exchange for,
or the proceeds of which are used to extend, refinance renew, replace, defease
or refund Indebtedness permitted to be incurred pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.9 hereof or
Indebtedness referred to in clauses (iii), (v), (vii), (ix) and (x) of the
second paragraph of Section 4.9 hereof.
"REGISTRATION RIGHTS AGREEMENTS" means those certain Registration
Rights Agreements dated as of the Issuance Date between the Company and Lehman
Brothers Inc. and between the Company and OHST setting forth certain
registration rights with respect to the Notes.
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative in respect of Designated Senior Debt, PROVIDED, that if, and
for so long as, any Designated Senior Debt lacks such a representative, then the
Representative for such Designated Senior Debt shall at all times constitute the
holders of a majority in outstanding principal amount of such Designated Senior
Debt in respect of any Designated Senior Debt.
"RESTRICTED INVESTMENTS" means an Investment other than a Permitted
Investment.
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
12
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR DEBT" means, in the case of the Company or any Guarantor, the
principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on any Indebtedness of the Company, whether
outstanding on the Issuance Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Notes. Without limiting the generality of the foregoing, "SENIOR DEBT" shall
also include the principal of, premium, if any, interest (including any interest
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on, and all other amounts
owing in respect of, (x) all Obligations of every nature of the Company under
the Credit Agreement, including, without limitation, obligations to pay
principal and interest, reimbursement obligations under letters of credit, fees,
expenses and indemnities, whether outstanding on the Issuance Date or thereafter
incurred, and (y) all Hedging Obligations (including Guarantees thereof),
whether outstanding on the Issuance Date or thereafter incurred.
Notwithstanding the foregoing, "SENIOR DEBT" shall not include (i) any
Indebtedness of the Company or any Guarantor to a Subsidiary of the Company or
any Affiliate of the Company or any of such Affiliate's Subsidiaries, (ii)
Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer
or employee of the Company or any Subsidiary of the Company or any Subsidiary of
the Company or any Guarantor (including, without limitation, amounts owed for
compensation), (iii) Indebtedness to trade creditors and other amounts incurred
in connection with obtaining goods, materials or services, (iv) any liability
for federal, state, local or other taxes owed or owing by the Company or any
Guarantor, (v) that portion of Indebtedness incurred in violation of this
Indenture provisions set forth under Section 4.9 hereof; PROVIDED, HOWEVER, that
in the case of this clause (v), (A) any Indebtedness issued to any person who
had no actual knowledge that the incurrence of such Indebtedness was not
permitted under this Indenture and who received in connection with the issuance
thereof a certificate from the Chief Financial Officer of the Company to the
effect that the issuance of such Indebtedness would not violate this Indenture
shall constitute Senior Debt and (B) any Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business shall constitute Senior
Debt provided that such Indebtedness is extinguished within three business days
of occurrence, and (vi) any Indebtedness which is, by its express terms,
subordinated in right of payment to any other Indebtedness of the Company or any
Guarantor.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"SIGNIFICANT SUBSIDIARY" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"SUBSIDIARY" means, with respect to any Person, 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
13
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"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 the successor serving hereunder.
"TRUST OFFICER" means any officer in the Corporate Trust Office of the
Trustee.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Indebtedness; (b) is not party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the same time from
Persons who are not affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results (other than pursuant
to agreements relating to the management of hotels entered into between
Restricted Subsidiaries and Unrestricted Subsidiaries in the ordinary course of
such Subsidiaries' business, consistent with past practice); and (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
filing with the Trustee a certified copy of the board resolution giving effect
to such designation and an officer's certificate certifying that such
designation complied with the foregoing conditions and was permitted by Section
4.7 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.9 hereof, the Company
shall be in default of such covenant). The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, PROVIDED that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary, and such designation shall only be
permitted if (i) such Indebtedness is permitted under Section 4.9 hereof and
(ii) no Default or Event of Default would be in existence following such
designation.
"WEIGHTED AVERAGE LIFE TO MANDATORY REDEMPTION" means, when applied to
any Disqualified Stock at any date, the number of years obtained by dividing (a)
the sum of the products obtained by multiplying (x) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
liquidation preference amount of such Disqualified Stock.
14
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (y) the
number of years (calculated to the nearest one twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
SECTION 1.2 OTHER DEFINITIONS.
Defined in
TERM Section
"ACCREDITED INVESTOR" 2.1
"AFFILIATE TRANSACTION" 4.11
"AGENT MEMBERS" 2.16
"ASSET SALE OFFER" 3.9
"ASSET SALE OFFER PRICE" 4.10
"BANKRUPTCY LAW" 6.1
"BLOCKAGE PERIOD" 10.3
"CHANGE OF CONTROL OFFER" 4.14
"CHANGE OF CONTROL PAYMENT" 4.14
"CHANGE OF CONTROL PAYMENT DATE" 4.14
"COMPUTATION PERIOD" 4.7
"COVENANT DEFEASANCE" 8.3
"CUSTODIAN" 6.1
"DEFEASANCE TRUST" 8.4
"DEFAULT NOTICE" 10.3
"DEPOSITARY" 2.1
"EVENT OF DEFAULT" 7.1
"EXCESS PROCEEDS" 4.10
"GLOBAL NOTE" 2.1
"LEGAL DEFEASANCE" 8.2
"LEGAL HOLIDAY" 12.7
"OFFSHORE PHYSICAL SECURITIES" 2.1
"PAYING AGENT" 2.4
"PAYMENT BLOCKAGE NOTICE" 10.3
"PRIVATE PLACEMENT LEGEND" 2.15
"PUBLIC EQUITY OFFERING" 3.7
"REDEMPTION PERCENTAGES" 3.7
"REGISTRAR" 2.3
"RESTRICTED PAYMENTS" 4.7
"RULE 144A" 2.1
"SUBSIDIARY GUARANTEE" 11.1
"US PHYSICAL SECURITIES" 2.1
SECTION 1.3 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.
15
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;
"OBLIGOR" on the Notes means the Company, any Guarantor and any
successor obligor.
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 1.4 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;
(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.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made a part of this Indenture. Subject to Section 2.7
hereof, the Notes shall be issued at any time, or from time to time, in an
aggregate principal amount not to exceed $200,000,000. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
agreements to which the Company or any Guarantor is subject or usage. Each Note
shall be dated the date of its authentication. The Notes shall be issued
initially in denominations of $1,000 and integral multiples thereof.
Notes offered and sold in reliance on Rule 144A under the Securities
Act ("RULE 144A") and to institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act ("ACCREDITED
INVESTORS") shall be issued initially in the form of one or more permanent
global notes in registered form, in substantially the form set forth in Exhibit
A (the "GLOBAL NOTE"), deposited with the Trustee, as custodian for The
Depository Trust Company (the "DEPOSITARY"),
16
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Note may from time to
time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depositary, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Securities in
registered form in substantially the form set forth in Exhibit A (the "OFFSHORE
PHYSICAL SECURITIES"). Additionally, Notes offered and sold in reliance on any
other exemption from registration under the Securities Act, including pursuant
to Rule 144A, other than as described in the preceding paragraph may be issued,
in the form of permanent certificated Notes in registered form, in substantially
the form set forth in Exhibit A (the "U.S. PHYSICAL SECURITIES"). The Offshore
Physical Securities and the U.S. Physical Securities are sometimes collectively
herein referred to as the "PHYSICAL SECURITIES".
SECTION 2.2 EXECUTION AND AUTHENTICATION.
An Officer of the Company 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 the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A hereto.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Notes for original issue up to an
aggregate principal amount stated in Section 2.1 hereof. The aggregate
principal amount of Notes outstanding at any time may not exceed the amount set
forth herein, except as provided in Section 2.7.
The Trustee may appoint an authenticating agent to authenticate Notes.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "REGISTRAR") and (ii) an office or agency where Notes may be
presented for payment (the "PAYING AGENT"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without 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 or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent
17
or Registrar. The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which shall incorporate the provisions
of the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such, and shall be entitled to appropriate compensation in accordance with
Section 7.7 hereof.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
SECTION 2.4 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
principal of, premium, if any, or interest or Liquidated Damages (as defined in
the Registration Rights Agreement), if any, on the Notes, and will notify the
Trustee of any default by the Company or Guarantor, if any, 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. 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) shall have no
further liability for the money delivered to the Trustee. If the Company or any
of its Subsidiaries 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 2.5 HOLDERS 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
Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven (7)
Business Days before each interest payment date and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, including
the aggregate principal amount thereof, and the Company and the Guarantors shall
otherwise comply with TIA Section 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) Where Notes are presented to the Registrar with a request to
register the transfer thereof or exchange them for an equal principal amount of
Notes of other denominations, the Registrar shall register the transfer or make
the exchange if its requirements for such transactions are met; PROVIDED,
HOWEVER, that any Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar and the Trustee duly executed by
the Holder thereof or by his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Company shall issue and the Trustee
shall authenticate Notes at the Registrar's request, subject to such rules as
the Trustee may reasonably require.
(b) The Company and the Registrar shall not be required (i) to issue,
to register the transfer of, or to exchange Notes during a period beginning at
the opening of business on a Business Day fifteen (15) days before the day of
any selection of Notes for redemption or purchase under Section 3.2 and ending
at the close of business on the day of selection, (ii) to register the transfer
of or
18
exchange any Note so selected for redemption or purchase in whole or in part,
except the unredeemed or unpurchased portion of any Note being redeemed or
purchased in part or (iii) to register the transfer or exchange of a Note
between the Record Date and the next succeeding Interest Payment Date.
(c) No service charge shall be made for any registration of a transfer
or exchange (except as otherwise expressly permitted herein), but the Company
may require payment by the Holder of a sum sufficient to cover any transfer tax
or similar governmental charge payable in connection therewith (other than such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.10, 3.6 or 9.5).
(d) Prior to due presentment for registration of transfer of any Note,
the Trustee, any Agent and the Company may deem and treat the Person in whose
name any Note is registered as the absolute owner of such Note for the purpose
of receiving payment of principal of, premium, if any, and interest on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and
neither the Trustee, any Agent, nor the Company shall be affected by notice to
the contrary.
(e) Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Global Note shall be required to be reflected in a book entry.
SECTION 2.7 REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or either of the
Company or the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, the Company shall issue and the Trustee, upon the
written order of the Company signed by two Officers of the Company, shall
authenticate a replacement Note if an indemnity bond is supplied by the Holder
that is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, each Agent and each authenticating agent from any loss
which any of them may suffer if a Note is replaced. The Company and the Trustee
may charge for its expenses in replacing a Note.
Every replacement Note is an additional Obligation of the Company.
SECTION 2.8 OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in interest in a Global Note effected by the
Trustee in accordance with the provision hereof, and those described in this
Section as not outstanding.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.9 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
19
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, a Guarantor, if any, or any Affiliate of the Company or a Guarantor, if
any, shall be considered as though not outstanding, except that for purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer knows to be so
owned shall be so considered. The Company agrees to notify the Trustee of the
existence of any Notes owned by the Company, by any Guarantor or by any
Affiliate of the Company or a Guarantor.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and the Trustee, upon receipt of
the written order of the Company signed by two Officers of the Company, shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act) unless the Company directs them to be returned to them. The Company may
not issue new Notes to replace Notes that have been redeemed or paid or that
have been delivered to the Trustee for cancellation. All cancelled Notes held
by the Trustee shall be destroyed and certification of their destruction
delivered to the Company unless by a written order, signed by an Officer of the
Company, the Company shall direct that cancelled Notes be returned to them.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, which date shall be at the earliest
practicable date but in all events at least five (5) Business Days prior to the
payment date, in each case at the rate provided in the Notes and in Section 4.1
hereof. The Company shall, with the consent of the Trustee, fix or cause to be
fixed each such special record date and payment date. At least fifteen (15)
days before the special record date, the Company (or the Trustee, in the name of
and at the expense of the Company) shall mail to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
20
SECTION 2.13 RECORD DATE.
The record date for purposes of determining the identity of Holders
entitled to vote or consent to any action by vote or consent authorized or
permitted under this Indenture shall be determined as provided for in TIA
Section 316(c).
SECTION 2.14 CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company will
promptly notify the Trustee in writing of any change in the CUSIP number.
SECTION 2.15 RESTRICTIVE LEGENDS.
Each Global Note and Physical Security that constitutes a Restricted
Security shall bear the following legend (the "PRIVATE PLACEMENT LEGEND") unless
otherwise agreed by the Company and the Holder thereof:
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY 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 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, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) 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 (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 HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
21
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH
NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF A
SUCCESSOR DEPOSITARY, OR ANY NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE ISSUER 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 HEREON 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.
SECTION 2.16 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the name of
the Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set forth in
Section 2.15.
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 the Trustee as its custodian, or under the
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 the 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 governing the
exercise of the rights of a Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depositary, its successors or their respective
nominees. Interest of beneficial owners in the Global Note may be transferred
or exchanged for Physical Securities in accordance with the rules and procedures
of the Depositary and the provisions of Section 2.17. In addition, Physical
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in the Global Note if (i) the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the Global
Note and a successor depositary is not appointed by the Company within 90 days
of such
22
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depositary to issue Physical
Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b) above, the Registrar shall (if one or more Physical Securities are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of the beneficial interest in the Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b) above, the Global Note shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the Global Note, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
above shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of
Section 2.17, bear the legend regarding transfer restrictions applicable to the
Physical Securities set forth in Section 2.15.
