AMERICAN SKIING COMPANY
$12,500,000 (plus accreted interest)
11.3025% CONVERTIBLE SUBORDINATED NOTES DUE 2007
INDENTURE
Dated as of August 31, 2001
OAK HILL CAPITAL PARTNERS, L.P.
Trustee
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS.........................................................1
Section 1.01 Definitions.......................................1
Section 1.02 Other Definitions.................................9
Section 1.03 Incorporation by Reference of Trust Indenture Act10
Section 1.04 Rules of Construction............................11
ARTICLE II. THE NOTES.........................................................11
Section 2.01 Form and Dating..................................11
Section 2.02 Title and Terms..................................13
Section 2.03 Execution and Authentication.....................14
Section 2.04 Registrar and Paying Agent.......................15
Section 2.05 Paying Agent to Hold Money in Trust..............15
Section 2.06 Holder Lists.....................................15
Section 2.07 Transfer and Exchange............................16
Section 2.08 Replacement Notes................................20
Section 2.09 Outstanding Notes................................20
Section 2.10 Treasury Notes...................................21
Section 2.11 Temporary Notes; Global Notes....................21
Section 2.12 Cancellation.....................................22
ARTICLE III. REDEMPTION.......................................................22
Section 3.01 Notices to Trustee...............................22
Section 3.02 Selection of Notes to be Redeemed................22
Section 3.03 Notice of Redemption.............................23
Section 3.04 Effect of Notice of Redemption...................24
Section 3.05 Deposit of Redemption Price......................24
Section 3.06 Notes Redeemed in Part...........................24
Section 3.07 Optional Redemption..............................24
Section 3.08 Mandatory Redemption.............................24
ARTICLE IV. COVENANTS.........................................................24
Section 4.01 Payment of Notes.................................24
Section 4.02 Reports..........................................25
Section 4.03 Compliance Certificate...........................25
Section 4.04 Stay, Extension and Usury Laws...................26
Section 4.05 Corporate Existence..............................26
Section 4.06 Taxes............................................26
Section 4.07 Change of Control................................26
Section 4.08 Compliance with Laws.............................28
ARTICLE V. CONVERSION.........................................................29
Section 5.01 Conversion Privilege.............................29
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Section 5.02 Conversion Procedure.............................29
Section 5.03 No Impairment of Conversion Privilege............30
Section 5.04 Taxes on Conversion..............................30
Section 5.05 Company to Provide Stock.........................30
Section 5.06 Adjustment of Conversion Price...................31
Section 5.07 No Adjustment....................................35
Section 5.08 Other Adjustments................................35
Section 5.09 Adjustments for Tax Purposes.....................36
Section 5.10 Notice of Adjustment.............................36
Section 5.11 Notice of Certain Transactions...................36
Section 5.12 Effect of Reclassifications, Consolidations,
Mergers or Sales on Conversion Privilege.........36
Section 5.13 Trustee's Disclaimer.............................37
ARTICLE VI. SUBORDINATION.....................................................38
Section 6.01 Agreement to Subordinate.........................38
Section 6.02 Liquidation; Dissolution, Bankruptcy.............38
Section 6.03 Default on Senior Debt; No Stock Collateral......39
Section 6.04 Acceleration of Notes............................40
Section 6.05 When Distribution Must Be Paid Over..............40
Section 6.06 Notice...........................................40
Section 6.07 Subrogation......................................40
Section 6.08 Relative Rights..................................41
Section 6.09 Subordination May Not Be Impaired by Company.....41
Section 6.10 Distribution or Notice to Representative.........42
Section 6.11 Rights of Trustee and Paying Agent...............42
Section 6.12 Authorization to Effect Subordination............43
Section 6.13 Payment..........................................43
Section 6.14 No Claims Against Subsidiaries...................43
Section 6.15 Amendments.......................................44
ARTICLE VII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.............44
Section 7.01 Company May Consolidate, Etc. Only On Certain
Terms............................................44
Section 7.02 Successor Substituted............................45
ARTICLE VIII. DEFAULTS AND REMEDIES...........................................45
Section 8.01 Events of Default................................45
Section 8.02 Acceleration.....................................47
Section 8.03 Other Remedies...................................48
Section 8.04 Waiver of Past Defaults..........................48
Section 8.05 Control by Majority..............................48
Section 8.06 Limitation on Suits..............................48
Section 8.07 Rights of Holders to Receive Payment.............49
Section 8.08 Collection Suit by Trustee.......................49
Section 8.09 Trustee May File Proofs of Claim.................49
Section 8.10 Priorities.......................................50
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Section 8.11 Undertaking for Costs............................50
ARTICLE IX. TRUSTEE ..........................................................50
Section 9.01 Duties of Trustee................................50
Section 9.02 Rights of Trustee................................51
Section 9.03 Individual Rights of Trustee.....................52
Section 9.04 Trustee's Disclaimer.............................52
Section 9.05 Notice of Defaults...............................52
Section 9.06 Reports by Trustee to Holders....................52
Section 9.07 Compensation and Indemnity.......................52
Section 9.08 Replacement of Trustee...........................53
Section 9.09 Successor Trustee by Merger, etc.................54
Section 9.10 Eligibility; Disqualification....................54
Section 9.11 Preferential Collection of Claims Against
Company..........................................54
ARTICLE X. DISCHARGE OF INDENTURE.............................................55
Section 10.01 Termination of Company's Obligations.............55
Section 10.02 Repayment to Company.............................55
ARTICLE XI. AMENDMENTS, SUPPLEMENTS AND WAIVERS...............................55
Section 11.01 Without Consent of Holders.......................55
Section 11.02 With Consent of Holders..........................56
Section 11.03 Compliance with Trust Indenture Act..............57
Section 11.04 Revocation and Effect of Consents................57
Section 11.05 Notation on or Exchange of Notes.................58
Section 11.06 Trustee Protected................................58
ARTICLE XII. MISCELLANEOUS....................................................58
Section 12.01 Trust Indenture Act Controls.....................58
Section 12.02 Notices..........................................58
Section 12.03 Communication by Holders with other Holders......59
Section 12.04 Certificate and Opinion as to Conditions
Precedent........................................59
Section 12.05 Statements Required in Certificate or Opinion....59
Section 12.06 Rules by Trustee and Agents......................60
Section 12.07 Legal Holidays...................................60
Section 12.08 No Recourse Against Others.......................60
Section 12.09 Counterparts and Facsimile Signatures............60
Section 12.10 Variable Provisions..............................60
Section 12.11 Governing Law, Submission to Jurisdiction........61
Section 12.12 No Adverse Interpretation of other Agreements....62
Section 12.13 Successors.......................................62
Section 12.14 Severability.....................................62
Section 12.15 Table of Contents, Headings, etc.................62
Section 12.16 Enforceability of the Company's Rights...........62
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INDENTURE, dated as of August 31, 2001, between American
Skiing Company, a Delaware corporation (the "COMPANY"), and Oak Hill Capital
Partners, L.P., a Delaware limited partnership, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders (as defined in
Section 1.01 hereof) of the Company's 11.3025% Convertible Subordinated Notes
due 2007 (the "NOTES"):
ARTICLE I.
DEFINITIONS
Section 1.01 Definitions.
-----------
"Accreted Value" means, for any Note, as of any date of
determination, the sum of (i) the Original Issue Price of the Note and (ii) any
interest in respect of such Note added to such Accreted Value pursuant to
Section 2.02 of this Indenture and the terms of such Note. Initially, upon the
Issuance Date, the amount under clause (ii) shall be zero.
"Affiliate" of any specified Person means any other Person
directly indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided, however, that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Bank Credit Agreements" means (i) the Amended, Restated and
Consolidated Credit Agreement dated as of October 12, 1999 among the Company,
various Subsidiaries of the Company, the lenders party thereto and Fleet
National Bank, as agent for the lenders, (ii) any other credit, loan,
reimbursement or other similar agreements among the Company, any Subsidiary and
any bank, insurance company, finance company or other institutional lender,
(iii) each instrument pursuant to which Obligations under any of the agreements
described in (i) or (ii) above, are amended, deferred, extended, renewed,
replaced, refunded or refinanced, in whole or in part, and (iv) each instrument
now or hereafter evidencing, governing, guarantying or securing any Indebtedness
under any agreements described in (i), (ii) or (iii) above, in each case, as
modified, amended, reformed, renewed, extended, restated or supplemented from
time to time.
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"Bank Lenders" means the lenders and creditors under the Bank
Credit Agreements.
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of the Board of Directors.
"Board Resolution" means a duly authorized resolution of the
Board of Directors.
"Business Day" means any day that is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, including, without limitation, partnership interests.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Restricted Subsidiaries, taken as a whole, to any "person" (as such term is used
in Section 13(d)(3) of the Exchange Act) other than the Permitted Holders, or
(ii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act), other than the Permitted
Holders, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50%
of the voting power of the Capital Stock of the Company, unless, in the case of
this clause (ii), the Permitted Holders retain the right or ability, by voting
power, contract or otherwise, to elect or designate a majority of the Board of
Directors of the Company.
"Common Stock" means the common stock, par value $.01 per
share, of the Company.
"Company" means the party named as such above until a
successor replaces it in accordance with Article VII and thereafter means the
successor.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"Depositary" shall mean The Depository Trust Company, its
nominees and their respective successors.
"Designated Senior Debt" means the Company's Obligations under
the Senior Notes, the Bank Credit Agreements and any other Senior Debt of such
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Person permitted to be incurred by the Company the principal amount of which is
$25.0 million or more and that has been designated by the Board of Directors as
"Designated Senior Debt" by notice to the Trustee from both the Company and the
Senior Agent.
"Designated Subsidiary" means any Subsidiary of the Company
that is not an "Unrestricted Subsidiary" as defined in, and for the purposes of
the Senior Credit Agreement; provided, that each Subsidiary that is a Designated
Subsidiary at the time when the obligations under the Senior Credit Agreement
shall have been paid in full shall remain a Designated Subsidiary for so long as
this Indenture remains in effect.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock, but excluding any Indebtedness
that is convertible into, or exchangeable for Capital Stock.
"Excess Payment" means the excess of (A) the aggregate of the
cash and the fair value of other consideration paid by the Company or any of its
Subsidiaries with respect to shares acquired in a tender offer or other
negotiated transaction over (B) the aggregate Current Market Price of such
acquired shares immediately prior to the announcement of the tender offer (in
the case of a tender offer) or as of the date of acquisition (in the case of a
negotiated transaction). For purposes of this definition, the "fair value" of
any consideration other than cash shall be agreed to by the Company and the
Majority Holders or, if such Persons do not agree, the determination of fair
value of such consideration shall be determined in a manner consistent with the
determination of Current Market Price as set forth in Section 5.06(f).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession, which are in effect on the Issuance Date and are applied
on a consistent basis.
"Guarantee" means a guarantee, other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest and currency rate swap agreements,
interest rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest or currency exchange rates.
"Holder" means a Person in whose name a Note is registered in
the register referred to in Section 2.04.
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"Indebtedness" means, with respect to any Person, without
duplication, (i) any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or
representing the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, all indebtedness of others secured by a lien on any asset
of such Person (whether or not such indebtedness is assumed by such Person) and,
to the extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person. The amount of any Indebtedness outstanding as
of any date shall be the accreted value thereof, in the case of any Indebtedness
issued with original issue discount. Indebtedness shall not include liabilities
for taxes of any kind.
"Indenture" means this Indenture, as modified, amended,
reformed, renewed, extended, restated or supplemented from time to time
"Insolvency or Liquidation Proceeding" means, with respect to
any Person, (i) any insolvency or bankruptcy or similar case or proceeding, or
any reorganization, receivership, liquidation, dissolution or winding up of such
Person, whether voluntary or involuntary, or (ii) any assignment for the benefit
of creditors or any other marshalling of assets and liabilities of such Person.
"Interest Accrual Date" means, with respect to any installment
of interest on any Notes, the dates specified in Section 2.02 as the fixed dates
on which such installment of interest accrues and is added to the Accreted Value
in effect immediately prior to the applicable Interest Accrual Date.
"Issuance Date" means the date on which the Notes are first
authenticated and issued.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Majority Holders" means, at any time, the Holders of a
majority in aggregate Accreted Value of the then outstanding Notes.
"Maturity" means, with respect to any Note, the date on which
the Accreted Value of such Note becomes due and payable as therein provided and
5
as provided in this Indenture, whether at the Stated Maturity, the Purchase Date
or otherwise.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"Non-Recourse Real Estate Debt" means Indebtedness (i) as to
which neither the Company nor any of its Restricted Subsidiaries (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender, (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries; provided, that if there has been
a legal defeasance or covenant defeasance under Article 8 of the Senior
Indenture or the Senior Indenture has been discharged, there shall be no
Non-Recourse Real Estate Debt.
"Notes" has the meaning set forth in the preamble hereto.
"NYSE" means the New York Stock Exchange.
"Oak Hill" means Oak Hill Capital Partners, L.P.
"Obligations" with respect to any instrument or agreement
means any and all principal, Accreted Value, interest (including Post-Petition
Interest), penalties, premiums, fees (including, without limitation, to the
extent provided for in such instrument or agreement, fees and expenses of
counsel), indemnifications, reimbursements, damages and other charges,
obligations and liabilities existing from time to time under such instrument or
agreement, whether direct or indirect, joint or several, actual, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, including any
obligations or liabilities to repay, redeem, repurchase, retire, acquire or
defease any Indebtedness under such instrument or agreement, or any obligation
to establish a sinking fund for any such purpose.
"Officers' Certificate" means a certificate of the Company
signed by two Officers, one of whom must be the Chairman of the Board, the
President, the Treasurer or a Vice President of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the Company or the
Trustee.
6
"Original Issue Price" means, with respect to any Note, the
amount designated as original issue price on the face of such Note.
"Permitted Holders" means (a) Leslie B. Otten (or, in the
event of his incompetence or death, his estate and his estate's heirs, executor,
administrator, committee or other representative (collectively, "Heirs")), (b)
any Person in which Leslie B. Otten and his Heirs, directly or indirectly, have
an 80% controlling interest, and/or (c) Oak Hill Capital Partners, L.P. and Oak
Hill Securities Fund, L.P. and their respective affiliates and associates.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Post-Petition Interest" means, with respect to any
Indebtedness of any Person, all interest accrued or accruing on such
Indebtedness after the commencement of any Insolvency or Liquidation Proceeding
against such Person in accordance with and at the contract rate (including,
without limitation, any rate applicable upon default) specified in the agreement
or instrument creating, evidencing or governing such Indebtedness, whether or
not, pursuant to applicable law or otherwise, the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding.
"Purchase Agreement" means the Securities Purchase Agreement,
dated as of July 15, 2001, among the Company and the purchasers named therein,
as modified, amended, reformed, renewed, extended, restated or supplemented,
from time to time.
"Purchasers" means Oak Hill Capital Partners, L.P. and Oak
Hill Capital Management Partners, L.P.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Notes and the underlying Series D Preferred Stock,
dated August 31, 2001, among the Company and the Persons party thereto, as
modified, amended, reformed, renewed, extended, restated or supplemented, from
time to time.
"Representative" means, with respect to any Senior Debt, the
agent or other representative(s), if any, of holders of such Senior Debt.
"Responsible Officer," when used with respect to the Trustee,
means (i) with respect to Oak Hill as Trustee, means any member of OHCP MGP, LLC
(a Delaware limited liability company and the general partner of OHCP GenPar,
L.P., a Delaware limited partnership and general partner of Oak Hill), and (ii)
with respect to any other Person as Trustee, any Trust Officer of the Trustee
or, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of his or her knowledge of and familiarity
with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an "Unrestricted Subsidiary" as defined in, and for the purposes of,
7
the Senior Indenture; provided, that each Subsidiary that is a Restricted
Subsidiary at the time when the Senior Indenture is discharged shall remain a
Restricted Subsidiary for so long as this Indenture remains in effect.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Agents" means, collectively, (i) (A) until all
Indebtedness under the Bank Credit Agreements is paid in full in cash, the agent
(or the institution performing similar functions) under the Bank Credit
Agreement under which the greatest aggregate principal amount of Indebtedness is
outstanding and (B) if all Indebtedness under the Bank Credit Agreements has
been paid in full, the Person (or representative of the Persons) holding the
greatest amount of Senior Debt other than Senior Notes, and (ii) until all
Indebtedness under the Senior Notes has been paid in full in cash, the trustee
under the Senior Indenture.
