Exhibit 4.1
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LODGIAN FINANCING CORP.,
Issuer
LODGIAN, INC.,
THE SUBSIDIARY GUARANTORS
(AS DEFINED HEREIN)
and
BANKERS TRUST COMPANY,
Trustee
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Indenture
Dated as of July 23, 1999
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12 1/4% Senior Subordinated Notes due 2009
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CROSS-REFERENCE TABLE
TIA Sections Indenture Sections
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ss. 310(a)(1)......................................... 7.10
(a)(2)........................................... 7.10
(b).............................................. 7.03; 7.08
ss. 311(a)............................................ 7.03
(b).............................................. 7.03
ss. 312(a)............................................ 2.04
(b).............................................. 13.02
(c).............................................. 13.02
ss. 313(a)............................................ 7.06
(b)(2)........................................... 7.07
(c).............................................. 7.05; 7.06; 13.02
(d).............................................. 7.06
ss. 314(a)............................................ 7.05; 13.02
(a)(4)........................................... 4.17; 13.02
(c)(1)........................................... 13.03
(c)(2)........................................... 13.03
(e).............................................. 4.17; 13.04
ss. 315(a)............................................ 7.02
(b).............................................. 7.05; 13.02
(c).............................................. 7.02
(d).............................................. 7.02
(e).............................................. 6.11
ss. 316(a)(1)(A)...................................... 6.05
(a)(1)(B)........................................ 6.04
(b).............................................. 6.07
(c).............................................. 9.03
ss. 317(a)(1)......................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.05
ss. 318(a)............................................ 10.01
(c).............................................. 10.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a part
of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions...................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............24
SECTION 1.03. Rules of Construction........................................24
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating..............................................25
SECTION 2.02. Restrictive Legends..........................................26
SECTION 2.03. Execution, Authentication and Denominations..................28
SECTION 2.04. Registrar and Paying Agent...................................29
SECTION 2.05. Paying Agent to Hold Money in Trust..........................30
SECTION 2.06. Transfer and Exchange........................................30
SECTION 2.07. Book-Entry Provisions for Global Notes.......................31
SECTION 2.08. Special Transfer Provisions..................................33
SECTION 2.09. Replacement Notes............................................36
SECTION 2.10. Outstanding Notes............................................37
SECTION 2.11. Temporary Notes..............................................37
SECTION 2.12. Cancellation.................................................38
SECTION 2.13. CUSIP Numbers................................................38
SECTION 2.14. Defaulted Interest...........................................38
SECTION 2.15. Issuance of Additional Notes.................................38
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption..........................................39
SECTION 3.02. Notices to Trustee...........................................39
SECTION 3.03. Selection of Notes to Be Redeemed............................39
SECTION 3.04. Notice of Redemption.........................................40
SECTION 3.05. Effect of Notice of Redemption...............................41
SECTION 3.06. Deposit of Redemption Price..................................41
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Note: The Table of Contents shall not for any purposes be deemed to be a part of
the Indenture.
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SECTION 3.07. Payment of Notes Called for Redemption.......................41
SECTION 3.08. Notes Redeemed in Part.......................................42
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.............................................42
SECTION 4.02. Maintenance of Office or Agency..............................42
SECTION 4.03. Limitation on Indebtedness...................................43
SECTION 4.04. Limitation on Senior Subordinated Indebtedness...............46
SECTION 4.05. Limitation on Restricted Payments............................46
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries............................50
SECTION 4.07. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries......................................52
SECTION 4.08. Limitation on Issuances of Guarantees by Restricted
Subsidiaries ................................................53
SECTION 4.09. Limitation on Transactions with Shareholders and Affiliates..54
SECTION 4.10. Limitation on Liens..........................................55
SECTION 4.11. Limitation on Asset Sales....................................55
SECTION 4.12. Repurchase of Notes upon a Change of Control.................57
SECTION 4.13. Existence....................................................57
SECTION 4.14. Payment of Taxes and Other Claims............................57
SECTION 4.15. Maintenance of Properties and Insurance......................57
SECTION 4.16. Notice of Defaults...........................................58
SECTION 4.17. Compliance Certificates......................................58
SECTION 4.18. Commission Reports and Reports to Holders....................59
SECTION 4.19. Waiver of Stay, Extension or Usury Laws......................59
SECTION 4.20. Guarantee by Impac Hotel I L.L.C.............................59
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc..................................59
SECTION 5.02. Successor Substituted........................................60
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................................61
SECTION 6.02. Acceleration.................................................63
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SECTION 6.03. Other Remedies...............................................64
SECTION 6.04. Waiver of Past Defaults......................................64
SECTION 6.05. Control by Majority..........................................64
SECTION 6.06. Limitation on Suits..........................................64
SECTION 6.07. Rights of Holders to Receive Payment.........................65
SECTION 6.08. Collection Suit by Trustee...................................65
SECTION 6.09. Trustee May File Proofs of Claim.............................65
SECTION 6.10. Priorities...................................................66
SECTION 6.11. Undertaking for Costs........................................66
SECTION 6.12. Restoration of Rights and Remedies...........................66
SECTION 6.13. Rights and Remedies Cumulative...............................67
SECTION 6.14. Delay or Omission Not Waiver.................................67
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General......................................................67
SECTION 7.02. Certain Rights of Trustee....................................67
SECTION 7.03. Individual Rights of Trustee.................................68
SECTION 7.04. Trustee's Disclaimer.........................................69
SECTION 7.05. Notice of Default............................................69
SECTION 7.06. Reports by Trustee to Holders................................69
SECTION 7.07. Compensation and Indemnity...................................69
SECTION 7.08. Replacement of Trustee.......................................70
SECTION 7.09. Successor Trustee by Merger, Etc.............................71
SECTION 7.10. Eligibility..................................................71
SECTION 7.11. Money Held in Trust..........................................72
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.........................72
SECTION 8.02. Defeasance and Discharge of Indenture........................73
SECTION 8.03. Defeasance of Certain Obligations............................75
SECTION 8.04. Application of Trust Money...................................76
SECTION 8.05. Repayment to Company.........................................76
SECTION 8.06. Reinstatement................................................77
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders...................................77
SECTION 9.02. With Consent of Holders......................................78
SECTION 9.03. Revocation and Effect of Consent.............................79
SECTION 9.04. Notation on or Exchange of Notes.............................79
SECTION 9.05. Trustee to Sign Amendments, Etc..............................80
SECTION 9.06. Conformity with Trust Indenture Act..........................80
ARTICLE TEN
NOTE GUARANTEES
SECTION 10.01 Note Guarantee...............................................80
SECTION 10.02 Obligations Unconditional....................................83
SECTION 10.03 Release of Note Guarantees...................................83
SECTION 10.04 Notice to Trustee............................................83
SECTION 10.05 This Article Not to Prevent Events of Default................83
ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinated to Senior Indebtedness...................83
SECTION 11.02. No Payment on Notes in Certain Circumstances................84
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc.................85
SECTION 11.04. Subrogation.................................................87
SECTION 11.05. Obligations of Company Unconditional........................87
SECTION 11.06. Notice to Trustee...........................................88
SECTION 11.07. Reliance on Judicial Order or Certificate of Liquidating
Agent ......................................................89
SECTION 11.08. Trustee's Relation to Senior Indebtedness...................89
SECTION 11.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness............89
SECTION 11.10. Holders Authorize Trustee to Effectuate Subordination
of Notes ...................................................89
SECTION 11.11. Not to Prevent Events of Default............................90
SECTION 11.12. Trustee's Compensation Not Prejudiced.......................90
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SECTION 11.13. No Waiver of Subordination Provisions.......................90
SECTION 11.14. Payments May Be Paid Prior to Dissolution...................90
SECTION 11.15. Consent of Holders of Senior Indebtedness...................91
SECTION 11.16. Trust Moneys Not Subordinated...............................91
ARTICLE TWELVE
SUBORDINATION OF NOTE GUARANTEES
SECTION 12.01. Note Guarantees Subordinated to Guarantor Senior
Indebtedness ...............................................91
SECTION 12.02. No Payment on Note Guarantees in Certain Circumstances......91
SECTION 12.03. Payment over Proceeds upon Dissolution, Etc.................93
SECTION 12.04. Subrogation.................................................94
SECTION 12.05. Obligations of Guarantor Unconditional......................95
SECTION 12.06. Notice to Trustee...........................................95
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating
Agent ......................................................96
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness.........97
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions
of a Guarantor or Holders of Guarantor Senior Indebtedness..97
SECTION 12.10. Holders Authorize Trustee to Effectuate Subordination
of Note Guarantees..........................................97
SECTION 12.11. Not to Prevent Events of Default............................98
SECTION 12.12. Trustee's Compensation Not Prejudiced.......................98
SECTION 12.13. No Waiver of Subordination Provisions.......................98
SECTION 12.14. Payments May Be Paid Prior to Dissolution...................98
SECTION 12.15. Consent of Holders of Guarantor Senior Indebtedness.........98
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act of 1939.................................99
SECTION 13.02. Notices.....................................................99
SECTION 13.03. Certificate and Opinion as to Conditions Precedent.........100
SECTION 13.04. Statements Required in Certificate or Opinion..............100
SECTION 13.05. Rules by Trustee, Paying Agent or Registrar................101
SECTION 13.06. Payment Date Other Than a Business Day.....................101
SECTION 13.07. Governing Law..............................................101
SECTION 13.08. No Adverse Interpretation of Other Agreements..............101
SECTION 13.09. No Recourse Against Others.................................102
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SECTION 13.10. Successors.................................................102
SECTION 13.11. Duplicate Originals........................................102
SECTION 13.12. Separability...............................................102
SECTION 13.13. Table of Contents, Headings, Etc...........................102
SECTION 13.14. Counterparts...............................................102
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SCHEDULE I Initial Subsidiary Guarantors
EXHIBIT A Form of Note.................................................A-1
EXHIBIT B Form of Certificate..........................................B-1
EXHIBIT C Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Non-QIB Accredited Investors.....C-1
EXHIBIT D Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S.....................D-1
INDENTURE, dated as of July 23, 1999, between LODGIAN FINANCING CORP., a
Delaware corporation (the "Company"), LODGIAN, INC. ("Lodgian"), a Delaware
corporation and the sole stockholder of the Company, and the SUBSIDIARY
GUARANTORS listed in Schedule I thereto, as guarantors (the "Subsidiary
Guarantors," and together with Lodgian, the "Guarantors"), and BANKERS TRUST
COMPANY, a New York banking corporation, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $200,000,000 aggregate
principal amount of the Company's 12 1/4% Senior Subordinated Notes due 2009
(the "Notes") issuable as provided in this Indenture. All things necessary to
make this Indenture a valid agreement of the Company and each Guarantor, in
accordance with its terms, have been done, and the Company and each Guarantor
have done all things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939, as amended, that are required to be a part of
and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary; provided that Indebtedness of
such Person which is redeemed, defeased, retired or otherwise repaid at the time
of or immediately upon consummation of the transactions by which such Person
becomes a Restricted Subsidiary or such Asset Acquisition shall not be Acquired
Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of Lodgian and its Restricted Subsidiaries for such period
determined in conformity with GAAP; provided
2
that the following items shall be excluded in computing Adjusted Consolidated
Net Income (without duplication):
(1) the net income (or loss) of any Person that is not a Restricted
Subsidiary;
(2) the net income (or loss) of any Person accrued prior to the date
it becomes a Restricted Subsidiary or is merged into or consolidated with
Lodgian or any of its Restricted Subsidiaries or all or substantially all
of the property and assets of such Person are acquired by Lodgian or any
of its Restricted Subsidiaries;
(3) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary;
(4) any gains or losses (on an after-tax basis) attributable to
sales of assets outside the ordinary course of business of Lodgian and its
Restricted Subsidiaries;
(5) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.05, (a) any amount paid or accrued as dividends on Preferred
Stock of Lodgian owned by Persons other than Lodgian and any of its
Restricted Subsidiaries and (b) any amount paid as interest on the
Convertible Debentures or dividends on the CRESTS; and
(6) all extraordinary gains and, for purposes of calculating the
Fixed Charge Coverage Ratio only, extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of Lodgian and its Restricted Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), except to the extent resulting from
write-ups of capital assets (excluding write-ups in connection with accounting
for acquisitions in conformity with GAAP), after deducting therefrom (1) all
current liabilities of Lodgian and its Restricted Subsidiaries (excluding
intercompany items) and (2) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of
Lodgian and its Restricted Subsidiaries, prepared in conformity with GAAP and
filed with the SEC or provided to the Trustee.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common
3
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means any Registrar, Co-Registrar, Paying Agent or authenticating
agent.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (1) an investment by Lodgian or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with
Lodgian or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of
Lodgian and its Restricted Subsidiaries on the date of such investment or (2) an
acquisition by Lodgian or any of its Restricted Subsidiaries of the property and
assets of any Person other than Lodgian or any of its Restricted Subsidiaries
that constitute substantially all of a division or line of business of such
Person; provided that the property and assets acquired are related, ancillary or
complementary to the businesses of Lodgian and its Restricted Subsidiaries on
the date of such acquisition.
"Asset Disposition" means the sale or other disposition by Lodgian or any
of its Restricted Subsidiaries (other than to Lodgian or another Restricted
Subsidiary) of (1) all or substantially all of the Capital Stock of any
Restricted Subsidiary or (2) all or substantially all of the assets that
constitute a division or line of business of Lodgian or any of its Restricted
Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by Lodgian or any of its Restricted
Subsidiaries to any Person other than Lodgian or any of its Restricted
Subsidiaries of (1) all or any of the Capital Stock of any Restricted
Subsidiary, (2) all or substantially all of the property and assets of an
operating unit or business of Lodgian or any of its Restricted Subsidiaries or
(3) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of Lodgian or any of its Restricted
Subsidiaries outside the ordinary course of business of Lodgian or such
Restricted Subsidiary and, in each case, that is not governed by the provisions
of Article Five; provided that "Asset Sale" shall not include (a) sales or other
dispositions of inventory, receivables and other current assets or (b) sales,
transfers or other dispositions of assets with a fair market value not in excess
of $1.0 million in any transaction or series of related transactions, (c) sales,
transfers or other dispositions of assets constituting a Permitted Investment or
a Restricted Payment permitted to be made under Section 4.05, or (d) any sale,
transfer, assignment or other disposition of any property or equipment that has
become damaged, worn out, obsolete or otherwise unsuitable for use in connection
with the business of Lodgian or its Restricted Subsidiaries.
4
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (1) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (2) the sum of all such principal payments.
"Bank Agent" means the agent for the lenders under the Credit Agreement or
its successors as agent for the lenders under the Credit Agreement.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participating or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
"Change of Control" means such time as (1) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 3d-3 under the Exchange Act) of
more than 35% of the total voting power of the Voting Stock of Lodgian on a
fully diluted basis; or (2) individuals who on the Closing Date constitute the
Board of Directors (together with any new directors whose election by the Board
of Directors or whose nomination by the Board of Directors for election by
Lodgian's stockholders was approved by a vote of at least a majority of the
members of the Board of Directors then in office who either were members of the
Board of Directors on the Closing Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the members of the Board of Directors then in office.
5
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of the
Company (i) by its Chairman, a Vice Chairman, its President or a Vice President
and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary and delivered to the Trustee; provided, however, that such written
request or order may be signed by any two of the officers or directors listed in
clause (i) above in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(1) Consolidated Interest Expense and accrued but unpaid interest on
the Convertible Debentures or accrued but unpaid dividends on the CRESTS;
(2) income taxes;
(3) depreciation expense;
(4) amortization expense; and
(5) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and for which an
accrual or reserve is, or is required by GAAP to be, made), less all
non-cash items increasing Adjusted Consolidated Net Income, all as
determined on a consolidated basis for Lodgian and its Restricted
Subsidiaries in conformity with GAAP;
provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (a) the amount of the
Adjusted Consolidated Net Income attributable to such Restricted Subsidiary
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multiplied by (b) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by Lodgian or any
of its Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, (1) the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by Lodgian or any of its Restricted
Subsidiaries) paid or accrued by Lodgian and its Restricted Subsidiaries during
such period, (2) all but the principal component of rentals in respect of
Capitalized Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by Lodgian and its Restricted Subsidiaries during such period and (3)
solely for calculating the Fixed Charge Coverage Ratio, the aggregate amount of
interest on the Convertible Debentures or dividends on the CRESTS paid by
Lodgian and its Restricted Subsidiaries during such period for such period to
the extent paid under clause (8) of Section 4.05; excluding, however, (1) any
amount of such interest of any Restricted Subsidiary if the net income of such
Restricted Subsidiary is excluded in the calculation of Adjusted Consolidated
Net Income pursuant to clause (3) of the definition thereof (but only in the
same proportion as the net income of such Restricted Subsidiary is excluded from
the calculation of Adjusted Consolidated Net Income pursuant to clause (3) of
the definition thereof) and (2) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the offering of the Notes, the
establishment of the Credit Agreement and any concurrent repayment of
Indebtedness, all as determined on a consolidated basis (without taking into
account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity plus, to the extent not included, any Preferred Stock of
Lodgian as set forth on the most recently available quarterly or annual
consolidated balance sheet of Lodgian and its Restricted Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of Lodgian or any of its Restricted Subsidiaries, each item to be
determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Consolidated Operating Rental Expense" of any Person means, for any
period, the aggregate amount of rental expense with respect to any Operating
Leases deducted in computing net income of such Person during such period.
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"Convertible Debentures" means the 7% Convertible Debentures due 2010
issued pursuant to the indenture dated June 17, 1998 among Servico, Inc., as
issuer, Lodgian, and Wilmington Trust Company, as trustee, as amended (including
any amendment and restatement thereof), supplemented, extended, renewed,
replaced or otherwise modified from time to time and including any agreement
extending the maturity of, refinancing or otherwise restructuring all or any
portion of the Indebtedness under such indenture or any successor agreement, as
such agreement may be amended, renewed, extended, substituted, replaced,
restated or otherwise modified from time to time.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at Bankers Trust Company, 0 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; Attention: Corporate Trust and Agency Services.
"Credit Agreement" means the credit agreement to be dated as of the
Closing Date among the Company, the guarantors named therein and Xxxxxx Xxxxxxx
Senior Funding, Inc. and any other lenders and parties thereto, together with
any agreements, instruments and documents executed or delivered pursuant to or
in connection with such credit agreement (including, without limitation, any
Guarantees and security documents), in each case as such credit agreement or
such agreements, instruments or documents may be amended (including any
amendment and restatement thereof), supplemented, extended, renewed, replaced or
otherwise modified from time to time and including any agreement extending the
maturity of, refinancing or otherwise restructuring (including, but not limited
to, the inclusion of additional borrowers thereunder that are Subsidiaries of
Lodgian) all or any portion of the Indebtedness under such agreement or any
successor agreement, as such agreement may be amended, renewed, extended,
substituted, replaced, restated or otherwise modified from time to time.
"CRESTS" means the 7% Convertible Redeemable Equity Structured Trust
Securities of Lodgian Capital Trust.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Designated Senior Indebtedness" means (1) any Indebtedness under the
Credit Agreement (except that any Indebtedness which represents a partial
refinancing of Indebtedness theretofore outstanding pursuant to the Credit
Agreement, rather than a complete refinancing thereof, shall only constitute
Designated Senior Indebtedness if such partial refinancing meets the
requirements of clause (2) below) and
8
(2) any other Indebtedness constituting Senior Indebtedness that, at the date of
determination, has an aggregate principal amount outstanding of at least $25
million and that is specifically designated, in the instrument creating or
evidencing such Senior Indebtedness as "Designated Senior Indebtedness."