(f) The Holder of the 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 Securities.
SECTION 2.17 SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after August 19,
1999, or (y) (1) in the case of a transfer to an Institutional Accredited
Investor which is not a QIB (excluding Non-U.S. Persons), the proposed
transferee has delivered to the Registrar a certificate substantially in
the form of Exhibit C hereto or (2) in the case of a transfer to a Non-U.S.
Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures, (a) the Registrar shall reflect on its books and records the
date and (if the transfer does not involve a transfer of outstanding
Physical Securities) a decrease in the principal amount of the Global Note
in an amount equal to the principal amount of the beneficial interest in
the Global Note to be transferred, and (b) the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Securities
of like tenor and amount.
23
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been effected in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing the
Notes for its own account or an account with respect to which it exercises
sole investment discretion and that any such account is a QIB within the
meaning of Rule 144A, and it 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 it 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 its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member and the Notes to
be transferred consist of Physical Securities which after transfer are to
be evidenced by an interest in the Global Note, upon receipt by the
Registrar of instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities so
transferred.
(c) Private Placement Legend. Upon the registration of the transfer,
exchange or replacement of Notes not bearing the Private Placement Legend, the
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the registration of the transfer, exchange or replacement of Notes bearing
the Private Placement Legend, the Registrar shall deliver only Notes that bear
the Private Placement legend unless (i) the circumstance contemplated by
paragraph (a)(i)(x) of this Section 2.17 exists or (ii) there is delivered to
the Registrar an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related restrictions
on transfer are required in order to maintain compliance with the provisions of
the Securities Act.
(d) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain for at least two years copies of all
letters, notices and other written communications received pursuant to Section
2.16 hereof or this Section 2.17. The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable written notice to the
Registrar.
24
ARTICLE 3
REDEMPTIONS AND OFFERS TO PURCHASE
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 45 days but not more than 90 days before a redemption date (unless a
shorter notice period shall be satisfactory to the Trustee), an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Notes to be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Notes pursuant
to the provisions of Sections 4.10 or 4.14, it shall furnish to the Trustee, an
Officers' Certificate setting forth (i) the Section of this Indenture pursuant
to which the offer to purchase shall occur, (ii) the offer's terms, (iii) the
purchase price, (iv) the principal amount of the Notes to be purchased and (v) a
statement to the effect that (a) the Company or one of its Restricted
Subsidiaries has made an Asset Sale and that the conditions set forth in
Sections 3.9 and 4.10 have been satisfied or (b) a Change of Control has
occurred and the conditions set forth in Section 4.14 have been satisfied, as
applicable.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
In the event that less than all of the Notes are to be purchased in an
Asset Sale Offer or redeemed at any time, the Trustee shall select the Notes to
be redeemed or purchased among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed, or, if the Notes are not so listed, on a PRO RATA basis, by
lot or by such method as the Trustee shall deem fair and appropriate (and in
such manner as complies with applicable legal requirements). The Company shall
give written notice to the Trustee of such requirements of any securities
exchange not less than forty-five (45) nor more than ninety (90) days prior to
the date on which notice of such redemption or purchase is to be given. In the
event a partial redemption is made with the proceeds of a public offering by the
Company of common equity securities, selection of the Notes or portions thereof
for redemption shall be made by the Trustee only on a PRO RATA basis or on as
nearly a PRO RATA basis as practicable (subject to procedures of the
Depositary), unless such method is otherwise prohibited. In the event of
partial redemption, other than PRO RATA, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Notes not previously called for redemption. In the event that less than all of
the Notes properly tendered in an Asset Sale Offer are to be purchased, the
particular Notes to be purchased shall be selected promptly upon the expiration
of such Asset Sale Offer.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of them selected shall be in principal amounts of
$1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder
are to be redeemed or purchased, the entire outstanding principal amount of
Notes held by such Holder shall be redeemed or purchased. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption also apply to portions of Notes called for redemption.
25
In the event the Company is required to make an Asset Sale Offer
pursuant to Section 3.9 and Section 4.10 hereof, and the amount of Excess
Proceeds to be applied to such purchase would result in the purchase of a
principal amount of Notes which is not evenly divisible by $1,000, the Trustee
shall promptly refund to the Company the portion of such Excess Proceeds that is
not necessary to purchase the immediately lesser principal amount of Notes that
is so divisible.
SECTION 3.3 NOTICE OF REDEMPTION.
At least thirty (30) days but not more than sixty (60) days before a
redemption date, the Company shall mail, or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.
The notice shall identify the CUSIP number of the Notes, if any, and
the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note of the same series in principal amount
equal to the unredeemed portion will be issued;
(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;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for redemption
ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become due and payable on the redemption
date at the redemption price. On and after the redemption date, unless the
Company defaults in the payment of the redemption price, interest and Liquidated
Damages, if any, will cease to accrue on the Notes or portions of them called
for redemption and all rights of Holders of such Notes will terminate except for
the right to receive the redemption price. Upon surrender to the Paying Agent,
the Holders of such Notes shall be paid the redemption price plus accrued
interest and Liquidated Damages, if any, to the redemption date, but
26
interest installments and unpaid Liquidated Damages, if any, whose maturity is
on or prior to the redemption date will be payable to the Holder of record at
the close of business on the relevant record dates referred to in the Notes. A
notice of redemption may not be conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
At least one Business Day before the redemption date, the Company
shall deposit with the Trustee or with the Paying Agent money in immediately
available funds sufficient to pay the redemption price of and, if applicable,
accrued interest and Liquidated Damages, if any, on all Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly, and in any event
within two Business Days after the redemption date, return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of and, if applicable, accrued
interest and Liquidated Damages, if any, on all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, interest and Liquidated Damages, if any, on the Notes or the portions
of Notes to be redeemed will cease to accrue on the applicable redemption date,
whether or not such Notes are presented for payment. If any Note called for
redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest will be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest not paid on such unpaid
principal, from the redemption date until such unpaid interest is paid, in each
case at the rate provided in the Notes and in Section 4.1 hereof.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered; PROVIDED, HOWEVER, that no Note of $1,000 or less in principal
amount shall be purchased or redeemed in part.
SECTION 3.7 OPTIONAL REDEMPTION.
At any time on or after August 15, 2002, the Notes will be subject to
redemption at the option of the Company, in whole or in part, up on not less
than 30 nor more than 60 days notice, at the redemption prices (expressed as
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on August 15 of the
years indicated below:
YEAR PERCENTAGE
- ---- ----------
2002....................................................................104.375%
2003....................................................................102.917%
2004....................................................................101.458%
2005 and thereafter.....................................................100.000%
Notwithstanding the foregoing, prior to August 15, 2000, the Company
may redeem, on any one or more occasions, with the net cash proceeds of one or
more public offerings of its common equity (a "PUBLIC EQUITY OFFERING") (within
60 days of the consummation of any such Public Equity Offering), up to 35% of
the aggregate principal amount of the Notes issued at a redemption
27
price equal to 108.750% of the principal amount of such Notes plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date;
PROVIDED, HOWEVER, that at least 65% of the aggregate principal amount of Notes
originally issued remains outstanding immediately after each such redemption.
In addition, the Company, at its option, at any time prior to August
15, 2002, may redeem the Notes, in whole or in part (if in part, by lot or by
such other method as the Trustee shall deem fair or appropriate) at the
Make-Whole Price, plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the applicable redemption date.
SECTION 3.8 MANDATORY REDEMPTION.
Subject to the Company's obligation to make an offer to purchase Notes
pursuant to Section 4.10 and Section 4.14, the Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
Within 30 days after the date that Excess Proceeds exceed $10.0
million and an Asset Sale Offer is required under Section 4.10 hereof, the
Company shall mail or cause the Trustee to mail (in the Company's name and at
its expense and pursuant to an Officers' Certificate) an offer to purchase to
each Holder of Notes pursuant to the terms of this Section 3.9 and to holders of
other Indebtedness that ranks by its terms PARI PASSU in right of payment with
the Notes and the terms of which contain substantially similar requirements with
respect to the application of net proceeds from asset sales as are contained
herein.
The Asset Sale Offer (as defined in Section 4.10) with respect to the
Notes shall be mailed by the Company (or the Trustee) to Holders of Notes at
their last registered address with a copy to the Trustee and the Paying Agent
and shall set forth (a) notice that an Asset Sale has occurred, that the Company
is making an Asset Sale Offer, pursuant to this Section 3.9, and that each
Holder of Notes then outstanding has the right to require the Company to
repurchase, for cash, such Holder's Notes at the Asset Sale Offer Price, plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the
payment date; (b) the purchase price per $1,000 of principal amount and the
payment date of the Asset Sale Offer, (c) the maximum amount of Excess Proceeds,
required to be applied to such Asset Sale Offer with respect to the Notes; (d)
that any Notes properly tendered pursuant to the Asset Sale Offer will be
accepted for payment (subject to reduction as provided in this Section 3.9) on
the payment date of the Asset Sale Offer and any Notes not properly tendered
will remain outstanding and continue to accrue interest and Liquidated Damages,
if applicable; (e) that unless the Company defaults in the payment of the Asset
Sale Offer Price, all Notes accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest and Liquidated Damages after the payment
date of the Asset Sale Offer; (f) that Holders electing to have any Notes
purchased pursuant to an Asset Sale Offer will be required to surrender the
Notes, with the form entitled Option of Holder to Elect Purchase on the reverse
of the Notes completed, or transfer by book-entry transfer, to the Company, the
Depository or the Paying Agent specified in the notice at the address specified
in the notice prior to the close of business on the third Business Day preceding
the payment date of the Asset Sale Offer; (g) that Holders will be entitled to
withdraw their tendered Notes and their election to require the Company to
purchase the Notes provided that the Paying Agent receives, not later than the
close of business on the second Business Day preceding the payment date of the
Asset Sale Offer, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal
28
amount of Notes tendered for purchase, and a statement that such Holder is
withdrawing such Holder's tendered Notes and such Holder's election to have such
Notes purchased; (h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the amount of the Asset Sale Offer, the Company
shall select the Notes to be purchased by lot on a PRO RATA basis (with such
adjustments as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased or
otherwise in accordance with this Indenture); and (i) that Holders whose Notes
are being purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer). If the payment date of the Asset Sale Offer is on or
after an interest payment record date and on or before the related interest
payment date, any accrued interest and Liquidated Damages will be paid to the
Person in whose name a Note is registered at the close of business on such
record date, and no additional interest will be payable to Holders who tender a
Note pursuant to the Asset Sale Offer.
The Company shall fix the payment date of the Asset Sale Offer for
such purchase no earlier than 30 but no more than 60 days after the Asset Sale
Offer is mailed as set forth above, except as may otherwise be required by
applicable law.
The Company shall comply, to the extent applicable, with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable, in the event that the Company is required to repurchase Notes
pursuant to this Section 3.9. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 3.9,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Indenture by
virtue thereof.
On the payment date of the Asset Sale Offer, the Company shall, to the
extent permitted by law, (x) accept for payment Notes or portions thereof
properly tendered pursuant to the Asset Sale Offer, (y) deposit with the Paying
Agent the amount of money, in immediately available funds, equal to the maximum
Excess Proceeds required under Section 4.10 to be applied to such Asset Sale
Offer with respect to such Notes and (z) deliver or cause to be delivered to the
Trustee, Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. If the aggregate purchase
price of all Notes properly tendered exceeds the maximum amount of Excess
Proceeds, required to be applied to such Asset Sale Offer with respect to such
Notes, as applicable, the Notes or portions thereof to be purchased shall be
selected pursuant to Section 3.2 hereof. The Paying Agent shall promptly mail
to each Holder of Notes so accepted for payment a check in an amount equal to
the aggregate purchase price of the Notes purchased by the Company from such
Holder and the Trustee shall promptly authenticate and mail to each Holder a new
Note of the same series equal in principal amount to any unpurchased portion of
any Note surrendered, if any, or return any unpurchased Note to such Holder;
PROVIDED, HOWEVER, that each such new Note shall be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly announce in a
newspaper of national circulation or in a press release provided to a nationally
recognized financial wire service the results of the Asset Sale Offer on the
payment date.
Other than as specifically provided in this Section 3.9, each purchase
pursuant to this Section 3.9 shall be made pursuant to the provisions of
Sections 3.1, 3.2, 3.5 and 3.6 hereof.
29
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest and Liquidated Damages, if any, on the Notes on the dates
and in the manner provided in this Indenture and the Notes. Principal, premium,
if any, and interest and Liquidated Damages, if any, shall be considered paid on
the due date if the Paying Agent, if other than the Company or a Subsidiary of
the Company, holds as of 9:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and sufficient
to pay all principal, premium, if any, and interest and Liquidated Damages, if
any, then due. Such Paying Agent shall return to the Company promptly, and in
any event, no later than five days following the date of payment, any money
(including accrued interest) that exceeds such amount of principal, premium, if
any, and interest paid on the Notes. The Company shall pay all Liquidated
Damages, if any, in the same manner and on the same dates as set forth above and
in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the interest rate then applicable to the Notes to
the extent lawful. In addition, it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable grace
period) at the same rate to the extent lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee or Registrar) where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3.