"Senior Bank Debt" means all Obligations outstanding under the
Bank Credit Agreements.
"Senior Credit Agreement" means the Amended, Restated and
Consolidated Credit Agreement dated as of October 12, 1999, among the Company
and certain Subsidiaries of the Company, as borrowers, the lenders and Fleet
National Bank (f/k/a BankBoston, N.A.), as agent for the lenders, as modified,
amended, restated or supplemented from time to time.
"Senior Debt" of any Person means and includes all principal
of, premium and interest on and other Obligations with respect to (i) the Bank
Credit Agreements, (ii) the Senior Notes and (iii) any other Indebtedness of
such Person (other than as otherwise provided in this definition), whether
outstanding on the date of issuance of the Notes or thereafter incurred;
provided, however, Senior Debt shall not include: (a) except in the case of
Indebtedness under the Amended, Restated and Consolidated Credit Agreement dated
as of October 12, 1999 among the Company, various Subsidiaries of the Company,
the lenders party thereto and Fleet National Bank, as agent for the lenders, and
the guarantees of various Subsidiaries of the Company issued in connection
therewith, in each case as modified, amended and in effect from time to time,
any Indebtedness which by the terms of the instrument creating or evidencing the
same is subordinated or junior in right of payment to any other Senior Debt in
any respect or (b) that portion of any Indebtedness incurred in violation of
this Indenture or the Senior Indenture. Notwithstanding the foregoing, Senior
Debt shall not include (1) Indebtedness evidenced by the Notes, (2) Indebtedness
which when incurred and without respect to any election under Section 1111(b) of
the United States Bankruptcy Code is without recourse to the Company, (3) any
liability for foreign, federal, state, local or other taxes owed or owing by the
Company, (4) Indebtedness of such Person to the extent such liability
constitutes Indebtedness to a Subsidiary of the Company, (5) Indebtedness for
the purchase of goods or materials in the ordinary course of business except
8
purchase money Indebtedness secured by a security interest in or Lien upon the
goods or materials purchased or (6) Indebtedness owed by the Company for
compensation to employees or for services.
"Senior Indenture" means the Indenture, dated as of June 28,
1996, between the Company (as successor to ASC East, Inc.), and United States
Trust Company of New York as trustee, as modified, amended, restated or
supplemented from time to time.
"Senior Notes" means the 12% Series A and Series B Senior
Subordinated Notes due 2006, issued by the Company pursuant to the Senior
Indenture.
"Series D Equivalents" means Series D Preferred Stock or
rights, warrants, options or other convertible securities representing the right
to acquire Series D Preferred Stock.
"Shelf Registration Statement" shall have the meaning set
forth in the Registration Rights Agreement.
"Stated Maturity" when used with respect to any Indebtedness
or any installment of interest thereon, means the dates specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness, the
Accreted Value or such installment of interest, as the case may be, is due and
payable.
"Stock Collateral" means any Equity Interests in any
Subsidiary of the Company.
"Stockholders' Agreement" means the Stockholders' Agreement
dated as of August 6, 1999, as amended by Amendment No. 1 thereto dated July 31,
2000, and as it may be further amended from time to time, among the Company,
Leslie B. Otten, Oak Hill and the other parties identified therein.
"Subordinated Obligations" means all Indebtedness and other
Obligations of the Company or any of its Subsidiaries, contingent or otherwise,
now or hereafter existing under or in respect of the Notes (pursuant to the
terms thereof or any other agreement or instrument relating thereto) or this
Indenture.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of such Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner of
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
9
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
(Sections) 77aaa-77bbbb) as in effect on the date of execution of this
Indenture.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Unrestricted Subsidiary" means any Subsidiary of the Company
that is an "Unrestricted Subsidiary" as defined in, and for the purposes of, the
Senior Indenture; provided, that each Subsidiary that is an Unrestricted
Subsidiary at the time when the Senior Indenture is discharged shall remain an
Unrestricted Subsidiary for so long as this Indenture remains in effect.
Section 1.02 Other Definitions.
-----------------
DEFINED
TERM IN SECTION
"AGENT MEMBERS".............................................. 2.01
"APPLICABLE STOCK"........................................... 5.06
"BANKRUPTCY LAW" 8.01
"CEDEL"...................................................... 2.01
"CHANGE OF CONTROL PAYMENT".................................. 4.07
"COMMENCEMENT DATE".......................................... 4.07
"CONVERSION AGENT"........................................... 2.04
"CONVERSION DATE"............................................ 5.02
"CONVERSION PRICE"........................................... 5.01
"CONVERSION SHARES".......................................... 5.01
"CURRENT MARKET PRICE" ...................................... 5.06
"CUSTODIAN".................................................. 8.01
"DISTRIBUTION DATE".......................................... 5.06
"DISTRIBUTION RECORD DATE"................................... 5.06
"EUROCLEAR".................................................. 2.01
"EVENT OF DEFAULT"........................................... 8.01
"GLOBAL NOTES"............................................... 2.01
"LEGAL HOLIDAY".............................................. 12.07
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"OFFER AMOUNT"............................................... 4.07
"OFFICER".................................................... 12.10
"NON-PURCHASER DIRECTORS".................................... 12.16
"PAYING AGENT"............................................... 2.04
"PAYMENT BLOCKAGE NOTICE".................................... 6.03
"PAYMENT DEFAULT"............................................ 8.01
"PURCHASE DATE".............................................. 4.07
"PURCHASE OFFER"............................................. 4.07
"QIBS"....................................................... 2.01
"REGISTRAR".................................................. 2.04
"REGULATION S"............................................... 2.01
"REGULATION S GLOBAL NOTE"................................... 2.01
"RESTRICTED NOTES"........................................... 2.01
"REPURCHASE DATE"............................................ 5.06
"RIGHTS"..................................................... 5.06
"RULE 144A".................................................. 2.01
"RULE 144A GLOBAL NOTE"...................................... 2.01
"SURVIVING ENTITY"........................................... 7.01
"TENDER PERIOD".............................................. 4.07
Section 1.03 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"Indenture Securities" means the Notes;
"Indenture Security Holder" means a Holder of a Note;
"Indenture To Be Qualified" means this Indenture;
"Indenture Trustee" or "institutional trustee" means the
Trustee; and
"Obligor" on the Notes means the Company or any other obligor
on the Notes.
11
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction.
---------------------
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP consistently applied;
(c) "OR" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time; and
(g) a reference to "$" or U.S. Dollars is to United States
dollars.
ARTICLE II.
THE NOTES
Section 2.01 Form and Dating.
---------------
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, which is
hereby incorporated by reference and expressly made a part of this Indenture.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). The Company shall furnish any such legend not contained in
Exhibit A to the Trustee in writing. Each Note shall be dated the date of its
authentication. The Notes shall be issued only in denominations of Accreted
Value with $100 of Original Issue Price and integral multiples thereof. The
terms and provisions of the Notes set forth in Exhibit A are part of this
Indenture and to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby. However, to the extent any provision of any
12
Note conflicts with the express provisions of this Indenture, the provisions of
this Indenture shall govern and be controlling.
(b) Global Notes. Notes transferred in reliance on Regulation
S under the Securities Act ("REGULATION S"), as provided in Section 2.07(a)(ii)
hereof, shall be issued in the form of one or more permanent Global Notes in
definitive, fully registered form without interest coupons with the Global Notes
Legend and Restricted Notes Legend set forth in Exhibit A hereto (the
"REGULATION S GLOBAL NOTE"), which shall be deposited on behalf of the
transferee of the Notes represented thereby with the Trustee, at its New York
office, as custodian for the Depositary, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of the Euroclear System ("EUROCLEAR") or Cedelbank
("CEDEL"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Regulation S Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided.
Notes transferred to Qualified Institutional Buyers ("QIBS")
in reliance on Rule 144A under the Securities Act ("RULE 144A"), as provided in
Section 2.07(a)(ii) hereof, shall be issued in the form of one or more permanent
Global Notes in definitive, fully registered form without interest coupons with
the Global Notes Legend and Restricted Notes Legend set forth in Exhibit A
hereto ("RULE 144A GLOBAL NOTE"), which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Trustee, at its New York
office, as custodian for the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee and the Depositary
or its nominee as hereinafter provided.
Notwithstanding the foregoing, for so long as the Purchasers
hold the Notes, the Notes shall be held by them in certificated form.
(c) Book-Entry Provisions. This Section 2.01(c) shall apply
only to the Regulation S Global Note and the Rule 144A Global Note issued in the
form of one or more permanent Global Notes (collectively, the "GLOBAL NOTES")
deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(c), authenticate and deliver initially one or more Global
Notes that (a) shall be registered in the name of the Depositary for such Global
Note or Global Notes or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
13
Members of, or participants in, the Depositary ("AGENT
MEMBERS") shall have no rights under this Indenture with respect to any Global
Note held on their behalf by the Depositary or by the Trustee as the custodian
of the Depositary or under such Global Note, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices of the Depositary governing the exercise of the rights of an
owner of a beneficial interest in any Global Note.
Notwithstanding the foregoing, for so long as the Purchasers
hold the Notes, the Notes shall not be issued in the form of Global Notes.
(d) Certificated Notes. Notes transferred to "accredited investors" (as defined
in Rule 501 (a) (1), (2), (3), (4), (5), (6) and (7) of Regulation D under the
Securities Act), as provided in Section 2.07(a), or to any Person in a
transaction exempt from the registration requirements of the Securities Act,
other than a Person who elects to receive a Global Note as provided elsewhere in
the Indenture, shall be issued in the form of one or more certificated Notes in
definitive, fully registered form without interest coupons with the Restricted
Notes Legend set forth in Exhibit A hereto ("RESTRICTED NOTES"), which shall be
registered in the name of such Accredited Investor or its nominee, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. Such
Restricted Notes may only be transferred in reliance on Regulation S or to QIBs
in reliance on Rule 144A, pursuant to another exception from registration under
the Securities Act or pursuant to an effective registration statement.
In addition to the provisions of Section 2.11, owners of
beneficial interests in Global Notes may, if the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Notes, receive a certificated Note, which certificated Note shall
bear the Restricted Notes Legend set forth in Exhibit A hereto unless otherwise
provided in this Section 2.01(d) and Section 2.07(b) hereof.
After a transfer of any Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to the Notes and
pursuant thereto, all requirements for Restricted Notes Legends on such Note
will cease to apply, and a certificated Note without a Restricted Notes Legend
will be available to the Holder of such Notes.
Section 2.02 Title and Terms.
---------------
The aggregate Original Issue Price of Notes which may be
authenticated and delivered under this Indenture is limited to $12,500,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for or in lieu of, other Notes pursuant to Sections 2.03, 2.04,
2.07, 2.08, 4.07 and 11.05.
14
The Notes shall be known and designated as the "11.3025%
Convertible Subordinated Notes due 2007" of the Company. The Stated Maturity of
the Accreted Value of the Notes shall be August 28, 2007 and the Notes shall
each bear interest at the rate of 11.3025% on the Accreted Value thereof from
August 31, 2001 until the Stated Maturity of the Accreted Value.
On each August 31 on which the Notes are outstanding,
commencing August 31, 2002, and at the Stated Maturity of the Accreted Value,
interest on the Notes shall accrue and be paid through the addition of such
interest to the Accreted Value in effect immediately prior to the applicable
Interest Accrual Date. The Company shall notify the Trustee in writing of the
aggregate amount of such interest not less than five (5) or more than 45 days
prior to any Interest Accrual Date on which accretion will occur. On the
applicable Interest Accrual Date, the Accreted Value shall increase by the
amount of such interest.
On Maturity, the Accreted Value shall be payable at the office
or agency of the Company maintained for such purpose in the City of New York, or
at such other office or agency of the Company as may be maintained for such
purpose. If a Holder so requests, Accreted Value, accrued and unpaid interest
thereon, and premium, if any, may be paid by wire transfer of immediately
available funds to an account previously specified in writing by such Holder to
the Company and the Trustee.
At the option of the Holder, the Notes may be converted into
shares of Series D Preferred Stock pursuant to Article IV hereof.
Holders shall have the right to require the Company to
repurchase their Notes, in whole or in part, in the event of a Change of
Control, pursuant to Section 3.07.
Section 2.03 Execution and Authentication.
----------------------------
One Officer shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed
by an Officer, authenticate Notes for Original Issue Price up to an amount
stated in paragraph 3 of the Note. The aggregate Notes outstanding at any time
may not have an aggregate Original Issue Price that exceeds $12,500,000 except
as provided in Section 2.08.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
15
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders, the
Company or an Affiliate.
Section 2.04 Registrar and Paying Agent.
--------------------------
The Company shall maintain in the Borough of Manhattan, City
of New York, State of New York, (i) offices or agencies where the Notes may be
presented for registration of transfer or for exchange ("REGISTRAR"), (ii)
offices or agencies where the Notes may be presented for payment ("PAYING
AGENT") and (iii) offices or agencies where the Notes may be presented for
conversion ("CONVERSION AGENT"); provided that if the only Holders are the
Purchasers, such offices or agencies may be the executive offices of the Company
as set forth in Section 12.10. The Company shall act initially as principal
Registrar, Paying Agent and Conversion Agent. The principal Registrar shall keep
a register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars, one or more additional paying agents and one
or more additional Conversion Agents in such other locations as it shall
determine. The term "Registrar" includes any co-registrar, the term "Paying
Agent" includes any additional paying agent and the term "Conversion Agent"
includes any additional conversion agent. The Company may change any Paying
Agent, Registrar or Conversion Agent without prior notice to any Holder. The
Company shall notify the Trustee of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar, Paying Agent or Conversion Agent, the Trustee shall act as
such. The Company or any of its Affiliates may act as Paying Agent, Registrar or
Conversion Agent.
Section 2.05 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of the Accreted Value at Maturity, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee and to account for any money disbursed by it. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further liability for the money. If the
Company or an Affiliate of the Company acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.
Section 2.06 Holder Lists.
------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at such times as the Trustee may request in writing a
16
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Holders.
Section 2.07 Transfer and Exchange.
---------------------
Where Notes are presented to the Registrar or a co-registrar
with a request to register a transfer or to exchange them for one or more new
Notes of any authorized denomination or denominations, of a like aggregate
Accreted Value, the Registrar shall register the transfer or make the exchange
if its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Company shall issue and the Trustee shall
authenticate Notes at the Registrar's request. No service charge shall be made
for any registration of transfer or exchange (except as otherwise expressly
permitted herein), but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Sections 2.11 or 11.05 hereof).
(a) Notwithstanding any provision to the contrary herein, so
long as a Global Note remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Note, in whole or in part, or of any
beneficial interest therein, shall only be made in accordance with Section
2.01(b) and this Section 2.07(a); provided, however, that beneficial interests
in a Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in the same Global Note in accordance with the
transfer restrictions set forth in the Restricted Notes Legend.
(i) Except for transfers or exchanges made in accordance with
clauses (ii) through (iv) of this Section 2.07(a), transfers of a Global Note
shall be limited to transfers of such Global Note in whole, but not in part, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(ii) Rule 144A Global Note to Regulation S Global Note. If an
owner of a beneficial interest in the Rule 144A Global Note deposited with the
Depositary or the Trustee as custodian for the Depositary wishes at any time to
transfer its interest in such Rule 144A Global Note to a Person who is required
to take delivery thereof in the form of an interest in the Regulation S Global
Note, such owner may, subject to the rules and procedures of the Depositary,
exchange or cause the exchange of such interest for an equivalent beneficial
interest in the Regulation S Global Note. Upon receipt by the principal
Registrar of (1) instructions given in accordance with the Depositary's
procedures from an Agent Member directing the principal Registrar to credit or
cause to be credited a beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the Rule 144A Global Note to be
exchanged, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the participant account of the
Depositary and the Euroclear or Cedel account to be credited with such increase
and (3) a certificate in the form of Exhibit B attached hereto given by the
17
Holder of such beneficial interest, then the principal Registrar shall instruct
the Depositary to reduce or cause to be reduced the Accreted Value of the Rule
144A Global Note and to increase or cause to be increased the Accreted Value of
the Regulation S Global Note by the aggregate Accreted Value of the beneficial
interest in the Rule 144A Global Note equal to the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, to credit or cause to
be credited to the account of the Person specified in such instructions a
beneficial interest in the Regulation S Global Note equal to the reduction in
the Accreted Value of the Rule 144A Global Note and to debit or cause to be
debited from the account of the Person making such exchange or transfer the
beneficial interest in the Rule 144A Global Note that is being exchanged or
transferred.