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (1) required to be redeemed prior to
the Stated Maturity of the Notes, (2) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (3) convertible into or exchangeable for Capital Stock referred
to in clause (1) or (2) above or Indebtedness having a scheduled maturity prior
to the Stated Maturity of the Notes; provided that any Capital Stock that would
not constitute Disqualified Stock but for provisions thereof giving holders
thereof the right to require such Person to repurchase or redeem such Capital
Stock upon the occurrence of an "asset sale" or "change of control" occurring
prior to the Stated Maturity of the Notes shall not constitute Disqualified
Stock if the "asset sale" or "change of control" provisions applicable to such
Capital Stock are no more favorable to the holders of such Capital Stock than
the provisions contained in Section 4.11 and Section 4.12 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such Notes
as are required to be repurchased pursuant to Section 4.11 and Section 4.12.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be conclusive if
evidenced by a Board Resolution.
"Fixed Charge Coverage Ratio" means, on any Transaction Date, the ratio of
(1) the aggregate amount of Consolidated EBITDA and one-third of Consolidated
Operating Rental Expense for the then most recent four fiscal quarters prior to
such Transaction Date for which reports have been filed with the SEC or provided
to the Trustee (the "Four Quarter Period") to (2) the aggregate Consolidated
Interest Expense and one-third of Consolidated Operating Rental Expense during
such Four Quarter Period. In making the foregoing calculation, (A) pro forma
effect shall be given to any Indebtedness Incurred or repaid during the period
(the "Reference Period") commencing on the first day of the Four Quarter Period
9
and ending on the Transaction Date (other than Indebtedness Incurred under a
revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement) in
effect on the last day of such Four Quarter Period unless any portion of such
Indebtedness is projected, in the reasonable judgment of the senior management
of Lodgian, to remain outstanding for a period in excess of 12 months from the
date of the Incurrence thereof), in each case as if such Indebtedness had been
Incurred or repaid on the first day of the Reference Period; (B) pro forma
effect shall be given to any Operating Leases entered into during such Reference
Period as if they had been entered into on the first day of such Reference
Period; (C) Consolidated Interest Expense attributable to interest on any
Indebtedness (whether existing or being Incurred) computed on a pro forma basis
and bearing a floating interest rate shall be computed as if the rate in effect
on the Transaction Date (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months or, if shorter, at least equal to the remaining term
of such Indebtedness) had been the applicable rate for the entire period; (D)
pro forma effect shall be given to Asset Dispositions and Asset Acquisitions
(including giving pro forma effect to the application of proceeds of any Asset
Disposition) that occur during such Reference Period as if they had occurred and
such proceeds had been applied on the first day of such Reference Period; and
(E) pro forma effect shall be given to asset dispositions and asset acquisitions
(including giving pro forma effect to the application of proceeds of any asset
disposition) that have been made by any Person that has become a Restricted
Subsidiary or has been merged with or into Lodgian or any Restricted Subsidiary
during such Reference Period and that would have constituted Asset Dispositions
or Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period; provided that to the extent that clause (D) or (E) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based upon the four full
fiscal quarters immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed for
which financial information is available.
"Foreign Subsidiary" means any Subsidiary of Lodgian that is an entity
which is a controlled foreign corporation under Section 957 of the Internal
Revenue Code.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those 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. All ratios and computations contained or referred to in
this Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants and with other provisions of this Indenture shall be
made without giving effect to (i) the amortization of any expenses incurred in
connection with the offering of the Notes, the establishment of the Credit
Agreement and any concurrent repayment of Indebtedness and (ii) except as
10
otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (1) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (2) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantee Payment Blockage Period" has the meaning provided in Section
12.02.
"Guarantor" means Lodgian, an Initial Subsidiary Guarantor or any other
Restricted Subsidiary that provides a Guarantee of the Company's obligations
under this Indenture and the Notes.
"Guarantor Senior Indebtedness" means, with respect to any Guarantor, the
Senior Indebtedness of such Guarantor.
"Holder" or "Noteholder" means the registered holder of any Note.
"Impac I Debt" means the loan in the aggregate principal amount of
$132.359 million extended by Nomura Asset Capital Corporation to Impac Hotel I,
L.L.C. in March 1997.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Acquired Indebtedness; provided that neither the
accrual of interest nor the accretion of original issue discount shall be
considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(1) all indebtedness of such Person for borrowed money;
11
(2) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto, but excluding obligations with respect to letters of
credit (including trade letters of credit) securing obligations (other
than obligations described in (1) or (2) above or (5), (6) or (7) below)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement);
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
except Trade Payables;
(5) all Capitalized Lease Obligations;
(6) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser
of (A) the fair market value of such asset at such date of determination
and (B) the amount of such Indebtedness;
(7) all Indebtedness of other Persons Guaranteed by such Person to
the extent such Indebtedness is Guaranteed by such Person; and
(8) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements (other
than Currency Agreements and Interest Rate Agreements designed solely to
protect Lodgian or its Restricted Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates and that do not increase
the Indebtedness of the obligor outstanding at any time other than as a
result of fluctuations in foreign currency exchange rates or interest
rates or by reason of fees, indemnities and compensation payable
thereunder).
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (A) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP, (B) that money borrowed and set
aside at the time of the Incurrence of any Indebtedness in order to prefund the
payment of the interest on such Indebtedness
12
shall not be deemed to be "Indebtedness" and (C) that Indebtedness shall not
include (x) any liability for federal, state, local or other taxes, (y)
performance, surety or appeal bonds provided in the ordinary course of business
or (z) agreements providing for indemnification, adjustment of purchase price or
similar obligations, or Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of Lodgian or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in connection
with the disposition of any business, assets or Restricted Subsidiary (other
than Guarantees of Indebtedness Incurred by any Person acquiring all or any
portion of such business, assets or Restricted Subsidiary for the purpose of
financing such acquisition), so long as the principal amount does not to exceed
the gross proceeds actually received by Lodgian or any Restricted Subsidiary in
connection with such disposition.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Initial Subsidiary Guarantors" means each wholly-owned subsidiary of
Lodgian Financing Corp.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
January 15 and July 15 of each year, commencing January 15, 2000.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but excluding advances to customers or suppliers in the
ordinary course of business that are, in conformity with GAAP, recorded as
accounts receivable, prepaid expenses or deposits on the balance sheet of
Lodgian or its Restricted Subsidiaries and endorsements for collection or
deposit arising in the ordinary course of business) or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, bonds, notes, debentures or other similar
instruments issued by, such Person and shall include (1) the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary and (2) the retention of the
Capital Stock (or any other Investment) by Lodgian or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary, including, without limitation, by reason of any transaction
permitted by clause (3) of Section 4.07. For purposes of the definition of
"Unrestricted Subsidiary" and Section 4.05, (a) the
13
amount of or a reduction in an Investment shall be equal to the fair market
value thereof at the time such Investment is made or reduced and (b) in the
event Lodgian or a Restricted Subsidiary makes an Investment by transferring
assets to any Person and as part of such transaction receives Net Cash Proceeds,
the amount of such Investment shall be the fair market value of the assets less
the amount of Net Cash Proceeds so received, provided that the Net Cash Proceeds
are applied in accordance with clause (A) or (B) of Section 4.11.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof or any agreement to
give any security interest).
"Lodgian" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Lodgian Capital Trust" means Lodgian Capital Trust I, a statutory
business trust formed under the laws of the State of Delaware.
"Lodgian Capital Trust Declaration" means the amended and restated
declaration of trust dated June 17, 1998 among Lodgian (as successor of Servico,
Inc.) as sponsor, Xxxxx Xxxxxxxxxx, Xxxxxxx X. Xxxx and Xxxxxxx X. Xxxx as the
initial regular trustees, Wilmington Trust Company as the initial property
trustee and initial Delaware trustee, Lodgian and the holders, from time to
time, of undivided beneficial ownership interest in the trust, as in effect on
the Closing Date.
"Lodgian Capital Trust Guarantee" means the Guarantee by Lodgian (as
successor of the original guarantor Servico, Inc.) of Lodgian Capital Trust's
obligations under the CRESTS, as in effect on the Closing Date.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means:
(a) with respect to any Asset Sale, the proceeds of such Asset Sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form
of cash or cash equivalents and proceeds from the conversion of other
property received when converted to cash or cash equivalents, net of:
(1) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers)
related to such Asset Sale;
14
(2) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale
without regard to the consolidated results of operations of Lodgian
and its Restricted Subsidiaries, taken as a whole;
(3) payments made to repay Indebtedness or any other
obligation outstanding at the time of such Asset Sale that either
(x) is secured by a Lien on the property or assets sold or (y) is
required to be paid as a result of such sale; and
(4) appropriate amounts to be provided by Lodgian or any
Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as
determined in conformity with GAAP; and
(b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the
extent corresponding to the principal, but not interest, component
thereof) when received in the form of cash or cash equivalents and
proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such
issuance or sale and net of taxes paid or payable as a result thereof.
"Non-U.S. Person" means a person who is not a "U.S. person" (as defined in
Regulation S).
"Note Guarantee" means any Guarantee of the obligations of the Company
under this Indenture and the Notes by any Guarantor.
"Notes" means any of the securities, as defined in the first paragraph of
the recitals hereof, that are authenticated and delivered under this Indenture.
For all purposes of this Indenture, the term "Notes" shall include the Notes
initially issued on the Closing Date, any Exchange Notes to be issued and
exchanged for any Notes pursuant to the Registration Rights Agreement and this
Indenture and any other Notes issued after the Closing Date under this
Indenture. For purposes of this Indenture, all Notes shall vote together as one
series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating:
(1) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata
basis;
15
(2) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date");
(3) that any Note not tendered will continue to accrue interest
pursuant to its terms;
(4) that, unless the Company defaults in the payment of the purchase
price, any Note accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest on and after the Payment Date;
(5) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with
the form entitled "Option of the Holder to Elect Purchase" on the reverse
side of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the Business Day
immediately preceding the Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the
principal amount of Notes delivered for purchase and a statement that such
Holder is withdrawing his election to have such Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered; provided that each Note purchased and each new
Note issued shall be in a principal amount of $1,000 or integral multiples
of $1,000.
On the Payment Date, the Company shall (a) accept for payment on a pro rata
basis Notes or portions thereof tendered pursuant to an Offer to Purchase; (b)
deposit with the Paying Agent money sufficient to pay the purchase price of all
Notes or portions thereof so accepted; and (c) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof accepted
for payment by the Company. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples of $1,000. The Company will publicly announce
the results of an Offer to Purchase as soon as practicable after the Payment
Date. The Trustee shall act as the Paying Agent for an Offer to Purchase. The
Company will comply with Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
16
regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase.
"Officer" means (i) the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President or the Chief Financial Officer, and
(ii) the Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii) of
the definition thereof or two officers listed in clause (i) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"Offshore Global Note" has the meaning provided in Section 2.01.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Operating Lease" means any lease of any property (whether real, personal
or mixed) other than a Capitalized Lease.
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to Lodgian, that meets the requirements of
Section 10.04 hereof. Each such Opinion of Counsel shall include the statements
provided for in TIA Section 314(e).
"Pari Passu Indebtedness" has the meaning provided in Section 4.11.
"Paying Agent" has the meaning provided in Section 2.04, except that, for
the purposes of Article Eight, the Paying Agent shall not be Lodigan or a
Subsidiary of Lodgian or an Affiliate of any of them. The term "Paying Agent"
includes any additional Paying Agent.
"Payment Blockage Period" has the meaning provided in Section 11.02.
"Payment Date" has the meaning provided in the definition of Offer to
Purchase.
"Permanent Offshore Global Notes" has the meaning provided in Section
2.01.
"Permitted Investment" means:
(1) an Investment in Lodgian or a Restricted Subsidiary or a Person
which will, upon the making of such Investment, become a Restricted
Subsidiary or be merged or consolidated with or into or transfer or convey
all or substantially all its assets to, Lodgian or a Restricted
Subsidiary;
17
provided that (a) such person's primary business is related, ancillary or
complementary to the businesses of Lodgian and its Restricted Subsidiaries
on the date of such Investment and (b) none of the Company, Lodgian or any
Subsidiary Guarantor will transfer any hotel properties to a Restricted
Subsidiary other than a Subsidiary Guarantor and no Restricted Subsidiary
other than the Company or a Subsidiary Guarantor will acquire or otherwise
develop any hotels other than hotels held by such Subsidiary on the
Closing Date;
(2) Temporary Cash Investments;
(3) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP;
(4) stock, obligations or securities received in satisfaction of
judgments;
(5) an Investment in an Unrestricted Subsidiary consisting solely of
an Investment in another Unrestricted Subsidiary;
(6) Interest Rate Agreements and Currency Agreements designed solely
to protect Lodgian or its Restricted Subsidiaries against fluctuations in
interest rates or foreign currency exchange rates; and
(7) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of Lodgian and its
Restricted Subsidiaries on the date of such Investment; provided that the
aggregate amount of such Investments under this clause (7) does not exceed
(a) $20 million plus (b) the net reduction in Investments made pursuant to
this clause (7) resulting from distributions on or repayments of such
Investments, including payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other distributions or other transfers
of assets, in each case to Lodgian or any Restricted Subsidiary, or from
the Net Cash Proceeds from the sale or other disposition of any such
Investment (except, in each case, to the extent of any gain on such sale
or disposition that would be included in the calculation of Adjusted
Consolidated Net Income), from the release of any Guarantee or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investments");
provided that the net reduction in any such Investments shall not exceed
the amount of such Investments in such Person.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Physical Notes" has the meaning provided in Section 2.01.
18
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
outstanding on the Closing Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"Purchase Money Indebtedness" means any Indebtedness, including
Capitalized Leases, which is Incurred to finance the acquisition, construction,
installation or improvement of any Replacement Assets and which is Incurred
concurrently with, or within six months following, such acquisition,
construction, installation or improvement.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated July 20, 1999, between the Company, the Guarantors and Xxxxxx Xxxxxxx &
Co. Incorporated, Xxxxxx Brothers Inc. and Bear, Xxxxxxx & Co. Inc. and certain
permitted assigns specified therein.
"Registration Statement" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 1 or July 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
19
"Replacement Assets" means, on any date, property or assets (other than
current assets) of a nature or type or that are used in a business (or an
Investment in a company having property or assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the property
and assets of, or the business of, Lodgian and its Restricted Subsidiaries
existing on such date.
"Responsible Officer", when used with respect to the Trustee, means any
officer assigned to the Corporate Trust Office, including any managing director,
principal, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Trustee customarily performing
functions which are similar to those performed by any of the above designated
officers having direct responsibility for the administration of this Indenture
and also with respect to other similar matters.
"Restricted Payments" has the meaning provided in Section 4.05.
"Restricted Subsidiary" means any Subsidiary of Lodgian other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Secured Indebtedness" has the meaning provided in Section 4.10.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.04.
"Senior Indebtedness" means the following obligations of Lodgian, the
Company or any Subsidiary Guarantor, whether outstanding on the Closing Date or
thereafter Incurred: (1) all Indebtedness and all other monetary obligations
(including, without limitation, expenses, fees, principal, interest,
reimbursement obligations under letters of credit and indemnities payable in
connection therewith) under (or in respect of) the Credit Agreement or any
Interest Rate Agreement or Currency Agreement relating to the Indebtedness under
the Credit Agreement and (2) all Indebtedness and all other monetary obligations
of Lodgian, the Company or any Subsidiary Guarantor (other than the Notes and
any Note Guarantee and the Convertible Debentures), including principal and
interest on such Indebtedness, unless such Indebtedness, by its terms or by the
terms of any agreement or instrument pursuant to which such Indebtedness is
issued, is pari passu with, or subordinated in right of payment to, the Notes or
any Note Guarantee; provided that the term "Senior Indebtedness" shall not
include (a) any Indebtedness of Lodgian, the Company or any Subsidiary Guarantor
that, when Incurred, was without recourse to Lodgian, the Company or such
Subsidiary Guarantor, (b) any Indebtedness of Lodgian, the Company or any
Subsidiary Guarantor to a Subsidiary of Lodgian, or to a joint venture in which
Lodgian or any Restricted Subsidiary has an interest, (c) any
20
Indebtedness of Lodgian, the Company or any Subsidiary Guarantor, to the extent
not permitted by Section 4.03 or Section 4.04; provided that Indebtedness under
the Credit Agreement shall be deemed Senior Indebtedness if Lodgian, the Company
or any Subsidiary Guarantor, as the case may be, believed in good faith at the
time of incurrence that it was permitted to incur such Indebtedness under this
Indenture and delivers an officers' certificate to the lenders under the Credit
Agreement to such effect, (d) any repurchase, redemption or other obligation in
respect of Disqualified Stock, (e) any Indebtedness to any employee of Lodgian
or any of its Subsidiaries, (f) any liability for taxes owed or owing by
Lodgian, the Company or any Subsidiary Guarantor, or (g) any Trade Payables.
"Senior Subordinated Obligations" means any principal of, premium, if any,
or interest on the Notes payable pursuant to the terms of the Notes or any Note
Guarantee or upon acceleration, including any amounts received upon the exercise
of rights of rescission or other rights of action (including claims for damages)
or otherwise, to the extent relating to the purchase price of the Notes or
amounts corresponding to such principal, premium, if any, or interest on the
Notes.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of Lodgian, accounted for more than 10% of the consolidated
revenues of Lodgian and its Restricted Subsidiaries or (ii) as of the end of
such fiscal year, was the owner of more than 10% of the consolidated assets of
Lodgian and its Restricted Subsidiaries, all as set forth on the most recently
available consolidated financial statements of Lodgian for such fiscal year.
"Stated Maturity" means (1) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (2) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.08.
"Subsidiary Guarantor" means any Initial Subsidiary Guarantor and any
other Restricted Subsidiary which provides a Guarantee of the Company's
obligations under this Indenture and the Notes pursuant to Section 4.07 or
Section 4.20.
21
"Temporary Cash Investment" means any of the following:
(1) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United
States of America or any agency thereof, in each case maturing within one
year;
(2) time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country
recognized by the United States of America, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess
of $100 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank or trust company meeting the qualifications described in
clause (2) above;
(4) commercial paper, maturing not more than one year after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x or "A-1" (or
higher) according to S&P;
(5) securities with maturities of six months or less from the date
of acquisition issued or fully and unconditionally guaranteed by any
state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof, and rated at least
"A" by S&P or Xxxxx'x; and
(6) any mutual fund that has at least 95% of its assets continuously
invested in investments of the types described in clauses (1) through (5)
above.
"Temporary Offshore Global Notes" has the meaning provided in Section
2.01.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S. Code xx.xx. 77aaa-77bbbb), as in effect on the date this Indenture was
executed, except as provided in Section 9.06.
22
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness, the date such Indebtedness is to be Incurred and, with respect to
any Restricted Payment, the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (1) any Subsidiary of Lodgian other than
the Company that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors in the manner provided below;
and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of Lodgian) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, Lodgian or any Restricted Subsidiary; provided that (a) any Guarantee by
Lodgian or any Restricted Subsidiary of any Indebtedness of the Subsidiary being
so designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by Lodgian or such Restricted Subsidiary (or both, if applicable)
at the time of such designation; (b) either (x) the Subsidiary to be so
designated has total assets of $1,000 or less or (y) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.05 and (c) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (a) of this proviso would be permitted under Section 4.03
and Section 4.05. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that (i) no Default or Event
of Default shall have occurred and be continuing at the time of or after giving
effect to such designation and (ii) all Liens and Indebtedness of such
Unrestricted Subsidiary outstanding immediately after such designation would, if
Incurred at such time, have been permitted to be Incurred (and shall be deemed
to have been Incurred) for all purposes of this Indenture. Any such designation
by the Board of Directors shall be evidenced to the Trustee by promptly filing
with the Trustee a copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing provisions.
"U.S. Global Notes" has the meaning provided in Section 2.01.
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"U.S. Government Obligations" means securities that are (1) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (2) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"U.S. Physical Notes" means the Notes issued in the form of permanent
certificated Notes in registered form in substantially the form set forth in
Exhibit A to Institutional Accredited Investors which are not QIBs (excluding
Non-U.S. Persons) in accordance with Section 2.08(a).