30
SECTION 4.3 SEC REPORTS.
(a) The Company shall, whether or not required by the rules and
regulations of the SEC, submit to the SEC for public availability and provide to
the Trustee and the Holders copies of all quarterly and annual reports and other
information, documents and reports specified in Sections 13 and 15(d) of the
Exchange Act for so long as the Notes are outstanding.
(b) If the Company or a Guarantor, if any, is required to furnish
annual or quarterly reports to its stockholders pursuant to the Exchange Act,
the Company shall cause such annual report or quarterly or other financial
report furnished to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Notes maintained by the Registrar.
(c) The Company and the Guarantors, if any, shall deliver all reports
and other documents and information to the Holders under this Section 4.3. The
Trustee shall, if requested to by the Company, deliver such reports, other
documents and information to the Holders, but at the sole expense of the
Company.
(d) The Company, for so long as the Notes are outstanding, will
continue to provide to Holders and to prospective purchasers of Notes the
information required by Rule 144A(d)(4).
(e) Notwithstanding anything contrary herein, the Trustee shall have
no duty to review such documents for purposes of determining compliance with any
provision of this Indenture.
SECTION 4.4 COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within sixty (60) days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether each of the Company and its
Subsidiaries has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge each of the Company and
its Subsidiaries has kept, observed, performed and fulfilled each and every
covenant 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 or she may have knowledge and what action each of
the Company and its Subsidiaries is taking or propose to take with respect
thereto) and that to the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account of the principal of
or interest or Liquidated Damages, if any, on the Notes are prohibited (or if
such event has occurred, a description of the event and what action each is
taking or proposes to take with respect thereto).
(b)The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of (i) any
Default or Event of Default or (ii) any event of default under any other
mortgage, indenture or instrument which with the passage of time or giving of
notice would be a Default or an Event of Default under Section 6.1 hereof, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
SECTION 4.5 TAXES.
31
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 4.6 STAY, EXTENSION AND USURY LAWS.
The Company covenants, and the Company shall cause any Guarantor to
covenant (to the extent they 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. The Company (to the extent it may lawfully do so) hereby
expressly waives, and the Company will cause any Guarantor (to the extent it may
lawfully do so) expressly to waive, 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 has been
enacted.
SECTION 4.7 LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (other than: (1) dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company; (2)
dividends or distributions by a Restricted Subsidiary of the Company, provided
that to the extent that a portion of such dividend or distribution is paid to a
holder of Equity Interests of a Restricted Subsidiary other than the Company or
a Restricted Subsidiary, such portion of such dividend or distribution is not
greater than such holder's PRO RATA aggregate common equity interest in such
Restricted Subsidiary; and (3) dividends or distributions payable on Existing
Preferred OP Units and Preferred OP Units issued in compliance with Section 4.09
hereof); (ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any Restricted Subsidiary or other Affiliate
of the Company (other than (A) any Equity Interests owned by the Company or any
Restricted Subsidiary of the Company, (B) any Existing Preferred OP Units and
(C) any Preferred OP Units issued in compliance with Section 4.9 hereof); (iii)
purchase, redeem or otherwise acquire or retire for value any Indebtedness of
the Company or any Restricted Subsidiary that is subordinated or junior in right
of payment, by its terms, to the Notes or any Guarantee thereof prior to the
scheduled final maturity or sinking fund payment dates for payment of principal
and interest in accordance with the original documentation for such subordinated
or junior Indebtedness; or (iv) make any Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "RESTRICTED PAYMENTS"), unless, at the time of such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.9 hereof; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries after
the Issuance Date (excluding Restricted Payments permitted by clauses (ii),
(iii), (iv), (v) and (vi) (X) of the next succeeding
32
paragraph), is less than the sum, without duplication, of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one accounting
period) from June 30, 1997 to the end of the Company's most recently ended
fiscal quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), PLUS (ii) 100% of the aggregate net
proceeds (including the fair market value of non-cash proceeds as determined in
good faith by the Board of Directors) received by the Company from the issue or
sale, in either case, since the Issuance Date of either (A) Equity Interests of
the Company or of (B) debt securities of the Company that have been converted or
exchanged into such Equity Interests (other than Equity Interests (or
convertible or exchangeable debt securities) sold to a Restricted Subsidiary of
the Company and other than Disqualified Stock or debt securities that have been
converted or exchanged into Disqualified Stock), PLUS (iii) in case any
Unrestricted Subsidiary has been redesignated a Restricted Subsidiary pursuant
to the terms of this Indenture or has been merged, consolidated or amalgamated
with or into, or transfers or conveys assets to, or is liquidated into, the
Company or a Restricted Subsidiary and PROVIDED that no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof, the lesser of (A) the book value (determined in accordance with GAAP)
at the date of such redesignation, combination or transfer of the aggregate
Investments made by the Company and its Restricted Subsidiaries in such
Unrestricted Subsidiary (or of the assets transferred or conveyed, as
applicable) and (B) the fair market value of such Investments in such
Unrestricted Subsidiary at the time of such redesignation, combination or
transfer (or of the assets transferred or conveyed, as applicable), in each case
as determined in good faith by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a resolution of such Board
and, in each case, after deducting any Indebtedness associated with the
Unrestricted Subsidiary so designated or combined or with the assets so
transferred or conveyed, PLUS (iv) 100% of any dividends or interest actually
received in cash by the Company or a Restricted Subsidiary after the Issuance
Date from (A) a Restricted Subsidiary the Net Income of which has been excluded
from the computation of Consolidated Net Income, (B) an Unrestricted Subsidiary,
(C) a Person that is not a Subsidiary or (D) a Person that is accounted for on
the equity method PLUS (v) $15.0 million.
Notwithstanding the foregoing, the provisions of this Section 4.7 will
not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture; (ii) (X) the redemption,
purchase, retirement or other acquisition of any OP Unit in exchange for
Equity Interests of the Company (other than Disqualified Stock) and (Y) the
redemption, purchase, retirement or other acquisition of any Equity
Interests of the Company or a Restricted Subsidiary (other than OP Units or
Preferred OP Units) in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Restricted Subsidiary of the
Company) of other Equity Interests of the Company (other than any
Disqualified Stock); PROVIDED that in the case of (X) and (Y) the amount of
any proceeds that is utilized for such redemption, repurchase, retirement
or other acquisition shall be excluded from clause (c)(ii) of the preceding
paragraph; (iii) the defeasance, redemption, repayment or purchase of
Indebtedness of the Company or any Restricted Subsidiary that is
subordinated or junior in right of payment, by its terms, to the Notes or
any Guarantee thereof in a Permitted Refinancing; (iv) the defeasance,
redemption, repayment or purchase of Indebtedness of the Company or any
Restricted Subsidiary; that is subordinated or junior in right of payment,
by its terms, to the Notes or any Guarantee thereof with the proceeds of a
substantially concurrent sale (other than to a Subsidiary of the Company)
of Equity Interests (other than Disqualified Stock) of the Company;
PROVIDED that the amount of any proceeds that is utilized for such
33
defeasance, redemption, repayment or purchase shall be excluded from clause
(c) (ii) of the preceding paragraph; (v) the purchase, redemption or other
acquisition or retirement for value of any Equity Interests of the Company
pursuant to any management equity subscription agreement or stock option
agreement; PROVIDED, HOWEVER, that the aggregate price paid for all such
purchased, redeemed, acquired or retired Equity Interests shall not exceed
$1,000,000 in any 12 month period; and (vi)(X) the making of any Permitted
Investment described in clauses (a), (b), (c), (d) or (f) of the definition
thereof and (Y) the making of any Permitted Investment described in clause
(e) thereof, PROVIDED that, in the case of clauses (ii)(Y), (iii), (iv),
(v) and (vi)(Y), no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof.
In determining whether any Restricted Payment is permitted by this
Section 4.7, the Company may allocate or reallocate all or any portion of such
Restricted Payment among the clauses (i) through (vi) of the preceding paragraph
or among such clauses and the first paragraph of this Section 4.7 including
clauses (a), (b) and (c), PROVIDED that at the time of such allocation or
reallocation, all such Restricted Payments, or allocated portions thereof, would
be permitted under the various provisions of this Section 4.7.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors of the
Company set forth in an Officers' Certificate delivered to the Trustee) on the
date of the Restricted Payment of the asset(s) proposed to be transferred by the
Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. Not later than (i) the end of any calendar quarter in which
any Restricted Payment is made or (ii) the making of a Restricted Payment which,
when added to the sum of all previous Restricted Payments made in a calendar
quarter, would cause the aggregate of all Restricted Payments made in such
quarter to exceed $5.0 million, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section 4.7
were computed, which calculations may be based upon the Company's latest
available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default or
Event of Default. For purposes of making the determination as to whether such
designation would cause a Default or Event of Default, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation and will reduce the amount available
for Restricted Payments under the first paragraph of this Section 4.7. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greatest of (x) the net book value of such Investments at the time
of such designation, (y) the fair market value of such Investments at the time
of such designation and (z) the original fair market value of such Investments
at the time they were made. Such designation will only be permitted if such
Restricted Payment would be permitted at such time and if such Restricted
Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.
Any such designation by the Board of Directors shall be evidenced to
the Trustee by filing with the Trustee a certified copy of the resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
SECTION 4.8 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
34
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) (i) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or
(B) with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (b) make loans or advances or capital contributions to
the Company or any of its Restricted Subsidiaries, or (c) sell, lease or
transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries, except for such encumbrances or restrictions existing under or by
reasons of (i) Existing Indebtedness as in effect on the Issuance Date, (ii) the
Credit Agreement, PROVIDED that the encumbrances or restrictions contained in
such agreement as amended, modified, supplemented, restructured, renewed,
restated, refunded, replaced or refinanced or extended from time to time on one
or more occasions are no more restrictive than those contained in the Credit
Agreement as in effect on the Issuance Date, (iii) this Indenture and the Notes,
(iv) applicable law, (v) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its Restricted Subsidiaries or of
any Person that becomes a Restricted Subsidiary as in effect at the time of such
acquisition or such Person becoming a Restricted Subsidiary (except to the
extent such Indebtedness was incurred in connection with or in contemplation of
such acquisition or such Person becoming a Restricted Subsidiary), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, PROVIDED that the Consolidated Cash Flow of such Person is
not taken into account (to the extent of such restriction) in determining
whether such acquisition was permitted by the terms of this Indenture, (vi)
restrictions of the nature described in clause (c) above by reason of customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, (vii) purchase money obligations
for property acquired in the ordinary course of business that impose
restrictions of the nature described in this clause (c) above on the property so
acquired, (viii) Permitted Refinancing Indebtedness, PROVIDED that the
restrictions contained in the agreements governing such Permitted Refinancings
are no more restrictive than those contained in the agreements governing the
Indebtedness or Disqualified Stock being refinanced, or (ix) customary
restrictions in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the transfer of
the property subject to such security agreements and mortgages.
SECTION 4.9 LIMITATION ON ADDITIONAL INDEBTEDNESS AND ISSUANCE OF
CERTAIN CAPITAL STOCK.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to (collectively,
"INCUR" and correlatively, an "INCURRENCE" of) any Indebtedness (including
Acquired Debt), the Company shall not issue, and shall not permit any of its
Restricted Subsidiaries to issue, any shares of Disqualified Stock and the
Company shall not permit any of its Restricted Subsidiaries to issue any
Preferred Stock; PROVIDED, HOWEVER, that the Company or any Guarantor may incur
Indebtedness or issue shares of Disqualified Stock and the Restricted
Subsidiaries may incur Indebtedness under the Credit Agreement if the Fixed
Charge Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least 2.0 to 1, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
35
The foregoing provisions shall not apply to:
(a) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Indebtedness; PROVIDED, HOWEVER, that if any such Indebtedness
ceases to be Non-Recourse Indebtedness of an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company;
(b) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness pursuant to the Credit Agreement in an aggregate principal amount
not to exceed $300.0 million at any one time outstanding, MINUS any Net Proceeds
that have been applied to permanently reduce the outstanding amount of such
Indebtedness pursuant to clause (a) of the second paragraph of Section 4.10
hereof;
(c) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(d) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under Hedging Obligations that do not increase the Indebtedness of
the Company or the Restricted Subsidiary, as the case may be, other than as a
result of fluctuations in interest or foreign currency exchange rates provided
that such Hedging Obligations are incurred for the purpose of providing interest
rate protection with respect to Indebtedness permitted under the Indenture or to
provide currency exchange protection in connection with revenues generated in
currencies other than U.S. dollars;
(e) the incurrence or the issuance by the Company of Refinancing
Indebtedness or Refinancing Disqualified Stock or the incurrence or issuance by
a Restricted Subsidiary of Refinancing Indebtedness or Refinancing Disqualified
Stock; PROVIDED, HOWEVER, that such Refinancing Indebtedness or Refinancing
Disqualified Stock is a Permitted Refinancing;
(f) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; PROVIDED, HOWEVER, that (a) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being held by a Person other than a Restricted Subsidiary and (b) any sale or
other transfer of any such Indebtedness to a Person that is not either the
Company or a Restricted Subsidiary shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be;
(g) the incurrence of Indebtedness represented by the Notes and any
Guarantee thereof;
(h) the incurrence by the Company or any of its Restricted
Subsidiaries, in the ordinary course of business and consistent with past
practice, of surety, performance or appeal bonds;
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness (in addition to Indebtedness permitted by any other
clause of this paragraph) in an aggregate principal amount at any time
outstanding not to exceed $50.0 million;
(j) the incurrence by the Company or any of its Restricted
Subsidiaries of Assumed Indebtedness--PROVIDED that, after giving effect to the
incurrence thereof, the Company could incur at
36
lease $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage
Ratio test described in the preceding paragraph; and
(k) the issuance of Preferred OP Units by the Company or any of its
Restricted Subsidiaries as full or partial consideration for the acquisition of
lodging facilities and related assets, PROVIDED that, after giving effect to the
issuance thereof, the Company could incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test described in the
preceding paragraph.