(iii) Regulation S Global Note to Rule 144A Global Note. If an
owner of a beneficial interest in the Regulation S Global Note deposited with
the Depositary or with the Trustee as custodian for the Depositary wishes at any
time to transfer its interest in such Regulation S Global Note to a Person who
is required to take delivery thereof in the form of an interest in the Rule 144A
Global Note, such Holder may, subject to the rules and procedures of Euroclear
or Cedel, as the case may be, and the Depositary, exchange or cause the exchange
of such interest for an equivalent beneficial interest in the Rule 144A Global
Note. Upon receipt by the principal Registrar of (1) instructions from Euroclear
or Cedel, if applicable, and the Depositary, directing the principal Registrar
to credit or cause to be credited a beneficial interest in the Rule 144A Global
Note equal to the beneficial interest in the Regulation S Global Note to be
exchanged or transferred, (2) a written order given in accordance with the
Depositary's procedures containing information regarding the participant account
of the Depositary and (3) a certificate in the form of Exhibit C attached hereto
given by the owner of such beneficial interest, then Euroclear or Cedel or the
principal Registrar, as the case may be, will instruct the Depositary to reduce
or cause to be reduced the Accreted Value of the Regulation S Global Note and to
increase or cause to be increased the Accreted Value of the Rule 144A Global
Note by the aggregate Accreted Value of the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, and the principal
Registrar shall instruct the Depositary, concurrently with such reduction, to
credit or cause to be credited to the account of the Person specified in such
instructions a beneficial interest in the Rule 144A Global Note equal to the
reduction in the Accreted Value of the Regulation S Global Note and to debit or
cause to be debited from the account of the Person making such exchange or
transfer the beneficial interest in the Regulation S Global Note that is being
exchanged or transferred.
(iv) Global Note to Restricted Note. If an owner of a
beneficial interest in a Global Note deposited with the Depositary or with the
Trustee as custodian for the Depositary wishes at any time to transfer its
interest in such Global Note to a Person who is required to take delivery
thereof in the form of a Restricted Note, such owner may, subject to the rules
and procedures of Euroclear or Cedel, if applicable, and the Depositary, cause
the exchange of such interest for one or more Restricted Notes of any authorized
denomination or denominations and of the same aggregate Accreted Value. Upon
receipt by the principal Registrar of (1) instructions from Euroclear or Cedel,
if applicable, and the Depositary directing the principal Registrar to
authenticate and deliver one or more Restricted Notes of the same aggregate
Accreted Value as the beneficial interest in the Global Note to be exchanged,
such instructions to contain the name or names of the designated transferee or
transferees, the authorized denomination or denominations of the Restricted
18
Notes to be so issued and appropriate delivery instructions, (2) a certificate
in the form of Exhibit D attached hereto given by the owner of such beneficial
interest to the effect set forth therein, (3) a certificate in the form of
Exhibit E attached hereto given by the Person acquiring the Restricted Notes for
which such interest is being exchanged, to the effect set forth therein, and (4)
such other certifications, legal opinions or other information as the Company
may reasonably require to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, then Euroclear or Cedel, if applicable, or
the principal Registrar, as the case may be, will instruct the Depositary to
reduce or cause to be reduced such Global Note by the aggregate Accreted Value
of the beneficial interest therein to be exchanged and to debit or cause to be
debited from the account of the Person making such transfer the beneficial
interest in the Global Note that is being transferred, and concurrently with
such reduction and debit the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Restricted Notes of the same aggregate
Accreted Value in accordance with the instructions referred to above.
(v) Restricted Note to Restricted Note. If a Holder of a
Restricted Note wishes at any time to transfer such Restricted Note to a Person
who is required to take delivery thereof in the form of a Restricted Note, such
Holder may, subject to the restrictions on transfer set forth herein and in such
Restricted Note, cause the exchange of such Restricted Note for one or more
Restricted Notes of any authorized denomination or denominations and of the same
aggregate Accreted Value. Upon receipt by the principal Registrar of (1) such
Restricted Note, duly endorsed as provided herein, (2) instructions from such
Holder directing the principal Registrar to authenticate and deliver one or more
Restricted Notes of the same aggregate Accreted Value as the Restricted Note to
be exchanged, such instructions to contain the name or authorized denomination
or denominations of the Restricted Notes to be so issued and appropriate
delivery instructions, (3) a certificate from the Holder of the Restricted Note
to be exchanged in the form of Exhibit D attached hereto, (4) a certificate in
the form of Exhibit E attached hereto given by the Person acquiring the
Restricted Notes for which such interest is being exchanged, to the effect set
forth therein, and (5) such other certifications, legal opinions or other
information as the Company may reasonably require to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act, then the Registrar shall
cancel or cause to be canceled such Restricted Note and concurrently therewith,
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Restricted Notes of the same aggregate Accreted Value, in accordance
with the instructions referred to above.
(vi) Restricted Note to Rule 144A Global Note. If an owner of
a Restricted Note registered in the name of such owner wishes at any time to
transfer such Restricted Note to a Person who is required to take delivery
thereof in the form of an interest in the Rule 144A Global Note, such Holder
may, subject to the rules and procedures of the Depositary, exchange or cause
the exchange of such Restricted Note for an equivalent beneficial interest in
the Rule 144A Global Note. Upon receipt by the principal Registrar of (1)
instructions from the Company, directing the principal Registrar (A) to credit
or cause to be credited a beneficial interest in the Rule 144A Global Note equal
to the Accreted Value of the Restricted Note to be exchanged or transferred and
19
(B) to cancel such Restricted Note to be exchanged or transferred, (2) a written
order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary and (3) a
certificate in the form of Exhibit C attached hereto given by the owner of such
Restricted Note, then the principal Registrar will instruct the Trustee to
cancel such Restricted Note and will instruct the Depositary to increase or
cause to be increased the Accreted Value of the Rule 144A Global Note by the
Accreted Value of the Restricted Note to be exchanged or transferred, and the
principal Registrar shall instruct the Depositary, concurrently with such
cancellation of the Restricted Note, to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the Rule 144A Global Note equal to the Accreted Value of the Restricted Note to
be canceled by the Trustee.
(vii) Restricted Note to Regulation S Global Note. If an owner
of a Restricted Note registered in the name of such owner wishes at any time to
transfer such Restricted Note to a Person who is required to take delivery
thereof in the form of an interest in the Regulation S Global Note, such owner
may, subject to the rules and procedures of the Euroclear or Cedel, as the case
may be, exchange or cause the exchange of such Restricted Note for an equivalent
beneficial interest in the Regulation S Global Note. Upon receipt by the
principal Registrar of (1) instructions from the Company, directing the
principal Registrar (A) to credit or cause to be credited a beneficial interest
in the Regulation S Global Note equal to the Accreted Value of the Restricted
Note to be exchanged or transferred and (B) to cancel such Restricted Note to be
exchanged or transferred, (2) a written order given in accordance with the
Depositary's procedures containing information regarding the participant account
of the Euroclear or Cedel account to be credited with such increase and (3) a
certificate in the form of Exhibit B attached hereto given by the Holder of such
Restricted Note, then the principal Registrar will instruct the Trustee to
cancel such Restricted Note and will instruct the Depositary to increase or
cause to be increased the Accreted Value of the Regulation S Global Note by the
Accreted Value of the Restricted Note to be exchanged or transferred, and the
principal Registrar shall instruct the Depositary, concurrently with such
cancellation of the Restricted Note, to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the Regulation S Global Note equal to the Accreted Value of the Restricted Note
to be canceled by the Trustee.
(viii) Other Exchanges. In the event that a beneficial
interest in a Global Note is exchanged for a certificated Note in definitive
registered form pursuant to Section 2.11, prior to the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be exchanged
only in accordance with such procedures as are substantially consistent with the
provisions of clauses (ii) through (v) above (including the certification
requirements intended to ensure that such transfers comply with Rule 144A, Rule
144, Regulation S or any other available exemption from registration, as the
case may be) and such other procedures as may from time to time be adopted by
the Company.
20
(b) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement, if Notes are issued upon the transfer, exchange or replacement of
Notes bearing the Restricted Securities Legend set forth in Exhibit A hereto, or
if a request is made to remove such Restricted Notes Legend on Notes, the Notes
so issued shall bear the Restricted Notes Legend, or the Restricted Notes Legend
shall not be removed, as the case may be, unless there is delivered to the
Company such satisfactory evidence, which may include an opinion of counsel
licensed to practice law in the State of New York, as may be reasonably required
by the Company, that neither the legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A, Rule 144, Regulation S or any other available exemption
from registration under the Securities Act or, with respect to Restricted Notes,
that such Notes are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Trustee, at
the direction of the Company, shall authenticate and deliver Notes that do not
bear the legend.
(c) Neither the Company nor the Trustee shall have any
responsibility for any actions taken or not taken by the Depositary and the
Company shall have no responsibility for any actions taken or not taken by the
Trustee as agent or custodian of the Depositary.
Section 2.08 Replacement Notes.
-----------------
If the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken or if such Note is mutilated and is surrendered to
the Trustee, the Company shall issue and the Trustee shall authenticate a
replacement Note if the Trustee's and the Company's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be sufficient in
the judgment of both to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Note is
replaced. The Company may charge for its reasonable expenses in replacing a
Note.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Note, pay such Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.09 Outstanding Notes.
-----------------
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section as not outstanding.
21
If a Note is replaced, paid or purchased pursuant to Section
2.08 hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced, paid or purchased Note is held by a bona
fide purchaser. If the Accreted Value of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
Except as set forth in Section 2.10 hereof, a Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note.
Section 2.10 Treasury Notes.
--------------
In determining whether the Holders of the required Accreted
Value of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or a Subsidiary of the Company shall be considered as though they
are not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
Section 2.11 Temporary Notes; Global Notes.
-----------------------------
(a) Until definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate definitive
Notes in exchange for temporary Notes. Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
(b) A Global Note deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.01 shall be
transferred to the beneficial owners thereof in the form of certificated Notes
only in accordance with Section 2.01(d) or if such transfer complies with
Section 2.07 and (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Note or if at any time such
Depositary ceases to be a "clearing agency" registered under the Exchange Act
and a successor Depositary is not appointed by the Company within 90 days after
receipt of such notice or after it becomes aware of such cessation or (ii) an
Event of Default has occurred and is continuing.
(c) Any Global Note that is transferable to the beneficial
owners thereof in the form of certificated Notes pursuant to Section 2.01(d) or
to this Section 2.11 shall be surrendered by the Depositary to the Trustee to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Note, an equal aggregate Accreted Value of Notes of authorized
denominations in the form of certificated Notes. Any portion of a Global Note
transferred pursuant to this Section 2.11 shall be executed, authenticated and
delivered only in denominations of Accreted Value with $100 of Original Issue
Price and any integral multiple thereof and registered in such names as the
22
Depositary shall direct. Any Note in the form of certificated Notes delivered in
exchange for an interest in the Global Notes shall, except as otherwise provided
by Section 2.07(b), bear the Restricted Notes Legend set forth in Exhibit A
hereto.
(d) The registered Holder of a Global Note may grant proxies
and otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
(e) In the event of the occurrence of either of the events
specified in Section 2.11(b), the Company will promptly make available to the
Trustee a reasonable supply of certificated Notes in definitive, fully
registered form without interest coupons.
Section 2.12 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee shall promptly cancel all Notes surrendered for
registration of transfer, exchange, payment, conversion, replacement or
cancellation and shall dispose of canceled Notes as the Company directs. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
ARTICLE III.
REDEMPTION
Section 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of the Notes and Section 3.07 hereof, it shall notify the
Trustee of the redemption date and the Accreted Value of Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at least 45
days before the redemption date (unless a shorter notice period shall be
reasonably satisfactory to the Trustee).
Section 3.02 Selection of Notes to be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed at any time,
selection of Notes shall be made by the Trustee on a pro rata basis or by lot or
by method that complies with the requirements of any exchange on which the Notes
are listed and that the Trustee considers fair and appropriate, provided that no
Notes with Accreted Value with Original Issue Price of less than $100 shall be
redeemed in part. The Trustee shall make the selection not more than 60 days and
not less than 30 days before the redemption date from Notes outstanding not
previously called for redemption. Notes and portions of Notes selected shall be
in amounts of Accreted Value with $100 of Original Issue Price or integral
23
multiples thereof. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The Trustee
shall notify the Company promptly of the Notes or portions of Notes to be called
for redemption.
If any Note selected for partial redemption is converted in
part after such selection, the converted portion of such Note shall be deemed
(so far as may be) to be the portion to be selected for redemption. The Notes
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereunder, notwithstanding that any such Note is converted in
whole or in part before the mailing of the notice of redemption. Upon any
redemption of less than all the Notes, the Company and the Trustee may treat as
outstanding any Notes surrendered for conversion during the period 15 days next
preceding the mailing of a notice of redemption and need not treat as
outstanding any Note authenticated and delivered during such period in exchange
for the unconverted portion of any Note converted in part during such period.
Section 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail, by first class mail, a notice of redemption to
each Holder whose Notes are to be redeemed at its registered address. The notice
shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is to be redeemed in part only, the portion of
the Accreted Value with $100 Original Issue Price thereof redeemed, and that,
after the redemption date, upon surrender of such Note, a new Note in Accreted
Value and Original Issue Price equal to the unredeemed portion thereof shall be
issued in the name of the Holder thereof upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price plus accrued interest, if any;
(f) that interest on Notes called for redemption ceases to
accrue on and after the redemption date; and
(g) the paragraph of the Notes pursuant to which the Notes
called for redemption are being redeemed.
Such notice shall also state the current Conversion Price and
the date on which the right to convert such Notes or portions thereof into
Series D Preferred Stock of the Company will expire.
24
At the Company's request, the Trustee shall give notice of
redemption in the Company's name and at its expense; provided that the Company
shall have delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice, as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become due and payable on the
redemption date at the price set forth in the Notes. A notice of redemption may
not be conditional.
Section 3.05 Deposit of Redemption Price.
---------------------------
On or before the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on all Notes to be redeemed on that date unless
theretofore converted into Series D Preferred Stock pursuant to the provisions
hereof. The Trustee or the Paying Agent shall return to the Company any money
not required for that purpose.
Section 3.06 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder at the expense of
the Company a new Note equal in Accreted Value and Original Issue Price to the
unredeemed portion of the Note surrendered.
Section 3.07 Optional Redemption.
-------------------
The Company may redeem all or any portion of the Notes, upon
the terms and at the redemption prices set forth in the Notes. Any redemption
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Section 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
--------------------
The Company shall not be required to make mandatory redemption
payments or sinking fund payments with respect to the Notes.
ARTICLE IV.
COVENANTS
Section 4.01 Payment of Notes.
----------------
The Company shall pay the Accreted Value and any other amounts
due on the Notes, if any, at Maturity in the manner provided in the Notes. The
25
Accreted Value and other amounts due on the Notes, if any, shall be considered
paid on the date due if the Paying Agent (other than the Company or an Affiliate
of the Company) holds on that date money designated for and sufficient to pay
all Accreted Value and such other amounts payable on the Notes, if any, then
due. To the extent lawful, the Company shall pay interest (including
Post-Petition Interest in any proceeding under any Bankruptcy Law) on overdue
Accreted Value and any other amounts due on the Notes, if any, at the rate borne
by the Notes, compounded annually.
Section 4.02 Reports.
-------
Whether or not required by the rules and regulations of the
SEC, so long as any Notes are outstanding, the Company shall file with the SEC
and furnish to the Trustee and to the Holders of Notes, all quarterly and annual
financial information required to be contained in a filing with the SEC on Forms
10-Q and 10-K, including a "Management's Discussion and Analysis of Results of
Operations and Financial Condition" and, with respect to the annual information
only, a report thereon by the Company's certified independent accountants, in
each case, as required by the rules and regulations of the SEC as in effect on
the Issuance Date.
Section 4.03 Compliance Certificate.