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
SECTION 1.02. 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 or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
24
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(I) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate of
authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company or any Guarantor is subject or usage. The Company shall approve the form
of the Notes and any notation, legend or endorsement on the Notes. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the form of the Notes annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture. To the extent applicable, the Company,
25
each Guarantor and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (the "U.S. Global Notes"),
registered in the name of the nominee of the Depositary, deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary, or its nominee, in accordance with the instructions given by the
Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on Regulation
S shall be issued initially in the form of one or more temporary global Notes in
registered form substantially in the form set forth in Exhibit A (the "Temporary
Offshore Global Notes"), registered in the name of the nominee of the
Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. At any time on or after September 1, 1999, upon receipt by the Trustee
and the Company of a certificate substantially in the form of Exhibit B hereto,
one or more permanent global Notes in registered form substantially in the form
set forth in Exhibit A hereto (the "Permanent Offshore Global Notes"; and
together with the Temporary Offshore Global Notes, the "Offshore Global Notes"),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided shall be deposited with the Trustee, as custodian for the Depositary,
or its nominee, and the Registrar shall reflect on its books and records the
date and a decrease in the principal amount of the Temporary Offshore Global
Notes in an amount equal to the principal amount of the beneficial interest in
the Temporary Offshore Global Notes transferred.
Notes issued pursuant to Section 2.07 in exchange for interests in the
U.S. Global Notes and the Offshore Global Notes shall be in the form of
permanent certificated Notes in registered form substantially in the form set
forth in Exhibit A hereto (the "U.S. Physical Notes" and the "Offshore Physical
Notes", respectively).
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Notes
and the Offshore Global Notes are sometimes referred to herein as the "Global
Notes."
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.
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SECTION 2.02. Restrictive Legends. Unless and until a Note is exchanged
for an Exchange Note or sold in connection with an effective Registration
Statement pursuant to the Registration Rights Agreement, (i) the U.S. Global
Notes and U.S. Physical Notes shall bear the legend set forth below on the face
thereof and (ii) the Offshore Physical Notes, until at least the 41st day after
the Closing Date and receipt by the Company and the Trustee of a certificate
substantially in the form of Exhibit B hereto, and the Temporary Offshore Global
Notes shall bear the legend set forth below on the face thereof.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
(B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN
"INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS
IN EFFECT ON THE DATE OF TRANSFER OF THIS NOTE, RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER
THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE), AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN
THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE
27
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM 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. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE 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 CEDE & CO. 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
SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. Execution, Authentication and Denominations. Subject to
Article Four and applicable law, the aggregate principal amount of Notes which
may be authenticated and delivered under this Indenture is unlimited. The Notes
shall be executed by two Officers of the Company. The signature of these
Officers on the Notes may be by facsimile or manual signature in the name and on
behalf of the Company.
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If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall, upon receipt of a Company Order,
authenticate for original issue Notes in the aggregate principal amount
specified in such Company Order; provided that the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Company in
connection with such authentication of Notes. Such Company Order shall specify
the amount of Notes to be authenticated and the date on which the original issue
of Notes is to be authenticated and, in case of an issuance of Notes pursuant to
Section 2.15, shall certify that such issuance is in compliance with Article
Four.
The Trustee may appoint an authenticating agent to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served, which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Security Register"). The Security Register shall be
in written form or any other form capable of being converted into written form
within a reasonable time. The Company may have one or more co-Registrars and one
or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an
29
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee as of each Regular Record Date and at such other
times as the Trustee may reasonably request the names and addresses of Holders
as they appear in the Security Register, including the aggregate principal
amount of Notes held by each Holder.
SECTION 2.05. Paying Agent to Hold Money in Trust. Not later than 11:00
a.m. (New York City time) on each due date of the principal, premium, if any,
and interest on any Notes, the Company shall deposit with the Paying Agent money
in immediately available funds sufficient to pay such principal, premium, if
any, and interest so becoming due. The Company shall require each Paying Agent
other than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, and interest on the
Notes (whether such money has been paid to it by the Company or any other
obligor on the Notes), and such Paying Agent shall promptly notify the Trustee
of any default by the Company (or any other obligor on the Notes) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any time during the continuance of any payment default, upon
written request to a Paying Agent, require such Paying Agent to pay all money
held by it to the Trustee and to account for any funds disbursed. Upon doing so,
the Paying Agent shall have no further liability for the money so paid over to
the Trustee. If the Company or any Subsidiary of the Company or any Affiliate of
any of them acts as Paying Agent, it will, on or before each due date of any
principal of, premium, if any, or interest on the Notes, segregate and hold in a
separate trust fund for the benefit of the Holders a sum of money sufficient to
pay such principal, premium, if any, or interest so becoming due until such sum
of money shall be paid to such Holders or otherwise disposed of as provided in
this Indenture, and will promptly notify the Trustee of its action or failure to
act.
SECTION 2.06. Transfer and Exchange. The Notes are issuable only in
registered form. A Holder may transfer a Note only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Security
Register. Prior to the registration of any transfer by a Holder
30
as provided herein, the Company, the Trustee, and any agent of the Company shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue, and neither the Company,
the Trustee, nor any such agent shall be affected by notice to the contrary.
Furthermore, any Holder of a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent) and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry. When Notes are presented
to the Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Notes of other authorized
denominations (including an exchange of Notes for Exchange Notes), the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Notes are duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Trustee and Registrar duly executed by the Holder thereof or by an
attorney who is authorized in writing to act on behalf of the Holder); provided
that no exchanges of Notes for Exchange Notes shall occur until a Registration
Statement shall have been declared effective by the Commission and that any
Notes that are exchanged for Exchange Notes shall be cancelled by the Trustee.
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange or redemption
of the Notes, 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 taxes or other similar governmental charge payable
upon exchanges pursuant to Section 2.11, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
SECTION 2.07. Book-Entry Provisions for Global Notes. (a) The U.S. Global
Notes and Offshore Global Notes initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary, (ii) be
delivered to the Trustee as custodian for such Depositary and (iii) bear legends
as set forth in Section 2.02.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under 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
31
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in Global Notes may be
transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08. In addition, U.S. Physical Notes and Offshore
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the U.S. Global Notes or the Offshore Global
Notes, as the case may be, if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the U.S. Global Notes or the
Offshore Global Notes, as the case may be, and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) an Event of Default
has occurred and is continuing and the Registrar has received a request from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
will, upon transfer, cease to be an interest in such Global Note and become an
interest in such other Global Note and, accordingly, will thereafter be subject
to all transfer restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.
(d) In connection with any transfer of a portion of the beneficial
interests in a Global Note to beneficial owners pursuant to paragraph (b) of
this Section 2.07, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of such Global Note in an amount equal to
the principal amount of the beneficial interest in such Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more U.S. Physical Notes or Offshore Physical Notes, as the
case may be, of like tenor and amount.
(e) In connection with the transfer of the U.S. Global Notes or the
Offshore Global Notes, in whole, to beneficial owners pursuant to paragraph (b)
of this Section 2.07, the U.S. Global Notes or Offshore Global Notes, as the
case may be, shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the U.S. Global Notes or Offshore Global Notes, as the
case may be, an equal aggregate principal amount of U.S. Physical Notes or
Offshore Physical Notes, as the case may be, of authorized denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Notes pursuant to paragraph (b), (d) or (e) of this Section 2.07
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Physical Note set
forth in Section 2.02.
32
(g) Any Offshore Physical Note delivered in exchange for an interest in
the Offshore Global Notes pursuant to paragraph (b), (d) or (e) of this Section
2.07 shall, except as otherwise provided by paragraph (f) of Section 2.08, bear
the legend regarding transfer restrictions applicable to the Offshore Physical
Note set forth in Section 2.02.
(h) 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.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Note to any Institutional Accredited Investor which is not a QIB (excluding
Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether
or not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act or (y) the proposed transferee has delivered to the
Registrar (A) a certificate substantially in the form of Exhibit C hereto
and (B) if the aggregate principal amount of the Notes being transferred
is less than $100,000, an opinion of counsel acceptable to the Company
that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Notes, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (i) above
and (y) instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the U.S. Global
Notes in an amount equal to the principal amount of the beneficial
interest in the U.S. Global Notes to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more U.S.
Physical Notes of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note to a QIB (excluding
Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) either Offshore
Physical Notes prior to the removal of the Private Placement Legend or
U.S. Physical Notes, the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked the box
provided for on the form of Note stating, or has otherwise advised the
Company and the Xxxxxxxxx
00
in writing, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided for
on the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the 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 QIB within the meaning of
Rule 144A 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 and the Guarantor as it has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Notes, the transfer of such interest may be
effected only through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to
be transferred consists of either Offshore Physical Notes prior to removal
of the Private Placement Legend or U.S. Physical Notes, upon receipt by
the Registrar of the documents referred to in paragraph (i) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of U.S. Global Notes in an amount
equal to the principal amount of the Offshore Physical Notes or U.S.
Physical Notes to be transferred, and the Trustee shall cancel the
Offshore Physical Notes or U.S. Physical Notes so transferred.
(c) Transfers of Interests in the Temporary Offshore Global Notes. The
following provisions shall apply with respect to registration of any proposed
transfer of an interest in a Temporary Offshore Global Notes:
(i) The Registrar shall register the transfer of any Note (x) if the
proposed transferee is a Non-U.S. Person and the proposed transferor has
delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the 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 QIB within the meaning of
Rule 144A, 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 and the Guarantors as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware
that the transferor is relying upon its foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
34
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. Global Notes in an
amount equal to the principal amount of the Temporary Offshore Global
Notes to be transferred, and the Trustee shall decrease the amount of the
Temporary Offshore Global Notes.
(d) Transfers of Interests in the Permanent Offshore Global Notes or
Unlegended Offshore Physical Notes. The following provisions shall apply with
respect to any transfer of interests in Permanent Offshore Global Notes or
unlegended Offshore Physical Notes. The Registrar shall register the transfer of
any such Note without requiring any additional certification.
(e) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) Prior to September 1, 1999, the Registrar shall register any
proposed transfer of a Note to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit D hereto from the
proposed transferor.
(ii) On and after September 1, 1999, the Registrar shall register
any proposed transfer to any Non-U.S. Person if the Note to be transferred
is a U.S. Physical Note or an interest in U.S. Global Notes, upon receipt
of a certificate substantially in the form of Exhibit D hereto from the
proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Notes, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Notes in an
amount equal to the principal amount of the beneficial interest in the
U.S. Global Notes to be transferred, and (b) if the proposed transferee is
an Agent Member, upon receipt by the Registrar of instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the Offshore Global Notes in an amount equal to
the principal amount of the U.S. Physical Notes or the U.S. Global Notes,
as the case may be, to be transferred, and the Trustee shall cancel the
Physical Note, if any, so transferred or decrease the amount of the U.S.
Global Notes.
(f) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the transfer, exchange
or replacement of Notes bearing the Private Placement
35
Legend, the Registrar shall deliver only Notes that bear the Private Placement
Legend unless (i) the Private Placement Legend is no longer required by Section
2.02, (ii) the circumstances contemplated by paragraph (a)(i)(x) of this Section
2.08 exist or (iii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(g) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. If a mutilated Note is surrendered to the
Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such Note has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.09 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
36
SECTION 2.10. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or one of its
Affiliates holds such Note, provided, however, that in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which the Trustee has actual
knowledge to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company or any other obligor upon the
Notes or any Affiliate of the Company or of such other obligor.
SECTION 2.11. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Notes of authorized denominations. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.12. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously
37
authenticated hereunder which the Company has not issued and sold. The Registrar
and the Paying Agent shall forward to the Trustee any Notes surrendered to them
for transfer, exchange or payment. The Trustee shall cancel all Notes
surrendered for transfer, exchange, payment or cancellation and shall destroy
them in accordance with its normal procedure.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the Company
and the Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in
notices of redemption or exchange as a convenience to Holders; provided that any
such notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall promptly notify
the Trustee of any change in "CUSIP", "CINS" or "ISIN" numbers for the Notes.
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment of
interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.15. Issuance of Additional Notes. The Company may, subject to
Article Four of this Indenture and applicable law, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. (a) The Notes are redeemable, at the
Company's option, in whole or in part, at any time or from time to time, on or
after July 15, 2004 and prior to maturity, upon not less than 30 nor more than
60 days' prior notice mailed by first-class mail to each Holder's last address,
as it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount), plus accrued and unpaid interest
to the Redemption Date (subject to the right of Holders of record on the
relevant Regular Record Date that is prior to the Redemption Date to receive
interest due
38
on an Interest Payment Date), if redeemed during the 12-month period commencing
May 1 of the years set forth below:
Redemption
Year Price
---- ----------
2004.................... 106.125%
2005.................... 104.083%
2006.................... 102.042%
2007 and thereafter .... 100.000%
(b) In addition, at any time prior to July 15, 2002, the Company may
redeem up to 35% of the aggregate principal amount of the Notes with the Net
Cash Proceeds of one or more sales of Capital Stock (other than Disqualified
Stock), at any time as a whole or from time to time in part, at a Redemption
Price (expressed as a percentage of principal amount) of 112.250%, plus accrued
and unpaid interest to the Redemption Date (subject to the rights of Holders of
record on the relevant Regular Record Date that is prior to the Redemption Date
to receive interest due on an Interest Payment Date); provided that (i) at least
65% of the aggregate principal amount of Notes originally issued on the Closing
Date remains outstanding after each such redemption and (ii) notice of such
redemption is mailed within 60 days after such sale of Capital Stock.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem Notes
pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Notes to be redeemed and the
provision of the Note pursuant to which redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in an
Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the Company,
of the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not listed on a national securities exchange or
automated quotation system, by lot or by such other method as the Trustee in its
sole discretion shall deem fair and appropriate; provided that no Note of $1,000
in principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 in principal amount or any integral multiple thereof)
of Notes that have denominations larger than $1,000 in principal amount.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
39
The Trustee shall notify the Company and the Registrar promptly in writing of
the Notes or portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price plus the amount of any accrued interest;
if any;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is
to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of the
principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
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SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption is
mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, shall segregate and hold in trust as provided in
Section 2.05) on or prior to 11:00 a.m. New York time money sufficient to pay
the Redemption Price of, and accrued interest, if any, on all Notes to be
redeemed on that date other than Notes or portions thereof called for redemption
on that date that have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge, a new Note equal in principal
amount to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them)
41
holds on that date money designated for and sufficient to pay the installment.
If the Company or any Subsidiary of the Company or any Affiliate of any of them
acts as Paying Agent, an installment of principal, premium, if any, or interest
shall be considered paid on the due date if the entity acting as Paying Agent
complies with the last sentence of Section 2.05. As provided in Section 6.09,
upon any bankruptcy or reorganization procedure relative to the Company, the
Trustee shall serve as the Paying Agent, if any, for the Notes.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided that no
such designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company shall give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee as such office of the Company in accordance with Section 2.04.
SECTION 4.03. Limitation on Indebtedness. (a) Lodgian will not, and will
not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (other
than the Notes, the Note Guarantees and other Indebtedness existing on the
Closing Date); provided that Lodgian, the Company or any Subsidiary Guarantor
may Incur Indebtedness if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Fixed Charge Coverage Ratio would be greater than (x) 1.85:1, for Indebtedness
Incurred based on any four fiscal quarters ended no later than September 30,
1999 and (y) 2.0:1, for Indebtedness Incurred on or before June 30, 2001, (II)
2.25:1 for Indebtedness Incurred after June 30, 2001 and on or before December
31, 2002 and (III) 2.5:1 for Indebtedness Incurred after December 31, 2002.
42
Notwithstanding the foregoing, Lodgian and the Company and, as specified
below, any other Restricted Subsidiary may Incur each and all of the following:
(1) Indebtedness outstanding under the Credit Agreement in an
aggregate principal amount (together with refinancings thereof) at any
time not to exceed $300 million minus the amount of Impac I Debt then
outstanding and the amount of such Indebtedness permanently repaid as
provided under Section 4.11;
(2) Indebtedness owed (A) to Lodgian, the Company or any Subsidiary
Guarantor evidenced by a promissory note or (B) to any other Restricted
Subsidiary; provided that any event which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of such Indebtedness (other than to Lodgian or another Restricted
Subsidiary) shall be deemed, in each case, to constitute an Incurrence of
such Indebtedness not permitted by this clause (2);
(3) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness
(other than Indebtedness outstanding under clause (2) or (9) or the
Convertible Debentures and CRESTS) and any refinancings thereof in an
amount not to exceed the amount so refinanced or refunded (plus premiums,
accrued interest, fees and expenses); provided that
(a) Indebtedness the proceeds of which are used to refinance
or refund the Notes or Indebtedness that is pari passu with, or
subordinated in right of payment to, the Notes or a Note Guarantee
shall only be permitted under this clause (3) if (x) in case the
Notes are refinanced in part or the Indebtedness to be refinanced is
pari passu with the Notes or a Note Guarantee, such new
Indebtedness, by its terms or by the terms of any agreement or
instrument pursuant to which such new Indebtedness is outstanding,
is expressly made pari passu with, or subordinate in right of
payment to, the remaining Notes or the Note Guarantee, or (y) in
case the Indebtedness to be refinanced is subordinated in right of
payment to the Notes or a Note Guarantee, such new Indebtedness, by
its terms or by the terms of any agreement or instrument pursuant to
which such new Indebtedness is issued or remains outstanding, is
expressly made subordinate in right of payment to the Notes or the
Note Guarantee at least to the extent that the Indebtedness to be
refinanced is subordinated to the Notes or the Note Guarantee,
(b) such new Indebtedness, determined as of the date of
Incurrence of such new Indebtedness, does not mature prior to the
Stated Maturity of the Indebtedness to be refinanced or refunded,
and the Average Life of such new Indebtedness is at least equal to
the remaining Average Life of the Indebtedness to be refinanced or
refunded, and
43
(c) such new Indebtedness is Incurred by the Company or a
Guarantor or by the Restricted Subsidiary who is the obligor on the
Indebtedness to be refinanced or refunded;
(4) Indebtedness of Lodgian or the Company, to the extent the net
proceeds thereof are promptly (a) used to purchase Notes tendered in an
Offer to Purchase made as a result of a Change in Control or (b) deposited
to defease the Notes as described under Section 8.02 or 8.03;
(5) Guarantees of the Notes and Guarantees of Indebtedness of
Lodgian, the Company or any Subsidiary Guarantor by any Restricted
Subsidiary provided the Guarantee of such Indebtedness is permitted by and
made in accordance with Section 4.08;
(6) Indebtedness of any Restricted Subsidiary in an aggregate
principal amount outstanding at any time (together with refinancings
thereof) not to exceed $18 million, less any amount of such Indebtedness
permanently repaid as provided under Section 4.11;
(7) Purchase Money Indebtedness of Lodgian, the Company or any
Subsidiary Guarantor in an aggregate amount outstanding at any time
(together with refinancings thereof) not to exceed $10 million;
(8) Indebtedness of Lodgian or the Company issued in exchange for,
or the net proceeds of which are used to repurchase the Convertible
Debentures and CRESTS; provided that either:
(a) after giving effect to the Incurrence of such Indebtedness and
the receipt and application of the proceeds therefrom, (x) the Fixed
Charge Coverage Ratio would be greater than 2.0:1 and (y) Lodgian or the
Company could Incur at least $1.00 of Indebtedness under the first
paragraph of this Section 4.03; provided, however, that such Indebtedness
(1) is expressly made subordinate in right of payment to the Notes or
Lodgian's Note Guarantee, as the case may be, at least to the extent that
the Convertible Debentures are subordinated to Lodgian's Note Guarantee on
the Closing Date and (2) does not mature prior to the Stated Maturity of
the Convertible Debentures, and the Average Life of such new Indebtedness
is at least equal to the remaining Average Life of the Convertible
Debentures, determined as of the date of Incurrence of such Indebtedness;
or
(b) such Indebtedness (w) is expressly made subordinate in right of
payment to the Notes or Lodgian's Note Guarantee, as the case may be, at
least to the extent that the Convertible Debentures are subordinated to
Lodgian's Note Guarantee on the Closing Date, (x) does not mature prior to
the Stated Maturity of the Convertible Debentures and the Average Life of
such new Indebtedness is at least equal to the remaining Average Life of
the Convertible Debentures,
44
determined as of the date of the Incurrence of such Indebtedness, (y)
permits interest on such Indebtedness to be deferred on terms at least as
favorable to the Holders as the Convertible Debentures and (z) on a pro
forma basis does not cause the Fixed Charge Coverage Ratio to be less than
the Fixed Charge Coverage Ratio prior to the exchange or repurchase,
assuming that the interest on the Convertible Debentures constituted
Consolidated Interest Expense;
(9) performance or completion guarantees arising in the ordinary
course of business in an aggregate amount outstanding at any time not to
exceed 5% of Adjusted Consolidated Net Tangible Assets (determined as of
the last day of the last fiscal quarter preceding the date of such
guarantee for which reports have been filed with the SEC or provided to
the Trustee); and
(10) Indebtedness of Lodgian, the Company or any Subsidiary
Guarantor (in addition to Indebtedness permitted under clauses (1) through
(9) above) in an aggregate principal amount outstanding at any time
(together with refinancings thereof) not to exceed $10 million, less any
amount of such Indebtedness permanently repaid as provided under Section
4.11.