SECTION 4.10 LIMITATION ON SALE OF ASSETS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, conduct an Asset Sale, unless (x) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value of the assets sold or
otherwise disposed of (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) and (y) at least 75%
of the consideration therefor received by the Company or such Restricted
Subsidiary is in the form of cash or Cash Equivalents; PROVIDED, HOWEVER, that
the principal amount of the following shall be deemed to be cash for purposes of
this provision: (A) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet or in the notes thereto), of
the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes or any Guarantee thereof) that are assumed
by the transferee of any such assets and (B) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into cash within
90 days of the closing of such Asset Sale (to the extent of the cash received).
Notwithstanding the foregoing, the restriction in clause (y) above will not
apply with respect to mortgages, other notes receivable or other securities
received by the Company or any Restricted Subsidiary from a transferee of any
assets to the extent such mortgages, other notes receivable or other securities
are Investments permitted to be made by the Company or such Restricted
Subsidiary under Section 4.7 hereof.
Within 365 days of any Asset Sale, the Company or such Restricted
Subsidiary may (a) apply the Net Proceeds from such Asset Sale to repay any
Indebtedness that ranks by its terms senior to the Notes (or any Guarantee
thereof) and, in the case of any Indebtedness under the Credit Agreement, to
effect a permanent reduction in the amount of Indebtedness that may be incurred
pursuant to clause (ii) of the second paragraph of Section 4.9 hereof, or (b)
invest the Net Proceeds from such Asset Sale in property or assets used in a
Hospitality-Related Business, PROVIDED that the Company or such Restricted
Subsidiary will have complied with this clause (b) if, within 365 days of such
Asset Sale, the Company or such Restricted Subsidiary shall have commenced and
not completed or abandoned an investment in compliance with this clause (b) and
shall have segregated such Net Proceeds from the general funds of the Company
and its Subsidiaries for that purpose and such Investment is substantially
completed within 180 days after the first anniversary of such Asset Sale. Any
Net Proceeds from an Asset Sale that are not applied or invested as provided in
the first sentence of this paragraph will be deemed to constitute "EXCESS
PROCEEDS". When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company shall make an offer, to all Holders of Notes and to holders of other
Indebtedness that ranks by its terms PARI PASSU in right of payment with the
Notes and the terms of which contain substantially similar requirements with
respect to the application of net proceeds from asset sales as are contained in
this Indenture (an "ASSET SALE OFFER") to purchase on a PRO RATA basis the
maximum principal amount of Notes, that is an integral multiple of $1,000, that
may be purchased out of the Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the
37
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the procedures set
forth in this Indenture. To the extent that the aggregate amount of Notes and
other such Indebtedness tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds available
for purchase thereof, the Trustee shall select the Notes to be purchased in the
manner described under Section 3.3 hereof. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero. Pending the
final application of any Net Proceeds from an Asset Sale pursuant to this
paragraph, the Company or any Restricted Subsidiary may temporarily reduce
Indebtedness of the Company or a Restricted Subsidiary that ranks by its terms
senior to the Notes or otherwise invest such Net Proceeds in Cash Equivalents.
Any offer to purchase the Notes pursuant to this Section 4.10 shall be
made pursuant to the provisions of Section 3.9 hereof. Simultaneously with the
notification of such offer to the Trustee, the Company shall provide the Trustee
with an Officer's is Certificate setting forth the calculations used in
determining the amount of Excess Proceeds to be applied to the purchase of the
Notes. The Company will comply, to the extent applicable, with the requirements
of Rule 14e-1 under the Exchange Act and other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with any offer to purchase and the purchase of Notes as described above. To the
extent that the provisions of any securities laws or regulations conflict with
Section 3.9 and this Section 4.10, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under the provisions of Section 3.9 and this Section 4.10 to make an
Asset Sale Offer.
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or Guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "AFFILIATE
TRANSACTION"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary on an arm's length basis with an unrelated Person, (b) the
Company delivers to the Trustee (i) with respect to any Affiliate Transaction
involving aggregate payments in excess of $5.0 million, an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above and
such Affiliate Transaction is approved by a majority of the disinterested
members of the Board of Directors and (ii) with respect to any Affiliate
Transaction involving aggregate payments in excess of $10.0 million (other than
an Affiliate Transaction involving the acquisition or disposition of a lodging
facility by the Company or a Restricted Subsidiary of the Company), an opinion
as to the fairness to the Company or such Restricted Subsidiary from a financial
point of view issued, at the option of the Company, by an investment banking
firm of national standing or a Qualified Appraiser and (c) the Company delivers
to the Trustee in the case of an Affiliate Transaction involving the acquisition
or disposition of a lodging facility by the Company or a Restricted Subsidiary
of the Company and (x) involving aggregate payments of more than $5.0 million
and less than $25.0 million, an appraisal by a Qualified Appraiser to the effect
that the transaction is being undertaken at fair market value or (y) involving
aggregate payments of $25.0 million or more, an opinion as to the fairness of
the transaction to the Company or such Restricted Subsidiary from a financial
point of view issued by an investment banking firm of national standing;
PROVIDED, HOWEVER, that the following shall not be deemed Affiliate
Transactions: (A) any employment, deferred compensation, stock option,
noncompetition, consulting or similar agreement entered into by the
38
Company or any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such Restricted
Subsidiary, (B) transactions between or among the Company and/or its Restricted
Subsidiaries, (C) the incurrence of fees in connection with the provision of
hotel management services, provided that such fees are paid in the ordinary
course of business and are consistent with past practice and (D) Restricted
Payments permitted by Section 4.7 hereof.
SECTION 4.12 LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien that secures obligations under any Indebtedness which is PARI
PASSU with or subordinated to the Notes, unless the Notes are equally and
ratably secured with the obligations so secured or until such time as such
obligations are no longer secured by a Lien.
SECTION 4.13 CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5 hereof, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence and the corporate existence of each of its
Subsidiaries, in accordance with its respective organizational documents (as the
same may be amended from time to time) and (ii) its (and its Subsidiaries')
rights (charter and statutory), licenses and franchises; PROVIDED, HOWEVER, that
the Company shall not be required to preserve any such right, license or
franchise, or the corporate existence of any of its Subsidiaries, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.14 CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of Notes shall
have the right to require that the Company purchase all or a portion of such
Holder's Notes pursuant to the offer described below (the "CHANGE OF CONTROL
OFFER"), at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase (the "CHANGE OF CONTROL PAYMENT").
Prior to the mailing of the notice referred to below, but in any event
within 30 days following any Change of Control, the Company shall (i) repay in
full and terminate all commitments under Indebtedness under the Credit Agreement
and all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Agreement and all other such Senior Debt and to
repay the Indebtedness owed to each lender or holder of Senior Debt which has
accepted such offer or (ii) obtain the requisite consents under the Credit
Agreement and all other Senior Debt to permit the repurchase of the Notes as
provided below. The Company shall first comply with the covenant in the
immediately preceding sentence before it shall be required to repurchase Notes
pursuant to the provisions described below, and the Company's failure to comply
with the covenant described in the immediately preceding sentence shall
constitute an Event of Default described in clause (3) and not in clause (2)
under Section 6.1 hereof.
Within 10 days following the date upon which the Change of Control
occurs, the Company must send, by first class mail, a notice to each Holder,
with a copy to the Trustee, which notice shall govern the terms of the Change of
Control Offer. Such notice shall state, among other
39
things, the purchase date, which must be no earlier than 30 days nor later than
60 days from the date such notice is mailed, other than as may be required by
law (the "CHANGE OF CONTROL PAYMENT DATE"). Holders electing to have a Note
purchased pursuant to a Change of Control 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 Trustee or Paying Agent, if any, at the
address specified in the notice prior to the close of business on the third
business day prior to the Change of Control Payment Date.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.14, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 4.14 to make a Change of Control Offer.
On the Change of Control Payment Date, the Company will, to the extent
permitted by law, (x) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (y) deposit with the Paying
Agent an amount equal to the aggregate Change of Control Payment in respect of
all Notes or portions thereof so tendered and (z) deliver, or cause to be
delivered, to the Trustee for cancellation the Notes so accepted together with
an Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so accepted the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail to each
Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; PROVIDED, HOWEVER, that each such new Note shall be
in principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce in a newspaper of national circulation or in a press release
provided to a nationally recognized financial wire service the results of the
Change of Control Offer on the Change of Control Payment Date.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control made by the Company
and purchased all Notes validly tendered and not withdrawn under such Change of
Control Offer.
SECTION 4.15 SUBSIDIARY GUARANTEES.
Prior to guaranteeing any other Indebtedness of the Company (other
than the Credit Agreement), a Restricted Subsidiary that is also a Significant
Subsidiary must execute and deliver to the Trustee a supplemental indenture in
the form of Exhibit B hereto pursuant to which such Restricted Subsidiary shall
Guarantee, on an unsecured senior subordinated basis, all of the Obligations of
the Company with respect to the Notes together with an opinion of counsel (which
counsel may be an employee of the Company) to the effect that the supplemental
indenture has been duly executed and delivered by such Restricted Subsidiary and
is in compliance in all material respects with the terms of this Indenture.
The Indebtedness represented by any such Subsidiary Guarantee (i.e.,
the payment of Obligations on the Notes) will be subordinated on the same basis
to Senior Debt of the Guarantor as the Notes are subordinated to Senior Debt of
the Company.
40
SECTION 4.16 LINE OF BUSINESS.
For so long as any Notes are outstanding, the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, engage in any business
or activity other than a Hospitality-Related Business.
SECTION 4.17 PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or agreed
to be paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 4.18 NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is senior in right of payment to the
Notes and subordinate or junior in right of payment to any other Indebtedness of
the Company, and no Guarantor shall incur, issue, assume, guarantee or otherwise
become liable for any Indebtedness that is senior in right of payment to the
Guarantee by such Guarantor of the Notes and subordinate or junior in right of
payment to any other Indebtedness of the Guarantor.
ARTICLE 5
SUCCESSORS
SECTION 5.1 WHEN THE COMPANY MAY MERGE, ETC.
The Company shall not consolidate or merge with or into or wind up
into (whether or not the Company is the surviving entity), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another
corporation, Person or entity unless:
(i) the Company is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the Company)
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person or to which such sale,
assignment, transfer, lease, conveyance or other disposition will have been
made assumes all the obligations of the Company under the Notes and this
Indenture pursuant to a supplemental indenture;
(iii) at the time of such transaction and immediately after such
transaction after giving pro forma effect thereto, no Default or Event of
Default exists or would exist;
(iv) the Company or any Person formed by or surviving such
consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have
41
been made (A) shall have Consolidated Net Worth (immediately after the
transaction) equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) shall, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.9 hereof; and
(v) the Company shall have delivered to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate and an
Opinion of Counsel to the combined effect that such sale, assignment,
transfer, lease, conveyance or other disposition, and, if applicable, any
supplemental indenture executed in connection therewith, comply with this
Indenture. The Trustee shall be entitled to conclusively rely upon such
Officers' Certificate and Opinion of Counsel.
SECTION 5.2 SUCCESSOR SUBSTITUTED.