----------------------
The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under, and complied with the covenants
and conditions contained in, this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
Company has kept, observed, performed and fulfilled each and every covenant, and
complied with the covenants and conditions contained in this Indenture and is
not in default in the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he may have
knowledge) and that to the best of his knowledge no event has occurred and
remains in existence by reason of which payments on account of the aggregate
Accreted Value on the Notes are prohibited.
One of the Officers signing such Officers' Certificate shall
be either the Company's principal executive officer, principal financial officer
or principal accounting officer.
The Company will, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default.
26
Section 4.04 Stay, Extension and Usury Laws.
------------------------------
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 4.05 Corporate Existence.
-------------------
Subject to Article VI hereof, to the extent permitted by law,
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each subsidiary of the Company in accordance
with the respective organizational documents of each subsidiary and the rights
(charter and statutory), licenses and franchises of the Company; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any
subsidiary, if the preservation thereof is no longer desirable in the conduct of
the business of the Company and its subsidiaries taken as a whole.
Section 4.06 Taxes.
-----
The Company shall, and shall cause each of its subsidiaries
to, pay prior to delinquency all material taxes, assessments and governmental
levies, except as contested in good faith and by appropriate proceedings.
Section 4.07 Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
of such Holder's Notes (with Accreted Value with $100 of Original Issue Price or
integral multiples thereof), pursuant to an offer to all Holders of the Notes to
purchase Notes (the "PURCHASE OFFER") at the purchase prices set forth in the
Notes plus accrued and unpaid interest to the date of purchase (the "CHANGE OF
CONTROL PAYMENT").
(b) The Purchase Offer shall remain open for a period
specified by the Company which shall be no less than 30 calendar days and no
more than 40 calendar days following its commencement (the "COMMENCEMENT DATE")
(as determined in accordance with this Section 4.07 hereof), except to the
extent that a longer period is required by applicable law (the "TENDER PERIOD").
Upon the expiration of the Tender Period (the "PURCHASE DATE"), the Company
shall irrevocably deposit with the Paying Agent an amount in immediately
available funds sufficient to pay the aggregate Change of Control Payment for
27
all the Notes required to be purchased pursuant to this Section 4.07 (the "OFFER
AMOUNT"), to be held for payment in accordance with the terms of this Section
4.07.
(c) The Company shall provide the Trustee with notice of the
Purchase Offer at least 10 days before the Commencement Date.
(d) Within 40 days following any Change of Control, the
Company or the Trustee (at the expense of the Company) shall send, by first
class mail, a notice to each of the Holders, which shall govern the terms of the
Purchase Offer and shall state:
(i) that the Purchase Offer is being made pursuant to which
all Notes validly tendered will be accepted for payment and the length of time
the Purchase Offer will remain open;
(ii) the purchase price (as determined in accordance with
Section 4.07(a) hereof) and the Purchase Date, and that all Notes tendered will
be accepted for payment;
(iii) that any Note or portion thereof not tendered or
accepted for payment will continue to accrue and accrete interest;
(iv) that, unless the Company defaults in the payment of the
purchase price, any Note or portion thereof accepted for payment pursuant to the
Purchase Offer will cease to accrue or accrete interest after the Purchase Date;
(v) that Holders electing to have a Note or portion thereof
purchased pursuant to any Purchase Offer will be required to surrender the Note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the Purchase
Date;
(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Purchase Date, or such longer period as may be
required by law, a letter or a telegram, telex or facsimile transmission
(receipt of which is confirmed and promptly followed by a letter) setting forth
the name of the Holder, the Accreted Value of the Note or portion thereof the
Holder delivered for purchase and a statement that such Holder is withdrawing
his election to have the Note or portion thereof purchased; and
(vii) that Holders whose Notes were purchased only in part
will be issued new Notes equal in Accreted Value to the unpurchased portion of
the Notes surrendered.
(e) On the Purchase Date, the Company shall, to the extent
lawful and subject to Article VI hereof, (i) accept for payment the Notes or
portions thereof properly tendered pursuant to the Purchase Offer, (ii) deliver
or cause the depositary or Paying Agent to deliver to the Trustee Notes so
28
accepted and (iii) deliver to the Trustee an Officers' Certificate stating such
Notes or portions thereof have been accepted for payment by the Company in
accordance with the terms of this Section 4.07. The Paying Agent shall promptly
(but in any case not later than ten (10) calendar days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the purchase price
of the Notes tendered by such Holder and accepted by the Company for purchase,
and the Trustee shall promptly authenticate and mail or deliver to such Holders
a new Note equal in Accreted Value to any unpurchased portion of the Note
surrendered. Any Notes not so accepted shall be promptly mailed or delivered by
or on behalf of the Company to the Holder thereof.
(f) The Purchase Offer shall be made by the Company in
compliance with all applicable provisions of the Exchange Act, and all
applicable tender offer rules promulgated thereunder, and shall include all
instructions and materials necessary to enable such Holders to tender their
Notes.
(g) If and to the extent that a purchase of Notes required by
this Section 4.07 is prohibited under the Senior Indenture, then notwithstanding
any other provision of this Section 4.07, such purchase shall not occur and be
deferred until the first date on which such purchase shall be permitted to be
made under the terms of the Senior Indenture. Any Note that is not purchased on
a scheduled Purchase Date as otherwise contemplated by this Section 4.07 shall
continue to be outstanding and shall accrue interest until such Note is
purchased.
(h) The Company shall not be required to make a Purchase Offer
if a third party makes the Purchase Offer in the manner and at the times
prescribed by, and otherwise in compliance with the requirements set forth in,
this Section 4.07 and purchases all Notes validly tendered and not withdrawn
under such Purchase Offer.
Section 4.08 Compliance with Laws.
--------------------
The Company shall, and shall cause each of its Subsidiaries
to, comply in all respects with all laws, rules, regulations and governmental
orders (whether Federal, state or local) applicable to it and the operation of
its businesses whether now in effect or hereafter enacted if noncompliance with
any such law, rule, regulation or governmental order, either individually or in
the aggregate, would have a material adverse effect on (i) the business, assets,
liabilities, properties, operations, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or (ii) the
ability of the Company to perform its obligations in accordance with the terms
hereof or of the Notes.
29
ARTICLE V.
CONVERSION
Section 5.01 Conversion Privilege.
--------------------
A Holder of a Note may convert it into fully paid and
nonassessable shares of Series D Preferred Stock at any time following the
Issuance Date and prior to Maturity at the Conversion Price then in effect. The
number of shares of Series D Preferred Stock issuable upon conversion of a Note
(the "CONVERSION SHARES") is determined by dividing (i) the Accreted Value of
such Note on the Conversion Date, plus any accrued and unpaid interest thereon
as of such date, by (ii) the Conversion Price in effect on the Conversion Date
(the "CONVERSION PRICE").
The initial Conversion Price is stated in paragraph 9 of the
Note and is subject to adjustment as provided in this Article V.
A Holder may convert a portion of the Accreted Value of a Note
in effect on the Conversion Date, so long as such portion has a $100 Original
Issue Price or any integral multiple thereof. Provisions of this Indenture that
apply to conversion of the entire Accreted Value of a Note also apply to
conversion of such portion of it.
Section 5.02 Conversion Procedure.
--------------------
To convert a Note, a Holder must satisfy the requirements in
paragraph 9 of the Notes. The date on which the Holder satisfies all of those
requirements is the conversion date (the "CONVERSION DATE"). As soon as
practicable after the Conversion Date, the Company shall deliver to the Holder
through the Conversion Agent a certificate for the number of whole shares of
Series D Preferred Stock (including fractional shares) issuable upon the
conversion. The Person in whose name the certificate is registered shall become
the stockholder of record on the Conversion Date and, as of such date, such
Person's rights as a Holder shall cease; provided, however, that no surrender of
a Note on any date when the stock transfer books of the Company shall be closed
shall be effective to constitute the Person entitled to receive the shares of
Series D Preferred Stock upon such conversion as the stockholder of record of
such shares of Series D Preferred Stock on such date, but such surrender shall
be effective to constitute the Person entitled to receive such shares of Series
D Preferred Stock as the stockholder of record thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; provided further, however, that such conversion shall be at the
Conversion Price in effect on the date that such Note shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed.
If a Holder converts more than one Note at the same time, the
number of whole shares of Series D Preferred Stock issuable upon the conversion
shall be based on the total Accreted Value of Notes converted.
30
Upon surrender of a Note that is converted in part, the
Trustee shall authenticate for the Holder a new Note equal in Accreted Value to
the unconverted portion of the Note surrendered.
Section 5.03 No Impairment of Conversion Privilege.
-------------------------------------
The Company shall not, nor permit any of its Subsidiaries to,
take any action or enter into or amend any transaction, contract, agreement or
understanding that impairs the rights of Holders to convert their Notes in
accordance with the provisions of the Notes and this Article V.
Section 5.04 Taxes on Conversion.
-------------------
The issuance of certificates for shares of Series D Preferred
Stock upon the conversion of any Note shall be made without charge to the
converting Holder for such certificates or for any tax in respect of the
issuance of such certificates, and such certificates shall be issued in the
respective names of, or in such names as may be directed by, the Holder or
Holders of the converted Note; provided, however, that in the event that
certificates for shares of Series D Preferred Stock are to be issued in a name
other than the name of the holder of the Note converted, such Note, when
surrendered for conversion, shall be accompanied by an instrument of transfer,
in form reasonably satisfactory to the Company, duly executed by the registered
holder thereof or his duly authorized attorney; and provided further, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the holder of the converted Note, and
the Company shall not be required to issue or deliver such certificates unless
or until the Person or Persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid or is not applicable.
Section 5.05 Company to Provide Stock.
------------------------
The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued preferred stock,
solely for the purpose of issuance upon conversion of Notes as herein provided,
a sufficient number of shares of Series D Preferred Stock to permit the
conversion of all outstanding Notes for shares of Series D Preferred Stock. All
shares of Series D Preferred Stock which may be issued upon conversion of the
Notes shall be duly authorized, validly issued, fully paid and nonassessable
when so issued. Shares of Series D Preferred Stock issuable upon conversion of a
Restricted Note shall bear such restrictive legends as the Company shall provide
in accordance with applicable law. If shares of Series D Preferred Stock are to
be issued upon conversion of a Restricted Note and they are to be registered in
a name other than that of the holder of such Restricted Note, then the Person in
whose name such shares of Series D Preferred Stock are to be registered must
deliver to the Trustee a certificate reasonably satisfactory to the Company and
signed by such Person as to compliance with the restrictions on transfer
contained in such restrictive legends.
31
Section 5.06 Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustment from time
to time as follows:
(a) In case the Company shall (1) pay a dividend in shares of
Series D Preferred Stock to all holders of Series D Preferred Stock, (2) make a
distribution in shares of Series D Preferred Stock to holders of Series D
Preferred Stock, (3) subdivide its outstanding shares of Series D Preferred
Stock into a greater number of shares of Series D Preferred Stock or (4) combine
its outstanding shares of Series D Preferred Stock into a smaller number of
shares of Series D Preferred Stock, the Conversion Price in effect immediately
prior to such action shall be adjusted so that the holder of any Note thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Series D Preferred Stock which he would have owned immediately following such
action had such Notes been converted immediately prior thereto. Any adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision or
combination.
(b) In case the Company shall issue Series D Equivalents to
all or substantially all holders of Series D Preferred Stock or to any other
Person (other than the Holders) entitling such Person or Persons to subscribe
for, purchase or otherwise acquire shares of Series D Preferred Stock (or
securities in any manner representing the right to acquire Series D Preferred
Stock) at a price per share that is less than the then Current Market Price per
share of Series D Preferred Stock (as determined in accordance with subsection
(f) below) at the record date for the determination of shareholders entitled to
receive such Series D Equivalents on the date of issuance thereof or, with
respect to issuances to Persons other than shareholders, on the issue date, as
applicable, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date or issue date,
as applicable, by a fraction of which the numerator shall be the number of
shares of Series D Preferred Stock outstanding on such record date or issue
date, as applicable, plus the number of shares which the aggregate offering
price of the total number of shares of Series D Preferred Stock so offered (or
the aggregate conversion price of the convertible securities so offered) would
purchase at such Current Market Price (as defined in subsection (f) below), and
of which the denominator shall be the number of shares of Series D Preferred
Stock outstanding on such record date or issue date, as applicable, plus the
number of additional shares of Series D Preferred Stock offered (or into which
the convertible securities so offered are convertible). Such adjustment shall be
made successively whenever any Series D Equivalents are issued, and shall become
effective immediately after such record date or such issue date, as applicable.
If at the end of the period during which such Series D Equivalents are
exercisable not all such Series D Equivalents shall have been exercised, the
adjusted Conversion Price shall be readjusted to what it would have been based
upon the number of additional shares of Series D Preferred Stock actually issued
(or the number of shares of Series D Preferred Stock issuable upon conversion of
convertible securities actually issued).
32
(c) In case the Company shall distribute to all or
substantially all holders of Series D Preferred Stock any shares of capital
stock of the Company other than Series D Preferred Stock, evidences of
indebtedness or other non-cash assets (including securities of any Person other
than the Company), or shall distribute to all or substantially all holders of
Series D Preferred Stock rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in subsection (b) above), then in
each such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution by a fraction of which the
numerator shall be the Current Market Price per share (as defined in subsection
(f) below) of the Series D Preferred Stock on the record date mentioned below
less the fair market value on such record date (as agreed to by the Company and
the Majority Holders (or, if not so agreed, as determined in a manner similar to
that used to determine Current Market Price as provided in the last sentence of
subsection (f) below)) of the portion of the capital stock or assets or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Series D Preferred Stock (determined on the basis of
the number of shares of Series D Preferred Stock outstanding on the record
date), and of which the denominator shall be the Current Market Price per share
(determined as provided in subsection (f) below) of the Series D Preferred Stock
on such record date. Such adjustment shall become effective immediately after
the record date for the determination of shareholders entitled to receive such
distribution.
Notwithstanding the foregoing, in the event that the Company
shall distribute rights or warrants (other than those referred to in subsection
(b) above) ("RIGHTS") pro rata to holders of Series D Preferred Stock, the
Company may, at its option, in lieu of making any adjustment pursuant to this
Section 5.06, make proper provision so that each Holder who converts her/ his/
its Note (or any portion thereof with Accreted Value with an Original Issue
Price of $100 or integral multiples thereof) after the record date for such
distribution and prior to the expiration or redemption of the Rights shall be
entitled to receive upon such conversion, in addition to the shares of
Conversion Stock issuable upon such conversion, a number of Rights to be
determined as follows: (i) if such conversion occurs on or prior to the date for
the distribution to the holders of Rights of separate certificates evidencing
such Rights (the "DISTRIBUTION DATE"), the same number of Rights to which a
holder of a number of shares of Series D Preferred Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in accordance with
the terms and provisions of and applicable to the Rights and (ii) if such
conversion occurs after the Distribution Date, the same number of Rights to
which a holder of the number of shares of Series D Preferred Stock into which
the Accreted Value of the Note so converted was convertible immediately prior to
the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(d) In case the Company shall, by dividend or otherwise, at
any time distribute to all holders of Common Stock and, if any shares thereof
are outstanding, Series D Preferred Stock cash (including any distributions of
cash out of current or retained earnings of the Company) in an aggregate amount
33
that, together with the sum of (x) the aggregate amount of any other
distributions to all holders of Common Stock and, if any shares thereof are
outstanding, Series D Preferred Stock made in cash plus (y) all Excess Payments
in respect of Common Stock and, if any shares thereof are outstanding, Series D
Preferred Stock, in each case made within the 12 months preceding the date fixed
for determining the stockholders entitled to such distribution (the
"DISTRIBUTION RECORD DATE") and in respect of which no Conversion Price
adjustment pursuant to paragraphs (c) or (e) of this Section 5.06 or this
subsection (d) has been made, exceeds five percent (5%) of the product of the
Current Market Price per share (determined as provided in subsection (f) below)
of the Common Stock on the Distribution Record Date times the sum of (i) the
number of shares of Common Stock and (ii) if any shares of Series D Preferred
Stock are outstanding, the number of Common Stock equivalents represented by
such shares of Series D Preferred Stock, in each case outstanding on the
Distribution Record Date (excluding shares held in the treasury of the Company),
the Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying such Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
paragraph (d) by a fraction of which the numerator shall be the Current Market
Price per share (determined as provided in subsection (f) below) of the Common
Stock on the Distribution Record Date less the amount of such cash and other
consideration (including any Excess Payments) so distributed applicable to one
share (based on the pro rata portion of the aggregate amount of such cash and
other consideration (including any Excess Payments) paid in respect of the
Common Stock, divided by the shares of Common Stock outstanding on the
Distribution Record Date) of Common Stock and the denominator shall be such
Current Market Price per share (determined as provided in subsection (f) below)
of the Common Stock on the Distribution Record Date, such reduction to become
effective immediately prior to the opening of business on the day following the
Distribution Record Date.