(b) Notwithstanding any other provision of this Section 4.03, the maximum
amount of Indebtedness that may be Incurred pursuant to this Section 4.03 will
not be deemed to be exceeded, with respect to any outstanding Indebtedness due
solely to the result of fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (x) Indebtedness Incurred under the Credit Agreement on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (1)
of the second paragraph of clause (a) of this Section 4.03, (y) Guarantees,
Liens or obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not be
included and (z) any Liens granted pursuant to the equal and ratable provisions
referred to in Section 4.10 shall not be treated as Indebtedness. For purposes
of determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described above (other than Indebtedness referred to in clause (x) of the
preceding sentence), including under the first paragraph of part (a), Lodgian,
in its sole discretion, shall classify, and from time to time may reclassify,
such item of Indebtedness.
(d) Notwithstanding the foregoing, neither Lodgian nor any Restricted
Subsidiary will issue any Indebtedness in exchange for, or the net proceeds of
which will be used to, refinance or refund the Convertible Debentures or the
CRESTS unless (x) such Indebtedness is expressly made subordinate in right of
payment to Lodgian's Note Guarantees or the Note Guarantee at least to the
extent as the Convertible Debentures are subordinated to Lodgian's Note
Guarantee and (y) such new Indebtedness, determined as of the date of Incurrence
of such Indebtedness, does not mature prior to the Stated Maturity of the
Convertible Debentures, and the Average Life of such new Indebtedness is at
least equal to the remaining Average Life of the Convertible Debentures.
45
SECTION 4.04. Limitation on Senior Subordinated Indebtedness. Lodgian will
not, and will not permit the Company or any Subsidiary Guarantor to, Incur any
Indebtedness that is subordinate in right of payment to any Senior Indebtedness
unless such Indebtedness is pari passu with, or subordinated in right of payment
to, the Notes or any Note Guarantee; provided that the foregoing limitation
shall not apply to distinctions between categories of Senior Indebtedness that
exist by reason of any Liens or Guarantees arising or created in respect of some
but not all such Senior Indebtedness.
SECTION 4.05. Limitation on Restricted Payments. Lodgian will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, (1)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than dividends or distributions payable solely in shares of
its Capital Stock (other than Disqualified Stock) or in options, warrants or
other rights to acquire shares of such Capital Stock) held by Persons other than
Lodgian or any of its Restricted Subsidiaries or make any payment on the
Convertible Debentures or the CRESTS (including payments pursuant to the Lodgian
Capital Trust Guarantee), (2) purchase, call for redemption or redeem, retire or
otherwise acquire for value any shares of Capital Stock of (A) Lodgian, the
Company, Lodgian Capital Trust or any Subsidiary Guarantor (including options,
warrants or other rights to acquire such shares of Capital Stock) held by any
Person or (B) a Restricted Subsidiary other than the Company or a Subsidiary
Guarantor (including options, warrants or other rights to acquire such shares of
Capital Stock) held by any Affiliate of Lodgian (other than a Wholly Owned
Restricted Subsidiary) or any holder (or any Affiliate of such holder) of 5% or
more of the Capital Stock of Lodgian, (3) make any voluntary or optional
principal payment, or voluntary or optional redemption, repurchase, defeasance,
or other acquisition or retirement for value, of Indebtedness of the Company
that is subordinated in right of payment to the Notes or any Indebtedness of
Lodgian or a Subsidiary Guarantor that is subordinated in right of payment to a
Note Guarantee or (4) make any Investment, other than a Permitted Investment, in
any Person (such payments or any other actions described in clauses (1) through
(4) above being collectively "Restricted Payments") if, at the time of, and
after giving effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing,
(B) Lodgian could not Incur at least $1.00 of Indebtedness under the
first paragraph of part (a) of Section 4.03 or
(C) the aggregate amount of all Restricted Payments (the amount, if
other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a
Board Resolution) made after April 1, 1999 shall exceed the sum of:
(1) the excess of (x) 100% of the aggregate amount of
Consolidated EBITDA accrued on a cumulative basis during the period
(taken as one accounting period) beginning on April 1, 1999 and
ending on the last day of the last fiscal quarter preceding the
Transaction Date for which reports have been filed with the SEC or
provided to the
46
Trustee over (y) 2.0 times the aggregate amount of Consolidated
Interest Expense accrued on a cumulative basis during the period
(taken as one accounting period) beginning on April 1, 1999 and
ending on the last day of the last fiscal quarter preceding the
Transaction Date for which reports have been filed with the SEC or
provided to the Trustee plus
(2) the aggregate Net Cash Proceeds received by Lodgian after
the Closing Date from the issuance and sale permitted by this
Indenture of its Capital Stock (other than Disqualified Stock) to a
Person who is not a Subsidiary of Lodgian, including an issuance or
sale permitted by this Indenture of Indebtedness of Lodgian or any
Restricted Subsidiary for cash subsequent to the Closing Date upon
the conversion of such Indebtedness into Capital Stock (other than
Disqualified Stock) of Lodgian, or from the issuance to a Person who
is not a Subsidiary of Lodgian of any options, warrants or other
rights to acquire Capital Stock of Lodgian (in each case, exclusive
of any Disqualified Stock or any options, warrants or other rights
that are redeemable at the option of the holder, or are required to
be redeemed, prior to the Stated Maturity of the Notes) plus
(3) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments) in any Person resulting
from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to
Lodgian or any Restricted Subsidiary or from the Net Cash Proceeds
from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation
of Adjusted Consolidated Net Income), from the release of any
Guarantee or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the
definition of "Investments"), not to exceed, in each case, the
amount of Investments previously made by Lodgian or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(1) the payment of any dividend or redemption of any Capital Stock
within 60 days after the related date of declaration or call for
redemption if, at said date of declaration or call for redemption, such
payment or redemption would comply with the preceding paragraph;
(2) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes or any Note Guarantee including premium, if any, and
accrued interest, with the proceeds of, or in exchange for, Indebtedness
Incurred under clause (3) of the second paragraph of part (a) of Section
4.03;
(3) the repurchase, redemption or other acquisition of Capital Stock
of Lodgian, the Company, Lodgian Capital Trust or a Subsidiary Guarantor
(or options, warrants or other rights
47
to acquire such Capital Stock) in exchange for, or out of the proceeds of
a substantially concurrent offering of, shares of Capital Stock (other
than Disqualified Stock) of Lodgian or the Company (or options, warrants
or other rights to acquire such Capital Stock; provided that such options,
warrants or other rights are not redeemable prior to the Stated Maturity
of the Notes);
(4) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness which is subordinated in right of payment to the Notes or any
Note Guarantee in exchange for, or out of the proceeds of, a substantially
concurrent offering of, shares of the Capital Stock (other than
Disqualified Stock) of Lodgian or the Company (or options, warrants or
other rights to acquire such Capital Stock; provided that such options,
warrants or other rights are not redeemable prior to the Stated Maturity
of the Notes);
(5) payments or distributions, to dissenting stockholders pursuant
to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the property and assets of Lodgian;
(6) Investments acquired in exchange for, or out of the proceeds of
a substantially concurrent offering of, Capital Stock (other than
Disqualified Stock) of Lodgian;
(7) the declaration or payment of dividends on Capital Stock (other
than Disqualified Stock) of Lodgian in an aggregate annual amount not to
exceed 6% of the Net Cash Proceeds received by Lodgian after the Closing
Date from the sale of such Capital Stock;
(8) the payment of interest or liquidated damages on the Convertible
Debentures or the declaration or payment of dividends or liquidated
damages on the CRESTS; provided that the time of any such payment, Lodgian
could not defer any such payment;
(9) any purchase of any fractional shares of Common Stock in
connection with the conversion of the Convertible Debentures or CRESTS;
(10) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of Lodgian and its
Restricted Subsidiaries on the date of such Investment; provided that the
aggregate amount of such Investments under this clause (10) does not
exceed (a) 10% of Adjusted Consolidated Net Tangible Assets (determined as
of the last day of the last fiscal quarter preceding the date of such
Investment for which reports have been filed with the SEC or provided to
the Trustee), plus (b) the net reduction in Investments made pursuant to
this clause (10) resulting from distributions on or repayments of such
Investments, including payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other
48
distributions or other transfers of assets, in each case to Lodgian or any
Restricted Subsidiary, or from the Net Cash Proceeds from the sale or
other disposition of any such Investment (except, in each case, to the
extent of any gain on such sale or disposition that would be included in
the calculation of Adjusted Consolidated Net Income), from the release of
any Guarantee or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the definition
of "Investments"); provided that the net reduction in any such Investments
shall not exceed the amount of such Investments in such Person;
(11) the repurchase or other acquisition of Convertible Debentures
and CRESTS with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (8) of Section 4.03 or Preferred Stock of a Restricted
Subsidiary issued under clause (5) of Section 4.07; or
(12) other Restricted Payments in an aggregate amount not to exceed
$10 million;
provided that, except in the case of clauses (1) and (3), no Default or Event of
Default shall have occurred and be continuing or occur as a consequence of the
actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (2) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (3) or (4) thereof, an Investment acquired in exchange for Capital Stock
referred to in clause (6) thereof and the repurchase or other acquisition of
Convertible Debentures and CRESTS referred to clause (11) thereof), and the Net
Cash Proceeds from any issuance of Capital Stock referred to in clauses (3), (4)
and (6), shall be included in calculating whether the conditions of clause (C)
of the first paragraph of this Section 4.05 have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of Lodgian are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is pari passu with the Notes or
any Note Guarantee, then the Net Cash Proceeds of such issuance shall be
included in clause (C) of the first paragraph of this Section 4.05 only to the
extent such proceeds are not used for such redemption, repurchase or other
acquisition of Indebtedness. For purposes of determining compliance with this
Section 4.05, in the event that a Restricted Payment meets the criteria of more
than one of the types of Restricted Payments described in the above clauses,
including the first paragraph of this Section 4.05, Lodgian, in its sole
discretion, may order and classify, and from time to time may reclassify, such
Restricted Payment if it would have been permitted at the time such Restricted
Payment was made and at the time of such reclassification.
SECTION 4.06. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. Lodgian will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (1) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by Lodgian or any other Restricted
49
Subsidiary, (2) pay any Indebtedness owed to Lodgian or any other Restricted
Subsidiary, (3) make loans or advances to Lodgian or any other Restricted
Subsidiary or (4) transfer any of its property or assets to Lodgian or any other
Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(1) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements;
provided that the encumbrances and restrictions in any such extensions,
refinancings, renewals or replacements taken as a whole are no less
favorable in any material respect to the Holders than those encumbrances
or restrictions that are then in effect and that are being extended,
refinanced, renewed or replaced;
(2) existing under or by reason of applicable law;
(3) with respect to any Person or the property or assets of such
Person acquired by Lodgian or any Restricted Subsidiary, existing at the
time of such acquisition and not incurred in contemplation thereof, which
encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired;
(4) in the case of clause (4) of the first paragraph of this Section
4.06, (A) that restrict in a customary manner the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance
or contract or similar property or asset, (B) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of Lodgian or any Restricted Subsidiary
not otherwise prohibited by this Indenture or (C) arising or agreed to in
the ordinary course of business, not relating to any Indebtedness, and
that do not, individually or in the aggregate, detract from the value of
property or assets of Lodgian or any Restricted Subsidiary in any manner
material to Lodgian or any Restricted Subsidiary;
(5) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of,
such Restricted Subsidiary;
(6) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued if:
(A) the encumbrance or restriction applies only in the event
of a payment default or a default with respect to a financial
covenant contained in such Indebtedness or agreement,
50
(B) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in
comparable financings (as determined by Lodgian in good faith) and
(C) Lodgian determines that any such encumbrance or
restriction will not materially affect the Company's ability to make
principal or interest payments on the Notes; or
(7) relating to a Subsidiary Guarantor and contained in the terms of
any Indebtedness or any agreement pursuant to which such Indebtedness was
issued if:
(A) the encumbrance or restriction is not materially more
disadvantageous to the Holders of the Notes than is customary in
comparable financings (as determined by Lodgian in good faith) and
(B) Lodgian determines that any such encumbrance or
restriction will not materially affect the Company's ability to make
principal or interest payments on the Notes.
Nothing contained in this Section 4.06 shall prevent Lodgian or any Restricted
Subsidiary from (1) creating, incurring, assuming or suffering to exist any
Liens otherwise permitted in Section 4.10 or (2) restricting the sale or other
disposition of property or assets of Lodgian or any of its Restricted
Subsidiaries that secure Indebtedness of Lodgian or any of its Restricted
Subsidiaries.
SECTION 4.07. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. Lodgian will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except:
(1) to Lodgian or a Wholly Owned Restricted Subsidiary;
(2) issuances of director's qualifying shares or sales to foreign
nationals of shares of Capital Stock of foreign Restricted Subsidiaries,
to the extent required by applicable law;
(3) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving effect
to such issuance or sale would have been permitted to be made under
Section 4.05 if made on the date of such issuance or sale;
(4) sales of Common Stock (including options, warrants or other
rights to purchase shares of such Common Stock) of a Restricted Subsidiary
by Lodgian or a Restricted Subsidiary,
51
provided that Lodgian or such Restricted Subsidiary applies the Net Cash
Proceeds of any such sale in accordance with clause (A) or (B) of Section
4.11 described below; or
(5) sales of Preferred Stock of a Restricted Subsidiary whose sole
assets consist of Indebtedness of Lodgian or the Company, in exchange for
or the proceeds of which are used to repurchase the Convertible Debentures
and CRESTS, provided such Indebtedness (a) is expressly made subordinate
in right of payment to the Notes or Lodgian's Note Guarantee, as the case
may be, at least to the extent that the Convertible Debentures are
subordinated to Lodgian's Note Guarantee on the Closing Date, (b) does not
mature prior to the Stated Maturity of the Convertible Debentures and the
Average Life of such new Indebtedness is at least equal to the remaining
Average Life of the Convertible Debentures, (c) on a pro forma basis does
not cause the Fixed Charge Coverage Ratio to be less than the Fixed Charge
Coverage Ratio prior to such sale, assuming the interest on such
Indebtedness and the Convertible Debentures constituted Consolidated
Interest Expense and (d) permits interest on such Indebtedness to be
deferred on terms at least as favorable to the Holders as the Convertible
Debentures.
SECTION 4.08. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. Lodgian will not permit any Restricted Subsidiary which is not a
Subsidiary Guarantor, directly or indirectly, to Guarantee any Indebtedness of
Lodgian, the Company or any other Restricted Subsidiary (other than a Foreign
Subsidiary), unless (1) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a Guarantee (a
"Subsidiary Guarantee") of payment of the Notes by such Restricted Subsidiary
and (2) such Restricted Subsidiary waives and will not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against Lodgian or any other
Restricted Subsidiary as a result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee; provided that this covenant shall not apply to
any Guarantee existing on the Closing Date of the Company's obligations under
the Credit Agreement by a Restricted Subsidiary existing on the Closing Date.
The Subsidiary Guarantee may be subordinated to the Senior Indebtedness of the
Subsidiary Guarantor to the same extent as the Notes are subordinated to the
Senior Indebtedness of the Company.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (x) any sale, exchange or transfer,
to any Person not an Affiliate of Lodgian, of all of Lodgian's and each
Restricted Subsidiary's Capital Stock in, or all or substantially all the assets
of, such Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by this Indenture) or (y) the release or discharge of the Guarantee
which resulted in the creation of such Subsidiary Guarantee, except a discharge
or release by or as a result of payment under such Guarantee.
SECTION 4.09. Limitation on Transactions with Shareholders and Affiliates.
Lodgian will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any
52
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any holder
(or any Affiliate of such holder) of 5% or more of any class of Capital Stock of
Lodgian or with any Affiliate of Lodgian or any Restricted Subsidiary, except
upon fair and reasonable terms no less favorable to Lodgian or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(1) transactions (A) approved by a majority of the disinterested
members of the Board of Directors or (B) for which Lodgian or a Restricted
Subsidiary delivers to the Trustee a written opinion of a nationally
recognized investment banking, accounting, valuation or appraisal firm
stating that the transaction is fair to Lodgian or such Restricted
Subsidiary from a financial point of view;
(2) any transaction solely between Lodgian and any of its Wholly
Owned Restricted Subsidiaries or solely among Wholly Owned Restricted
Subsidiaries;
(3) the payment of reasonable and customary regular fees to
directors of Lodgian who are not employees of Lodgian and indemnification
arrangements entered into by Lodgian in the ordinary course of business
and consistent with past practices of Lodgian;
(4) any payments or other transactions pursuant to any tax-sharing
agreement between Lodgian and any other Person with which Lodgian files a
consolidated tax return or with which Lodgian is part of a consolidated
group for tax purposes;
(5) any sale of shares of Capital Stock (other than Disqualified
Stock) of Lodgian or the Company;
(6) development, management and administrative services and
performance and completion guarantees provided in the ordinary course of
business by Lodgian or any Restricted Subsidiary to any Person in which
Lodgian or any Restricted Subsidiary has an Investment; or
(7) any Permitted Investments or any Restricted Payments not
prohibited by Section 4.05.
Notwithstanding the foregoing, any transaction or series of related transactions
covered by the first paragraph of this Section 4.09 and not covered by clauses
(2) through (7) of this paragraph, (a) the aggregate amount of which exceeds $1
million in value, must be approved or determined to be fair in the
53
manner provided for in clause (1)(A) or (B) above and (b) the aggregate amount
of which exceeds $5 million in value, must be determined to be fair in the
manner provided for in clause (1)(B) above.
SECTION 4.10. Limitation on Liens. Lodgian will not, and will not permit
the Company or any Subsidiary Guarantor to, Incur any Indebtedness secured by a
Lien ("Secured Indebtedness") which is not Senior Indebtedness unless
contemporaneously therewith effective provision is made to secure the Notes or
the Note Guarantee equally and ratably with (or, if the Secured Indebtedness is
subordinated in right of payment to the Notes or the Note Guarantees, prior to)
such Secured Indebtedness for so long as such Secured Indebtedness is secured by
a Lien.
The foregoing limitation does not apply to:
(1) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Closing Date; provided that such Lien
is created solely for the purpose of securing Indebtedness Incurred, in
accordance with Section 4.03, to finance the cost (including the cost of
improvement or construction) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction
or the commencement of full operation of such property;
(2) any interest or title of a lessor in the property subject to any
Capitalized Lease;
(3) Liens on shares of Capital Stock of any Unrestricted Subsidiary
to secure Indebtedness of such Unrestricted Subsidiary; and
(4) Liens on cash set aside at the time of the Incurrence of any
Indebtedness, or government securities purchased with such cash, in either
case to the extent that such cash or government securities prefund the
payment of interest on such Indebtedness and are held in an escrow account
or similar arrangements to be applied for such purpose.