Upon any consolidation, merger, lease, conveyance or transfer of all
or substantially all of the assets of the Company, as the case may be, in
accordance with Section 5.1 hereof, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale, lease,
conveyance or transfer 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 therein and thereafter the predecessor corporation shall be relieved
of all further obligations and covenants under this Indenture and the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default under this
Indenture:
(1) default for 30 days in the payment when due of interest or
Liquidated Damages, if any, on the Notes (whether or not such payment shall
be prohibited by the subordination provisions of this Indenture);
(2) default in payment when due of principal of or premium, if any, on
the Notes at maturity, upon redemption or otherwise (including the failure
to make a payment to purchase Notes tendered pursuant to a Change of
Control Offer or an Assets Sale Offer) (whether or not such payment shall
be prohibited by the subordination provisions of this Indenture);
(3) failure by the Company or any Restricted Subsidiary to comply with
Section 5.1;
(4) failure by the Company or any Guarantor for 30 days in the
performance of any other covenant, warranty or agreement in this Indenture
or the Notes after written notice shall have been given to the Company by
the Trustee or to the Company and the Trustee from Holders of at least 25%
in principal amount of the Notes then outstanding;
(5) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of Non-Recourse Indebtedness of the Company or any of its Restricted
Subsidiaries with an aggregate principal amount in excess of
42
the lesser of (A) 10% of the total assets of the Company and its Restricted
Subsidiaries measured as of the end of the Company's most recent fiscal
quarter for which internal financial statements are available immediately
preceding the date on which such default occurred, determined on a pro
forma basis and (B) $50 million, and such failure continues for a period of
10 days or more, or the acceleration of the final stated maturity of any
such Non-Recourse Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 10 days of receipt by the Company or
such Restricted Subsidiary of notice of any such acceleration);
(6) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness (other than Non-Recourse Indebtedness) of the Company
or any Restricted Subsidiary of the Company and such failure continues for
a period of 10 days or more, or the acceleration of the final stated
maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 10 days of receipt by the Company or
such Restricted Subsidiary of notice of any such acceleration) if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to
pay principal at final maturity or which has been accelerated, in each case
with respect to which the 10-day period described above has passed,
aggregates $10.0 million or more at any time;
(7) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments rendered against them (other than judgment liens
without recourse to any assets or property of the Company or any of its
Restricted Subsidiaries other than assets or property securing Non-Recourse
Indebtedness) aggregating in excess of $10.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days (other than any
judgments as to which a reputable insurance company has accepted full
liability);
(8) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in a judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Guarantor
(or its successors or assigns), or any Person acting on behalf of such
Guarantor (or its successors or assigns), shall deny or disaffirm its
obligations or shall fail to comply with any obligations under its
Subsidiary Guarantee;
(9) the Company, any Guarantor or any of the Company's Subsidiaries
that would constitute a Significant Subsidiary or any group of the
Company's Subsidiaries that, taken together, would constitute a Significant
Subsidiary pursuant to or within the meaning of the Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in
an involuntary case,
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(d) makes a general assignment for the benefit of its creditors,
(e) admits in writing its inability to pay its debts as they
become due; and
43
(10) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief in an involuntary case against the Company,
any Guarantor or any Subsidiary that is a Significant Subsidiary of
the Company or any group of Subsidiaries that, taken together, would
constitute a Significant Subsidiary of the Company,
(b) appoints a Custodian of the Company, any Guarantor or any
Subsidiary that is a Significant Subsidiary of the Company or any
group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary of the Company, or for all or substantially all
of the property of the Company, any Guarantor or any Subsidiary that
is a Significant Subsidiary of the Company, or any group of
Subsidiaries that, taken together, would constitute a Significant
Subsidiary of the Company, or
(c) orders the liquidation of the Company, any Guarantor or any
Subsidiary that is a Significant Subsidiary of the Company or any
group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary of the Company,
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 or state law for the relief of debtors, each as amended from time to
time. The term Custodian means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
SECTION 6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clauses (9) and (10) of Section 6.1 hereof) occurs and is continuing, the
Trustee by written notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes by written notice to
the Company and the Trustee, may declare all Notes to be due and payable
immediately. Upon the effectiveness of such declaration, all amounts due and
payable on the Notes, as determined in the succeeding paragraphs, shall be due
and payable effective immediately. If an Event of Default specified in clause
(9) or (10) of Section 6.1 hereof occurs, all outstanding Notes shall ipso facto
become and be immediately due and payable immediately without further action or
notice on the part of or by the Trustee or any Holder.
In the event that the maturity of the Notes is accelerated pursuant to
this Section 6.2, 100% of the principal amount thereof shall become due and
payable plus premium, if any, and accrued and unpaid interest, if any, to the
date of payment.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, or interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
44
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 6.4 WAIVER OF PAST DEFAULTS.
Subject to Section 9.2 hereof, Holders of a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may
waive an existing Default or Event of Default and its consequences except a
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or interest or Liquidated Damages, if any, on any Note held by
a non-consenting Holder. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, or that the Trustee determines may be
unduly prejudicial to the rights of other Holders or that may involve the
Trustee in personal liability; PROVIDED, HOWEVER, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction.
SECTION 6.6 LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this Indenture or the
Notes only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default or the Trustee receives such notice from the Company;
(2) the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(5) during such 60-day period the Holders of a majority in aggregate
principal amount of the then outstanding Notes 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 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
45
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Note, 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.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company or any Guarantor for the
whole amount of principal, premium, if any, and interest and Liquidated Damages,
if any, remaining unpaid on the Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 7.7 hereof) and the Holders allowed in any
judicial proceedings relative to the Company or any Guarantor (or any other
obligor upon the Notes), their creditors or their property and shall be entitled
and empowered to collect, receive and distribute any money or securities or
other property payable or deliverable on any such claims and to distribute the
same, and any custodian in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof. To the extent that
the payment of any such compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 hereof out of the estate in any such proceeding shall be denied for
any reason, payment of the same shall be secured by a Lien on, and shall be paid
out of, any and all distributions, dividends, money, securities and other
properties that the Holders of the Notes may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects or receives any money or securities or other
property pursuant to this Article, it shall pay out the money or securities or
other property in the following order:
First: to the Trustee, its agents and counsel for amounts due under
Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
46
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest and Liquidated Damages, if any,
ratably, without preference or priority of any kind (including defaulted
interest), according to the amounts due and payable on the Notes for principal,
premium, if any, and interest and Liquidated Damages, if any, respectively;
Third: without duplication, to Holders for any other obligations
owing to the Holders under the Notes or this Indenture; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any such
payment to Holders.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant. This Section does not apply to a suit by the Trustee, a
suit by a Holder pursuant to Section 6.7 hereof, or a suit by Holders of more
than 10% in aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(1) 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.
(2) Except during the continuance of an Event of Default:
(a) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(3) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
47
(a) this paragraph does not limit the effect of paragraph (2) of this
Section 7.1;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(4) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(1), (2) and (3) of this Section.
(5) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. 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.
(6) 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 7.2 RIGHTS OF TRUSTEE.
Subject to TIA Section 315:
(1) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed and monitored with due
care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(6) Without limiting the provisions of Section 7.1(5), the Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of the Holders of a majority in
aggregate principal amount of the then outstanding Notes pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or
48
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction.
(7) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(8) Except with respect to Section 4.1, the Trustee shall have no duty
to inquire as to the performance of the Company's covenants in Article 4. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
6.1(1), 6.1(2) or 4.1 or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
SECTION 7.3 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, any
Subsidiary of the Company or any Affiliate of the foregoing with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and 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 or any money
paid to the Company or upon the Company's direction under any provision hereof,
it shall not be responsible for the use or application of any money received by
any Paying Agent other than the Trustee and it shall not be responsible for any
statement or recital herein or any statement in the Notes or any other document
in connection with the sale of the Notes or pursuant to this Indenture other
than its certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known by a Trust Officer of 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 of principal or
interest on any Note, the Trustee may withhold the notice if and so long as a
Trust Officer in good faith determines that withholding the notice is in the
interests of Holders. The Trustee shall comply with TIA Section 315(b).
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with the May 15, 1998
following the date hereof, the Trustee shall mail to Holders a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b). 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
submitted to the SEC and each stock exchange, if any, on which the Notes are
listed. The Company shall promptly notify the Trustee when the Notes are listed
on or delisted by any stock exchange.
49
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company agrees to pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company agrees to reimburse the Trustee
promptly upon request for all reasonable disbursements, advances and expenses
incurred or made by it in addition to the compensation for its services. Such
expenses shall include the reasonable compensation, disbursements and expenses
of the Trustee's agents and counsel.
The Company agrees to indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture, except
as set forth in the next paragraph. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder except to the extent the Company has been prejudiced thereby. The
Company shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and, if the Company or the Trustee shall
have been advised by its respective counsel that representation of the Trustee
and the Company by the same counsel would be inappropriate under applicable
standards of professional conduct (whether or not such representation by the
same counsel has been proposed), the Company shall pay the reasonable fees 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
provisions of this paragraph shall survive the satisfaction and discharge of
this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through its own gross negligence or
willful misconduct.
The obligations of the Company under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular
Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(9) or (10) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 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.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in aggregate principal amount of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Company. The
Company may remove the Trustee at its discretion or if:
(1) the Trustee fails to comply with Section 7.10;
50
(2) 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;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) 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 Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of at least 10% in aggregate principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
Subject to the provision of TIA Section 315(e), if the Trustee after
written request by any Holder who has been a bona fide holder of a Note or Notes
for at least six months fails to comply with Section 7.10, such Holder, on
behalf of himself and others similarly situated, may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
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 the Holders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums owing
to the Trustee hereunder have been paid and subject to the Lien provided for in
Section 7.7. Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 hereof shall continue
for the benefit of the retiring Trustee.
SECTION 7.9 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 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee powers, shall be subject to supervision or examination by Federal or
state authority and shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a). The Trustee is subject to TIA Section
310(b). The provisions of TIA Section 310 shall apply to the Company as the
obligor of the Notes.
51
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
The provisions of TIA Section 311 shall apply to the Company as the obligor of
the Notes.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.1 DEFEASANCE AND DISCHARGE OF THIS INDENTURE AND THE
NOTES.
(a) The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, with respect
to the Notes, elect to have either Section 8.2 or 8.3 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article 8.
(b) The Company may terminate its obligations (and the obligations of
any Guarantor in respect of Subsidiary Guarantees) under the Notes and this
Indenture (except those obligations referred to in the penultimate paragraph of
this Section 8.1(b)) if all such Notes thereto authenticated and delivered
(except lost, stolen or destroyed Notes that have been replaced or paid and
Notes for whose payment cash in United States dollars has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company, as provided in Section 8.6, or discharged from such
trust) have been delivered to the Trustee for cancellation and the Company has
paid all sums payable by it hereunder, or if (i) either (x) pursuant to Article
3, the Company shall have given notice to the Trustee and mailed a notice of
redemption to each Holder of the redemption of all of the Notes under
arrangements satisfactory to the Trustee for the giving of such notice or (y)
all Notes have otherwise become due and payable hereunder, (ii) the Company
shall have irrevocably deposited or caused to be deposited with the Trustee or a
trustee satisfactory to the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds in
trust solely for the benefit of the Holders for that purpose, cash in United
States dollars in such amount as is sufficient without consideration of
reinvestment of such interest, to pay principal of, premium, if any, interest
and Liquidated Damages, if any, on the outstanding Notes to maturity or
redemption; provided that the Trustee shall have been irrevocably instructed to
apply such deposit to the payment of said principal, premium, if any, interest
and Liquidated Damages, if any, with respect to the Notes; and, provided,
further, that from and after the time of deposit, the money deposited shall not
be subject to the rights of holders of Senior Debt pursuant to the provisions of
Article 10; (iii) no Default or Event of Default with respect to this Indenture
or the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Company or any Guarantor is a party or by which it is bound; (iv) the
Company shall have paid all other sums payable by it hereunder; and (v) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent relating to the
satisfaction and discharge of this Indenture have been complied with. Such
Opinion of Counsel shall also state that such satisfaction and discharge does
not result in a default under the Credit Agreement (if then in effect) or any
other agreement or instrument then known to such counsel that binds or affects
the Company or any Guarantor.
52
Notwithstanding the foregoing paragraph, the Company's (and any
Guarantor's) obligations in Sections 2.5, 2.6, 2.7, 2.8, 4.1, 4.2, 7.7, 8.6 and
8.7 shall survive until the Notes are no longer outstanding pursuant to the last
paragraph of Section 2.8. After the Notes are not longer outstanding, the
Company's obligations in Sections 7.7, 8.6 and 8.7 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations (and the
obligations of any Guarantors in respect of Subsidiary Guarantees) under the
Notes and this Indenture except for those surviving obligations specified above.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1(a) hereof of the option
applicable to this Section 8.2, the Company and the Guarantors, if any, shall be
deemed to have been discharged from their obligations with respect to all
outstanding Notes and Subsidiary Guarantees, if any, on the date the conditions
set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this
purpose, such Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be outstanding only for the purposes
of Section 8.5 hereof and the other Sections of this Indenture referred to in
clauses (i) and (ii) of this Section 8.2, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest and Liquidated Damages, if any, on such Notes when such
payments are due, solely from amounts deposited with the Trustee, as provided in
Section 8.4 hereof, (ii) the Company's and the Guarantors' obligations with
respect to the Notes under Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.10 and 4.2
hereof, (iii) the rights, powers, trusts, duties, indemnities and immunities of
the Trustee and the Company's obligations in connection therewith and (iv) this
Article 8.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1(a) hereof of the option
applicable to this Section 8.3, the Company and the Guarantors, if any, shall be
released from their obligations under the covenants contained in Sections 4.7,
4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.18, 5.1 and 11.2 with respect to
the outstanding Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter
be deemed not outstanding for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed outstanding for
all other purposes hereunder (it being understood that such Notes shall not be
deemed outstanding for accounting purposes). For this purpose, such Covenant
Defeasance means that, with respect to the outstanding Notes, the Company and
the Guarantors may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1(e) hereof but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3, any event described in
Sections 6.1(c) through 6.1(i) hereof
shall not constitute Events of Default.