(e) In case a tender offer or other negotiated transaction
made by the Company or any Subsidiary for all or any portion of the Common Stock
and, if any shares thereof are outstanding, the Series D Preferred Stock shall
be consummated, if an Excess Payment is made in respect of such tender offer or
other negotiated transaction and the amount of such Excess Payment, together
with the sum of (x) the aggregate amount of all Excess Payments in respect of
Common Stock and, if any shares thereof are outstanding, Series D Preferred
Stock plus (y) the aggregate amount of all distributions to all holders of the
Common Stock and, if any shares thereof are outstanding, Series D Preferred
Stock made in cash (specifically including distributions of cash out of retained
earnings), in each case made within the 12 months preceding the date of payment
of such current negotiated transaction consideration or expiration of such
current tender offer, as the case may be (the "REPURCHASE DATE"), and as to
which no adjustment pursuant to paragraph (c) or paragraph (d) of this Section
5.06 or this paragraph (e) has been made, exceeds five percent (5%) of the
product of the Current Market Price per share (determined as provided in
subsection (f) below) of the Common Stock on the Repurchase Date times the sum
of (i) the number of shares of Common Stock and (ii) if any shares of Series D
Preferred Stock are outstanding, the number of Common Stock equivalents
represented by such shares of Series D Preferred Stock, in each case outstanding
34
(including any tendered shares but excluding any shares held in the treasury of
the Company) on the Repurchase Date, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying such Conversion
Price in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this paragraph (e) by a fraction of which the
numerator shall be the Current Market Price per share (determined as provided in
subsection (f) below) of the Common Stock on the Repurchase Date less the amount
of such Excess Payments and such cash distributions, if any, applicable to one
share (based on the pro rata portion of the aggregate amount of such Excess
Payments and such cash distributions paid in respect of the Common Stock,
divided by the shares of Common Stock outstanding on the Repurchase Date) of
Common Stock and the denominator shall be such Current Market Price per share
(determined as provided in subsection (f) below) of the Common Stock on the
Repurchase Date, such reduction to become effective immediately prior to the
opening of business on the day following the Repurchase Date.
(f) For the purpose of any computation under subsections (b),
(c), (d) and (e) of this Section 5.06, the current market price (the "CURRENT
MARKET PRICE") per share of Common Stock or Series D Preferred Stock (the
"APPLICABLE STOCK") on any date shall be deemed to be equal to the average of
the daily closing prices of the Applicable Stock on the NYSE or, if not then
listed or traded on the NYSE, such other national securities exchange or the
NASDAQ National Market if the Applicable Stock is then listed or traded thereon,
for the 10 trading days immediately prior to the record date or date of issuance
with respect to distributions, issuances or other events requiring such
computation under subsection (b), (c), (d) or (e) above; provided that in the
case of an underwritten public offering of Series D Equivalents which are
currently traded, the Current Market Price shall be the closing price of the
Series D Preferred Stock on the issuance date, less an allowance for a customary
discount to the current market trading price which is reasonably required to
effect such offering. The closing price for each day shall be the closing price
on the NYSE or the last reported sales price or, if the shares of Applicable
Stock are not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which the shares of the Applicable Stock are
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, the closing sales price of the Applicable Stock as
quoted on the NASDAQ National Market. Notwithstanding the provisions of this
subsection (f), if (i) the Applicable Stock is listed or traded on the NYSE or
other national securities exchange or quoted on the NASDAQ National Market, but
either (A) the prices described in this subsection (f) are not available or (B)
the Majority Holders determine that such prices do not adequately reflect the
fair value of the Applicable Stock due to limited float or trading volume, or
(ii) the Applicable Stock is not listed on the NYSE or other national securities
exchange or quoted on the NASDAQ National Market, the Current Market Price shall
be the fair value of the Applicable Stock as agreed by the Company and the
Majority Holders or if the Company and Majority Holders are unable to agree, the
fair value of the Applicable Stock as determined by a nationally recognized
investment bank selected jointly by the Company and the Majority Holders (or if
they are unable to agree on such investment bank, as determined by a nationally
recognized investment bank selected by lot by the Board of Directors from a
total of four such investment banks (two of which shall be selected by the
Company and two of which shall be selected by the Majority Holders)).
35
(g) In any case in which this Section 5.06 shall require that
an adjustment be made following a record date the Company may elect to defer
(but only until five Business Days following the mailing by the Company to the
holders of the notice of adjustment described in Section 5.10 below) issuing to
the Holder of a Note converted after such record date the Conversion Shares and
other capital stock of the Company issuable upon such conversion over and above
the Conversion Shares and other capital stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to adjustment; and,
in lieu of the shares the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such shares.
(h) The shares of Series D Preferred Stock shall be subject to
the antidilution adjustments set forth in their certificate of designation from
the date hereof, regardless of whether there are any shares of Series D
Preferred Stock outstanding.
(i) The fees and expenses of any investment bank retained to
make any determination under this Indenture shall be paid by the Company.
Section 5.07 No Adjustment.
-------------
No adjustment in the Conversion Price shall be required unless
the adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; provided, however, that any adjustments which
by reason of this Section 5.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article V shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in
Section 5.06 above if all Holders are entitled to participate in the transaction
on a basis and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Series D
Preferred Stock participate in the transaction. The Company shall give 30 days
prior notice to any transfer agent and to the Holders of any such determination.
No adjustment need be made for a change in the par value or a
change to no par value of the Series D Preferred Stock.
To the extent that the Notes become convertible into the right
to receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash.
Section 5.08 Other Adjustments.
-----------------
If any distribution in respect of which an adjustment to the
Conversion Price is required to be made as of the record date therefor is not
thereafter made or paid by the Company for any reason, the Conversion Price
shall be readjusted to the Conversion Price which would then be in effect if
such record date had not been fixed or such effective date had not occurred.
36
Section 5.09 Adjustments for Tax Purposes.
----------------------------
The Company may make such reductions in the Conversion Price,
in addition to those required by Section 5.06 hereof, as it determines to be
advisable in order that any stock dividend, subdivision of shares, distribution
or rights to purchase stock or securities or distribution of securities
convertible into or exchangeable for stock made by the Company to its
stockholders will not be taxable to the recipients thereof.
Section 5.10 Notice of Adjustment.
--------------------
Whenever the Conversion Price is adjusted, the Company shall
promptly mail to Holders at the addresses appearing on the Registrar's books a
notice of the adjustment and file with the Trustee an Officers' Certificate
briefly stating the facts requiring the adjustment and the manner of computing
it. The certificate shall be conclusive evidence of the correctness of such
adjustment.
Section 5.11 Notice of Certain Transactions.
------------------------------
In the event that:
(1) the Company takes any action which would require an
adjustment in the Conversion Price;
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 5.12; or
(3) there is a dissolution or liquidation of the Company; a
Holder of a Note may wish to convert such Note into shares of Series D Preferred
Stock prior to the record date for or the effective date of the transaction.
Therefore, the Company shall mail to Holders at the addresses appearing on the
Registrar's books and the Trustee a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least
10 days before such date; however, failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in clause
(1), (2) or (3) of this Section 5.11.
Section 5.12 Effect of Reclassifications, Consolidations, Mergers or Sales
on Conversion Privilege.
If any of the following shall occur, namely: (a) any
reclassification or change of Conversion Shares issuable upon conversion of the
Notes (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination,
or any other change for which an adjustment is provided in Section 5.06 above);
(b) any consolidation or merger to which the Company is a party other than a
merger in which the Company is the continuing corporation and which does not
result in any reclassification of, or change (other than a change in name, or in
par value, or from par value to no par value, or from no par value to par value,
37
or as a result of a subdivision or combination) in, outstanding shares of Series
D Preferred Stock; or (c) any sale or conveyance of all or substantially all of
the assets of the Company as an entirety, then the Company, or such successor or
purchasing corporation, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale or conveyance,
execute and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee providing that the holder of each Note then
outstanding shall have the right to convert such Note into the kind and amount
of shares of stock and other securities and property (including cash) receivable
upon such reclassification, change, consolidation, merger, sale or conveyance by
a holder of the number of shares of Conversion Shares deliverable upon
conversion of such Notes immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments of the Conversion Price which shall be as nearly
equivalent as may be practicable to the adjustments of the Conversion Price
provided for in this Article V. If, in the case of any such consolidation,
merger, sale or conveyance, the stock or other securities and property
(including cash) receivable thereupon by a holder of Series D Preferred Stock
includes shares of stock or other securities and property of a corporation other
than the successor or purchasing corporation, as the case may be, in such
consolidation, merger, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the holders of the Notes as
the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provisions of this Section 5.12 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
In the event the Company shall execute a supplemental
indenture pursuant to this Section 5.12, the Company shall promptly file with
the Trustee an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or securities or property (including cash)
receivable by holders of the Notes upon the conversion of their Notes after any
such reclassification, change, consolidation, merger, sale or conveyance and any
adjustment to be made with respect thereto.
Section 5.13 Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under
this Article IV should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 5.10 hereof. The Trustee makes no representation as to the
validity or value of any securities or assets issued upon conversion of Notes,
and the Trustee shall not be responsible for the Company's failure to comply
with any provisions of this Article V.
The Trustee shall not be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
executed pursuant to Section 5.12, but may accept as conclusive evidence of the
38
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.12 hereof.
ARTICLE VI.
SUBORDINATION
Section 6.01 Agreement to Subordinate.
------------------------
The Company, for itself and its successors, and each Holder of
Notes by accepting a Note agrees, that the Subordinated Obligations are
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full in cash of all Obligations with
respect to Senior Debt of the Company (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt. It is the intention of the
Company and each Holder of Notes that the provisions of this Article VI comply
with the requirements set forth in clause (x) of Section 4.09 of the Senior
Indenture and that the Subordinated Obligations accordingly be subordinated in
right of payment to the Senior Notes to the same extent as the Senior Notes are
subordinated in right of payment to "Senior Debt" (as defined in the Senior
Indenture) of the Company pursuant to Article 10 of the Senior Indenture.
Section 6.02 Liquidation; Dissolution, Bankruptcy.
------------------------------------
Upon any distribution of cash, securities or other property to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities;
(a) holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of such Senior
Debt before Holders of the Notes shall be entitled to receive any payment with
respect to the Notes (except that Holders may receive securities that are
subordinated to at least the same extent as the Notes to (i) Senior Debt of the
Company and (ii) any securities issued in exchange for Senior Debt of the
Company); and
(b) until all Obligations with respect to Senior Debt of the
Company (as provided in subsection (a) above) are paid in full in cash, any
distribution to which Holders of Notes would be entitled but for this Article
shall be made to holders of such Senior Debt (except that Holders may receive
securities that are subordinated to at least the same extent as the Notes to (i)
Senior Debt of the Company and (ii) any securities issued in exchange for Senior
Debt of the Company), as their interests may appear.
39
Section 6.03 Default on Senior Debt; No Stock Collateral.
-------------------------------------------
The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Notes and
may not acquire from the Trustee or any Holder any Notes for cash or property
(other than securities that are subordinated to at least the same extent as the
Notes to (i) Senior Debt of the Company and (ii) any securities issued in
exchange for Senior Debt of the Company) until all principal and other
Obligations with respect to such Senior Debt have been paid in full in cash if:
(1) a default in the payment of the principal of or premium or
interest on Senior Debt of the Company occurs and in continuing; or
(2) a default, other than a payment default, under the
agreement, indenture, or other document governing Designated Senior Debt occurs
and is continuing that permits holders of the Designated Senior Debt as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of such default (a "PAYMENT BLOCKAGE NOTICE") from a Senior Agent. If the
Trustee receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless until at
least 360 days shall have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions
in respect of the Notes and it may acquire them upon:
(A) in the case of a default referred to in Section 6.03(1)
hereof, the date upon which such default is cured or waived, or
(B) in the case of a default referred to in Section 6.03(2)
hereof, the earlier of the date upon which the default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is received,
unless the maturity of such Senior Debt has been accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
The Company agrees that it will not, directly or indirectly,
transfer or pledge or grant any security interests in any Stock Collateral for
any of the Subordinated Obligations, and the Trustee and the Holders agree that
neither the Trustee nor any Holder will demand or accept any such Stock
Collateral, and should any transfer or pledge of or security interest in any
Stock Collateral at any time be made to or received by the Trustee or any such
Holder, such Stock Collateral shall be held for the benefit of the holders of
Senior Debt of the Company and, upon request, delivered and transferred to the
Senior Agent for the benefit of the holders of such Senior Debt.
40
Section 6.04 Acceleration of Notes.
---------------------
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the Company
of the acceleration.
Section 6.05 When Distribution Must Be Paid Over.
-----------------------------------
In the event that the Trustee or any Holder of Notes receives
any payment of any Obligations with respect to the Notes at a time when a
Responsible Officer of the Trustee or such Holder, as applicable, has actual
knowledge that such payment is prohibited by Section 6.03 hereof, such payment
shall be held by the Trustee or such Holder, in trust for the benefit of, and
shall be paid forthwith over and delivered, upon written request, to the holders
of Senior Debt of the Company as their interests may appear under the indenture
or other agreement (if any) pursuant to which such Senior Debt may have been
issued, as their respective interests may appear as set forth in a writing
provided to the Trustee and consented to by all Representatives of the holders
of Senior Debt of the Company, for application to the payment of all Obligations
with respect to such Senior Debt remaining unpaid to the extent necessary to pay
such Obligations in full in accordance with their terms, after giving affect to
any concurrent payment or distribution to or for the holders of such Senior
Debt.
With respect to the holders of Senior Debt of the Company, the
trustee undertakes to perform such obligations on the part of the Trustee as are
specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of the Company, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders of Notes of the Company or any other Person money or assets to
which any holders of such Senior Debt shall be entitled by virtue of this
Article VI, except if such payment is made at a time when a Responsible Officer
has actual knowledge that the terms of this Article VI prohibit such payment.
Section 6.06 Notice.
------
The Company shall promptly notify the Trustee and the Paying
Agent in writing of any facts known to the Company that would cause a payment of
any Obligations with respect to the Notes to violate this Article, but failure
to give such notice shall not affect the subordination of the Notes to the
Senior Debt of the Company as provided in this Article VI.
Section 6.07 Subrogation.
-----------
After all Senior Debt of the Company is paid in full in cash
and until the Notes are paid in full, Holders of Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of such Senior Debt to receive distributions applicable to
41
such Senior Debt to the extent that distributions otherwise payable to the
Holders have been applied to the payment of such Senior Debt. A distribution
made under this Article VI to holders of Senior Debt of the Company that
otherwise would have been made to Holders of Notes is not, as between the
Company and Holders of Notes, a payment by the Company on the Notes.
Section 6.08 Relative Rights.
---------------
This Article VI defines the relative rights of Holders of
Notes and holders of Senior Debt of the Company. Nothing in this Indenture
shall:
(i) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay Accreted
Value of and premium and interest on the Notes in accordance with their terms;
(ii) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders of such
Senior Debt; or
(iii) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default, subject to
the rights of holders of owners of such Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article VI to pay
Accreted Value of or premium or interest on a Note on the due date, the failure
is still a Default or Event of Default.
Section 6.09 Subordination May Not Be Impaired by Company.
--------------------------------------------
(a) No right of any holder of Senior Debt of the Company to
enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or any Holder or the
failure of the Company or any Holder to comply with this Indenture.
