SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE is entered into as of October 15, 1998 by
and between LODGENET ENTERTAINMENT CORPORATION, a Delaware corporation (the
"Company") having its principal office at 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxx Xxxxxx 00000 and MARINE MIDLAND BANK, a New York banking
corporation and trust company, as trustee (the "Trustee"), amending and
supplementing the indenture (the "Indenture") dated as of December 19, 1996
pursuant to which the Company issued $150,000,000 10-1/4% Senior Notes due
2006 (the "Notes").
RECITALS:
WHEREAS, the parties wish to make certain amendments to the Indenture
pursuant to Section 9.02 of the Indenture; and
WHEREAS, the Company has duly authorized the execution and delivery of
this Supplemental Indenture, has obtained the consent of at least a majority
of the holders of the Notes, and done all other things necessary to make this
Supplemental Indenture a valid agreement of the Company.
NOW, THEREFORE, in consideration of the premises, mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto
agree as follows:
1. AMENDMENTS. The Indenture is hereby amended as follows:
1A. DEFINITIONS. The definitions of "ASSET SALE" and "PERMITTED
INVESTMENTS" in Section 1.01 of the Indenture are hereby deleted in their
entirety and replaced with the following language:
"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 the Company or any of
its Restricted Subsidiaries to any Person, other than the Company or any of
its Restricted Subsidiaries of (i) all or any of the Capital Stock of any
Restricted Subsidiary, (ii) all or substantially all of the property and
assets of an operating unit or business of the Company or any of its
Restricted Subsidiaries or (iii) any other property and assets of the
Company or any of its Restricted Subsidiaries (other than the Capital Stock
or assets of an Unrestricted Subsidiary) outside the ordinary course of
business of the Company or such Restricted Subsidiary and, in each case,
that is not governed by Article Five; PROVIDED that "Asset Sale" shall not
include (a) sales or other dispositions of
inventory, receivables and other current, obsolete or worn out assets,
(b) sales or other dispositions of assets for consideration at least
equal to the fair market value of the assets sold or disposed of,
provided that the consideration received would satisfy clause (B) of
Section 4.11, (c) issuances or sales of Common Stock of ResNet pursuant
to the ResNet Transaction Documents or (d) the contribution to Newco of
(1) the assets of ResNet LLC, (2) the limited liability company
membership interests of ResNet LLC or (3) the equity interests of a
special purpose entity created for the purpose of conveying such assets,
but no other assets.
"PERMITTED INVESTMENTS" means (i) an Investment in the Company
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, the Company or a Restricted Subsidiary; PROVIDED
that such person's primary business is related, ancillary or
complementary to the businesses of the Company and its Restricted
Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) 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; (iv) stock,
obligations or securities received in satisfaction of judgments; and
(v) Investments in Newco received in connection with the ResNet
Contribution and (vi) Investments in Newco in connection with or after
the closing of the ResNet Contribution in aggregate amount not to
exceed $5 million.
The following definitions of "NEWCO", "RESNET CONTRIBUTION" and "RESNET LLC" are
hereby added to Section 1.01 of the Indenture:
"Newco" means the joint venture company which will own
substantially all of the operations of Shared Technologies
Communications LLC ("STC"), Interactive Cable Systems, Inc. ("ICS")
and ResNet LLC, to be created pursuant to a nonbinding agreement among
STC, ICS and ResNet LLC dated August 18, 1998.
"ResNet Contribution" means the contribution to Newco of (i) the
assets of ResNet LLC, (ii) the limited liability company membership
interests of ResNet LLC or (iii) the equity interests of a special
purpose entity created for the purpose of conveying such assets, in
exchange for approximately 30% of the equity interest therein and
notes payable in an aggregate amount equal to Investments made by the
Company or any Subsidiary in ResNet LLC to acquire operating assets
between June 1, 1998 and the closing of the ResNet Contribution.
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"ResNet LLC" means ResNet Communications, L.L.C., a Delaware
limited liability company.
1B. SECTION 4.08, LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND
AFFILIATES. Section 4.08 of the Indenture is hereby deleted in its entirety
and replaced with the following language:
4.08. LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND
AFFILIATES. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including without limitation, the purchase, sale, lease
or exchange or property or assets, or the rendering of any service)
with any holder (or any Affiliate of such holder) of 10% or more of
any class of Capital Stock of the Company or with any Affiliate of the
Company or any Restricted Subsidiary, except upon fair and reasonable
terms no less favorable to the Company 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
(i) transactions (A) approved by a majority of the disinterested
members of the Board of Directors or (B) for which the Company or a
Restricted Subsidiary delivers to the Trustee a written opinion of a
nationally recognized investment banking firm stating that the
transaction is fair to the Company or such Restricted Subsidiary from
a financial point of view; (ii) any transaction solely between the
Company and any of its Wholly Owned Restricted Subsidiaries or solely
between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who
are not employees of the Company; (iv) any payments or other
transactions pursuant to any tax-sharing agreement between the Company
and any other Person with which the Company files a consolidated tax
return or with which the Company is part of a consolidated group for
tax purposes; (v) any Restricted Payments not prohibited by Section
4.04; (vi) transactions pursuant to the ResNet Transaction Documents;
or (vii) transactions with Newco in the ordinary course of business on
terms no less favorable to the Company or such Restricted Subsidiary
than could be obtained in a comparable arm's-length transaction.
Notwithstanding the foregoing, any transaction covered by the first
paragraph of this Section 4.08 and not covered by clauses (ii) through
(vii) of this paragraph, the aggregate amount of which exceeds $1
million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above.
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2. RATIFICATION OF INDENTURE. As amended by this Supplemental
Indenture, the Indenture and the Notes are in all respects ratified and
confirmed and the Indenture as so amended by this Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
3. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which are made solely by the Company.
4. EFFECTIVENESS. This Supplemental Indenture shall be effective as
of the date first above written; PROVIDED that (i) Section 1 of this
Supplemental Indenture shall be operative so long as the ResNet Contribution
is consummated on or prior to November 30, 1998 and the Company furnishes an
Officers' Certificate to the Trustee certifying to the same, and (ii) the
conditions specified in Section 9.02 of the Indenture shall have been
satisfied.
5. MISCELLANEOUS.
(a) This Supplemental Indenture may be executed in any number of
counterparts and by each of the parties hereto on separate counterparts, each
of which, once executed and delivered, shall be deemed to be an original and
all of which taken together shall constitute but one and same instrument.
(b) This Supplemental Indenture shall be governed and construed in
accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
LODGENET ENTERTAINMENT CORPORATION
By /s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxxxxx
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Title: Vice President, General Counsel
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MARINE MIDLAND BANK, as Trustee
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Assistant Vice President
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