53
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
8.2 or Section 8.3 hereof to the outstanding Notes:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 7.10 hereof who shall agree to comply with the provisions of this
Article 8 applicable to it), in trust (the "DEFEASANCE TRUST"), for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (a) cash in
United States dollars in an amount, or (b) non-callable Government Securities
which through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before the
due date of any payment, cash in United States dollars in an amount, or (c) a
combination thereof, in such amounts as will be sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge and
which shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge the principal of, premium, if any, and interest (including defaulted
interest) and Liquidated Damages, if any, on the outstanding Notes and any other
obligations owing to the Holders of the Notes, under the Notes or this Indenture
on the stated maturity or on the applicable redemption date, as the case may be,
of such principal or installment of principal of, premium, if any, interest and
Liquidated Damages, if any, on the outstanding Notes, provided that the Trustee
shall have been irrevocably instructed to apply such money or the proceeds of
such non-callable Government Securities to said payments with respect to the
Notes;
(b) in the case of an election under Section 8.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
(which counsel may be an employee of the Company or any Subsidiary of the
Company) reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the Issuance Date, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same time, as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United States
(which counsel may be an employee of the Company or any Subsidiary of the
Company) reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Covenant Defeasance had not occurred;
(d)no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds applied to such deposit)
or, insofar as Section 6.1(h) or 6.1(i) hereof is concerned, at any time in the
period ending on the 123rd day after the date of such deposit (or greater period
of time in which any such deposit of trust funds may remain subject to
bankruptcy or insolvency laws insofar as those apply to the deposit by the
Company) (it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
54
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) in the case of an election under either Section 8.2 or 8.3 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel to the
effect that, as of the date of such opinion, (A) the trust funds will not be
subject to any rights of holders of Indebtedness other than the Notes and (B)
assuming no intervening bankruptcy of the Company between the date of deposit
and the 123rd day following the deposit and assuming no Holder of the Notes is
an insider of the Company, after the 123rd day following the deposit, as of the
date of such opinion, the trust funds will not be subject to avoidance under
Section 547 of the United States Bankruptcy Code (or any successor provision
thereto) and related judicial decisions or any other applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
under any United States or state law;
(g) in the case of an election under either Section 8.2 or 8.3 hereof,
the Company shall have delivered to the Trustee an Officers' Certificate stating
that the deposit made by the Company pursuant to its election under Section 8.2
or 8.3 hereof was not made by the Company with the intent of preferring the
Holders of Notes over other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding creditors of the Company or others;
and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States (which counsel may be
an employee of the Company or any Subsidiary of the Company), each stating that
all conditions precedent provided for relating to either the Legal Defeasance
under Section 8.2 hereof or the Covenant Defeasance under Section 8.3 hereof (as
the case may be) have been complied with as contemplated by this Section 8.4.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.5, the
"TRUSTEE") pursuant to Section 8.1(b) or Section 8.4 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company and the Guarantors, if any, shall pay and indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against the
cash or non-callable Government Securities deposited pursuant to Section 8.1(b)
or Section 8.4 hereof or the principal, premium, if any, and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are
55
in excess of the amount thereof which would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.6 REPAYMENT TO THE COMPANY.
The Trustee shall promptly pay to the Company after request therefor
any excess money held at such time in excess of amounts required to pay any of
the Company's Obligations then owing with respect to the Notes.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for one year after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or
non-callable Government Securities in accordance with Section 8.1(b), Section
8.2 or Section 8.3 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the obligations of the Company and
the Guarantors, if any, under this Indenture, the Notes and the Subsidiary
Guarantees, if any, shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.1(b), Section 8.2 or Section 8.3 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.1(b), Section 8.2 or Section 8.3 hereof, as the case
may be; PROVIDED, HOWEVER, that, if the Company or any Guarantor makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company or such Guarantor shall be
subrogated to the rights of the Holders of such Note to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
The Company, any Guarantor and the Trustee, as applicable, may amend
or supplement this Indenture, the Notes, and any Subsidiary Guarantee without
the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
56
(c) to provide for the assumption of the Company's obligations to
Holders of the Notes under this Indenture or any Guarantor's obligations
under its Subsidiary Guarantee in the case of a merger, consolidation or
sale of assets involving the Company or such Guarantor, as applicable,
pursuant to Article 5 or Article 11 hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes (including providing for Subsidiary
Guarantees and any supplemental indenture required pursuant to Section 4.15
hereof) or that does not adversely affect the legal rights under this
Indenture of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; and
(f) to release a Guarantor in accordance with Section 11.4 hereof.
Upon the request of the Company and any Restricted Subsidiary, in its
capacity as a Guarantor, accompanied by a resolution of the Board of Directors
of the Company or such Restricted Subsidiary, as applicable, authorizing the
execution of any such amended or supplemental indenture and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the Trustee shall join
with the Company and any such Restricted Subsidiary in the execution of any
amended or supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations which
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental indenture which adversely affects its own rights,
duties or immunities under this Indenture, or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS.
Except as provided below in this Section 9.2, the Company, any
Guarantor and the Trustee together may amend this Indenture, the Notes and any
Subsidiary Guarantee with the written consent of the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes (including
consents obtained in connection with a purchase of or a tender offer or exchange
offer for Notes).
Upon the request of the Company, accompanied by a resolution of the
Board of Directors of the Company, authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders as aforesaid, and upon
receipt by the Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company and any Guarantor, as the case may be, in
the execution of such supplemental indenture unless such supplemental indenture
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment or waiver under this Section 9.2 becomes effective,
the Company shall mail to the Holders of each Note affected thereby a notice
briefly describing the amendment or waiver. Any failure of the Company to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver. Subject to
57
Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding (including consents obtained in connection
with a purchase of or a tender offer or exchange offer for Notes) may waive any
existing default or compliance in a particular instance by the Company or any
Guarantor with any provision of this Indenture or the Notes. However, without
the consent of each Holder affected, an amendment or waiver under this Section
may not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or waive any of the provisions with respect to the redemption of the Notes;
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or an Event of Default in the payment of principal
of or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in aggregate
principal amount of the then outstanding Notes 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 the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive payments
of principal of or premium, if any, or interest or Liquidated Damages on the
Notes;
(g) waive a redemption payment with respect to any Note;
(h) modify or change any provision of this Indenture or the related
definitions affecting the subordination or ranking of the Notes in a manner
which adversely affects the Holders in any material respect;
(i) except pursuant to Article 8 or pursuant to Section 11.4, release
any Guarantor from its obligations under a Subsidiary Guarantee, or change any
such Subsidiary Guarantee in any manner that would adversely affect the Holders
in any material respect; or
(j) make any change in the foregoing amendment and waiver provisions.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to this Indenture or the Notes shall be set forth in
an amendment or supplemental indenture that complies with the TIA as then in
effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment 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 or her Note if the Trustee receives written notice of revocation before
the date the waiver or
58
amendment becomes effective. An amendment or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
The Company may fix a record date for determining which Holders must
consent to such amendment or waiver. If the Company fixes a record date, the
record date shall be fixed at (i) the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee prior to such solicitation pursuant to Section 2.5, or
(ii) such other date as the Company shall designate.
SECTION 9.5 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 the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing such amendment or supplemental
indenture, the Trustee shall be entitled to receive, and, subject to Section 7.1
hereof, shall be fully protected in relying upon, an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that such amendment or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company in
accordance with its terms. The Company may not sign an amendment or
supplemental indenture until the Board of Directors of the Company or any
Restricted Subsidiary in its capacity as a Guarantor, as applicable, approves
it.
ARTICLE 10
SUBORDINATION
SECTION 10.1 AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article, to the prior payment in
full in cash or Cash Equivalents of all Obligations on Senior Debt (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.
SECTION 10.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to creditors upon
any liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshalling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding relating to
the Company or its property, whether voluntary or involuntary, all Obligations
due upon all Senior Debt shall first be paid in full in cash or Cash
Equivalents, or such payment duly provided for
59
to the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations on
the Notes, or for the acquisition by the Company or any of its Subsidiaries of
any of the Notes for cash or property or otherwise, and until all Obligations
with respect to Senior Debt are paid in full in cash or Cash Equivalents, any
distribution to which the Holders would be entitled shall be made to the Holders
of Senior Debt (except that Holders of the Notes may receive Permitted Junior
Securities and payments made pursuant to Section 8.4 or Section 8.1(b)).
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by any Holder when such payment or
distribution is prohibited by Section 10.2(a), such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Debt (PRO RATA to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee under any indenture pursuant to which any of
such Senior Debt may have been issued, as their respective interests may appear,
for application to the payment of Senior Debt then due remaining unpaid until
all such Senior Debt has been paid in full in cash or Cash Equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Senior Debt.
(c) The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of all or substantially all of
its assets, to another corporation upon the terms and conditions provided in
Article 5 hereof and as long as permitted under the terms of the Senior Debt
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Company's obligations
hereunder in accordance with Article 5 hereof.
SECTION 10.3 NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES.
If any default occurs and is continuing in the payment when due
whether at maturity, upon any redemption, by declaration or otherwise, of any
principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Debt, no
payment of any kind or character shall be made by, or on behalf of, the Company
or any other Person on its behalf with respect to any Obligations on the Notes,
or to acquire any of the Notes for cash or property or otherwise (except that
Holders of Notes may receive Permitted Junior Securities and payments made from
the trust pursuant to Section 8.1(b) or Section 8.4). In addition, if any other
event of default occurs and is continuing with respect to any Designated Senior
Debt, as such event of default is defined in the instrument creating or
evidencing such Designated Senior Debt, permitting the holders of such
Designated Senior Debt then outstanding to accelerate the maturity thereof and
if the Representative for the respective issue of Designated Senior Debt gives
written notice of the event of default to the Trustee (a "DEFAULT NOTICE"),
then, unless and until all events of default have been cured or waived or have
ceased to exist or the Trustee receives notice from the Representative for the
respective issue of Designated Senior Debt terminating the Blockage Period (as
defined below), during the 179 days after the delivery of such Default Notice
(the Blockage Period), neither the Company nor any of its Subsidiaries shall (x)
make any payment of any kind or character with respect to any Obligations on the
Notes (except that Holders of Notes may receive Permitted Junior Securities and
payments made from the trust pursuant to Section 8.4 or 8.1(b)) or (y) acquire
any of the Notes for cash or property or otherwise. Notwithstanding anything
herein to the contrary, in no event will a Blockage Period extend beyond 179
days from the date the payment on the Notes was due and only one such Blockage
Period may be commenced within any 365 consecutive days. No event of default
60
which existed or was continuing on the date of the commencement of any Blockage
Period with respect to the Designated Senior Debt shall be, or be made, the
basis for the commencement of a second Blockage Period by the Representative of
such Designated Senior Debt whether or not within a period of 365 consecutive
days, unless such event of default shall have been cured or waived for a period
of not less than 180 consecutive days (it being acknowledged that any subsequent
action, or any breach of any financial covenants for a period commencing after
the date of commencement of such Blockage Period that, in either case, would
give rise to an event of default pursuant to any provisions under which an event
of default previously existed or was continuing shall constitute a new event of
default for this purpose).
The Trustee shall be entitled to rely on information regarding amounts
then due and owing on the Senior Debt, if any, received from the holders of
Senior Debt (or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only amounts
included in the information provided to the Trustee shall be paid to the holders
of Senior Debt.
Nothing contained in this Article Ten shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.2 or to pursue any rights or remedies hereunder.
SECTION 10.4 [THIS SECTION INTENTIONALLY OMITTED.]
SECTION 10.5 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 acceleration.
SECTION 10.6 WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.3 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 (PRO RATA to such holders
on the basis of the respective amounts of Senior Debt held by such Holders) or
their Representatives under the indenture or other agreement (if any) pursuant
to which Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with respect to Senior
Debt remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of 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, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.7 NOTICE BY THE COMPANY.
61
The Company shall promptly notify the Trustee and the Paying Agent 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 as
provided in this Article.
SECTION 10.8 SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders shall be subrogated (equally and ratably with all other
Indebtedness PARI PASSU with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt. A distribution made under this Article to holders of Senior
Debt that otherwise would have been made to Holders is not, as between the
Company and Holders, a payment by the Company on the Notes.
SECTION 10.9 RELATIVE RIGHTS.
This Article defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(a) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders and creditors of the Company
other than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest or Liquidated Damages, if any, on Notes on the due date, the failure is
still a Default or Event of Default.
SECTION 10.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt 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 by the failure of the Company or any
Holder to comply with this Indenture.
SECTION 10.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, 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 10, the Trustee and the Holders 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 for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and
62
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 10.
SECTION 10.12 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7 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 10.13 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note 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 10, 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
6.9 hereof at least 30 days before the expiration of the time to file such
claim, any Representative of Designated Senior Debt is hereby authorized to file
an appropriate claim for and on behalf of the Holders of the Notes.