(b) Without in any way limiting Section 6.09(a), the holders
of any Senior Debt of the Company may, at any time and from time to time,
without the consent of or notice to any Holders, without incurring any
liabilities to any Holder and without impairing or releasing the subordination
and other benefits provided in this Indenture or the Holders' obligations to the
holders of such Senior Debt, even if any Holder's right of reimbursement or
subrogation or other right or remedy is affected, impaired or extinguished
thereby, but subject to the proviso contained in the first sentence, and to the
second sentence, of the definition of "Senior Debt," do any one or more of the
following: (i) amend, renew, exchange, extend, modify, increase or supplement in
any manner such Senior Debt or any instrument evidencing or guaranteeing or
securing such Senior Debt or any agreement under which such Senior Debt is
outstanding (including, but not limited to, changing the manner, place or terms
of payment or changing or extending the time of payment of, or renewing,
exchanging, amending, increasing, releasing, terminating or altering, (A) the
terms of such Senior Debt, (B) any security for, or any guarantee of, such
Senior Debt, (C) any liability of any obligor on such Senior Debt (including any
42
guarantor) or any liability incurred in respect of such Senior Debt); (ii) sell,
exchange, release, surrender, realize upon, enforce or otherwise deal with in
any manner and in any order any property pledged, mortgaged or otherwise
securing such Senior Debt or any liability of any obligor thereon, to such
holder, or any liability incurred in respect thereof; (iii) settle or compromise
any such Senior Debt or any other liability of any obligor of such Senior Debt
to such holder or any security therefor or any liability incurred in respect
thereof and apply any sums by whomsoever paid and however realized to any
liability (including, without limitation, payment of any Senior Debt) in any
manner or order; and (iv) release, terminate or otherwise cancel, or fail to
take or to record or otherwise perfect, for any reason or for no reason, any
lien or security interest securing such Senior Debt by whomsoever granted,
exercise or delay in or refrain from exercising any right or remedy against any
obligor or any guarantor or any other Person, elect any remedy and otherwise
deal freely with any obligor and any security for such Senior Debt or any
liability of any obligor to the holders of such Senior Debt or any liability
incurred in respect to such Senior Debt.
Section 6.10 Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to
holders of Senior Debt of the Company, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article VI, the Trustee and the Holders of Notes shall be
entitled, to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article VI.
Section 6.11 Rights of Trustee and Paying Agent.
----------------------------------
Neither the Trustee nor any Paying Agent shall at any time be
charged with the knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee or Paying Agent under this Article
VI, unless and until the Trustee or Paying Agent shall have received written
notice thereof from the Company, the Senior Agent, one or more holders of Senior
Debt of the Company or a Representative of any holders of Senior Debt of the
Company; and, prior to the receipt of any such written notice, the Trustee or
Paying Agent shall be entitled to assume conclusively that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of written notice by
a Person representing itself to be a holder of Senior Debt (or a Representative
thereof) to establish that such notice has been given. In the event that the
Trustee or Paying Agent determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article VI, the
Trustee or Paying Agent may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee or Paying Agent as to the amount of
Senior Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
43
rights of such Person under this Article VI, and if such evidence is not
furnished, the Trustee or Paying Agent may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. Only the Company, a Representative or a holder of Senior Debt of the
Company that has no Representative may give the notice. Nothing in this Article
VI shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 9.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 6.12 Authorization to Effect Subordination.
-------------------------------------
Each Holder of Notes by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article VI, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 8.09 hereof at least 30 days before the expiration of the
time to file such claim, a Senior Agent is hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Notes.
Section 6.13 Payment.
-------
For all purposes of this Article VI, a "payment or
distribution on account of Subordinated Obligations" shall include, without
limitation, any direct or indirect payment or distribution on account of the
purchase, prepayment, redemption, retirement, defeasance or acquisition of any
Note, any recovery by the exercise of any right of set-off, any direct or
indirect payment of principal, premium or interest with respect to or in
connection with any mandatory or optional redemption or purchase provisions, any
direct or indirect payment or distribution payable or distributable by reason of
any other Indebtedness or Obligation being subordinated or any Subordinated
Obligations, and any direct or indirect payment or recovery on any claim
relating to or arising out of this Indenture, any Note or the issuance of the
Notes.
Section 6.14 No Claims Against Subsidiaries.
------------------------------
The Company and the Holders acknowledge and agree as follows:
(a) the Notes are an obligation of the Company only, and the Holders have and
will have no claim, right or demand against any Subsidiary of the Company or any
assets or properties of any Subsidiary of the Company on or in respect of the
Notes; (b) the Company is, and is capitalized as, a separate legal entity such
that any claim, right or demand by the Holders with respect to the assets and
properties of any Subsidiary of the Company would be solely as a creditor of a
direct or indirect shareholder of such Subsidiary, and that such arrangement has
been relied upon by and is for the benefit of holders of Senior Debt of the
Company or any such guarantor; (c) the Company's direct and indirect
44
Subsidiaries have no obligation to pay dividends to or to make investments in
the Company, for the purpose of funding payment obligations of the Company to
the Holders or otherwise; and (d) the Bank Credit Agreements and the Senior
Indenture permit Subsidiaries of the Company to pay dividends to or to make
investments in the Company only in limited amounts and under specified
circumstances.
Section 6.15 Amendments.
----------
The provisions of this Article VI shall not be amended or
modified without the written consent of the holders of all Senior Debt of the
Company.
ARTICLE VII.
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 7.01 Company May Consolidate, Etc. Only On Certain Terms.
---------------------------------------------------
The Company shall not, in a single transaction or through a
series of related transactions, consolidate with or merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the properties and assets of the
Company and its Subsidiaries on a consolidated basis to any other Person or
group of affiliated Persons, unless at the time and after giving effect thereto:
(a) either (i) the Company shall be the continuing corporation
or (ii) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition all or substantially all
of the properties and assets of the Company and its Subsidiaries on a
consolidated basis (the "SURVIVING ENTITY") shall be a corporation, partnership,
limited liability company, business trust or other entity duly organized and
validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and such Person expressly assumes, by a
supplemental indenture, executed and delivered to the Trustee, in a form
satisfactory to the Trustee, all the obligations of the Company under the Notes
and this Indenture, and this Indenture shall remain in full force and effect;
(b) immediately before and immediately after giving effect to
such transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and
45
(c) at the time of the transaction, the Company or the
Surviving Entity shall have delivered, or caused to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each to the effect that such
consolidation, merger, transfer, sale, assignment, conveyance, transfer, lease
or other transaction and the supplemental indenture in respect thereof comply
with this Indenture and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Paragraph (b) of this Section 7.01 shall not apply to any
merger of the Company with or into any wholly owned Subsidiary of the Company.
This Section 7.01 shall not apply to the transfer or lease of all or
substantially all of the assets of the Company to any of its wholly owned
Subsidiaries.
Section 7.02 Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company in accordance with Section 7.01, the
successor Person formed by such consolidation or into which the Company is
merged or the successor Person to which such sale, assignment, conveyance,
transfer, lease or disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture and
the Notes, with the same effect as if such successor had been named as the
Company herein or in the Notes. When a successor (other than a successor that is
an Affiliate of the Company) assumes all the Obligations of its predecessor
under this Indenture or the Notes, as the case may be, the predecessor shall be
released from those Obligations; provided that in the case of a transfer of
substantially all of the Company's assets (but not all of the assets), the
predecessor shall not be released from the payment of the aggregate Accreted
Value and any other payments due on the Notes.
ARTICLE VIII.
DEFAULTS AND REMEDIES
Section 8.01 Events of Default.
-----------------
An "EVENT OF DEFAULT" occurs if:
(a) the Company defaults in the payment of the aggregate
Accreted Value of or premium on the Notes when the same becomes due and payable
at maturity, in connection with a Purchase Offer, upon declaration or otherwise
(whether or not such payment is prohibited by the provisions of Article VI
hereof);
(b) the Company defaults for 30 days in the payment when due
of any other amounts payable on any Note (whether or not such payment is
prohibited by the provisions of Article VI hereof);
46
(c) the Company fails to observe or perform for a period of 30
days after notice any covenant or agreement contained in Sections 5.07 and 7.01
hereof (other than, in the case of Section 5.07, a failure to purchase Notes in
connection with a Purchase Offer) hereof;
(d) the Company fails to observe or perform any other covenant
or agreement contained in this Indenture or the Notes, required by it to be
performed and the Default continues for a period of 60 days after notice from
the Trustee to the Company or from the Holders of 25% in aggregate Accreted
Value of the then outstanding Notes to the Company and the Trustee stating that
such notice is a "Notice of Default";
(e) a continuing default occurs under any mortgage, indenture
or instrument under which may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Subsidiaries), other than any such Indebtedness that constitutes Non-Recourse
Real Estate Debt or Indebtedness of an Unrestricted Subsidiary, whether such
Indebtedness or guarantee now exists or is created after the date hereof, which
default:
(i) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such (a "PAYMENT DEFAULT"); or
(ii) results in the acceleration of such Indebtedness prior to
its express maturity;
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates $5
million or more;
(f) the Company or any of its Subsidiaries, fails to pay final
judgments aggregating in excess of $5 million and either (i) any creditor
commences enforcement proceedings upon any such judgment or (ii) such judgments
are not paid, discharged or stayed within 60 days after their entry;
(g) the Company or any of its Designated Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case;
(ii) consents to the entry of an order for relief against it
in an involuntary case;
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
47
(iv) makes a general assignment for the benefit of its
creditors; or
(v) admits in writing its inability generally to pay its debts
as they become due; and
(h) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its Designated
Subsidiaries in an involuntary case;
(ii) appoints a Custodian of the Company or any of its
Designated Subsidiaries or for all or substantially all of the property of the
Company or any of its Designated Subsidiaries;
(iii) orders the liquidation of the Company or any of its
Designated Subsidiaries and the order or decree remains unstayed and in effect
for 60 consecutive days.
The term "BANKRUPTCY LAW" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors or the
protection of creditors. The term "CUSTODIAN" means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.
At any time after Oak Hill ceases to be Trustee, an Event of
Default shall not be deemed to have occurred under clause (e) or (f) of this
Section 8.01 until the Trustee shall have received written notice of such
Default from the Company or any of the Holders or unless a Responsible Officer
shall have knowledge of such Event of Default.
Section 8.02 Acceleration.
------------
If an Event of Default (other than an Event of Default
specified in clauses (g) and (h) of Section 8.01 hereof) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in aggregate Accreted Value of the then outstanding Notes by notice to the
Company and the Trustee, may declare all the Notes to be due and payable. Upon
such declaration, the aggregate Accreted Value plus accrued and unpaid interest
thereon, and any other amounts payable on the Notes shall be due and payable
immediately. If an Event of Default specified in clause (g) or (h) of Section
8.01 hereof occurs, such amounts shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
If the Notes have been declared due and payable as a result of
the acceleration of Indebtedness prior to its express maturity pursuant to
Section 8.01(e)(ii), such declaration shall be automatically rescinded if the
acceleration of such indebtedness has been rescinded or annulled within 30 days
48
after such acceleration in accordance with the mortgage, indenture or instrument
under which it was issued and the conditions set forth in clauses (i) and (ii)
in the next paragraph are satisfied.
Except as otherwise provided in the immediately preceding
paragraph, the Majority Holders by notice to the Trustee may rescind an
acceleration and its consequences (i) if the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction and (ii) if all
existing Events of Default have been cured or waived except nonpayment of
Accreted Value or interest on the Notes that has become due solely because of
the acceleration of the Notes.
Section 8.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the aggregate Accreted Value plus
accrued and unpaid interest thereon and any other amounts payable on the Notes,
if any, or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 8.04 Waiver of Past Defaults.
-----------------------
The Majority Holders by notice to the Trustee may on behalf of
all of the Holders of the Notes waive an existing Default or Event of Default
and its consequences except a continuing Default or Event of Default in the
payment of the aggregate Accreted Value, accrued and unpaid interest thereon,
and any other amount payable on any Note, if any. When a Default or Event of
Default is waived, it is cured and ceases; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
Section 8.05 Control by Majority.
-------------------
The Majority Holders may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, is unduly prejudicial
to the rights of other Holders, or would involve the Trustee in personal
liability.
Section 8.06 Limitation on Suits.
-------------------
A Holder may pursue a remedy with respect to this Indenture or
the Notes only if:
49
(a) the Holder gives to the Trustee notice of a continuing
Event of Default;
(b) the Holders of at least 25% in aggregate Accreted Value of
the then outstanding Notes make a request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Majority Holders do not give
the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.
Section 8.07 Rights of Holders to Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of the Accreted Value, accrued
and unpaid interest thereon, and other amounts payable on the Note, if any, on
or after the respective due dates expressed in the Note, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder made pursuant to this
Section 8.07.
Section 8.08 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 8.01(a) or (b)
hereof occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole amount
of the aggregate Accreted Value, accrued and unpaid interest thereon, remaining
unpaid on the Notes and interest on overdue Accreted Value and such further
amounts as shall be sufficient to cover the costs and, to the extent lawful,
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 8.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property. Nothing contained herein shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
50
Section 8.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 9.07
hereof;
Second: to the holders of Senior Debt to the extent required
by Article VI;
Third: to Holders for amounts due and unpaid on the Notes for
the Accreted Value, accrued and unpaid interest thereon, and other amounts
payable under the Notes in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for the aggregate Accreted
Value, accrued and unpaid interest thereon, and other amounts, if any,
respectively; and
Fourth: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders made pursuant to this Section 8.10.
Section 8.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 8.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 8.07 hereof, or a suit by Holders of more than 10% in
aggregate Accreted Value of the then outstanding Notes.
ARTICLE IX.
TRUSTEE
Section 9.01 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default: (i)
the Trustee need perform only those duties that are specifically set forth in
this Indenture and no others and (ii) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
51
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 and to confirm
the correctness of all mathematical computations.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that: (i) this subsection does not limit the effect of
subsection (b) of this Section 9.01; (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 8.05 hereof.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 9.02 Rights of Trustee.
-----------------
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee shall not be charged with knowledge of any
Event of Default under subsection (c), (d), (e) or (f) (and subsection (a) or
(b) if the Trustee does not act as Paying Agent) of Section 8.01 unless either
(i) a Responsible Officer shall have actual knowledge thereof, or (ii) the
52
Trustee shall have received notice thereof in accordance with Section 12.02
hereof from the Company or any Holder.
Section 9.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, subject to the exceptions set forth
therein, the Trustee is subject to Sections 9.10 and 9.11 hereof.
Section 9.04 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in the Indenture or any statement in any Note
other than its authentication or for compliance by the Company with the
Registration Rights Agreement.
Section 9.05 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Holders.
Section 9.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after the reporting date stated in Section
12.10, the Trustee shall mail to Holders a brief report dated as of such
reporting date that complies with TIA Section 313(a) if and to the extent
required by such Section 313(a). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c). A copy of each report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange on which the Notes are
listed. The Company shall notify the Trustee when the Notes are listed on any
stock exchange. This Section 9.06 shall not apply so long as Oak Hill is the
Trustee.
Section 9.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time
reasonable compensation for its services hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such disbursements
53
and expenses may include the reasonable disbursements, compensation and expenses
of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or
liability incurred by it except as set forth in the next paragraph. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
The Company shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees, disbursements and expenses of such counsel. The Company need
not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee through negligence or bad
faith.
To secure the Company's payment obligations in this Section
9.07, the Trustee shall have a lien prior to the Notes on all money or property
held or collected by the Trustee, except money or property held in trust to pay
Accreted Value and interest on particular Notes.
Without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services after
an Event of Default specified in Section 8.01(g) or (h) hereof occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
All amounts owing to the Trustee under this Section 9.07 shall
be payable by the Company in United States dollars. This Section 9.07 shall not
apply so long as Oak Hill is the Trustee.
Section 9.08 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 9.08.
The Trustee may resign by so notifying the Company. The
Majority Holders may remove the Trustee by so notifying the Trustee and the
Company. If Oak Hill is not the Trustee, the Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA Section 310(b);
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
54
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Majority Holders may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% of the aggregate Accreted Value of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 9.10 hereof,
unless the Trustee's duty to resign is stayed as provided in TIA Section 310(b),
any Holder who has been a bona fide Holder of a Note for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee; provided, that the foregoing shall not
apply if the Trustee is Oak Hill.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 9.07 hereof. Notwithstanding replacement of the Trustee pursuant to
this Section 9.08 hereof, the Company's obligations under Section 9.07 hereof
shall continue for the benefit of the retiring trustee with respect to expenses
and liabilities incurred by it prior to such replacement.
Section 9.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 9.10 Eligibility; Disqualification.