SECTION 4.11. Limitation on Asset Sales. Lodgian will not, and will not
permit any Restricted Subsidiary to, consummate any Asset Sale, unless (1) the
consideration received by Lodgian or such Restricted Subsidiary is at least
equal to the fair market value of the assets sold or disposed of and (2) at
least 75% of the consideration received consists of (a) cash or Temporary Cash
Investments, (b) the assumption of Indebtedness of Lodgian or any Restricted
Subsidiary (other than Indebtedness to Lodgian or any Restricted Subsidiary),
provided that Lodgian or such Restricted Subsidiary is irrevocably and
unconditionally released from all liability under such Indebtedness or (c)
Replacement Assets.
In the event and to the extent that the Net Cash Proceeds received by
Lodgian or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of
54
the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of Lodgian and its Subsidiaries has been filed with
the SEC or provided to the Trustee), then Lodgian shall or shall cause the
relevant Restricted Subsidiary to:
(1) within twelve months after the date Net Cash Proceeds so
received exceed 10% of Adjusted Consolidated Net Tangible Assets,
(A) apply an amount equal to such excess Net Cash Proceeds to
permanently repay Senior Indebtedness of Lodgian, the Company or of
any Subsidiary Guarantor or Indebtedness of any other Restricted
Subsidiary, in each case owing to a Person other than Lodgian or any
of its Restricted Subsidiaries, or
(B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such
agreement), in Replacement Assets, and
(2) apply (no later than the end of the 12-month period referred to
in clause (1)) such excess Net Cash Proceeds (to the extent not applied
pursuant to clause (1)) as provided in the following paragraph of this
Section 4.11.
The amount of such excess Net Cash Proceeds required to be applied (or to be
committed to be applied) during such 12-month period as set forth in clause (1)
of the preceding sentence and not applied as so required by the end of such
period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $5 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders (and if required by the terms of any Indebtedness that
is pari passu with the Notes ("Pari Passu Indebtedness"), from the holders of
such Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount
of Notes (and Pari Passu Indebtedness) equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of the principal amount thereof, plus,
in each case, accrued interest (if any) to the Payment Date.
SECTION 4.12. Repurchase of Notes upon a Change of Control. The Company
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the principal amount thereof, plus accrued interest, if
any, to the Payment Date.
SECTION 4.13. Existence. Subject to Articles Four and Five of this
Indenture, Lodgian will do or cause to be done all things necessary to preserve
and keep in full force and effect its existence and the
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existence of each of its Restricted Subsidiaries in accordance with the
respective organizational documents of Lodgian and each Restricted Subsidiary
and the rights (whether pursuant to charter, partnership certificate, agreement,
statute or otherwise), licenses and franchises of Lodgian and each Restricted
Subsidiary; provided that Lodgian shall not be required to preserve any such
right, license or franchise, or the existence of any Restricted Subsidiary, if
the maintenance or preservation thereof is no longer desirable in the conduct of
the business of Lodgian and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. Lodgian will pay or
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
Lodgian or any such Subsidiary, (b) the income or profits of any such Subsidiary
which is a corporation or (c) the property of Lodgian or any such Subsidiary and
(ii) all material lawful claims for labor, materials and supplies that, if
unpaid, might by law become a lien upon the property of Lodgian or any such
Subsidiary; provided that Lodgian shall not be required to pay or discharge, or
cause to be paid or discharged, any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.
SECTION 4.15. Maintenance of Properties and Insurance. Lodgian will cause
all properties used or useful in the conduct of its business or the business of
any of its Restricted Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of Lodgian may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided that nothing in this Section
4.15 shall prevent Lodgian or any Restricted Subsidiary from discontinuing the
use, operation or maintenance of any of such properties or disposing of any of
them, if such discontinuance or disposal is, in the judgment of Lodgian,
desirable in the conduct of the business of Lodgian or such Restricted
Subsidiary.
Lodgian will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which Lodgian or any such Restricted Subsidiary, as the case may be,
is then conducting business.
SECTION 4.16. Notice of Defaults. In the event that any Officer of Lodgian
becomes aware of any Default or Event of Default, Lodgian shall promptly deliver
to the Trustee an Officers' Certificate specifying such Default or Event of
Default.
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SECTION 4.17. Compliance Certificates. (a) Lodgian shall deliver to the
Trustee, within 45 days after the end of each fiscal quarter (90 days after the
end of the last fiscal quarter of each year), an Officers' Certificate stating
whether or not the signers know of any Default or Event of Default that occurred
during such fiscal quarter. In the case of the Officers' Certificate delivered
within 90 days after the end of Lodgian's fiscal year, such certificate shall
contain a certification from the principal executive officer, principal
financial officer or principal accounting officer of Lodgian that a review has
been conducted of the activities of Lodgian and its Restricted Subsidiaries and
Lodgian's and its Restricted Subsidiaries' performance under this Indenture and
that Lodgian has complied with all conditions and covenants under this
Indenture. For purposes of this Section 4.17, such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If any of the officers of Lodgian signing such
certificate has knowledge of such a Default or Event of Default, the certificate
shall describe any such Default or Event of Default and its status. The first
certificate to be delivered pursuant to this Section 4.17(a) shall be for the
first fiscal quarter beginning after the execution of this Indenture.
(b) Lodgian shall deliver to the Trustee, within 90 days after the end of
each fiscal year, beginning with the fiscal year in which this Indenture was
executed, a certificate signed by Lodgian's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
(ii) that they have read the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (a) of this Section 4.17 and (iii) whether, in
connection with their audit examination, anything came to their attention that
caused them to believe that Lodgian was not in compliance with any of the terms,
covenants, provisions or conditions of Article Four and Section 5.01 of this
Indenture as they pertain to accounting matters and, if any Default or Event of
Default has come to their attention, specifying the nature and period of
existence thereof; provided that such independent certified public accountants
shall not be liable in respect of such statement by reason of any failure to
obtain knowledge of any such Default or Event of Default that would not be
disclosed in the course of an audit examination conducted in accordance with
generally accepted auditing standards in effect at the date of such examination.
SECTION 4.18. Commission Reports and Reports to Holders. Whether or not
Lodgian is then required to file reports with the SEC, Lodgian shall file with
the SEC all such reports and other information as it would be required to file
with the SEC by Section 13(a) or 15(d) under the Securities Exchange Act of 1934
if it were subject thereto. Lodgian shall supply to the Trustee and to each
Holder or shall supply to the Trustee for forwarding to each such Holder,
without cost to such Holder, copies of such reports and other information.
Lodgian and the Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.19. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium,
57
if any, or interest on the Notes as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.20. Guarantee by Impac Hotel I L.L.C. Upon repayment of the
Impac I Debt, Lodgian shall cause Impac Hotel I L.L.C., or the Restricted
Subsidiaries owning the hotel properties held by Impac Hotel I L.L.C. on the
Closing Date, to execute and deliver a supplemental indenture to this Indenture
providing for a Note Guarantee pursuant to Article Ten.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. Neither Lodgian nor the Company
will consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it,
unless:
(1) it shall be the continuing Person, or the Person (if other than
it) formed by such consolidation or into which it is merged or that
acquired or leased such property and assets (the "Surviving Person") shall
be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof and shall expressly
assume, by a supplemental indenture, executed and delivered to the
Trustee, all of its obligations under this Indenture and the Notes;
(2) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction on a pro
forma basis, Lodgian or the Company or the Surviving Person, as the case
may be, shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of Lodgian or the Company, as the case may be,
immediately prior to such transaction;
(4) immediately after giving effect to such transaction on a pro
forma basis, Lodgian or the Company or the Surviving Person, as the case
may be, could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 4.03; provided that this clause (4) shall not apply
to a consolidation, merger or sale of all (but not less than all) of the
assets of Lodgian or the Company, as the case may be, if all Liens and
Indebtedness of Lodgian or the Company or the
58
Surviving Person, as the case may be, and its Restricted Subsidiaries
outstanding immediately after such transaction would have been permitted
(and all such Liens and Indebtedness, other than Liens and Indebtedness of
Lodgian and its Restricted Subsidiaries outstanding immediately prior to
the transaction, shall be deemed to have been Incurred) for all purposes
of this Indenture;
(5) it delivers to the Trustee an Officers' Certificate (attaching
the arithmetic computations to demonstrate compliance with clauses (3) and
(4)) and Opinion of Counsel, in each case stating that such consolidation,
merger or transfer and such supplemental indenture complies with this
provision and that all conditions precedent provided for herein relating
to such transaction have been complied with; and
(6) each Guarantor, unless such Guarantor is the Person with which
Lodgian or the Company has entered into a transaction under this Section
5.01, shall have by amendment to its Note Guarantee confirmed that its
Note Guarantee shall apply to the obligations of the Company or the
Surviving Person in accordance with the Notes and this Indenture;
provided, however, that clauses (3) and (4) above do not apply if, in the good
faith determination of the Board of Directors of Lodgian, whose determination
shall be evidenced by a Board Resolution, the principal purpose of such
transaction is to change the state of incorporation of Lodgian or the Company
and any such transaction shall not have as one of its purposes the evasion of
the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger, or
any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of Lodgian or the Company in
accordance with Section 5.01 of this Indenture, the successor Person formed by
such consolidation or into which Lodgian or the Company is merged or to which
such sale, conveyance, transfer, lease or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
Lodgian or the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided that neither
Lodgian nor the Company shall be released from its obligation to pay the
principal of, premium, if any, or interest on the Notes or under the Notes
Guarantee in the case of a lease of all or substantially all of its property and
assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. Any of the following events shall
constitute an "Event of Default" hereunder:
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(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise, whether or not such payment is
prohibited by the provisions described under Article Eleven;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days, whether or not such payment is prohibited by the provisions
described under Article Eleven;
(c) default in the performance or breach of the provisions of
Article Four or the failure by the Company to make or consummate an Offer
to Purchase in accordance with Section 4.11 or Section 4.12;
(d) Lodgian, the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement in this
Indenture or under the Notes (other than a default specified in clause
(a), (b) or (c) above) and such default or breach continues for a period
of 30 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of Lodgian, the Company, any Subsidiary Guarantor or any Significant
Subsidiary having an outstanding principal amount of $5 million or more in
the aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event of
default that has caused the holder thereof to declare such Indebtedness to
be due and payable prior to its Stated Maturity and such Indebtedness has
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (II) the failure to
make a principal payment at the final (but not any interim) fixed maturity
and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary and shall not be paid or discharged, and there
shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all
such Persons to exceed $5 million during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of Lodgian, the Company, any Subsidiary
Guarantor or any Significant Subsidiary in an
60
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of Lodgian, the Company, any Subsidiary Guarantor or any Significant
Subsidiary or for all or substantially all of the property and assets of
Lodgian, the Company, any Subsidiary Guarantor or any Significant
Subsidiary or (C) the winding up or liquidation of the affairs of Lodgian,
the Company, any Subsidiary Guarantor or any Significant Subsidiary and,
in each case, such decree or order shall remain unstayed and in effect for
a period of 30 consecutive days;
(h) Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary (A) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case under
any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary or for all or substantially all of the property and
assets of Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors; or
(i) Lodgian or any Subsidiary Guarantor repudiates its obligations
under its Note Guarantee or, except as permitted by this Indenture, any
Note Guarantee is determined to be unenforceable or invalid or shall for
any reason cease to be in full force and effect.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event of
Default specified in clause (g) or (h) of Section 6.01 that occurs with respect
to Lodgian, the Company or any Subsidiary Guarantor) occurs and is continuing
under this Indenture, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
(and to the Trustee if such notice is given by the Holders), may, and the
Trustee at the request of such Holders shall, declare the principal of, premium,
if any, and accrued interest on the Notes to be immediately due and payable.
Upon a declaration of acceleration, such principal, premium, if any, and accrued
interest shall be immediately due and payable; provided that any such
declaration of acceleration shall not become effective until the earlier of (x)
five Business Days after receipt of the acceleration notice by the Bank Agent
and the Company or (y) acceleration of the Indebtedness under the Credit
Agreement; provided further that such acceleration shall automatically be
rescinded and annulled without any further action required on the part of the
Holders in the event that any and all Events of Default specified in the
acceleration notice under this Indenture shall have been cured, waived or
otherwise remedied as provided in this Indenture prior to the expiration of the
period referred to in the preceding clauses (x) and (y). In the event of a
declaration of acceleration because an Event of Default set forth in clause (e)
of Section 6.01 has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default triggering
such Event of Default pursuant to clause (e) shall be remedied or cured by
Lodgian, the Company or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified
61
in clause (g) or (h) of Section 6.01 occurs with respect to Lodgian, the Company
or any Subsidiary Guarantor, the principal of, premium, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such declaration of acceleration, but before a judgment
or decree for the payment of the money due has been obtained by the Trustee, the
Holders of at least a majority in principal amount of the outstanding Notes by
written notice to the Company and to the Trustee, may waive all past Defaults
and rescind and annul a declaration of acceleration and its consequences if (a)
the Company has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Notes, (iii) the principal of and
premium, if any, on any Notes that have become due otherwise than by such
declaration or occurrence of acceleration and interest thereon at the rate
prescribed therefor by such Notes, and (iv) to the extent that payment of such
interest is lawful, interest upon overdue interest, if any, at the rate
prescribed therefor by such Notes, (b) all existing Events of Default, other
than the non-payment of the principal of, premium, if any, and accrued interest
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (c) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07 and
9.02, the Holders of at least a majority in principal amount of the outstanding
Notes, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences, except a Default in the payment of principal of,
premium, if any, or interest on any Note as specified in clause (a) or (b) of
Section 6.01 or in respect of a covenant or provision of this Indenture which
cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority in
aggregate principal amount of the outstanding Notes may direct the time, method
and place of conducting any proceeding for
62
any remedy available to the Trustee or exercising any trust or power conferred
on the Trustee; provided that the Trustee may refuse to follow any direction
that conflicts with law or this Indenture, that may involve the Trustee in
personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders of Notes not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any such direction received from
Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) the Holder has previously given the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
pursue such remedy;
(iii) such Holder or Holders offer the Trustee indemnity reasonably
satisfactory to the Trustee against any costs, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06, the
Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. 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 principal of, premium, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.
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SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. 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 (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section
7.07) and the Holders allowed in any judicial proceedings relative to the
Company (or any other obligor of the Notes), its creditors or its property and
shall be entitled and empowered to collect and receive any monies, securities or
other property payable or deliverable upon conversion or exchange of the Notes
or upon any such claims and to distribute the same, and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07. Nothing herein contained shall be deemed to empower
the Trustee to authorize or consent to, or accept or adopt on behalf of any
Holder, any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money or other
property pursuant to this Article Six, it shall pay out such money or other
property in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to the holders of Senior Indebtedness, as and to the extent
required by Article Eleven or Twelve;
Third: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on 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 such Notes for principal, premium, if any, and interest,
respectively; and
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Fourth: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court 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 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Company, Trustee and the Holders shall continue as though no such proceeding had
been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Notes in Section 2.09, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
(i) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper person;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel, which shall conform to
Section 10.04. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or opinion;
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction;
(v) the Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within its
rights or powers, provided that the Trustee's conduct does not constitute
negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
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(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company or any Guarantor personally or by agent or
attorney; and
(viii) the Trustee shall not be responsible for the filing of any
financing statements or continuation statements in connection with the
Notes.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Notes and may
otherwise deal with Lodgian, the Company or its Affiliates with the same rights
it would have if it were not the Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each May
15, beginning with May 15, 2000, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange or of any delisting thereof.
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SECTION 7.07. Compensation and Indemnity. The Company and each Guarantor,
jointly and severally, shall pay to the Trustee such compensation as shall be
agreed upon in writing for its services hereunder. The compensation of the
Trustee shall not be limited by any law on compensation of a trustee of an
express trust. The Company and each Guarantor, jointly and severally, shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by the Trustee without negligence or bad faith on
its part. Such expenses shall include the reasonable compensation and expenses
of the Trustee's agents and counsel.
The Company and each Guarantor, jointly and severally, shall indemnify the
Trustee for, and hold it harmless against, any loss or liability or expense
incurred by it without negligence or bad faith on its part in connection with
the acceptance or administration of this Indenture and its duties under this
Indenture and the Notes, including the costs and expenses of defending itself
against any claim or liability and of complying with any process served upon it
or any of its officers in connection with the exercise or performance of any of
its powers or duties under this Indenture and the Notes. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder, unless the Company is materially prejudiced thereby.
The Company need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
To secure the Company's payment obligations in this Section 7.07, the
Company, the Guarantors and the Holders agree that the Trustee shall have a lien
prior to the Notes on all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay principal
of, premium, if any, and interest on particular Notes.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in clause (g) or (h) of Section 6.01, the expenses
and the compensation for the services will be intended to constitute expenses of
administration under Title 11 of the United States Bankruptcy Code or any
applicable federal or state law for the relief of debtors.
The provisions of this Section 7.07 shall survive the termination of this
Indenture and the replacement of the Trustee under Section 7.08.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. 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
7.08.