SECTION 10.14 AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.1 SUBSIDIARY GUARANTEES.
The Company's Obligations under the Notes and this Indenture will be
jointly and severally guaranteed by any Restricted Subsidiary (a "GUARANTOR")
which is required to execute and deliver a supplemental indenture pursuant to
Section 4.15 hereof (the "SUBSIDIARY GUARANTEES"). Subject to the provisions of
this Article 11, any such Guarantor will, jointly and severally, unconditionally
guarantee, on an unsecured senior subordinated basis, to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the Obligations of the Company under this Indenture or the Notes,
that: (i) the principal of, premium, if any, and interest and Liquidated
Damages, if any, on the Notes will be paid in full when due, whether at the
maturity or interest payment or mandatory redemption date, by acceleration, call
for redemption, offer to purchase or otherwise, and interest on the overdue
principal of, premium, and interest and Liquidated Damages, if any, on the Notes
and all other Obligations of the Company to the Holders or the Trustee under
this Indenture or the Notes will be promptly paid in full or performed, all in
accordance with the
63
terms of this Indenture and the Notes; (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, they will be
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at maturity, by acceleration or otherwise; and (iii) any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under any Subsidiary Guarantee
will be paid. Failing payment when due of any amount so guaranteed for whatever
reason, any Guarantor will be obligated (subject to any grace periods allowed
pursuant to Section 6.1 hereof) to pay the same whether or not such failure to
pay has become an Event of Default which could cause acceleration pursuant to
Section 6.2 hereof. An Event of Default under this Indenture or the Notes shall
constitute an event of default under any Subsidiary Guarantee, and shall entitle
the Holders of Notes to accelerate the Obligations of any Guarantor hereunder in
the same manner and to the same extent as the Obligations of the Company. Any
Guarantor will agree that its Obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of any Guarantor. Any Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of either or both of the Company, protest, notice and
all demands whatsoever and covenants that its Subsidiary Guarantee will not be
discharged except by complete performance of its Obligations under the Notes and
this Indenture. If any Holder or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor or any Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
any Guarantor any amount paid by any such entity to the Trustee or such Holder,
any Subsidiary Guarantee to the Notes, to the extent theretofore discharged,
shall be reinstated in full force and effect. Any Guarantor agrees that it
shall not be entitled to any right of subrogation in relation to the Holder in
respect of any Obligations guaranteed hereby until payment in full of all
Obligations guaranteed hereby. Any Guarantor will agree that, as between it, on
the one hand, and the Holders of Notes and the Trustee, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in Article 6 hereof for the purposes hereof, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby, and (y) in the event of any acceleration of such
Obligations as provided in Article 6 hereof, such Obligations (whether or not
due and payable) shall forthwith become due and payable by such Guarantor for
the purpose of such Subsidiary Guarantee. A Guarantor shall have the right to
seek contribution from any non-paying Guarantor so long as the exercise of such
right does not impair the rights of the Holder under its Subsidiary Guarantee.
The obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be junior and subordinated to the Senior Debt
of such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Company. For the purpose of the foregoing sentence, the
Trustee and the Holders of Notes shall have the right to receive and/or retain
payments by any of the Guarantors only at such times as they may receive and/or
retain payments in respect of the Notes pursuant to this Indenture, including
Article 10 hereof. In the event that the Trustee or any Holder shall have
received any Guarantor payment that is prohibited by the foregoing sentence,
such Guarantor payment shall be paid over and delivered forthwith to the holders
of the Senior Debt remaining unpaid, to the extent necessary to pay in full all
Senior Debt.
Each Holder of a Note by its acceptance thereof (a) agrees to and
shall be bound by the provisions of this Section 11.1, (b) authorizes and
directs the Trustee on its behalf to take such
64
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee its attorney-in-fact for any and all such
purposes.
SECTION 11.2 WHEN A GUARANTOR MAY MERGE, ETC.
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving person), another corporation, Person or entity
whether or not affiliated with such Guarantor unless:
(a) the person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the Obligations of such
Guarantor pursuant to a supplemental indenture in the form of Exhibit B
hereto and under the Notes and this Indenture;
(b) immediately after giving effect to such transaction, no Default or
Event of Default exists; and
(c) such Guarantor or any person formed by or surviving any such
consolidation or merger, (A) will have Consolidated Net Worth (immediately
after giving effect to such transaction) equal to or greater than the
Consolidated Net Worth of such Guarantor immediately preceding the
transaction and (B) would be permitted by virtue of the Company's Fixed
Charge Coverage Ratio set forth in the first paragraph of Section 4.9
hereof to incur, immediately after giving effect to such transaction, at
least $1.00 of additional Indebtedness.
The Guarantor shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel, covering clauses (i) and (ii) (in the case of clause
(ii), to such counsel's knowledge), stating that the proposed transaction and
such supplemental indenture comply with this Indenture. The Trustee shall be
entitled to conclusively rely upon such Officers' Certificate and Opinion of
Counsel.
Notwithstanding the foregoing, (A) a Guarantor may consolidate with or
merge with or into the Company; PROVIDED, HOWEVER, that the surviving
corporation (if other than the Company) shall expressly assume by supplemental
indenture complying with the requirements of this Indenture, the due and
punctual payment of the principal of, premium, if any, and interest and
Liquidated Damages, if any, on all of the Notes, and the due and punctual
performance and observance of all the covenants and conditions of this Indenture
to be performed by the Company and (B) a Guarantor may consolidate with or merge
with or into any other Guarantor.
SECTION 11.3 LIMITATION OF GUARANTOR'S LIABILITY.
For purposes of this Article 11 and any Subsidiary Guarantee, each
Guarantor's liability will be that amount from time to time equal to the
aggregate liability of such Guarantor hereunder and thereunder, but shall be
limited to the least of (i) the aggregate amount of the obligations of the
Company under the Notes and this Indenture or (ii) the amount, if any, which
would not have (A) rendered such Guarantor "INSOLVENT" (as such term is defined
in the federal Bankruptcy Code and in the Debtor and Creditor Law of the State
of New York) or (B) left it with unreasonably small capital at the time its
Subsidiary Guarantee was entered into, after giving effect to the incurrence of
existing Indebtedness immediately prior to such time; provided that, it shall be
a presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such guarantor, or debtor in possession or trustee in bankruptcy of
the Guarantor,
65
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii). In making any determination
as to the solvency or sufficiency of capital of a Guarantor in accordance with
the previous sentence, the right of such Guarantor to contribution from other
Guarantors and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
SECTION 11.4 RELEASE OF A GUARANTOR.
Concurrently with the payment in full of all of the Company's
Obligations under the Notes and this Indenture (other than with respect to any
indemnification obligations), each Guarantor shall be released from and relieved
of its Obligations under this Article 11. In the event of a sale or other
disposition of all of the assets of any Guarantor, which sale or other
disposition is otherwise in compliance with the terms of this Indenture, by way
of merger, consolidation or otherwise, or a sale or other disposition of all of
the capital stock of any Guarantor, then such Guarantor (in the event of a sale
or other disposition, by way of such a merger, consolidation or otherwise, of
all of the capital stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all of the assets of
such Guarantor) will be automatically and unconditionally released and relieved
of any obligations under its Subsidiary Guarantee. The Trustee shall deliver an
appropriate instrument evidencing any such release under this Section 11.4 upon
receipt of a request by the Company accompanied by an Officers' Certificate and
an Opinion of Counsel certifying as to the compliance with this Section 11.4.
The provisions of Section 11.2 shall not apply to any merger or consolidation
pursuant to which a Guarantor is released from its Obligations under this 11.4.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by operation of TIA Section 318(c), the imposed duties shall
control.
SECTION 12.2 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 (registered or certified, return receipt requested), or sent by telex,
telecopier or overnight air courier guaranteeing next Business Day delivery, to
the other's address:
If to the Company:
CapStar Hotel Company
1010 Wisconsin Avenue, N.W.
Suite 650
Washington, D.C. 20007
Attention: John Emery, Chief Financial Officer
Telecopier No.: (202) 965-4445
With a copy to:
66
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Richard S. Borisoff, Esq.
Telecopier No.: (212) 373-2523
If to the Trustee:
IBJ Schroder Bank and Trust Company
1 State Street
New York, NY 10004
Attention: Corporate Trust Department
Telecopier No.: (212) 858-2952
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next Business Day
delivery.
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 or given 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.
SECTION 12.3 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).
SECTION 12.4 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 in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5) stating that, in the
67
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.5) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 12.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to Section 4.4 and TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or 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, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
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; PROVIDED, HOWEVER, that
with respect to matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificate of public officials.
SECTION 12.6 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.7 LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" is a Saturday, a Sunday, or a day on which banking
institutions in The City of New York are authorized or obligated by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
SECTION 12.8 RECOURSE AGAINST OTHERS.
No director, officer, partner, employee, agent, manager, stockholder,
incorporator or other Affiliate, as such of the Company or of a Guarantor, if
any, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, or this Indenture or a Subsidiary Guarantee, if any,
or for any claim based upon, in respect of or by reason of such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. This waiver and release are part of the consideration for issuance
of the Notes. Such waiver and release may not be effective to waive or release
liabilities under the federal securities laws.
68
SECTION 12.9 DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 12.10 GOVERNING LAW.
The internal law of the State of New York shall govern and be used,
without reference to its choice of law principles (other than Sec. 5-1401 of the
General Obligation Law), to construe this Indenture, the Notes and Subsidiary
Guarantee.
SECTION 12.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 12.12 SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 12.13 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 12.14 COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 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.
69
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
written above.
SIGNATURES
CAPSTAR HOTEL COMPANY,
By: /s/ William H. Reynolds
-----------------------------
Name: Wiiiliam H. Reynolds
Title: Senior Vice President
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
By: /s/ Luis Perez
-----------------------------
Name: Luis Perez
Title: Assistant Vice President
EXHIBIT A
(Face of Note)
____% [Series A] [Series B] Senior Subordinated Note due ____
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL
REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS % OF
ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS , [19 ][20 ], [AND] THE
YIELD TO MATURITY IS % [THE METHOD USED TO DETERMINE THE YIELD IS AND
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL PERIOD OF
, [19 ][20 ] TO [19 ][20 ], IS % OF THE PRINCIPAL AMOUNT OF THIS
SECURITY].
No. $___________
CAPSTAR HOTEL COMPANY
promises to pay to _____________, or registered assigns, the
principal sum of __________________ Dollars on __________, ____.
Interest Payment Dates: ________ __ and ______ __
Record Dates: ________ __ and ______ __
Dated:
CAPSTAR HOTEL COMPANY
By: ____________________________
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the [Global] Notes
referred to in the within-
mentioned Indenture:
IBJ Schroder Bank & Trust Company,
as Trustee
By _____________________________
Authorized Signatory
A-1
(Back of Note)
_____% [Series A] [Series B] Senior Subordinated Note due ____
of
CapStar Hotel Company
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
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 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, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) 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 (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 HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF A SUCCESSOR DEPOSITARY OR ANY
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
A-2
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON 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.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. INTEREST. CapStar Hotel Company, a Delaware corporation (the
"COMPANY"), promises to pay interest on the principal amount of this _____%
[Series A] [Series B] Senior Subordinated Note due ____ (the "NOTE") at the rate
and in the manner specified below.
The Company shall pay interest on the principal amount of this Note in
cash at the rate per annum shown above and shall pay the Liquidated Damages, if
any, payable pursuant to Section 5 of the Registration Rights Agreement referred
to below. The Company shall pay interest and Liquidated Damages, if any,
semi-annually on each ________ __ and ______ __ commencing ________ __, 199_, or
if any such day is not a Business Day (as defined in the Indenture referred to
below), on the next succeeding Business Day (each an "INTEREST PAYMENT DATE").
Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months for the actual number of days elapsed. Interest shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of the original issuance of this Note. To
the extent lawful, the Company shall pay interest on overdue principal and
premium at the rate of 1% per annum in excess of the then applicable interest
rate on this Note; it shall pay interest on overdue installments of interest
(without regard to any applicable grace periods) at the same rate to the extent
lawful.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the _________ and
_________ next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium, if any, and
interest and Liquidated Damages, if any, at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest and Liquidated Damages, if
any, may be made by check mailed to the Holders at their addresses set forth in
the register of Holders; provided that payment by wire transfer of immediately
available funds will be required with respect to principal and premium, if any,
and interest and Liquidated Damages, if any, on all Global Notes and all other
Notes the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, IBJ Schroder Bank & Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company, any Guarantor or any other of its Subsidiaries may
act in any such capacity.
A-3
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of August 19, 1997 (the "INDENTURE") between the Company, as issuer, and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. The terms of the Indenture shall govern any inconsistencies between
the Indenture and the Notes.