-----------------------------
After the date on which Oak Hill shall no longer be the
Trustee, (i) this Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1) and (5), (ii) the Trustee shall always
have a combined capital and surplus as stated in Section 12.10 hereof and (iii)
the Trustee shall be subject to TIA Section 310(b).
Section 9.11 Preferential Collection of Claims Against Company.
-------------------------------------------------
After the date on which Oak Hill shall no longer be the
Trustee, (i) the Trustee shall be subject to TIA Section 311(a), excluding any
55
creditor relationship listed in TIA Section 311(b), (ii) a Trustee (other than
Oak Hill) who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated therein.
ARTICLE X.
DISCHARGE OF INDENTURE
Section 10.01 Termination of Company's Obligations.
------------------------------------
This Indenture shall cease to be of further effect (except
that the Company's obligations under Sections 9.07 and 10.02 hereof shall
survive) when all outstanding Notes theretofore authenticated and issued have
been delivered to the Trustee for cancellation and the Company has paid all sums
payable hereunder.
Section 10.02 Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of Accreted Value or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided, however, that the Company shall have first
caused notice of such payment to the Company to be mailed to each Holder
entitled thereto no less than 30 days prior to such payment. After payment to
the Company, the Trustee and the Paying Agent shall have no further liability
with respect to such money and Holders entitled to the money must look to the
Company for payment as general creditors unless any applicable abandoned
property law designates another Person.
ARTICLE XI.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 11.01 Without Consent of Holders.
--------------------------
The Company and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Sections 6.12 and 7.01 hereof;
(c) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
56
(d) to make any change that provides additional rights or
benefits to the Holders of the Notes;
(e) to make any change that does not adversely affect the
interests hereunder of any Holder; or
(f) to qualify the Indenture under the TIA or to comply with
the requirements of the SEC in order to maintain the qualification of the
Indenture under the TIA.
Section 11.02 With Consent of Holders.
-----------------------
Subject to Section 8.07 hereof, the Company and the Trustee
may amend or supplement this Indenture or the Notes with the written consent of
the Majority Holders. Subject to Sections 8.04 and 8.07 hereof, the Majority
Holders may also waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment, supplement or waiver under this Section
11.02 may not:
(a) reduce the percentage in aggregate Accreted Value of the
then outstanding Notes the consent of whose Holders is required for any
amendment, supplement to this Indenture or waiver of any provision of this
Indenture;
(b) change the Stated Maturity of the Accreted Value of any
Note or alter the Accreted Value thereof or any amounts payable thereon under
this Indenture, if any;
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a default in the payment of the Accreted Value or
any other amounts payable on any Note, if any, or impair the right to institute
suit for the enforcement of any such payment on or after the Maturity thereof,
except a rescission of acceleration of the Notes by the Majority Holders and a
waiver of the payment default that resulted from such acceleration;
(e) make any Note payable in money other than that stated in
the Note;
(f) make any change in Sections 8.04 or 8.07 hereof;
(g) impair the right to convert the Notes into Series D
Preferred Stock;
(h) modify Article V or VI in a manner adverse to the Holders
of Notes;
57
(i) except as provided by Article VII, consent to the
assignment or transfer by the Company of any of its rights and obligations under
the Indenture; and
(j) make any change in the foregoing amendment and waiver
provisions of this Article XI.
To secure a consent of the Holders under this Section 11.02,
it shall not be necessary for the Holders to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
11.02 becomes effective, the Company shall mail to Holders a notice briefly
describing the amendment or waiver.
Section 11.03 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Notes shall be set
forth in a supplemental indenture that complies with the TIA as then in effect.
Section 11.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder or subsequent Holder may revoke the
consent as to his Note or portion of a Note if the Trustee receives the notice
of revocation before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite Accreted Value of Notes
have consented to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consents from Holders of the
Accreted Value of Notes required hereunder for such amendment or waiver to be
effective shall have also been given and not revoked within such 90-day period.
After an amendment, supplement or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (a) through (j) of
Section 11.02 hereof. In such case, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder that evidences the
same debt as the consenting Holder's Note.
58
Section 11.05 Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an
amendment or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Failure to make such notation on a Note or to issue a new Note
as aforesaid shall not affect the validity and effect of such amendment or
waiver.
Section 11.06 Trustee Protected.
-----------------
The Trustee shall sign all supplemental indentures, except
that the Trustee may, but need not, sign any supplemental indenture that
adversely affects its rights.
ARTICLE XII.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
----------------------------
This Indenture is subject to the provisions of the TIA that
are required to be incorporated into this Indenture (or, prior to the
registration of the Notes pursuant to the Registration Rights Agreement, would
be required to be incorporated into this Indenture if it were qualified under
the TIA), and shall, to the extent applicable, be governed by such provisions.
If any provision of this Indenture limits, qualifies, or conflicts with another
provision which is required (or would be so required) to be incorporated in this
Indenture by the TIA, the incorporated provision shall control.
Section 12.02 Notices.
-------
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in Person or mailed by first
class mail to the other's address stated in Section 12.10 hereof. The Company or
the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
59
All other notices or communications shall be in writing.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by the Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
Section 12.03 Communication by Holders with other Holders.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c). This Section 12.03 shall not apply so long as
Oak Hill is the Trustee.
Section 12.04 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 4.03) shall include:
(a) a statement that the Person signing such certificate or
rendering such opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, such
Person has made such examination or investigation as is necessary to enable such
Person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
60
Section 12.06 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by, or a
meeting of, Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07 Legal Holidays.
--------------
A "LEGAL HOLIDAY" is a Saturday, a Sunday or a day on which
banking institutions in the State of New York are not required to be open. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period. If any other operative date
for purposes of this Indenture shall occur on a Legal Holiday then for all
purposes the next succeeding day that is not a Legal Holiday shall be such
operative date.
Section 12.08 No Recourse Against Others.
--------------------------
A director, officer, employee, incorporator or shareholder of
the Company, as such, shall not have any liability for any Obligations of the
Company under the Notes or this Indenture or for any claim based on, in respect
of or by reason of such Obligations or their creation. Each Holder by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Notes.
Section 12.09 Counterparts and Facsimile Signatures.
-------------------------------------
This Indenture may be executed by manual or facsimile
signature in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 12.10 Variable Provisions.
-------------------
"OFFICER" means the Chairman of the Board, the President, any
Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
The first certificate pursuant to Section 4.03 hereof shall be
for the fiscal year ended on December 31, 2001.
The reporting date for Section 9.06 hereof is March 15 of each
year after Oak Hill ceases to be the Trustee. The first reporting date is March
15, 2002.
Except for Oak Hill, the Trustee shall always have a combined
capital and surplus of at least $100,000,000 as set forth in its most recent
published annual report of condition.
61
The Company's address is:
American Skiing Company
P. O. Box 450
Sunday River Access Road
Bethel, Maine 04217
Telecopy: (207) 791-2607
Attention: Foster Stewart, Esq.
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Telecopy: (312) 861-2000
Attention: Gary Silverman, Esq.
The Trustee's address is:
Oak Hill Capital Partners, L.P.
201 Main Street
Fort Worth, Texas 76102
Telecopy: (817) 339-7350
Attention: Ray Pinson
with a copy to:
Oak Hill Capital Management, Inc.
65 East 55th Street, 32nd Floor
New York, New York 10022
Attention: Brad E. Bernstein
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Telecopy: (212) 373-2377
Attention: John C. Kennedy, Esq.
Each party may change its address by written notice to the
other party.
Section 12.11 Governing Law, Submission to Jurisdiction.
-----------------------------------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
62
Section 12.12 No Adverse Interpretation of other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or an Affiliate. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
Section 12.13 Successors.
----------
All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
Section 12.14 Severability.
------------
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 12.15 Table of Contents, Headings, etc.
--------------------------------
The Table of Contents, Cross-Reference Table, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 12.16 Enforceability of the Company's Rights.
--------------------------------------
Any demand, claim, lawsuit, action or proceeding for
enforcement of this Agreement against the Purchasers or their Affiliates may be
initiated either (i) upon the approval of a majority of the Directors of the
Company who are not nominated or appointed by the Purchasers or their Affiliates
(the "Non-Purchaser Directors"), or (ii) a special committee of the Independent
Directors (as such term is defined in the Stockholders' Agreement); provided
that no such action may be taken by the Non-Purchaser Directors under (i) above
unless one or more Non-Purchaser Directors shall have requested that a meeting
of the full Board of Directors be held to consider enforcement against the
Purchasers or their Affiliates and stating the nature of the enforcement action
sought to be taken, and the full Board of Directors has not, within 15 days
following the date on which such request is first made either (A) taken or
authorized the Company to take the requested action or (B) delegated authority
with respect to such matter to a special committee of the Independent Directors
(as such term is defined in the Stockholders' Agreement).
63
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
AMERICAN SKIING COMPANY, as Company
By: /s/ Foster Stewart
------------------------------------
Name: Foster Stewart
Title: Secretary
OAK HILL CAPITAL PARTNERS, L.P., as Trustee
By: OHCP GenPar, L.P., its general partner
By: OHCP MGP, LLC, its general partner
By: /s/ John R. Monsky
-----------------------------------------
Name: John R. Monsky
Title: Vice President
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Notes Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Notes Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE SECURITY EVIDENCED HEREBY AND ANY SHARES OF SERIES D PREFERRED STOCK ISSUED
UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
AND ANY SHARES OF SERIES D PREFERRED STOCK ISSUED UPON CONVERSION HEREOF MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, IF AVAILABLE, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT,
(d) TO AN ACCREDITED INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES
ACT)THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THE NOTES (IN SUBSTANTIALLY FORM OF EXHIBIT E OF THE INDENTURE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN ACCRETED VALUE WITH AN ORIGINAL ISSUE PRICE (AS
DEFINED IN THE TERMS OF NOTES) LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR ANY SUBSIDIARY THEREOF OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE PURCHASER WILL, AND EACH SUBSEQUENT
PURCHASER IS REQUIRED TO, NOTIFY ANY SUBSEQUENT PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OR ANY SERIES D PREFERRED STOCK ISSUABLE UPON
CONVERSION HEREOF OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
No. ________
$ Original Issue Price
or such other amount as is indicated on Schedule A hereof*
CUSIP No. [ ]/CINS No. [ ]
11.3025% CONVERTIBLE SUBORDINATED NOTE DUE 2007
American Skiing Company, a Delaware corporation (the
"COMPANY"), promises to pay to or registered assigns, the Accreted Value of this
Note (as defined on the reverse hereof) on August 28, 2007, subject to the
further provisions of this Note set forth on the reverse hereof which further
provisions shall for all purposes have the same effect as if set forth at this
place.
Interest Accrual Dates: Each August 31, commencing August 31, 2002
IN WITNESS WHEREOF, American Skiing Company has caused this
Note to be signed manually or by facsimile by one of its duly authorized
officers.
Dated:
----------------------------
AMERICAN SKIING COMPANY
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 11.3025%
Convertible Subordinated
Notes due 2007 described in
the within-mentioned
Indenture.
, as Trustee
----------------------------
By:
-------------------------------------
Authorized Officer
* Applicable to Global Notes Only
[FORM OF REVERSE OF NOTE]
AMERICAN SKIING COMPANY
11.3025% Convertible Subordinated Note due 2007
1. Interest. American Skiing Company, a Delaware corporation
(the "COMPANY," which term includes any successor Person under the Indenture
hereinafter referred to), is the issuer of 11.3025% Convertible Subordinated
Notes due 2007 (the "NOTES"). The Company promises to pay the Accreted Value of
this Note on August 28, 2007. The Notes will accrue interest, compounded
annually, as provided in Section 2 of the Indenture on the Accreted Value of the
Note, at a rate of 11.3025% per annum. Interest on the Notes will accrue from
August 31, 2001 and will be computed on the basis of a 360-day year of twelve
30-day months. The "ACCRETED VALUE" of this Note is defined as the sum of (i)
the Original Issue Price of this Note, and (ii) any interest or premium in
respect to this Note added to each Accreted Value pursuant to Section 2.02 of
the Indenture and the terms of this Note.
2. Method of Payment. Interest on the Notes shall be payable
through the addition of such interest to the Accreted Value in effect
immediately prior to the applicable Interest Accrual Date. The Company shall
notify the Trustee in writing of the aggregate amount of such interest not less
than five (5) nor more than 45 days prior to the Interest Accrual Date on which
accretion will occur. On the applicable Interest Accrual Date, the Accreted
Value shall increase by the amount of such interest. On maturity, Holders must
surrender Notes to a Paying Agent to collect the Accreted Value on such Notes.
The Company will pay the Accreted Value, accrued and unpaid interest thereon,
and premium, if any, in money of the United States that at the time of payment
is legal tender for payment of public and private debts. If a Holder so
requests, Accreted Value, accrued and unpaid interest thereon, and premium, if
any, may be paid by wire transfer of immediately available funds to an account
previously specified in writing by such Holder to the Company and the Trustee.
3. Paying Agent, Conversion Agent and Registrar. The Trustee
will act as Paying Agent, Conversion Agent and Registrar in the City of New
York, New York. The Company may change any Paying Agent, Conversion Agent or
Registrar without prior notice. The Company or any of its Affiliates may act in
any such capacity.
4. Indenture. The Company issued the Notes under the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by the Trust Indenture Act of 1939 (15 U.S.
Code (Sections) 77aaa-77bbbb) as in effect on the date of the Indenture. The
Notes are subject to, and qualified by, all such terms, certain of which are
summarized hereon, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are unsecured general obligations of the
Company limited (except as otherwise provided in the Indenture) to $12,500,000
in aggregate Original Issue Price and subordinated in right of payment to all
existing and future Senior Debt of the Company.
5. Optional Redemption. The Notes are not redeemable at the
Company's option prior to July 31, 2004. Thereafter, the Notes will be subject
to redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of Accreted Value thereof) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date, if redeemed during the
twelve-month period beginning on July 31 of the years indicated below:
Year Percentage
2004........................................... 119.00%
2005........................................... 115.33%
2006........................................... 111.66%
2007........................................... 100.00%
---------------
Any such optional redemption shall be initiated only upon (i)
the approval of a majority of the Board of Directors, provided that such
approval includes the approval of a majority of the directors of the Company who
are not designated or appointed by the Purchasers or their Affiliates (so long
as the Purchasers or their Affiliates are Holders) or by any other Person (or
group of Persons) which is a Holder and has the ability to designate or appoint
a majority of the Board of Directors or (ii) the approval of a special committee
of the Independent Directors (as such terms is defined in the Stockholders'
Agreement).
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of the Notes to be
redeemed at his address of record. The Company may redeem Notes in whole or in
part in denominations of Accreted Value with $100 of Original Issue Price or
integral multiples thereof. In the event of a redemption of less than all of the
Notes, the Notes will be chosen for redemption by the Trustee in accordance with
the Indenture. On and after the redemption date, interest ceases to accrue on
the Notes or portions of them called for redemption.
6. Mandatory Redemption. The Company will not be required to
make mandatory redemption or repurchase payments with respect to the Notes.
There are no sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holder. If there is a Change of
Control, the Company shall be required to offer to purchase all outstanding
Notes on the Purchase Date at the purchase price equal to the prices (expressed
as percentages of the Accreted Value thereof on a Purchase Date occurring within
the 12-month period beginning on July 31 of the years indicated below, other
than 2001, which shall be the period commencing on August 31, 2001 and ending on
July 30, 2002) set forth below, plus accrued and unpaid interest thereon to the
Purchase Date:
Year Percentage
2001........................................... 123.00%
2002........................................... 119.10%
2003........................................... 115.20%
2004........................................... 103.30%
2005........................................... 102.20%
2006........................................... 101.10%
2007........................................... 100.00%
Notwithstanding the foregoing, the purchase price payable with
respect to the Notes upon a Change of Control shall not exceed 100% of the
Accreted Value of the Notes, plus any accrued and unpaid interest thereon to the
Purchase Date unless (i) a majority of the Board of Directors, provided that
such majority includes a majority of the directors of the Company who are not
designated or appointed by the Purchasers or their Affiliates or by any other
Person (or group of Persons) which has the ability to designate or appoint a
majority of the Board of Directors or (ii) a majority of a special committee of
the Independent Directors (as such terms is defined in the Stockholders'
Agreement), shall have approved the transaction(s) constituting the Change of
Control; provided, that if such approval has been withheld solely or primarily
to reduce the purchase price payable upon a Change of Control the Holders shall
be entitled to receive the applicable purchase price set forth in the table in
the preceding paragraph, plus any accrued and unpaid interest on the Notes to
the Purchase Date.