The Trustee may resign at any time by so notifying the Company in writing
at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the outstanding
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Notes may remove the Trustee by so notifying the Trustee in writing and may
appoint a successor Trustee with the consent of the Company. The Company may
remove the Trustee if: (i) the Trustee is no longer eligible under Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or
other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount of the outstanding Notes may, at the expense
of the Company, petition any court of competent jurisdiction for the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 7.07, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder. No successor Trustee shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.08, the Trustee shall resign immediately in the manner and with the
effect provided in this Section.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligation under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor
69
Trustee had been named as the Trustee herein, provided such corporation shall be
otherwise qualified and eligible under this Article.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have a
combined capital and surplus of at least $25 million as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable Federal or state supervising or examining authority. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in this Article.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eight of this Indenture.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to
the Company, as provided in Section 8.05) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or
(ii) (A) the Notes mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the
benefit of the Holders for that purpose, money or U.S. Government
Obligations sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay principal, premium, if, any,
and interest on the Notes to maturity or redemption, as the case may be,
and to pay all other sums payable by it hereunder, (C) no Default or Event
of Default with respect to the Notes shall have occurred and be continuing
on the date of such deposit, (D) such deposit will not result in a breach
or violation of, or constitute a default under, this Indenture or any
other agreement or instrument
70
to which the Company is a party or by which it is bound and (E) the
Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations under
Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 4.01, 4.02,
7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.04,
8.05 and 8.06 and Article Eleven (with respect to payments in respect of Senior
Subordinated Obligations other than with the assets held in trust as described
in clause (ii) above) shall survive. After any such irrevocable deposit, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under the Notes and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred to
in clause (A) of this Section 8.02, and the provisions of this Indenture will no
longer be in effect with respect to the Notes, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same if:
(A) with reference to this Section 8.02, the Company has, in
addition to making all payment then payable to the Trustee under Section
7.07, irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10,
and conveyed all right, title and interest to the Trustee for the benefit
of the Holders, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal of, premium, if any, and interest,
if any, on the Notes, and dedicated solely to, the benefit of the Holders,
in and to (1) money in an amount, (2) U.S. Government Obligations that,
through the payment of interest, premium, if any, and principal in respect
thereof in accordance with their terms, will provide, not later than one
day before the due date of any payment referred to in this clause (A),
money in an amount or (3) a combination thereof in an amount sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, without consideration of the reinvestment
of such interest and after payment of all federal, state and local taxes
or other charges and assessments in respect thereof payable by the
Trustee, the principal of, premium, if any, and interest on the
outstanding Notes on the Stated Maturity of such principal or interest;
provided that the Trustee shall have been irrevocably instructed to apply
such money or the proceeds of such U.S. Government Obligations to the
payment of such principal, premium, if any, and interest with respect to
the Notes;
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(B) the Company has delivered to the Trustee (1) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.02 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such option had not been
exercised, which Opinion of Counsel shall be based upon (and accompanied
by a copy of) a ruling of the Internal Revenue Service to the same effect
unless there has been a change in applicable federal income tax law after
the Closing Date such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (2) an Opinion of
Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940 and that after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Company
under either such statute, and either (I) the trust funds will no longer
remain the property of the Company (and therefore will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally) or (II) if a court
were to rule under any such law in any case or proceeding that the trust
funds remained property of the Company, (a) assuming such trust funds
remained in the possession of the Trustee prior to such court ruling to
the extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise except for the
effect of Section 552(b) of the United States Bankruptcy Code on interest
on the trust funds accruing after the commencement of a case under such
statute and (b) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used in such case or proceeding;
(C) immediately after giving effect to such deposit, on a pro forma
basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on the
123rd day after such date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, this
Indenture or any other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound and is permitted by Article Thirteen;
(D) the Company is not prohibited from making payments in respect of
the Notes by the provisions described under Article Eleven;
(E) if the Notes are then listed on a national securities exchange,
the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
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(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(2) of this Section 8.02, none of the
Company's obligations under this Indenture shall be discharged. Subsequent to
the end of such 123-day (or one year) period with respect to this Section 8.02,
the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 4.01, 4.02,
8.04, 8.05, 8.06 and the rights, powers, trusts, duties and immunities of the
Trustee hereunder and Article Eleven (with respect to payments in respect of
Senior Subordinated Obligations other than with the assets held in trust as
described in this Section 8.02) shall survive until the Notes are no longer
outstanding. Thereafter, only the Company's obligations in Sections 7.07, 8.04,
8.05 and 8.06 shall survive. If and when a ruling from the Internal Revenue
Service or an Opinion of Counsel referred to in clause (B)(1) of this Section
8.02 is able to be provided specifically without regard to, and not in reliance
upon, the continuance of the Company's obligations under Section 4.01, then the
Company's obligations under such Section 4.01 shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may omit to
comply with any term, provision or condition set forth in clauses (iii) and (iv)
of Section 5.01 and Sections 4.03 through 4.11 and 4.20 and clause (c) of
Section 6.01 with respect to clauses (iii) and (iv) of Section 5.01, clause (d)
of Section 6.01 with respect to Sections 4.01, 4.02 and 4.12 through 4.20 and
clauses (e) and (f) of Section 6.01 shall be deemed not to be Events of Default
and Article Eleven shall not apply to the money and/or U.S. Government
Obligations held by the trust referred to in clause (i) below, in each case with
respect to the outstanding Notes if:
(i) the conditions precedent provided for in clauses (A), (C), (D)
and (E) of Section 8.02 have been complied with;
(ii) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the creation of the defeasance trust does not
violate the Investment Company Act of 1940, (B) after the passage of 123
days following the deposit (except, with respect to any trust funds for
the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or Section 15 of the New York
Debtor and Creditor Law in a case commenced by or against the Company
under either such
73
statute, and either (1) the trust funds will no longer remain the property
of the Company (and therefore will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (2) if a court were to rule
under any such law in any case or proceeding that the trust funds remained
property of the Company, (x) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not
paid to the Holders, the Trustee will hold, for the benefit of the
Holders, a valid and perfected security interest in such trust funds that
is not avoidable in bankruptcy or otherwise (except for the effect of
Section 552(b) of the United States Bankruptcy Code on interest on the
trust funds accruing after the commencement of a case under such statute)
and (y) the Holders will be entitled to receive adequate protection of
their interests in such trust funds if such trust funds are used in such
case or proceeding, (C) the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and
defeasance of certain covenants and Events of Default and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred and (D) the Trustee, for the benefit of the Holders, has a
valid first-priority security interest in the trust funds; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any excess money held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal, premium, if any, or
interest that remains unclaimed for two years; provided that the Trustee or
Paying Agent before being required to make any payment may cause to be published
at the expense of the Company once in a newspaper of general circulation in The
City of New York or mail to each Holder entitled to such money at such Holder's
address (as set forth in the Security Register) notice that such money remains
unclaimed and that after a date specified therein (which shall be at least 30
days from the date of such publication or mailing) any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to such money must look to the Company for payment as
general creditors unless an applicable law
74
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.01, 8.02 or
8.03, as the case may be; provided that, if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when authorized by
a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not, in the
good faith opinion of the Board of Directors as evidenced by a Board
Resolution, adversely affect the interests of the Holders in any material
respect;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(5) to make any change that, in the good faith opinion of the Board
of Directors as evidenced by a Board Resolution, does not materially and
adversely affect the rights of any Holder.
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SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and 6.07
and without prior notice to the Holders, the Company, when authorized by its
Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount of
the Notes then outstanding, and the Holders of a majority in aggregate principal
amount of the Notes then outstanding by written notice to the Trustee may waive
future compliance by the Company with any provision of this Indenture or the
Notes.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(ii) change the optional redemption dates or optional redemption
prices of the Notes from that stated under Section 3.01;
(iii) reduce the principal amount of, premium, if any, or interest
on any Note;
(iv) change any place or currency of payment of principal of,
premium, if any, or interest on, any Note;
(v) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity (or, in the case of redemption, on
or after the Redemption Date) on any Note;
(vi) waive a default in the payment of principal of, premium, if
any, or interest on, any Note;
(vii) release any Guarantor from its Note Guarantee except as
provided in this Indenture;
(viii) modify any of the provisions of Article Eleven or Article
Twelve in a manner adverse to the Holders; or
(ix) reduce the percentage or principal amount of outstanding Notes
the consent of whose Holders is necessary to modify or amend this
Indenture or to waive compliance with certain provisions of or certain
Defaults under this Indenture.
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It shall not be necessary for the consent of the Holders under this
Section 9.02 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 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder 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 Note of the consenting Holder, 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 its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
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 last
two sentences 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 such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in the second paragraph of
Section 9.02. In case of an amendment or waiver of the type described in the
second paragraph of Section 9.02, the amendment or waiver shall bind each Holder
who has consented to it and every subsequent Holder of a Note that evidences the
same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee. At the Company's expense, the
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation on
any Note thereafter authenticated. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure
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to make the appropriate notation, or issue a new Note, shall not affect the
validity and effect of such amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture, that it will be valid and binding upon the Company and that all
conditions precedent therewith have been satisfied. Subject to the preceding
sentence, the Trustee shall sign such amendment, supplement or waiver if the
same does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
NOTE GUARANTEES
SECTION 10.01 Note Guarantee. By its execution hereof, each of the
Guarantors acknowledges and agrees that it receives substantial benefits from
the Company and that such party is providing its Guarantee for good and valuable
consideration, including, without limitation, such substantial benefits and
services. Accordingly, subject to the provisions of this Article Ten, each of
the Guarantors hereby, jointly and severally, fully and unconditionally
Guarantees, to the extent permitted by law, to each Holder of Notes hereunder
and to the Trustee on behalf of the Holders: (I) the due and punctual payment of
the principal of, premium, if any, on and interest on each Note, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal of
and interest, if any, on the Notes, to the extent lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms of such Note and this Indenture
and (ii) in the case of any extension of time of payment or renewal of any Notes
or any of such other obligations, that the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
at Stated Maturity, by acceleration or otherwise, subject, however, in the case
of clauses (I) and (ii) above, to the limitations set forth in the second
succeeding paragraph.
Each Note Guarantee shall be Guaranteed on a senior subordinated basis in
accordance with Article Twelve hereof.
Each Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the Guarantee by such
Guarantor pursuant to its Note Guarantee not constitute a
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fraudulent transfer or conveyance for purposes of the United States Bankruptcy
Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Note Guarantee shall be limited to the maximum amount as
will, after giving effect to all other contingent and fixed liabilities of such
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Note Guarantee or pursuant to the following paragraph,
result in the obligations of such Guarantor under its Note Guarantee not
constituting such fraudulent transfer or conveyance.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Notes or any other Guarantor's obligations with
respect to its Note Guarantee. "Adjusted Net Assets" of such Guarantor at any
date shall mean the lesser of the amount by which (x) the fair value of the
property of such Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date), but
excluding liabilities under the Note Guarantee, of such Guarantor at such date
and (y) the present fair salable value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any Subsidiary of such Guarantor in respect of the
obligations of such Guarantor under the Note Guarantee of such Guarantor),
excluding debt in respect of its Note Guarantee, as they become absolute and
matured.
Each of the Guarantors hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or bankruptcy of
the Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Note or the
debt evidenced thereby and all demands whatsoever (except as specified above),
and covenants that this Note Guarantee will not be discharged as to any such
Note except by payment in full of the principal thereof and interest thereon and
as provided in Sections 8.01, 8.02 and 8.03. In the event of any declaration of
acceleration of such obligations as provided in Article Six, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purposes of this Article Ten. In addition, without limiting
the foregoing provisions, upon the effectiveness of an acceleration under
Article Six, the Trustee shall promptly make a demand for payment on the Notes
under the Note Guarantee provided for in this Article Ten.
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The obligations of each Guarantor under its Note Guarantee are independent
of the obligations Guaranteed by such Guarantor hereunder, and a separate action
or actions may be brought and prosecuted by the Trustee on behalf of, or by, the
Holders, subject to the terms and conditions set forth in this Indenture,
against a Guarantor to enforce this Guarantee, irrespective of whether any
action is brought against the Company or whether the Company is joined in any
such action or actions.
If the Trustee or the Holder is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, receiver, liquidator,
trustee, sequestrator or other similar official acting in relation to Company or
such Guarantor, any amount paid to the Trustee or such Holder in respect of a
Note, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each of the Guarantors further agrees, to
the fullest extent that it may lawfully do so, that, as between it, on the one
hand, and the Holders and the Trustee, on the other hand, the maturity of the
obligations Guaranteed hereby may be accelerated as provided in Article Six
hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition extant under any applicable bankruptcy law
preventing such acceleration in respect of the obligations Guaranteed hereby.
Each of the Guarantors hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company or any other Guarantor
that arise from the existence, payment, performance or enforcement of its
obligations under this Note Guarantee and this Indenture, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of the Holders
against the Company or any Guarantor or any collateral which any such Holder or
the Trustee on behalf of such Holder hereafter acquires, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company or a Guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security on account of such claim or
other rights. If any amount shall be paid to a Guarantor in violation of the
preceding sentence and the principal of, premium, if any, and accrued interest
on the Notes shall not have been paid in full, such amount shall be deemed to
have been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall forthwith be paid to the Trustee for the
benefit of the Holders to be credited and applied upon the principal of,
premium, if any, and accrued interest on the Notes. Each of the Guarantors
acknowledges that it will receive direct and indirect benefits from the issuance
of the Notes pursuant to this Indenture and that the waivers set forth in this
Section 10.01 are knowingly made in contemplation of such benefits
The Note Guarantee set forth in this Section 10.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
SECTION 10.02 Obligations Unconditional. Nothing contained in this Article
Ten or elsewhere in this Indenture or in the Notes is intended to or shall
impair, as among any Guarantor and the holders of
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the Notes, the obligation of such Guarantor, which is absolute and
unconditional, upon failure by the Company, to pay to the holders of the Notes
the principal of, premium, if any, and interest on the Notes as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of such
Guarantor, nor shall anything herein or therein prevent any Holder or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture.
Without limiting the foregoing, nothing contained in this Article Ten will
restrict the right of the Trustee or the Holders to take any action to declare
the Note Guarantee to be due and payable prior to the Stated Maturity of any
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder.
SECTION 10.03 Release of Note Guarantees. The Note Guarantee issued by any
Subsidiary Guarantor will be automatically and unconditionally released and
discharged upon (I) any sale, exchange or transfer to any Person (other than an
Affiliate of the Company) of all of the Capital Stock of such Subsidiary
Guarantor or (ii) the designation of such Subsidiary Guarantor as an
Unrestricted Subsidiary, in each case in compliance with the terms of this
Indenture.
SECTION 10.04 Notice to Trustee. A Guarantor shall give prompt written
notice to the Trustee of any fact known to such Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Note Guarantee
pursuant to the provisions of this Article Ten.
SECTION 10.05 This Article Not to Prevent Events of Default. The failure
to make a payment on account of principal of, premium, if any, or interest on
the Notes by reason of any provision of this Article Ten will not be construed
as preventing the occurrence of an Event of Default.
ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Notes Subordinated to Senior Indebtedness. The Company and
the Trustee each covenants and agrees, and each Holder, by its acceptance of a
Note, likewise covenants and agrees that all Notes shall be issued subject to
the provisions of this Article Eleven; and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that Senior Subordinated Obligations shall, to the extent and in the
manner set forth in this Article Eleven, be subordinated in right of payment to
the prior payment in full, in cash or cash equivalents, of all existing and
future Senior Indebtedness of the Company.
SECTION 11.02. No Payment on Notes in Certain Circumstances. (a) No direct
or indirect payment by or on behalf of the Company of Senior Subordinated
Obligations (other than with the money, securities or proceeds held under any
defeasance trust established in accordance with this Indenture),
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whether pursuant to the terms of the Notes or upon acceleration or otherwise
shall be made if, at the time of such payment, there exists a default in the
payment of all or any portion of the obligations on any Senior Indebtedness of
the Company and such default shall not have been cured or waived or the benefits
of this sentence waived by or on behalf of the holders of such Senior
Indebtedness.
(b) During the continuance of any other event of default with respect to
any Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated, upon receipt by the Trustee of written notice from the trustee or
other representative for the holders of such Designated Senior Indebtedness (or
the holders of at least a majority in principal amount of such Designated Senior
Indebtedness then outstanding), no payment of Senior Subordinated Obligations
(other than with the money, securities or proceeds held under any defeasance
trust established in accordance with this Indenture) may be made by or on behalf
of the Company upon or in respect of the Notes for a period (a "Payment Blockage
Period") commencing on the date of receipt of such notice and ending 179 days
thereafter (unless, in each case, such Payment Blockage Period shall be
terminated by written notice to the Trustee from such trustee of, or other
representatives for, such holders or by payment in full in cash or cash
equivalents of such Designated Senior Indebtedness or such event of default has
been cured or waived). Not more than one Payment Blockage Period may be
commenced with respect to the Notes during any period of 360 consecutive days.
Notwithstanding anything in this Indenture to the contrary, there must be 180
consecutive days in any 360-day period in which no Payment Blockage Period is in
effect. No event of default (other than an event of default pursuant to the
financial maintenance covenants under the Credit Agreement) that existed or was
continuing (it being acknowledged that any subsequent action that would give
rise to an event of default pursuant to any provision under which an event of
default previously existed or was continuing shall constitute a new event of
default for this purpose) on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or shall be made, the basis for the
commencement of a second Payment Blockage Period by the representative for, or
the holders of, such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
10.02(a) or 10.02(b) of this Indenture, the Trustee shall promptly notify the
holders of Senior Indebtedness of such prohibited payment and such payment shall
be held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of such
respective amount of Senior Indebtedness held by such holders) or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of Senior Indebtedness that such prohibited payment
has been made, the holders of the Senior Indebtedness (or their representative
or representatives of a trustee) within 30 days of receipt of such notice from
the Trustee notify the Trustee
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of the amounts then due and owing on the Senior Indebtedness, if any, and only
the amounts specified in such notice to the Trustee shall be paid to the holders
of Senior Indebtedness.
SECTION 11.03. Payment over Proceeds upon Dissolution, Etc. (a) Upon any
payment or distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities (other than with the money,
securities or proceeds held under any defeasance trust established in accordance
with this Indenture), in connection with any dissolution or winding up or total
or partial liquidation or reorganization of the Company, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
other marshalling of assets for the benefit of creditors, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full, in cash or
cash equivalents, before the Holders or the Trustee on their behalf shall be
entitled to receive any payment by (or on behalf of) the Company on account of
Senior Subordinated Obligations, or any payment to acquire any of the Notes for
cash, property or securities, or any distribution with respect to the Notes of
any cash, property or securities. Before any payment may be made by, or on
behalf of, the Company on any Senior Subordinated Obligations (other than with
the money, securities or proceeds held under any defeasance trust established in
accordance with this Indenture), in connection with any such dissolution,
winding up, liquidation or reorganization, any payment or distribution of assets
or securities for the Company of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee on their behalf
would be entitled, but for the provisions of this Article Eleven, shall be made
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person making such payment or distribution or by the
Holders or the Trustee if received by them or it, directly to the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their representatives or
to any trustee or trustees under any other indenture pursuant to which any such
Senior Indebtedness may have been issued, as their respective interests appear,
to the extent necessary to pay all such Senior Indebtedness in full, in cash or
cash equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee or other
similar Person, the Senior Indebtedness or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. To the extent the obligation to repay any Senior Indebtedness
is declared to be fraudulent, invalid, or otherwise set aside under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then
the obligation so declared fraudulent, invalid or otherwise set aside (and all
other amounts that would come due with respect thereto had such obligation not
been so affected) shall be deemed to be
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reinstated and outstanding as Senior Indebtedness for all purposes hereof as if
such declaration, invalidity or setting aside had not occurred.
(c) In the event that, notwithstanding the foregoing provision prohibiting
such payment or distribution, any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property or
securities, shall be received by the Trustee or any Holder at a time when such
payment or distribution is prohibited by Section 11.03(a) of this Indenture and
before all obligations in respect of Senior Indebtedness are paid in full, in
cash or cash equivalents, such payment or distribution shall be received and
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of such
respective amount of Senior Indebtedness held by such holders) or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any such Senior Indebtedness may have been issued, as their
respective interests appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full, in cash or cash equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(d) For purposes of this Section 11.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Notes to be treated in any case or proceeding or similar
event described in this Section 11.03 as part of the same class of claims as the
Senior Indebtedness or any class of claims pari passu with, or senior to, the
Senior Indebtedness for any payment or distribution, securities of the Company
or any other corporation provided for by a plan of reorganization or
readjustment that are subordinated, at least to the extent that the Notes are
subordinated, to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a new corporation results from such reorganization or
readjustment, such corporation assumes the Senior Indebtedness and (2) the
rights of the holders of the Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company with or into, another
corporation or the liquidation or dissolution of the Company following the sale,
conveyance, transfer, lease or other disposition of all or substantially all of
its property and assets to another corporation upon the terms and conditions
provided in Article Five of this Indenture shall not be deemed a dissolution,
winding up, liquidation or reorganization for the purposes of this Section 11.03
if such other corporation shall, as a part of such consolidation, merger, sale,
conveyance, transfer, lease or other disposition, comply (to the extent
required) with the conditions stated in Article Five of this Indenture.
SECTION 11.04. Subrogation. (a) Upon the payment in full of all Senior
Indebtedness in cash or cash equivalents, the Holders shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of, premium, if any, and interest on the Notes
shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders or the Trustee on their behalf would be entitled
except for the provisions of this Article Eleven, and no payment pursuant to the
provisions of this Article
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Eleven to the holders of Senior Indebtedness by Holders or the Trustee on their
behalf shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of this
Article Eleven are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Eleven shall have been
applied, pursuant to the provisions of this Article Eleven, to the payment of
all amounts payable under Senior Indebtedness, then, and in such case, the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full, in cash
or cash equivalents, of such Senior Indebtedness of such holders.
SECTION 11.05. Obligations of Company Unconditional. (a) Nothing contained
in this Article Eleven or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of, premium, if any, and interest on the Notes as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Holders or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Eleven
of the holders of the Senior Indebtedness.
(b) Without limiting the generality of the foregoing, nothing contained in
this Article Eleven will restrict the right of the Trustee or the Holders to
take any action to declare the Notes to be due and payable prior to their Stated
Maturity pursuant to Section 6.01 of this Indenture or to pursue any rights or
remedies hereunder; provided, however, that all Senior Indebtedness then due and
payable or thereafter declared to be due and payable shall first be paid in
full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from the Company of Senior
Subordinated Obligations.
SECTION 11.06. Notice to Trustee. (a) The Company shall give prompt
written notice to the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the Notes
pursuant to the provisions of this Article Eleven. The Trustee shall not be
charged with the knowledge of the existence of any default or event of default
with respect to any Senior Indebtedness or of any other facts that would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of the Company, or by a holder of Senior
Indebtedness or trustee or agent thereof; and prior to the receipt of any such
written notice, the Trustee shall, subject to Article Seven, be entitled to
assume that no such facts exist; provided that, if the Trustee shall not have
received the notice provided
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for in this Section 11.06 at least two Business Days prior to the date upon
which, by the terms of this Indenture, any monies shall become payable for any
purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Note), then, notwithstanding anything herein
to the contrary, the Trustee shall have full power and authority to receive any
monies from the Company and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it on or after such prior date except for an acceleration of the
Notes prior to such application. Nothing contained in this Section 11.06 shall
limit the right of the holders of Senior Indebtedness to recover payments as
contemplated by this Article Eleven. The foregoing shall not apply if the Paying
Agent is the Company. The Trustee shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself or itself to be a holder
of any Senior Indebtedness (or a trustee on behalf of, or other representative
of, such holder) to establish that such notice has been given by a holder of
such Senior Indebtedness or a trustee or representative on behalf of any such
holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eleven, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Eleven and, if such evidence is not
furnished to the Trustee, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 11.07. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets or securities referred to in
this Article Eleven, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution, delivered to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness 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 Eleven.
SECTION 11.08. Trustee's Relation to Senior Indebtedness. (a) The Trustee
and any Paying Agent shall be entitled to all the rights set forth in this
Article Eleven with respect to any Senior Indebtedness that may at any time be
held by it in its individual or any other capacity to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture shall deprive
the Trustee or any Paying Agent of any of its rights as such holder.
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eleven, and
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no implied covenants or obligations with respect to the holders of Senior
Indebtedness 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
Indebtedness (except as provided in Sections 11.02(c) and 11.03(c) of this
Indenture) and shall not be liable to any such holders if the Trustee shall in
good faith mistakenly pay over or distribute to Holders of Notes or to the
Company or to any other person cash, property or securities to which any holders
of Senior Indebtedness shall be entitled by virtue of this Article Eleven or
otherwise.
SECTION 11.09. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as provided in this
Article Eleven will at any time in any way be prejudiced or impaired by any act
or failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms of this Indenture, regardless of any knowledge thereof that any such
holder may have or otherwise be charged with. The provisions of this Article
Eleven are intended to be for the benefit of, and shall be enforceable directly
by, the holders of Senior Indebtedness.
SECTION 11.10. Holders Authorize Trustee to Effectuate Subordination of
Notes. Each Holder by his or her acceptance of any Notes authorizes and
expressly directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Eleven, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the property and assets
of the Company, the filing of a claim for the unpaid balance of its Notes in the
form required in those proceedings. If the Trustee does not file a proper claim
or proof in indebtedness in the form required in such proceeding at least 30
days before the expiration of the time to file such claim or claims, each holder
of Senior Indebtedness is hereby authorized to file an appropriate claim for and
on behalf of the Holders.
SECTION 11.11. Not to Prevent Events of Default. The failure to make a
payment on account of principal of, premium, if any, or interest on the Notes by
reason of any provision of this Article Eleven will not be construed as
preventing the occurrence of an Event of Default.
SECTION 11.12. Trustee's Compensation Not Prejudiced. Nothing in this
Article Eleven will apply to amounts due to the Trustee pursuant to other
sections of this Indenture, including Section 7.07.
SECTION 11.13. No Waiver of Subordination Provisions. Without in any way
limiting the generality of Section 11.09, the holders of Senior Indebtedness
may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article Eleven
or the obligations hereunder of the Holders to the holders of Senior
Indebtedness, do any one or more of the following:
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(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Indebtedness or any instrument evidencing the same
or any agreement under which Senior Indebtedness is outstanding or secured; (b)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 11.14. Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article Eleven or elsewhere in this Indenture shall prevent
(i) the Company, except under the conditions described in Section 11.02 or
11.03, from making payments of principal of, premium, if any, and interest on
the Notes, or from depositing with the Trustee any money for such payments, or
(ii) the application by the Trustee of any money deposited with it for the
purpose of making such payments of principal of, premium, if any, and interest
on the Notes to the holders entitled thereto unless, at least two Business Days
prior to the date upon which such payment becomes due and payable, the Trustee
shall have received the written notice provided for in Section 11.02(b) of this
Indenture (or there shall have been an acceleration of the Notes prior to such
application) or in Section 11.06 of this Indenture. The Company shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of the Company.
SECTION 11.15. Consent of Holders of Senior Indebtedness. The provisions
of this Article Eleven (including the definitions contained in this Article and
references to this Article contained in this Indenture) shall not be amended in
a manner that would adversely affect the rights of the holders of Senior
Indebtedness, and no such amendment shall become effective unless the holders of
Senior Indebtedness shall have consented (in accordance with the provisions of
the relevant agreements governing such Senior Indebtedness to such amendment.
The Trustee shall be entitled to receive and rely on an Officers' Certificate
stating that such consent has been given.
SECTION 11.16. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article Eight by the Trustee for the
payment of principal of, premium, if any, and interest on the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness (provided that, at
the time deposited, such deposit did not violate any then outstanding Senior
Indebtedness), and none of the Holders shall be obligated to pay over any such
amount to any holder of Senior Indebtedness.
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ARTICLE TWELVE
SUBORDINATION OF NOTE GUARANTEES
SECTION 12.01. Note Guarantees Subordinated to Guarantor Senior
Indebtedness. Each Guarantor and the Trustee each covenants and agrees, and each
Holder, by its acceptance of a Note Guarantee, likewise covenants and agrees
that all Note Guarantees shall be issued subject to the provisions of this
Article Twelve; and each Person holding any Note, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees that Senior
Subordinated Obligations shall, to the extent and in the manner set forth in
this Article Twelve, be subordinated in right of payment to the prior payment in
full, in cash or cash equivalents, of all existing and future Guarantor Senior
Indebtedness of such Guarantor.
SECTION 12.02. No Payment on Note Guarantees in Certain Circumstances. (a)
No direct or indirect payment by or on behalf of any Guarantor of Senior
Subordinated Obligations (other than with the money, securities or proceeds held
under any defeasance trust established in accordance with this Indenture),
whether pursuant to the terms of the Note Guarantees or upon acceleration or
otherwise shall be made if, at the time of such payment, there exists a default
in the payment of all or any portion of the obligations on any Guarantor Senior
Indebtedness of such Guarantor and such default shall not have been cured or
waived or the benefits of this sentence waived by or on behalf of the holders of
such Guarantor Senior Indebtedness.
(b) During the continuance of any other event of default with respect to
any Designated Guarantor Senior Indebtedness pursuant to which the maturity
thereof may be accelerated, upon receipt by the Trustee of written notice from
the trustee or other representative for the holders of such Designated Guarantor
Senior Indebtedness (or the holders of at least a majority in principal amount
of such Designated Guarantor Senior Indebtedness then outstanding), no payment
of Senior Subordinated Obligations (other than with the money, securities or
proceeds held under any defeasance trust established in accordance with this
Indenture) may be made by or on behalf of any Guarantor upon or in respect of
the Note Guarantees for a period (a "Guarantee Payment Blockage Period")
commencing on the date of receipt of such notice and ending 179 days thereafter
(unless, in each case, such Guarantee Payment Blockage Period has been
terminated by written notice to the Trustee from such trustee of, or other
representatives for, such holders or by payment in full in cash or cash
equivalents of such Designated Guarantor Senior Indebtedness or such event of
default has been cured or waived). Not more than one Guarantee Payment Blockage
Period may be commenced with respect to the Note Guarantees during any period of
360 consecutive days. Notwithstanding anything in this Indenture to the
contrary, there must be 180 consecutive days in any 360-day period in which no
Guarantee Payment Blockage Period is in effect. No event of default (other than
an event of default pursuant to the financial maintenance covenants under the
Credit Agreement) that existed or was continuing (it being acknowledged that any
subsequent action that would give rise to an event of default pursuant to any
provision under which an event of default previously existed or was continuing
shall constitute a new event of default for this purpose) on the date of the
commencement of any
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Guarantee Payment Blockage Period with respect to the Designated Guarantor
Senior Indebtedness initiating such Guarantee Payment Blockage Period shall be,
or shall be made, the basis for the commencement of a second Guarantee Payment
Blockage Period by the trustee or other representative for the holders of such
Designated Guarantor Senior Indebtedness, whether or not within a period of 360
consecutive days, unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by Section
12.02(a) or 12.02(b) of this Indenture, the Trustee shall promptly notify the
holders of Guarantor Senior Indebtedness of such prohibited payment and such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Guarantor Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of Guarantor Senior Indebtedness that such prohibited
payment has been made, the holders of the Guarantor Senior Indebtedness (or
their representative or representatives of a trustee) within 30 days of receipt
of such notice from the Trustee notify the Trustee of the amounts then due and
owing on the Guarantor Senior Indebtedness, if any, and only the amounts
specified in such notice to the Trustee shall be paid to the holders of
Guarantor Senior Indebtedness and any excess above such amounts due and owing on
Guarantor Senior Indebtedness shall be paid to such Guarantor.
SECTION 12.03. Payment over Proceeds upon Dissolution, Etc. (a) Upon any
payment or distribution of assets or securities of a Guarantor of any kind or
character, whether in cash, property or securities (other than with the money,
securities or proceeds held under any defeasance trust established in accordance
with this Indenture), in connection with any dissolution or winding up or total
or partial liquidation or reorganization of such Guarantor, whether voluntary or
involuntary, or in bankruptcy, insolvency, receivership or other proceedings or
other marshalling of assets for the benefit of creditors, all amounts due or to
become due upon all Guarantor Senior Indebtedness shall first be paid in full,
in cash or cash equivalents, before the Holders or the Trustee on their behalf
shall be entitled to receive any payment by (or on behalf of) such Guarantor on
account of Senior Subordinated Obligations, or any payment to acquire any of the
Note Guarantees for cash, property or securities, or any distribution with
respect to the Note Guarantees of any cash, property or securities. Before any
payment may be made by, or on behalf of, any Guarantor on any Senior
Subordinated Obligations (other than with the money, securities or proceeds held
under any defeasance trust established in accordance with this Indenture), in
connection with any such dissolution, winding up, liquidation or reorganization,
any payment or distribution of assets or securities for such Guarantor of any
kind or character, whether in cash, property or securities, to which the Holders
or the Trustee on their behalf would be entitled, but for the provisions of this
Article Twelve, shall be made by such Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person making such
payment or distribution or by the Holders or the Trustee if received by them or
it, directly to the holders of Guarantor Senior Indebtedness (pro rata to such
holders
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on the basis of the respective amounts of Guarantor Senior Indebtedness held by
such holders) or their representatives or to any trustee or trustees under any
indenture pursuant to which any such Guarantor Senior Indebtedness may have been
issued, as their respective interests appear, to the extent necessary to pay all
such Guarantor Senior Indebtedness in full, in cash or cash equivalents, after
giving effect to any concurrent payment, distribution or provision therefor to
or for the holders of such Guarantor Senior Indebtedness.
(b) To the extent any payment of Guarantor Senior Indebtedness (whether by
or on behalf of any Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee or other similar Person, the Guarantor Senior Indebtedness or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation to
repay any Guarantor Senior Indebtedness is declared to be fraudulent, invalid,
or otherwise set aside under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then the obligation so declared
fraudulent, invalid or otherwise set aside (and all other amounts that would
come due with respect thereto had such obligation not been so affected) shall be
deemed to be reinstated and outstanding as Guarantor Senior Indebtedness for all
purposes hereof as if such declaration, invalidity or setting aside had not
occurred.
(c) In the event that, notwithstanding the provision Section 12.03(a)
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder at a time
when such payment or distribution is prohibited by Section 12.03(a) of this
Indenture and before all obligations in respect of Guarantor Senior Indebtedness
are paid in full, in cash or cash equivalents, such payment or distribution
shall be received and held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Guarantor Senior Indebtedness (pro rata to such
holders on the basis of the respective amounts of Guarantor Senior Indebtedness
held by such holders) or their representatives or to any trustee or trustees
under any indenture pursuant to which any such Guarantor Senior Indebtedness may
have been issued, as their respective interests appear, for application to the
payment of all such Guarantor Senior Indebtedness remaining unpaid in full, in
cash or cash equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Indebtedness.
(d) For purposes of this Section 12.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Note Guarantees to be treated in any case or proceeding or
similar event described in this Section 12.03 as part of the same class of
claims as the Guarantor Senior Indebtedness or any class of claims pari passu
with, or senior to, the Guarantor Senior Indebtedness for any payment or
distribution, securities of any Guarantor or any other corporation provided for
by a plan of reorganization or readjustment that are subordinated, at least to
the extent that
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the Note Guarantees are subordinated, to the payment of all Guarantor Senior
Indebtedness then outstanding; provided that (1) if a new corporation results
from such reorganization or readjustment, such corporation assumes the Guarantor
Senior Indebtedness and (2) the rights of the holders of the Guarantor Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of a Guarantor with, or the
merger of a Guarantor with or into, another corporation or the liquidation or
dissolution of a Guarantor following the sale, conveyance, transfer, lease or
other disposition of all or substantially all of its property and assets to
another corporation upon the terms and conditions provided in Article Five of
this Indenture shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 12.03 if such other corporation
shall, as a part of such consolidation, merger, sale, conveyance, transfer,
lease or other disposition, comply (to the extent required) with the conditions
stated in Article Five of this Indenture.
SECTION 12.04. Subrogation. (a) Upon the payment in full of all Guarantor
Senior Indebtedness in cash or cash equivalents, the Holders shall be subrogated
to the rights of the holders of Guarantor Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Guarantors made
on such Guarantor Senior Indebtedness until all obligations arising under the
Note Guarantees shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Guarantor Senior
Indebtedness of any cash, property or securities to which the Holders or the
Trustee on their behalf would be entitled except for the provisions of this
Article Twelve, and no payment pursuant to the provisions of this Article Twelve
to the holders of Guarantor Senior Indebtedness by the Holders or the Trustee on
their behalf shall, as between each Guarantor, its creditors other than holders
of Guarantor Senior Indebtedness, and the Holders, be deemed to be a payment by
such Guarantor to or on account of the Guarantor Senior Indebtedness. It is
understood that the provisions of this Article Twelve are intended solely for
the purpose of defining the relative rights of the Holders, on the one hand, and
the holders of the Guarantor Senior Indebtedness, on the other hand.
(b) If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Twelve shall have been
applied, pursuant to the provisions of this Article Twelve, to the payment of
all amounts payable under Guarantor Senior Indebtedness, then, and in such case,
the Holders shall be entitled to receive from the holders of such Guarantor
Senior Indebtedness any payments or distributions received by such holders of
Guarantor Senior Indebtedness in excess of the amount required to make payment
in full, in cash or cash equivalents, of such Guarantor Senior Indebtedness of
such holders.
SECTION 12.05. Obligations of Guarantor Unconditional. (a) Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the Notes
is intended to or shall impair, as among the Guarantors and the Holders, the
obligation of such Guarantors, which is absolute and unconditional, to pay to
the Holders all obligations arising under the Note Guarantees as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders and creditors of the
Guarantors other than the holders of the Guarantor Senior Indebtedness, nor
shall
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anything herein or therein prevent the Holders or the Trustee on their behalf
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Twelve
of the holders of the Guarantor Senior Indebtedness.
(b) Without limiting the generality of the foregoing, nothing contained in
this Article Twelve will restrict the right of the Trustee or the Holders to
take any action to declare the Notes to be due and payable prior to their Stated
Maturity pursuant to Section 6.01 of this Indenture or to pursue any rights or
remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
then due and payable or thereafter declared to be due and payable shall first be
paid in full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from any Guarantor of
Guarantor Senior Subordinated Obligations.
SECTION 12.06. Notice to Trustee. (a) Each Guarantor shall give prompt
written notice to the Trustee of any fact known to such Guarantor that would
prohibit the making of any payment to or by the Trustee in respect of the Note
Guarantees pursuant to the provisions of this Article Twelve. The Trustee shall
not be charged with the knowledge of the existence of any default or event of
default with respect to any Guarantor Senior Indebtedness of any Guarantor or of
any other facts that would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of such
Guarantor, or by a holder of such Guarantor Senior Indebtedness or trustee or
agent thereof; and prior to the receipt of any such written notice, the Trustee
shall, subject to Article Seven, be entitled to assume that no such facts exist;
provided that, if the Trustee shall not have received the notice provided for in
this Section 12.06 at least two Business Days prior to the date upon which, by
the terms of this Indenture, any monies shall become payable for any purpose
(including, without limitation, the payment of all obligations arising under any
Note Guarantee), then, notwithstanding anything herein to the contrary, the
Trustee shall have full power and authority to receive any monies from such
Guarantor and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
on or after such prior date except for an acceleration of the Notes prior to
such application. Nothing contained in this Section 12.06 shall limit the right
of the holders of Guarantor Senior Indebtedness to recover payments as
contemplated by this Article Twelve. The foregoing shall not apply if the Paying
Agent is the Company. The Trustee shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself or itself to be a holder
of any Guarantor Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Guarantor Senior Indebtedness or a trustee or representative on
behalf of any such holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or
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distribution and any other facts pertinent to the rights of such Person under
this Article Twelve and, if such evidence is not furnished to the Trustee, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets or securities referred to in
this Article Twelve, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person making such payment or
distribution, delivered to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Guarantor Senior Indebtedness and other Indebtedness of a
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness. (a)
The Trustee and any Paying Agent shall be entitled to all the rights set forth
in this Article Twelve with respect to any Guarantor Senior Indebtedness that
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Guarantor Senior Indebtedness and nothing in
this Indenture shall deprive the Trustee or any Paying Agent of any of its
rights as such holder.
(b) With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Sections 12.02(c) and 12.03(c) of this
Indenture) and shall not be liable to any such holders if the Trustee shall in
good faith mistakenly pay over or distribute to Holders of Note Guarantees or to
a Guarantor or to any other person cash, property or securities to which any
holders of Guarantor Senior Indebtedness shall be entitled by virtue of this
Article Twelve or otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of a
Guarantor or Holders of Guarantor Senior Indebtedness. No right of any present
or future holders of any Guarantor Senior Indebtedness to enforce subordination
as provided in this Article Twelve will at any time in any way be prejudiced or
impaired by any act or failure to act on the part of a Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
such Guarantor with the terms of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with. The
provisions of this Article Twelve are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Guarantor Senior Indebtedness.
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SECTION 12.10. Holders Authorize Trustee to Effectuate Subordination of
Note Guarantees. Each Holder by his acceptance of the Notes authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Twelve, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of a Guarantor (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the property and assets
of such Guarantor, the filing of a claim for the unpaid balance of its Note
Guarantees in the form required in those proceedings. If the Trustee does not
file a proper claim or proof in indebtedness in the form required in such
proceeding at least 30 days before the expiration of the time to file such claim
or claims, each holder of Guarantor Senior Indebtedness is hereby authorized to
file an appropriate claim for and on behalf of the Holders.
SECTION 12.11. Not to Prevent Events of Default. The failure to fulfill
any obligation arising under the Note Guarantees by reason of any provision of
this Article Twelve will not be construed as preventing the occurrence of an
Event of Default.
SECTION 12.12. Trustee's Compensation Not Prejudiced. Nothing in this
Article Twelve will apply to amounts due to the Trustee pursuant to other
sections of this Indenture, including Section 7.07.
SECTION 12.13. No Waiver of Subordination Provisions. Without in any way
limiting the generality of Section 12.09, the holders of Guarantor Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders, without incurring responsibility to the
Holders and without impairing or releasing the subordination provided in this
Article Twelve or the obligations hereunder of the Holders to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (c) release any
Person liable in any manner for the collection of Guarantor Senior Indebtedness;
and (d) exercise or refrain from exercising any rights against the Company and
any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article Twelve or elsewhere in this Indenture shall prevent
(I) a Guarantor, except under the conditions described in Section 12.02 or
12.03, from fulfilling any obligation arising under the Note Guarantees, or from
depositing with the Trustee any money for such payments, or (ii) the application
by the Trustee of any money deposited with it for the purpose of fulfilling any
obligation arising under the Note Guarantees to the holders entitled thereto
unless, at least two Business Days prior to the date upon which such payment
becomes due and payable, the Trustee shall have received the written notice
provided for in Section 12.02(b) of this Indenture (or there shall have been an
acceleration of the Note Guarantees prior to such
95
application) or in Section 12.06 of this Indenture. The Company shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of such Guarantor.
SECTION 12.15. Consent of Holders of Guarantor Senior Indebtedness. The
provisions of this Article Twelve (including the definitions contained in this
Article and references to this Article contained in this Indenture) shall not be
amended in a manner that would adversely affect the rights of the holders of
Guarantor Senior Indebtedness, and no such amendment shall become effective
unless the holders of Guarantor Senior Indebtedness under the Credit Agreement
shall have consented (in accordance with the provisions of the relevant
agreements governing such Senior Indebtedness) to such amendment. The Trustee
shall be entitled to receive and rely on an Officers' Certificate stating that
such consent has been given.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act of 1939. Prior to the effectiveness of
the Registration Statement, this Indenture shall incorporate and be governed by
the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA. After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that are
required to be a part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 13.02. Notices. Any notice or communication shall be sufficiently
given if in writing and delivered in person, mailed by first-class mail or sent
by telecopier transmission addressed as follows:
if to the Company:
LODGIAN FINANCING CORP.
0000 Xxxxxxxxx Xxxx, XX
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Secretary
96
if to the Trustee:
BANKERS TRUST COMPANY
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000/6961
Attention: Corporate Trust and Agency Services
Lodgian, 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 mailed to a Holder shall be mailed to it at
its address as it appears on the Security Register by first-class mail and shall
be sufficiently given to him if so mailed within the time prescribed. Any notice
or communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
Failure to mail a notice or communication to a Holder as provided herein
or any defect in any such notice or communication shall not affect its
sufficiency with respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, and except as otherwise provided in
this Indenture, if a notice or communication is mailed in the manner provided in
this Section 10.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA Section
312(c).
SECTION 13.03. 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:
97
(I) 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
(ii) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 13.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(I) a statement that each person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 13.06. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
SECTION 13.07. Governing Law. This Indenture and the Notes shall be
governed by the laws of the State of New York. The Trustee, the Company and the
Holders agree to submit to the jurisdiction
98
of the courts of the State of New York in any action or proceeding arising out
of or relating to this Indenture or the Notes.
SECTION 13.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.09. No Recourse Against Others. No recourse for the payment of
the principal of, premium, if any, or interest on any of the Notes, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or
upon any obligation, covenant or agreement of the Company contained in this
Indenture or in any of the Notes, or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator or against any past,
present or future partner, stockholder, other equityholder, officer, director,
employee or controlling person, as such, of the Company or of any successor
Person, either directly or through the Company or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the Notes.
SECTION 13.10. Successors. All agreements of the Company in this Indenture
and the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 13.12. Separability. 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 13.13. 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
and provisions hereof.
SECTION 13.14. Counterparts. This Indenture may be executed 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.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
LODGIAN FINANCING CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
LODGIAN, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
SHEFFIELD MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
DOTHAN HOSPITALITY 3053, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
100
DOTHAN HOSPITALITY 3071, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
GADSDEN HOSPITALITY, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO FLAGSTAFF, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
LODGIAN ANAHEIM INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
LODGIAN ONTARIO INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
101
SERVICO PENSACOLA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO PENSACOLA 7200, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO PENSACOLA 7330, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO FT. XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
AMI OPERATING PARTNERS, L.P.
BY AMIOP ACQUISITION CORP
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
102
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO CENTRE ASSOCIATES, LTD.
BY PALM BEACH MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO WEST PALM BEACH, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO WINTER HAVEN, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO SILVER SPRING, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
103
ALBANY HOTEL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO NORTHWOODS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO WINDSOR, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
BRUNSWICK MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
LITTLE ROCK LODGING ASSOCIATES I, L.P.
BY IMPAC SPE #3, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President, Secretary and
Treasurer
000
XXXXXXX XXXXXXXXX LODGING, LLC
By: /s/ Xxxxxx X. Xxxx
--------------------
Name: Xxxxxx X. Xxxx
Title: Manager
LODGIAN RICHMOND, L.L.C.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO ROLLING XXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO CEDAR RAPIDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO METAIRIE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
105
SERVICO COLUMBIA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO COLESVILLE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO MARYLAND, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
NH MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
MINNEAPOLIS MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
106
SERVICO ROSEVILLE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
LODGIAN MOUNT LAUREL, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO JAMESTOWN, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO NEW YORK, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO NIAGARA FALLS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
107
SERVICO GRAND ISLAND, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
FAYETTEVILLE MOTEL ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
APICO INNS OF GREEN TREE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
APICO HILLS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO HILTON HEAD, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
108
SERVICO AUSTIN, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO MARKET CENTER, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
SERVICO HOUSTON, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
BANKERS TRUST COMPANY
By: /s/ Xxxxx Xxxxxxx
-------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
SCHEDULE I
LIST OF INITIAL SUBSIDIARY GUARANTORS
Sheffield Motel Enterprises, Inc., an Alabama corporation
Dothan Hospitality 3053, Inc., an Alabama corporation
Dothan Hospitality 3071, Inc., an Alabama corporation
Gadsden Hospitality, Inc., an Alabama corporation
Servico Flagstaff, Inc., an Arizona corporation
Lodgian Anaheim Inc., a California corporation
Lodgian Ontario Inc., a California corporation
Servico Pensacola, Inc., a Delaware corporation
Servico Pensacola 7200, Inc., a Delaware corporation
Servico Pensacola 7330, Inc., a Delaware corporation
Servico Ft. Xxxxxx, Inc., a Delaware corporation
AMI Operating Partners, L.P., a Delaware limited partnership
Servico Centre Associates, Ltd., a Florida corporation
Servico West Palm Beach, Inc., a Florida corporation
Servico Winter Haven, Inc., a Florida corporation
Servico Silver Spring, Inc., a Florida corporation
Albany Hotel, Inc., a Florida corporation
Servico Northwoods, Inc., a Florida corporation
2
Servico Windsor, Inc., a Florida corporation
Brunswick Motel Enterprises, Inc., a Georgia corporation
Little Rock Lodging Associates I, L.P., a Georgia limited partnership
Atlanta Hillsboro Lodging, LLC, a Georgia limited liability company
Lodgian Richmond, L.L.C., a Georgia limited liability company
Servico Rolling Xxxxxxx, Inc., an Illinois corporation
Servico Cedar Rapids, Inc., an Iowa corporation
Servico Metairie, Inc., a Louisiana corporation
Servico Columbia, Inc., a Maryland corporation
Servico Colesville, Inc., a Maryland corporation
Servico Maryland, Inc., a Maryland corporation
NH Motel Enterprises, Inc., a Michigan corporation
Minneapolis Motel Enterprises, Inc., a Minnesota corporation
Servico Roseville, Inc., a Minnesota corporation
Lodgian Mount Laurel, Inc., a New Jersey corporation
Servico Jamestown, Inc., a New York corporation
Servico New York, Inc., a New York corporation
Servico Niagara Falls, Inc., a New York corporation
Servico Grand Island, Inc., a New York corporation
Fayetteville Motel Enterprises, Inc., a North Carolina corporation
3
Apico Inns of Green Tree, Inc., a Pennsylvania corporation
Apico Hills, Inc., a Pennsylvania corporation
Servico Hilton Head, Inc., a South Carolina corporation
Servico Austin, Inc., a Texas corporation
Servico Market Center, Inc., a Texas corporation
Servico Houston, Inc., a Texas corporation
EXHIBIT A
[APPLICABLE LEGENDS]
[FACE OF NOTE]
LODGIAN FINANCING CORP.
12 1/4% Senior Subordinated Note due 2009
[CUSIP] [CINS] [ISIN] [__________]
No. ____ $200,000,000
LODGIAN FINANCING CORP., a Delaware corporation (the "Company", which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to _____________, or its registered assigns, the
principal sum of ____________ dollars ($____) on July 15, 2009.
Interest Payment Dates: January 15 and July 15, commencing January 15,
2000.
Regular Record Dates: January 1 and July 1.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
2
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
LODGIAN FINANCING CORP.
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 12 1/4% Senior Subordinated Notes due 2009 described in the
within-mentioned Indenture.
Date: [________,____] BANKERS TRUST COMPANY
as Trustee
By:____________________________________
Authorized Signatory
3
[REVERSE SIDE OF NOTE]
LODGIAN FINANCING CORP.
12 1/4% Senior Subordinated Note due 2009
1. Principal and Interest.
The Company will pay the principal of this Note on July 15, 2009.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the January 1 or July 1 immediately preceding
the Interest Payment Date) on each Interest Payment Date, commencing January 15,
2000.
If an exchange offer (the "Exchange Offer") registered under the
Securities Act is not consummated and a shelf registration statement (the "Shelf
Registration Statement") under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission, on or before January 23, 2000
in accordance with the terms of the Registration Rights Agreement dated July 20,
1999 between the Company, Lodgian, Inc. and the Subsidiary Guarantors named
therein and Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxx Brothers Inc. and Bear,
Xxxxxxx & Co. Inc., the annual interest rate borne by the Notes shall be
increased by 0.5% from the rate shown above accruing from July 23, 1999, payable
in cash semiannually, in arrears, on each Interest Payment Date, commencing
January 15, 2000 and if the Exchange Offer is not consummated, or a Shelf
Registration Statement under the Securities Act with respect to resales of the
Notes is not declared effective by the Commission on or before April 23, 2000 in
accordance with the terms of the Registration Rights Agreement, the annual
interest rate borne by the Notes shall be increased by an additional .5% per
annum. Once the Exchange Offer is consummated or the Shelf Registration
Statement is declared effective, the annual interest rate borne by the Notes
shall be changed to again be the rate shown above. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from July 23, 1999;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months on a U.S. corporate bond basis.
4
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
same rate per annum payable on the principal of this Note.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the principal
amount of the Notes as provided above on each January 15 and July 15, commencing
January 15, 2000 to the persons who are Holders (as reflected in the Security
Register at the close of business on the January 1 or July 1 immediately
preceding the Interest Payment Date), in each case, even if the Note is
cancelled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after July 15, 2009.
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
The Company may also pay principal, premium, if any, and interest by wire
transfer instructions provided by the Holder.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent,
Registrar and agent for service of notice and demands. The Company may change
any authenticating agent, Paying Agent or Registrar upon reasonable notice. The
Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent,
Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of July 23, 1999
(the "Indenture"), between the Company, Lodgian, Inc. and the Subsidiary
Guarantors named therein and Bankers Trust Company, trustee (the "Trustee").
Capitalized terms herein are used as defined in the Indenture unless otherwise
indicated. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act. The
Notes are subject to all such terms, and Holders are referred to the Indenture
and the Trust Indenture Act for a statement of all such terms. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Note and the terms of the Indenture, the terms of the Indenture shall
control.
The Notes are general unsecured obligations of the Company.
5
The Company may, subject to Article Four of the Indenture and applicable
law, issue additional Notes under the Indenture.
5. Optional Redemption.
The Notes are redeemable, at the Company's option, in whole or in part, at
any time or from time to time, on or after July 15, 2004 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by first class
mail to each Holder's last address, as it appears in the Security Register, at
the following Redemption Prices (expressed in percentages of principal amount ),
plus accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing July 15 of the years set forth
below:
Year Redemption Price
---- ----------------
2004................ 106.125%
2005................ 104.083%
2006................ 102.042%
2007 and thereafter. 100.000%
At any time prior to July 15, 2002, the Company may redeem up to 35% of
the aggregate principal amount of the Notes with the proceeds of one or more
Public Equity Offerings, at any time as a whole or from time to time in part, at
a Redemption Price (expressed as a percentage of principal amount) of 112.250%,
plus accrued and unpaid interest to the Redemption Date (subject to the rights
of Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that (I) at least 65% of the aggregate principal amount of Notes originally
issued on the Closing Date remains outstanding after each such redemption and
(ii) notice of such redemption shall be mailed within 60 days of the related
Public Equity Offering.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
6. Repurchase upon Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Payment Date").
6
A notice of such Change of Control will be mailed within 30 days after any
Change of Control occurs to each Holder at its last address as it appears in the
Security Register. Notes in original denominations larger than $1,000 may be
sold to the Company in part. On and after the Payment Date, interest ceases to
accrue on Notes or portions of Notes surrendered for purchase by the Company,
unless the Company defaults in the payment of the purchase price.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A Holder
may register the transfer or exchange of Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
or exchange of any Notes selected for redemption. Also, it need not register the
transfer or exchange of any Notes for a period of 15 days before the day of
mailing of a notice of redemption of Notes selected for redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders 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.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain provisions thereof, and (b) to the Stated Maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least
7
a majority in principal amount of the Notes then outstanding. Without notice to
or the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to, among other things, cure any ambiguity, defect or
inconsistency and make any change that does not materially and adversely affect
the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of Lodgian and
its Restricted Subsidiaries, among other things, to Incur Indebtedness, to Incur
Indebtedness that is subordinate to any Senior Indebtedness but senior to the
Notes or Note Guarantees, make Restricted Payments, suffer to exist restrictions
on the ability of Restricted Subsidiaries to make certain payments to Lodgian,
issue Capital Stock of Restricted Subsidiaries, Guarantee Indebtedness of the
Company or any Guarantor, engage in transactions with Affiliates, suffer to
exist or incur Liens, use the proceeds from Asset Sales, or merge, consolidate
or transfer substantially all of its assets. Within 45 days after the end of
each fiscal quarter (90 days after the end of the last fiscal quarter of each
year), Lodgian shall deliver to the Trustee an Officers' Certificate stating
whether or not the signers thereof know of any Default or Event of Default under
such restrictive covenants.
13. Successor Persons.
When a successor person or other entity assumes all the obligations of its
predecessor under the Notes and the Indenture, the predecessor person will be
released from those obligations.
14. Defaults and Remedies.
Any of the following events constitutes an "Event of Default" under
the Indenture:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise, whether or not such payment is
prohibited by the provisions described under Article Eleven;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days, whether or not such payment is prohibited by the provisions
described under Article Eleven;
(c) default in the performance or breach of Article Five or the
failure by the Company to make or consummate an Offer to Purchase in
accordance with Section 4.11 or Section 4.12;
(d) Lodgian, the Company or any Subsidiary Guarantor defaults in the
performance of or breaches any other covenant or agreement in the
Indenture or under the Notes (other than a default specified in clause
(a), (b) or (c) above) and such default or breach continues for a period
8
of 30 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of Lodgian, the Company, any Subsidiary Guarantor or any Significant
Subsidiary having an outstanding principal amount of $5 million or more in
the aggregate for all such issues of all such Persons, whether such
Indebtedness now exists or shall hereafter be created, (I) an event of
default that has caused the holder thereof to declare such Indebtedness to
be due and payable prior to its Stated Maturity and such Indebtedness has
not been discharged in full or such acceleration has not been rescinded or
annulled within 30 days of such acceleration and/or (II) the failure to
make a principal payment at the final (but not any interim) fixed maturity
and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary and shall not be paid or discharged, and there
shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final
judgments or orders outstanding and not paid or discharged against all
such Persons to exceed $5 million during which a stay of enforcement of
such final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of Lodgian, the Company, any Subsidiary
Guarantor or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of Lodgian, the Company, any
Subsidiary Guarantor or any Significant Subsidiary or for all or
substantially all of the property and assets of Lodgian, the Company, any
Subsidiary Guarantor or any Significant Subsidiary or (C) the winding up
or liquidation of the affairs of Lodgian, the Company, any Subsidiary
Guarantor or any Significant Subsidiary and, in each case, such decree or
order shall remain unstayed and in effect for a period of 30 consecutive
days;
(h) Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary (A) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case under
any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary or for all or substantially all of the property and
assets of Lodgian, the Company, any Subsidiary Guarantor or any
Significant Subsidiary or (C) effects any general assignment for the
benefit of creditors; or
9
(I) Lodgian or any Subsidiary Guarantor repudiates its obligations
under its Note Guarantee or, except as permitted by the Indenture, any
Note Guarantee is determined to be unenforceable or invalid or shall for
any reason cease to be in full force and effect.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding shall, declare all
the Notes to be due and payable. If a bankruptcy or insolvency default with
respect to the Company or a Guarantor occurs and is continuing, the Notes
automatically become due and payable. Holders may not enforce the Indenture or
the Notes except as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Notes. Subject to
certain limitations, Holders of at least a majority in principal amount of the
Notes then outstanding may direct the Trustee in its exercise of any trust or
power.
15. Subordination.
The payment of the Notes will, to the extent set forth in the Indenture,
be subordinated in right of payment to the prior payment in full, in cash or
cash equivalents, of all Senior Indebtedness.
16. Guarantee.
The Company's obligations under the Notes are guaranteed, to the extent
permitted by law, on a senior subordinated basis by each Guarantor. Each
Guarantor's obligation with respect to a Note Guarantee will, to the extent set
forth in the Indenture, be subordinated in right of payment to the prior payment
in full, in cash, of all Guarantor Senior Indebtedness of such Guarantor.
17. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other capacity,
may make loans to, accept deposits from and perform services for the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates as if
it were not the Trustee.
18. No Recourse Against Others.
No incorporator or any past, present or future partner, stockholder, other
equityholder, officer, director, employee or controlling person, as such, of the
Company or of any successor Person shall 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 by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
10
19. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to Lodgian Financing
Corp., 0000 Xxxxxxxxx Xxxx, XX, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000; Attention:
Corporate Secretary.
11
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
_____________________________________________________________________
Please print or typewrite name and address including zip code of assignee
_____________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing _________________________ attorney to transfer said Note on the books
of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
UNLEGENDED OFFSHORE GLOBAL NOTES AND
UNLEGENDED OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (I) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
|_|(a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
or
|_|(b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
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If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.
Date:______________ __________________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) 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:______________ __________________________________________________
NOTICE: To be executed by an executive officer
13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or 4.12 of the Indenture, check the Box: |_|
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.11 or 4.12 of the Indenture, state the amount (in
principal amount): $___________________.
Date: ___________
Your Signature:_________________________________________________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: ______________________________
EXHIBIT B
Form of Certificate
___________, __
Bankers Trust Company
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Services
Re: Lodgian Financing Corp. (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
Dear Sirs:
This letter relates to U.S. $_________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.02 of
the Indenture dated as of July 23, 1999 (the "Indenture") relating to the Notes,
we hereby certify that we are (or we will hold such securities on behalf of) a
person outside the United States to whom the Notes could be transferred in
accordance with Rule 904 of Regulation S promulgated under the U.S. Securities
Act of 1933. Accordingly, you are hereby requested to exchange the legended
certificate for an unlegended certificate representing an identical principal
amount of Notes, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By: ________________________________________
Authorized Signature
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
___________, __
Bankers Trust Company
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Services
Re: Lodgian Financing Corp. (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $__________________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of July
23, 2009 (the "Indenture") relating to the Notes and the undersigned agrees to
be bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with such restrictions and conditions and the Securities Act of 1933,
amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes within the time period referred to in Rule
144(k) of the Securities Act, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and, if such
transfer is in respect of an aggregate principal amount of less than $100,000,
an opinion of counsel acceptable to the Company that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available) or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing any of
the Notes from us a notice advising such purchaser that resales of the Notes are
restricted as stated herein.
C-2
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
You, the Company and each Guarantor 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.
Very truly yours,
[Name of Transferee]
By:___________________________________
Authorized Signature
EXHIBIT D
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
_______________, __
Bankers Trust Company
0 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Services
Re: Lodgian Financing Corp. (the "Company")
12 1/4% Senior Subordinated Notes due 2009 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$_________ aggregate principal
amount of the Notes, we confirm that such sale has been effected pursuant to and
in accordance with Regulation S under the Securities Act of 1933 and,
accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United States
in contravention of the requirements of Rule 903(b) or Rule 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 U.S. Securities Act of 1933.
You, the Company and each Guarantor are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:___________________________________
Authorized Signature