5. OPTIONAL REDEMPTION. On or after ______ __, ____, the Company may
redeem all or any portion of the Notes, at any time upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on ______ __ of the years indicated below:
YEAR PERCENTAGE
- ---- ----------
2002...................................................................._______%
2003...................................................................._______%
2004...................................................................._______%
2005 and thereafter....................................................._______%
Notwithstanding the foregoing, prior to ______ __, 2000, the Company
may redeem, on any one or more occasions, with the net cash proceeds of one or
more public offerings of its common equity (a "PUBLIC EQUITY OFFERING") (within
60 days of the consummation of any such Public Equity Offering), up to 35% of
the aggregate principal amount of the Notes originally issued at a redemption
price equal to _______% of the principal amount of such Notes plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date;
PROVIDED, HOWEVER, that at least 65% of the aggregate principal amount of Notes
originally issued remains outstanding immediately after any such redemption.
[In addition, the Company, at its option, at any time prior to ______
____, may redeem the Notes, in whole or in part (if in part, by lot or such
other method as the Trustee shall deem fair or appropriate) at the Make-Whole
Price, plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase.]
6. OFFERS TO PURCHASE. Subject to the Company's obligation to make an
offer to purchase Notes in connection with Asset Sales and a Change of Control
(as described in the Indenture), the Company has no mandatory redemption or
sinking fund obligations with respect to the Notes. Notice of any such offer to
purchase will be given as provided in the Indenture. Holders of Notes that are
the subject of an offer to purchase may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" appearing
below and taking certain other actions, all as set forth in the Indenture.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes
or portions thereof called for redemption.
A-4
8. SUBORDINATION. The Notes and the Subsidiary Guarantees, if any,
are subordinated to Senior Debt, as defined in the Indenture. To the extent
provided in the Indenture, Senior Debt must be paid before the Notes and the
Subsidiary Guarantees may be paid. The Company agrees, and each Holder by
accepting a Note and any Subsidiary Guarantee agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give them
effect and appoints the Trustee as attorney-in-fact for such purpose.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of $1,000
of principal amount. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Company shall not be required to exchange or register the
Notes during a period beginning at the opening of business 15 days before the
day of any selection of Notes for redemption under Section 3.2 of the Indenture
and ending at the close of business on the day of selection, or to exchange or
register any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part, or to exchange or
register a Note between a record date and the next succeeding Interest Payment
Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing Default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the Notes then outstanding. The Change of
Control and Asset Sale purchase features of the Notes may not be amended or
waived without the consent of at least 66 2/3% in principal amount of the Notes
then outstanding. Without the consent of any Holder of a Note, the Indenture or
the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to comply with Section 5.1, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the Company's obligations to Holders of the Notes under the Indenture or any
Guarantor's Obligations under its Subsidiary Guarantee in the case of a merger,
consolidation or sale of assets involving the Company or such Guarantor, as
applicable, pursuant to Article 5 or Article 11 of the Indenture, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes (including providing for Subsidiary Guarantees and any supplemental
indenture required pursuant to Section 4.15 of the Indenture) or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA and to release a Guarantor in
accordance with the Indenture.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest or Liquidated Damages, if any, on
the Notes (whether or not such payment shall be prohibited by the subordination
provisions of the Indenture); (ii) default in payment when due of the principal
of or premium, if any, on the Notes at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered pursuant to
a Change of Control Offer or an Assets Sale Offer) (whether or not such payment
shall be prohibited by the subordination provisions of the Indenture); (iii)
failure by the Company or any Restricted Subsidiary to comply with Section 5.01
of the Indenture; (iv) failure by the Company or any Guarantor for 60 days in
the performance of any other covenant, warranty or agreement in the Indenture or
the Notes after
A-5
written notice shall have been given to the Company by the Trustee or to the
Company and the Trustee from Holders of at least 25% in principal amount of the
Notes then outstanding; (v) the failure to pay at final stated maturity (giving
effect to any applicable grace periods and any extensions thereof) the principal
amount of Non-Recourse Indebtedness of the Company or any of its Restricted
Subsidiaries with an aggregate principal amount in excess of the lesser of (A)
10% of the total assets of the Company and its Restricted Subsidiaries measured
as of the end of the Company's most recent fiscal quarter for which internal
financial statements are available immediately prior to the date on which such
default occurred, determined on a pro forma basis and (B) $50 million, and such
failure continues for a period of 10 days or more, or the acceleration of the
final stated maturity of any such Non-Recourse Indebtedness (which acceleration
is not rescinded, annulled or otherwise cured within 10 days of receipt by the
Company or such Restricted Subsidiary of notice of such acceleration); (vi) the
failure to pay at final stated maturity (giving effect to any applicable grace
periods and any extensions thereof) the principal amount of any Indebtedness
(other than Non-Recourse Indebtedness) of the Company or any Restricted
Subsidiary of the Company and such failure continues for a period of 10 days or
more, or the acceleration of the final stated maturity of any such Indebtedness
(which acceleration is not rescinded, annulled or otherwise cured within 10 days
of receipt by the Company or such Restricted Subsidiary of notice of any such
acceleration) if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness, in default for failure
to pay principal at final maturity or which has been accelerated, in each case
with respect to which the 10-day period described above has passed, aggregates
$10.0 million or more at any time; (vii) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments rendered against them (other than
judgment liens without recourse to any assets or property of the Company or any
of its Restricted Subsidiaries other than assets or property securing
Non-Recourse Indebtedness) aggregating in excess of $10.0 million, which
judgments are not paid, discharged or stayed for a period of 60 days (other than
any judgments as to which a reputable insurance company has accepted full
liability); (viii) except as permitted by the Indenture, any Subsidiary
Guarantee shall be held in a judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any Guarantor
(or its successors or assigns), or any Person acting on behalf of such Guarantor
(or its successors or assigns), shall deny or disaffirm its obligations or shall
fail to comply with any obligations under its Subsidiary Guarantee; and (ix)
certain events of bankruptcy or insolvency with respect to the Company, any
Guarantor or any of the Company's Subsidiaries that would constitute a
Significant Subsidiary or any group of the Company's Subsidiaries that, taken
together, would constitute a Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, with
respect to the Company, any of its Subsidiary that would constitute a
Significant Subsidiary or any group of its Subsidiaries that, taken together,
would constitute a Significant Subsidiary or any Guarantor, all outstanding
Notes will become due and payable without further action or notice. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Notes may rescind any acceleration with respect to the Notes and its
consequences. Holders of the Notes may not enforce the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power.
13. GUARANTEES OF NOTES. Payment of principal, premium, if any, and
interest and Liquidated Damages, if any, (including interest on overdue
principal and overdue interest, if lawful) on the Notes will be unconditionally
guaranteed by the Guarantors, if any, pursuant to, and subject to the terms of,
Article 11 of the Indenture.
A-6
14. SECURITY. The Notes will be unsecured obligations of the Company,
ranking subordinate in right of payment to all Senior Debt of the Company.
15. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or stockholder shall have any liability for any obligations of the
Company or any Guarantor under the Notes, any Subsidiary Guarantee 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 issuance of the Notes. Such waiver and release may not be
effective to waive or release liabilities under the federal securities laws.
16. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. [SERIES A NOTES] REGISTRATION RIGHTS. Pursuant to the
Registration Rights Agreement (as defined in the Indenture), and subject to
certain terms and conditions stated therein, the Company will be obligated to
consummate an Exchange Offer pursuant to which the Holders of the Notes shall
have the right to exchange this Note for Exchange Notes, which have been
registered under the Securities Act, in like principal amount and having terms
identical in all material respect to the Note. In certain circumstances, and
subject to certain terms and conditions, Holders of the Notes shall have the
right to receive liquidated damages if the Company shall have failed to fulfill
its obligations under the Registration Rights Agreement.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
CapStar Hotel Company
1010 Wisconsin Avenue, N.W.
Suite 650
Washington, D.C. 20007
Attention: John Emery,
Chief Financial Officer
Telecopier No.: (202) 965-4445
A-7
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.
Date: _____________________________
Your Signature: ___________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee:* ______________________
- --------------------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
(Sign exactly as your name appears on the Note)
Tax Identification No:____________
Signature Guarantee:*/____________
- ------------------
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-9
Transfer and Exchange
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "SECURITIES ACT") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) March 26, 1999, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
Check One
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under the Securities
Act; or
(3) ___ to an institutional "ACCREDITED INVESTOR" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter can be
obtained from the Trustee); or
(4) ___ outside the United States to a "FOREIGN PERSON" in compliance
with Rule 904 of Regulation S under the Securities Act; or
(5) ___ pursuant to the exemption from registration provided by Rule 144
under the Securities Act; or
(6) ___ pursuant to an effective registration statement under the
Securities Act; or
(7) ___ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Notes evidenced by this certificate in the name of any Person other
than the registered Holder thereof; provided that if box (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes in its sole discretion, such legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company has reasonably requested
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. If none of the foregoing boxes is checked, the Trustee or
Registrar shall not be obligated to register this Security in the name of any
person other than the Holder hereof unless and until the conditions to any
such transfer of registration set forth herein and in Section 2.17 of the
Indenture shall have been satisfied.
Dated: ___________ Signed:_________________________________
(Sign exactly as name appears on the other side of
this Security)
Signature Guarantee:________________________________________
A-10
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
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.
Dated: ___________________ Signed:_________________________
NOTICE: To be executed
by an executive officer
A-11
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTES
The following exchanges of a part of this Global Note for Certificated
Notes have been made:
Amount of Principal Amount
decrease in Amount of increase of this Global Note Signature of
Principal in Principal following such authorized officer
Amount of Amount of this decrease of Trustee or Note
Date of Exchange this Global Note Global Note (or increase) Custodian
- ---------------- ---------------- --------------- ------------- ---------
A-12
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE
This "SUPPLEMENTAL INDENTURE", dated as of ________, between
_________________ (the "GUARANTOR"), a subsidiary of CapStar Hotel Company, a
Delaware corporation (the Company), and IBJ Schroder Bank & Trust Company, as
trustee under the indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company, a Delaware corporation, has heretofore executed
and delivered to the Trustee an indenture (the "INDENTURE"), dated as of August
19, 1997, providing for the issuance of up to an aggregate principal amount of
$200,000,000 of _____% Senior Subordinated Notes due ____ (the "NOTES");
WHEREAS, Section 4.15 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guarantor
shall unconditionally guarantee all of the Company's Obligations under the Notes
pursuant to a Guarantee on the terms and conditions set forth herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees, jointly and
severally with all other Guarantors, to guarantee the Company's obligations
under the Notes on the terms and subject to the conditions set forth in Article
11 of the Indenture and to be bound by all other applicable provisions of the
Indenture and to be bound by all other applicable provisions of the Indenture.
The obligations of the Guarantor hereunder shall be junior and subordinated to
the Senior Debt of such Guarantor in the manner and to the extent set forth in
Article 11 of the Indenture.
3. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, shareholder or agent of the Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, any Guarantees, the Indenture or this Supplemental 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 issuance of the Notes. Such waiver or release may not be
effective to waive or release liabilities under the federal securities laws.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
B-1
5. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated:____________, ____
[Guarantor]
By: ____________________________
Name:
Title:
IBJ Schroder Bank & Trust Company,
as Trustee
By: _____________________________
Name:
Title:
B-2
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
IBJ Schroder Bank & Trust Company
1 State Street
New York, NY 10004
Attention: Corporate Trust Department
Re: CapStar Hotel Company
_____% Senior Subordinated Notes due ____
Ladies and Gentlemen:
In connection with our proposed purchase of _____% Senior Subordinated
Notes due ____ (the "NOTES") of CapStar Hotel Company (the "COMPANY"), we
confirm that:
1. We have received a copy of the Final Memorandum (the "FINAL
MEMORANDUM"), dated ______ __, 1997 relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated on pages A-1 and
A-2 of the Final Memorandum and in the section entitled "NOTICE TO INVESTORS" of
the Final Memorandum including the restrictions on duplication and circulation
of the Final Memorandum.
2. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture relating to
the Notes (as described in the Final Memorandum) and the undersigned agrees to
be bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "SECURITIES ACT").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell or otherwise transfer any Notes prior to the date which
is three years after the original issuance of the Notes, we will do so only (i)
to the Company or any of its subsidiaries, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a "QUALIFIED INSTITUTIONAL
BUYER" (as defined in Rule 144A under the Securities Act), (iii) inside the
United States to an institutional "ACCREDITED INVESTOR" (as defined below) that,
prior to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to the Trustee (as defined in the Indenture relating to the
Notes), a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes, (iv) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act, (v)
pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vi) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
C-1
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "NOTICE TO INVESTORS" of the Final Memorandum.
5. We understand that, on any proposed resale of any Notes, we will be
required to furnish to the Trustee and the Company such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect.
6. We are an institutional "ACCREDITED INVESTOR" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our account or for
one or more accounts (each of which is an institutional "ACCREDITED INVESTOR")
as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereto to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
By:
--------------------------
Name:
C-2
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
IBJ Schroder Bank & Trust Company
1 State Street
New York, New York
Attention: Corporate Trust Department
Re: CapStar Hotel Company
(the Company) _____% Senior Subordinated Notes due ____
(the "NOTES")
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "SECURITIES ACT"), and, accordingly, we represent that:
1. the offer of the Notes was not made to a Person in the United
States;
2. either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting
on our behalf knows that the transaction has been pre-arranged with a buyer
in the United States;
3. no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
D-1
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. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
By:
------------------------------
Authorized Signature
D-2