Holders of Notes that are subject to an offer to purchase will
receive a Change of Control offer from the Company prior to any related Purchase
Date and may elect to have such Notes or portions thereof in authorized
denominations purchased by completing the form entitled "Option of Holder to
Elect Purchase" appearing below.
8. Subordination. The payment of the Accreted Value, accrued
and unpaid interest thereon or any other amounts due on the Notes is
subordinated in right of payment to all existing and future Senior Debt of the
Company, as described in the Indenture. Each Holder, by accepting a Note, agrees
to such subordination and authorizes and directs the Trustee on its behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee as its attorney-in-fact for
such purpose.
9. Conversion. The holder of any Note has the right,
exercisable at any time following the Issuance Date and prior to the close of
business (New York time) on the date of the Note's maturity, to convert the
Accreted Value thereof (or any portion thereof (with $100 Original Issue Price
or any integral multiples thereof) into shares of Series D Preferred Stock at
the initial Conversion Price of $12,500 per share, subject to adjustment under
certain circumstances as set forth in the Indenture.
To convert a Note, a holder must (1) complete and sign a
conversion notice substantially in the form set forth below, (2) surrender the
Note to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Registrar or Conversion Agent and (4) pay any
transfer or similar tax, if required. The number of shares issuable upon
conversion of a Note is determined by dividing the Accreted Value of the Note
converted, accrued and unpaid interest thereon, and any other amounts payable on
the Notes on the date of conversion, by the Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fractional interest.
A Note in respect of which a holder has delivered an "Option
of Holder to Elect Purchase" form appearing below exercising the option of such
holder to require the Company to purchase such Note may be converted only if the
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture. The above description of conversion of the Notes is
qualified by reference to, and is subject in its entirety by, the more complete
description thereof contained in the Indenture.
10. Denominations, Transfer, Exchange. The Notes are in
registered form, without coupons, in denominations of Accreted Value with $100
of Original Issue Price and any integral multiples thereof. The transfer of
Notes may be registered, and Notes may be exchanged, as provided in the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture.
11. Persons Deemed Owners. The registered Holder of a Note may
be treated as its owner for all purposes.
12. Unclaimed Money. If money for the payment of Accreted
Value or interest remains unclaimed for two years, the Trustee and the Paying
Agent shall pay the money back to the Company at its written request. After
that, Holders of Notes entitled to the money must look to the Company for
payment unless an abandoned property law designates another Person and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
13. Defaults and Remedies. The Notes shall have the Events of
Default set forth in Section 8.01 of the Indenture. Subject to certain
limitations in the Indenture, if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the Holders of at least 25% in aggregate
Accreted Value of the then outstanding Notes by notice to the Company and the
Trustee may declare all the Notes to be due and payable immediately, except that
in the case of an Event of Default arising from certain events of bankruptcy or
insolvency, all unpaid Accreted Value, accrued and unpaid interest thereon and
other amounts payable on the Notes, if any, shall become due and payable
immediately without further action or notice. The Majority Holders by written
notice to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of Accreted Value,
and other amounts due on the Notes, if any, that has become due solely because
of the acceleration. Holders may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, the Majority may
direct the Trustee in its exercise of any trust or power. The Company must
furnish annually compliance certificates to the Trustee. The above description
of Events of Default and remedies is qualified by reference, and subject in its
entirety, to the more complete description thereof contained in the Indenture.
14. Amendments, Supplements and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Majority Holders (including consents obtained in connection with
a tender offer or exchange offer for Notes), and any existing default may be
waived with the consent of the Majority Holders. Without the consent of any
Holder, the Indenture or the Notes may be amended among other things, to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for assumption of the
Company's obligations to Holders, to make any change that does not adversely
affect the rights of any Holder or to qualify the Indenture under the TIA or to
comply with the requirements of the SEC in order to maintain the qualification
of the Indenture under the TIA.
15. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the Notes
and may otherwise deal with the Company or an Affiliate with the same rights it
would have, as if it were not Trustee, subject to certain limitations provided
for in the Indenture and in the TIA. Any Agent may do the same with like rights.
16. No Recourse Against Others. A director, officer, employee,
incorporator or shareholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Notes.
17. Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THE INDENTURE AND THE NOTES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
18. Authentication. The Notes shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.
19. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and UGMA (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder of the Notes upon
written request and without charge a copy of the Indenture. Request may be made
to:
American Skiing Company
P.O. Box 450
Sunday River Access Road
Bethel, Maine 04217
Attention of: Foster Stewart, Esq.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
(Insert assignee's social security or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________ agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Your Signature:
---------------------------
(Sign exactly as your name
appears on the other side
of this Note)
Date:
Signature Guarantee: *
---------------------------
In connection with any transfer of any of the Notes evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Notes and the last date, if any,
on which such Notes were owned by the Company or any Affiliate of the Company,
the undersigned confirms that such Notes are being transferred:
CHECK ONE BOX BELOW
(1) [ ] to the Company or any subsidiary thereof,
(2)[ ] to a qualified institutional buyer in compliance with
Rule 144A,
(3) [ ] outside the United States in compliance with Rule 904
under the Securities Act,
(4) [ ] pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available),
(5) [ ] to an Accredited Investor (as defined in Regulation D
under the Securities Act) in a transaction exempt from registration under the
Securities Act,
(6) [ ] pursuant to any other exemption from registration
under the Securities Act or
(7) [ ] pursuant to an effective registration statement under
the Securities Act.
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange. However, such guarantee is not required so
long as a Purchaser holds the Note.
Signature
Signature Guarantee*
Signature must be guaranteed
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Date: _____________________
* Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange. However, such guarantee is not required so
long as a Purchaser holds the Note.
NOTICE: To be executed by an executive officer
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note or a portion thereof
repurchased by the Company pursuant to Section 4.07 of the Indenture, check the
box: [ ]
If the purchase is in part, indicate the portion of Accreted
Value with Original Issue Price in denominations of $100 or any integral
multiple thereof to be purchased:
Your Signature:
-----------------------------
(Sign exactly as your name
appears on the other side of
this Note)
Date:
-----------------------------
Signature Guarantee:**/
------------------------------
**/ Signature must be
guaranteed by a commercial
bank, trust company or
member firm of the New York
Stock Exchange. However,
this guarantee is not
required so long as a
Purchaser holds the Note.
ELECTION TO CONVERT
To American Skiing Company
The undersigned owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion below designated, into
Series D Preferred Stock of American Skiing Company in accordance with the terms
of the Indenture referred to in this Note, and directs that the shares issuable
and deliverable upon conversion, together with any check in payment for
fractional shares, be issued in the name of and delivered to the undersigned,
unless a different name has been indicated in the assignment below. If the
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Date:
-----------------------------
in whole ___ Portions of Accreted Value of the Note to be
converted (with
$100 Original Issue Price or integral multiples thereof):
$
------------------------------
Signature
--------------------------------
Please Print or Typewrite Name and Address, Including Zip
Code, and Social Security or Other Identifying Number
Signature Guarantee: *
-------------------------------
* Signature must be
guaranteed by a commercial
bank, trust company or
member firm of the New York
Stock Exchange. However,
this guarantee is not
required so long as the
Purchaser holds the Note.
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE A
SCHEDULE OF ORIGINAL ISSUE PRICE
The original issue price of this Global Note shall be $ . The
following increases or decreases in the Original Issue Price (as defined in the
Indenture) of this Global Note have been made:
Amount of increase Signature of Date of exchange
Amount of decrease in in Original Issue Original Issue authorized officer following such
Original Issue Price Price of this Price of this of Trustee or Notes decrease or
of this Global Note Global Note Global Note Custodian increase
- -------------------- ------------------ -------------- ------------------- ---------------
EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM RULE 144A GLOBAL NOTE OR RESTRICTED NOTE
TO REGULATION S GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(ii) or 2.06(a)(vii) of the Indenture)
[Name of Trustee]
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible Subordinated Notes
due 2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of August
31, 2001 (the "INDENTURE"), between American Skiing Company, as Issuer, and , as
Trustee.
This letter relates to $[ ] [check one] (i) [ ] aggregate
Accreted Value of Notes which are held in the form of the Rule 144A Global Note
(CUSIP No. ) with the Depositary or (ii) [ ] Accreted Value of Restricted Note
(CUSIP No. ) registered, in either case, in the name of [name of transferor]
(the "TRANSFEROR") to effect the transfer of the Notes in exchange for an
equivalent beneficial interest in the Regulation S Global Notes. The Original
Issue Price of such Notes is $ .
In connection with such request, the Transferor does hereby
certify that such transfer has been effected in accordance with (i) the transfer
restrictions set forth in the Notes and (ii) that:
(1) the offer of the Notes was not made to a Person in the
United States;
(2) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither the Transferor
nor any Person acting on its behalf knows that the transaction was pre-arranged
with a buyer in the United States;
(3) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of Regulation S, as
applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the United States Securities Act of 1933, as
amended (the "SECURITIES ACT").
In addition, if the sale is made during a distribution
compliance period and the provisions of Rule 903(c)(2) or (3) or Rule 904(c)(1)
of Regulation S are applicable thereto, we confirm that such sale has been made
in accordance with the applicable provisions of Rule 903(c)(2) or (3) or Rule
904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Capitalized terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S.
[Name of Transferor]
By:
------------------------
Name:
Title:
Dated:
-------------------
cc: American Skiing Company
P.O. Box 450
Sunday River Access Road
Bethel, Maine 04217
Attn: _______________
EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM REGULATION S GLOBAL NOTE OR RESTRICTED NOTE
TO RULE 144A GLOBAL NOTE
(Transfers pursuant to Section 2.06(a)(iii) or 2.06(a)(vi) of the Indenture)
[Trustee]
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible
Subordinated Notes due 2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of August
31, 2001 (the "INDENTURE"), between American Skiing Company, as Issuer, and , as
Trustee. Capitalized terms used but not defined herein shall have the respective
meanings given them in the Indenture.
This letter relates to $[ ] [check one] (i) [ ] aggregate
Accreted Value of Notes which are held in the form of the Regulation S Global
Note (CUSIP No. ____) with the Depositary or (ii) [ ] Accreted Value of
Restricted Note (CUSIP No. ----------------------------------- ) registered, in
each case, in the name of [name of transferor] (the "TRANSFEROR") to effect the
transfer of the Notes in exchange for an equivalent beneficial interest in the
Rule 144A Global Note. The Original Issue Price of such Notes is $_______.
In connection with such request, and in respect of such Notes
the Transferor does hereby certify that such Notes are being transferred in
accordance with (i) the transfer restrictions set forth in the Notes and (ii)
Rule 144A under the United States Securities Act of 1933, as amended, to a
transferee that the Transferor reasonably believes is purchasing the Notes for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
Dated: [Name of Transferor],
----------------------------
By:
------------------------
Name:
Title:
cc: American Skiing Company
P.O. Box 450
Sunday River Access
Bethel, Maine 04217
Attn: ________________
EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL NOTE OR RESTRICTED
NOTE TO RESTRICTED NOTE
(Transfers pursuant to Section 2.06(a)(iv) or Section 2.06(a)(v) of the
Indenture)
[Name of Trustee],
as Trustee
[Address]
Attn:
Re: American Skiing Company 11.3025% Convertible
Subordinated Notes due 2007 (the "NOTES")
Reference is hereby made to the Indenture, dated as of August
31 , 2001 (the "INDENTURE"), between American Skiing Company, as Issuer, and ,
as Trustee. Capitalized terms used but not defined herein shall have the
respective meanings given them in the Indenture.
This letter relates to $[ ] aggregate Accreted Value of Notes
which are held [in the form of the [Rule 144A/Regulation S]. [Global]
[Restricted] Note (CUSIP No. [ ] CINS No. [ ]) [with the Depositary] in the name
of [name of transferor] (the "TRANSFEROR") to effect the transfer of the Notes.
The Original Issue Price of such Notes is $-------.
In connection with such request, and in respect of such Notes,
the Transferor does hereby certify that such Notes are being transferred (i) in
accordance with the transfer restrictions set forth in the Notes and (ii) in
accordance with applicable securities laws of any state of the United States or
any other jurisdiction.
*Insert, if appropriate.
[Name of Transferor],
By:
------------------------
Name:
Title:
Dated:
-------------------
cc: American Skiing Company
P.O. Box 450
Sunday River Access Road
Bethel, Maine 04217
Attn: __________________
APPENDIX E
FORM OF LETTER TO BE DELIVERED BY INVESTORS OR OTHER
PERSONS IN A TRANSACTION EXEMPT FROM REGISTRATION
American Skiing Company
P.O. Box 450
Sunday River Access Road
Bethel, Maine 04217
Ladies and Gentlemen:
We are delivering this letter in connection with our
acquisition of 11.3025% Convertible Subordinated Notes due 2007 (the "Notes") of
American Skiing Company, a Delaware corporation (the "Company").
We hereby confirm that:
[(i) we are an "accredited investor" within the meaning of
Rule 501 (a) (1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501 (a) (1), (2), (3) or (7)
under the Securities Act (an "Institutional Accredited Investor");]
[(ii) (A) any purchase of the Notes by us will be for our own
account or for the account of one or more other Institutional Accredited
Investors or as fiduciary for the account of one or more trusts, each of which
is an "accredited investor" within the meaning of Rule 501 (a) (7) under the
Securities Act and for each of which we exercise sole investment discretion or
(B) we are a "bank," within the meaning of Section 3 (a) (2) of the Securities
Act, or a "savings and loan association" or other institution described in
Section 3 (a) (5) (A) of the Securities Act that is acquiring the Notes as
fiduciary for the account of one or more institutions for which we exercise sole
investment discretion;]
(iii) in the event that we purchase any of the Notes, we will
acquire Notes having a minimum Original Issue Price of not less than $250,000
for our own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing the Notes;
(v) we are not acquiring the Notes with a view to distribution
thereof or with any present intention of offering or selling any of the Notes,
except pursuant to an effective registration statement under the Securities Act
or pursuant to an exemption from the registration requirements thereof, as
provided below, provided that the disposition of our property and the property
of any accounts for which we are acting as fiduciary shall remain at all times
within our control; and
(vi) we acknowledge that we have had access to such financial
and other information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers thereto, as we
deem necessary in connection with our decision to acquire the Notes.
We understand that the Notes are being offered in a
transaction not involving any public offering within the United States within
the meaning of the Securities Act and that the Notes have not been registered
under the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Notes, that if in the future we decide to
resell, pledge or otherwise transfer such Notes, such Notes may be offered,
resold, pledged or otherwise transferred only: (a) to the Company or any of its
subsidiaries, (b) to a person whom the seller reasonably believes is a Qualified
Institutional Buyer or "QIB" (as defined in Rule 144A under the Securities Act)
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A, (c) in an offshore transaction meeting
the requirements of Rule 904 of the Securities Act, (d) in a transaction meeting
the requirements of Rule 144 under the Securities Act, (e) to an Accredited
Investor that, prior to such transfer, furnishes the trustee a signed letter
containing certain representations and agreements relating to the transfer of
the Notes (in substantially this form) and, if such transfer is in respect of an
Accreted Value with an Original Issue Price (as defined in the terms of Notes)
less than $250,000, an opinion of counsel acceptable to the Company that such
transfer is in compliance with the Securities Act, (f) in accordance with
another exemption from the registration requirements of the Securities Act (and
based upon an opinion of counsel acceptable to the Company) or (g) pursuant to
an effective registration statement and, in each case, in accordance with the
applicable securities laws of any state of the United States, or any other
applicable jurisdiction. We understand that the registrar and transfer agent for
the Notes will not be required to accept for registration of transfer any Notes
acquired by us, except upon presentation of evidence satisfactory to the Company
and the transfer agent that the foregoing restrictions on transfer have been
complied with. We further understand that any Notes acquired by us will be in
the form of definitive physical certificates and will bear a legend reflecting
the substance of this paragraph.
We acknowledge that the Company and others will rely upon our
confirmations, acknowledgments and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
Dated:
----------------------------
(Name of Purchaser)
By:
------------------------
Name:
Title:
Address: